SECURITIES Continued 2002 12 Full Audited Financial Statements w Notes

PT BANK MANDIRI PERSERO AND SUBSIDIARIES Notes to the Consolidated Financial Statements Continued December 31, 2002 and 2001 Expressed in millions of Rupiah, unless otherwise stated - 34 -

7. SECURITIES Continued

f. By Type of Issuer: 2002 2001 Government 538,117 158,572 Banks 792,148 976,332 Other companies 1,918,078 1,541,182 3,248,343 2,676,086 Less: Unamortized interest 30,418 12,097 Unrealized gainslosses from increase decrease in value of securities 9,108 54,186 Allowance for possible losses 1,064,624 1,062,683 2,162,409 1,547,120 g. By Related and Non-related Parties: 2002 2001 Related parties 511,317 129,410 Non-related parties 2,737,026 2,546,676 3,248,343 2,676,086 Less: Unamortized interest 30,418 12,097 Unrealized gainslosses from increase decrease in value of securities 9,108 54,186 Allowance for possible losses 1,064,624 1,062,683 2,162,409 1,547,120 h. Annual Average Interest Rates for the Year: 2002 2001 Rupiah 14.98 14.13 Foreign currency 5.76 4.37 i. Movements of Allowance for Possible Losses on Securities: 2002 2001 Balance at beginning of year 1,062,683 727,010 Provision during the year 6,438 83,723 Recoveries - 318,900 Write-offs - 110,212 Others 4,497 43,262 Balance at end of year 1,064,624 1,062,683 Includes foreign currency translation. The minimum allowances for possible losses on securities, under the guidelines prescribed by Bank Indonesia, as of December 31, 2002 and 2001 are Rp1,064,624 and Rp1,062,683, respectively. Management believes that the allowance for possible losses on securities is adequate. PT BANK MANDIRI PERSERO AND SUBSIDIARIES Notes to the Consolidated Financial Statements Continued December 31, 2002 and 2001 Expressed in millions of Rupiah, unless otherwise stated - 35 -

8. GOVERNMENT BONDS

Government Bonds consist of bonds issued by the Government to Bank Mandiri in connection with its Recapitalization Program in 1999, with details as follows: 2002 2001 Held-to-maturity, at cost 107,971,316 114,307,546 Available-for-sale, at fair value 31,580,517 31,170,372 Trading, at fair value 9,294,094 8,015,300 148,845,927 153,493,218 In the context of the Recapitalization Program as discussed in Note 3 to the consolidated financial statements, the Minister of Finance subscribed to additional paid in capital in Bank Mandiri. The subscription was paid by crediting Bank Mandiri’s account in Bank Indonesia, which was simultaneously used to purchase Government Bonds issued by the Government. This recapitalization was carried out in two tranches, on October 12, 1999 for Rp103,000,000 and on December 28, 1999 for Rp75,000,000. Per the Management Contract dated April 8, 2000 between the Government and Bank Mandiri, Government Bonds may be used by Bank Mandiri to settle obligations but may not be used to increase assets Note 58a, except for Government Bonds classified for trading purposes based on prevailing regulations. Based on maturities, the Government Bonds are as follows: 2002 2001 Held-to-maturity: Less than 1 year 7,293,373 13,244,606 1 - 5 years 11,497,263 26,342,821 5 - 10 years 8,214,601 74,720,119 More than 10 years 80,966,079 - 107,971,316 114,307,546 Available-for-sale: Less than 1 year - - 1 - 5 years 3,224,990 25,959,041 5 - 10 years 23,000,950 5,211,331 More than 10 years 5,354,577 - 31,580,517 31,170,372 Trading: Less than 1 year - - 1 - 5 years 4,313,283 1,863,511 5 - 10 years 4,980,811 6,151,789 9,294,094 8,015,300 148,845,927 153,493,218