LOANS Continued LOANS Continued

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 - 50 -

12. LOANS Continued

B. Significant information related to loans Continued: f. Loans to Related Parties Loans to related parties amounted to Rp899,232 and Rp926,833 as of December 31, 2002, and 2001, respectively, or 0.36 and 0.35 of total assets in 2002 and 2001, respectively. Details of loans given to related parties are as follows: 2002 2001 Related parties due to conversion of debt to equity: PT Semen Kupang Persero 352,300 304,081 PT Sentral Star Knitting 49,973 58,162 PT Kertas Padalarang 6,000 6,000 PT Pann Multi Finance 4,780 5,417 413,053 373,660 Related parties: Republic of Indonesia 261,334 303,806 PT Estika Sedaya Finance 67,931 66,042 PT Stacomitra Sedaya Finance 66,298 69,843 PT Staco Bosowa Finance 56,712 67,636 PT Bayu Beringin Lestari 27,600 37,100 PT Estika Jasa Kelola 4,393 7,323 Employee loans 1,911 1,423 486,179 553,173 899,232 926,833 These are subsidiaries of the Bank’s pension fund. The loans to Bank Mandiri employees consist of interest-bearing loans at 6 - 9 per annum in 2002 and 2001, and are intended for the acquisition of vehicles, houses and other personal property, and are repayable within 1 to 20 years through monthly payroll deductions. 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 - 51 -

12. LOANS Continued

B. Significant information related to loans Continued: g. Legal Lending Limit “LLL” As of December 31, 2002 and 2001, Bank Mandiri has not exceeded the LLL. h. Bank Mandiri has several loan-channeling agreements in place with several international financial institutions Note 56. i. Bank Mandiri does not capitalize interest in arrears. There was no capitalized interest in arrears for the years ended December 31, 2002 and 2001. j. Movements of Allowance for Possible Losses on Loans The allowance for possible loan losses is comprised of: 2002 2001 Allowance for possible loan losses 8,617,748 6,100,252 Allowance for possible losses on loans purchased from IBRA Note 12.B.m 288,797 - 8,906,545 6,100,252 The movements of allowance for possible loan losses excluding allowance for possible losses on loans purchased from IBRA are as follows: 2002 2001 Balance at beginning of year 6,100,252 12,499,948 Provision during the year 4,674,192 6,041,703 Loan recoveries 5,295,327 1,960,147 Write-offs 6,481,462 12,732,638 Others 970,561 1,668,908 Balance at end of year 8,617,748 6,100,252 Include loan full write-back to on-balance sheet of Raja Garuda Mas Group “RGM” exposures of Rp4,170,712 in 2002. Write-offs in 2002 include write-off of repurchase loans written-off below Rp5,000 and prior to legal merger at repurchase price of Rp2,520,119 Notes 12.B.l and 58.e and partial write-off of loans to RGM amounting to Rp2,691,355 in 2002 Includes foreign currency translation. 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 - 52 -

12. LOANS Continued