PT BANK MANDIRI PERSERO Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2016 and for the year then ended Expressed in millions of Rupiah, unless otherwise stated
51
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued f. Transactions with related parties continued
A related party is a person or entity that is related to the entity that prepares its financial statements reporting entity. The related parties are as follows:
1 A person who a has control or joint control over the reporting entity; b has significant influence over the reporting entity; or c the key management personnel of the reporting entity or the
parent of the reporting entity. 2 An entity is related to a reporting entity if any of the following:
a The entity and the reporting entity are members of the same group; b An entity is an associate or joint venture of the entity;
c Both entities are joint ventures from the same third party; d An entity is a joint venture of a third entity and the other entity is an associate of the third
entity; e The entity is a post-employment benefit plan for the benefits of employee either from the
reporting entity or an entity related to the reporting entity; f The entity is controlled or jointly controlled by a person identified as referred to in point 1; or
g A person identified as referred to point 1 letter a has significant influence over the entity or the entitys key management personnel;
h The entity is controlled, jointly controlled or significantly influenced by the Government, namely the Minister of Finance or the local governments which are the shareholders of the
entity. 3 Parties which are not related parties are as follows:
a Two entities simply because they have the same director or key management personnel or because the key management personnel of one entity has significant influence over the
other entity; b Two joint venturers simply because they share joint control of a joint venture;
c Fund provider, trade unions, public service, and ministry and agencies of government that does not control, jointly control or significantly influence the reporting entity, solely in the
execution of normal dealings with the entity; d Customers, suppliers, franchisor, distributor or general agent with whom an entity enter into
transaction with significant volumes of business solely because economic dependence due to circumstances.
All significant transactions with related parties have been disclosed in Note 55.
g. Cash and cash equivalents
Cash and cash equivalents consist of cash, current accounts with Bank Indonesia and current accounts with other banks and other short term highly liquid investments with original maturities of 3
three months or less since the date of acquisition.
h. Current accounts with Bank Indonesia and other banks
The minimum statutory reserve Current accounts with Bank Indonesia and other banks are classified as loans and receivables.
Refer to Note 2c for the accounting policy of loans and receivables.
PT BANK MANDIRI PERSERO Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2016 and for the year then ended Expressed in millions of Rupiah, unless otherwise stated
52
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued h. Current accounts with Bank Indonesia and other banks continued
The minimum statutory reserve continued Based on Bank Indonesia Regulation No. 1019PBI2008 dated October 14, 2008 regarding
Statutory Reserves of Commercial Banks in the Bank Indonesia in Rupiah and Foreign Currency, as amended by Bank Indonesia Regulation No. 1025PBI2008 dated October 23, 2008 as amended
by Bank Indonesia Regulation No. 1219PBI2010 dated October 4, 2010 as amended by Bank Indonesia Regulation No. 1310PBI2011 dated February 9, 2011 which has been amended with
PBI No. 1515PBI2013 dated December 24, 2013 and updated by Bank Indonesia Regulation No.1721PBI2015 dated November 26, 2015, PBI No. 183PBI2016 dated March 10, 2016 and
PBI No. 1814PBI2016 dated August 18, 2016, the Bank should comply with a Minimum Statutory Reserve GWM in Bank Indonesia in Rupiah and foreign currencies. Minimum reserve requirement
in Rupiah consists of Primary GWM, Secondary GWM and Loan to Funding Ratio LFR GWM. Primary GWM in Rupiah is set at 6.50 2015: 7.50 from the Rupiah third party funds, secondary
GWM in Rupiah is set at minimum 4.00 from the Rupiah third party funds and GWM LFR in Rupiah is calculated by the difference between lower disincentive parameter or higher disincentive
parameter with the difference between Bank’s LFR and target LFR by taking into account the difference between Bank’s Capital Adequacy Ratio CAR and incentive CAR. Primary GWM and
secondary GWM are applied effectively starting November 1, 2010 and GWM LDR is applied effectively starting 1 March 2011. GWM LFR applied effectively on August 3, 2015 to replace GWM
LDR. GWM in foreign currency is set at 8.00 of foreign currency third party fund.
The subsidiary company that engaged in business operation using Sharia principle, had implemented the Minimum Statutory Reserve in accordance with Bank Indonesia Regulation
No. 621PBI2004 dated August 3, 2004 regarding the Minimum Statutory Reserve in Rupiah and foreign currencies for Commercial Bank that engaged in business operation based on Sharia
principle, which amended by Bank Indonesia Regulation No. 823PBI2006 dated October 5, 2006 and the latest amendment using Bank Indonesia Regulation No. 1023PBI2008 dated October 16,
2008 and subsequently replace by PBI No.1516PBI2013 dated December 24, 2013, where every bank is obliged to maintain the Minimum Statutory Reserve in Rupiah and foreign currencies at
5.00 and 1 from third party fund in Rupiah and foreign currencies.
i. Placements with Bank Indonesia and other banks
Placements with Bank Indonesia and other banks represent placements in the form of Bank Indonesia deposit facility FASBI, sharia FASBI FASBIS, call money, “fixed-term” placements,
time deposits and others. Placements with Bank Indonesia and other banks are stated at amortised cost using effective
interest rate less any allowance for impairment losses. Placement with Bank Indonesia and other banks are classified as loans and receivables. Refer to
Note 2c for the accounting policy of loans and receivables.
