Investments in Shares continued

PT BANK MANDIRI PERSERO Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS AT 31 DECEMBER 2010, 2009 AND 2008 Expressed in millions of Rupiah, unless otherwise stated Appendix 540 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued

w. Deposits from Other Banks

Deposits from other banks represent liabilities to local and overseas banks, in the form of demand deposits, saving deposits, inter-bank call money with original maturities of 90 days or less and time deposits. Deposits from other banks are recorded as deposits from other banks. Included in the deposits from other banks are sharia deposits in form of wadiah deposits, Syirkah temporer fund which comprise of unrestricted investment mudharabah saving deposit and unrestricted investment mudharabah time deposit, and Certificates Mudharabah Investment Bank SIMA. SIMA is an investment certificate issued by the BSM which adopts profit sharing practice and in form of placement among banks. SIMA financing period ranges from 1 – 6 months. Refer to Note 2v for the accounting policy for Syirkah temporer fund. Deposits from other banks are classified as financial liabilities at amortised cost. Incremental costs directly attributable to acquistion of deposits from other banks are included in the amount of deposits and amortised over the expected life of the deposits. Refer to Note 2b for the accounting policy for financial liabilities at amortised cost. Prior to 1 January 2010, deposits from other banks are stated at the amount due to the other banks.

x. Liability for Future Policy Benefits and Liability to Unit-Linked Holders

Subsidiary’s liability for future policy benefits is stated in the consolidated balance sheet in accordance with the actuarial calculation. Increases or decreases in liability for future policy benefit are recognised as an expense or income in the current year consolidated statement of income. Liability to unit-linked policyholders is classified as financial liabilities at fair value through profit or loss. Refer to Note 2b for the accounting policy of financial liabilities at fair value through profit or loss. Funds received from customers for non-sharia unit-linked products are reported as gross premiums in the consolidated statement of income. Subsidiary’s liabilities to non-sharia unit-linked policyholders are recognised in the consolidated balance sheet for the amount received net of the portion of premium representing the Subsidiary’s revenue, with a corresponding income statement recognition for the increase in liabilities to non-sharia unit-linked policyholders. Any gain or loss due to increases or decreases in market value of investments are recorded as incomeexpense, with a corresponding recognition of increasedecrease in liability to non-sharia unit-linked policyholders in the consolidated statement of income and liability to non-sharia unit- linked policyholders in the consolidated balance sheet. Funds received from customers for sharia unit-linked products is recognized as liabilities to sharia unit-linked policyholders in the consolidated balance sheet for the amount received net of the Subsidiary’s fee ujrah portion for managing the revenue from unit-linked products.

y. Marketable Securities Issued

Marketable securities issued by the Bank and its Subsidiaries, include floating rate notes, medium- term notes and travelers’ cheques, are initially measured at fair value plus directly attributable transaction costs. Subsequently transactions costs are amortised using the effective interest rate up to the maturity of marketable securities issued. Marketable securities issued are classified as financial liabilities at amortised cost. Refer to Note 2b for the accounting policy for financial liabilities at amortised cost.