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
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130
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55. CUSTODIAL AND TRUST OPERATIONS
Custodial Operations Bank Mandiri has rendered custodial services since 1959 legacy banks: BDN, BEII, BBD and
Bapindo. As a result of the merger, the operating license for custodial services was renewed and re-issued based on BAPEPAM Decision Letter No. KEP.01PMKstd1999 dated October 4, 1999.
The Custodial Services Business “CSB”, which is part of the Securities Services Department the “SSD” of Bank Mandiri, provides a full range of custodial services such as:
a. Settlement and handling services for scrip and scripless trading transactions. b. Registration of securities to Biro Administrasi Efek, and splitting and merging of securities.
c. Safekeeping of securities and other valuable assets. d. Corporate action services related to the rights on the securities.
e. Proxy services for its customers’ shareholders’ meetings and obligation holders’ meetings. f. International services i.e. American Depository Receipts “ADR” and Global Depository
Receipts “GDRs”, which are required by entities listed on the domestic and overseas exchanges dual listing.
g. Sub-registry services for settlement of transactions of Indonesian recapitalization bonds “Government Bonds” as well as SBI’s.
h. Escrow Agent. Bank Mandiri has 238 and 144 custodial customers as of December 31, 2002 and 2001,
respectively. The customers are primarily pension funds, insurance companies, banks, securities and other private companies.
As of December 31, 2002 and 2001, CSB has 26 and 24 permanent employees, respectively. Total custodial fees and commissions earned for the years ended December 31, 2002 and 2001
amounted to Rp6,411and Rp6,791, respectively. Bank Mandiri carries insurance on custodial services against safekeeping and transit loss under
blanket policies amounting to approximately Rp175,000,000,000 full amount. Management is of the opinion that the insurance coverage is adequate to cover possible losses from safekeeping and
transit risks.
Trust Operations Bank Mandiri has been rendering trustee services since 1983 legacy banks: Bank Exim, BDN,
BBD and Bapindo. The operating license for trustee services was renewed and re-registered with BAPEPAM as stipulated in No. 17STTD-WAPM1999 dated October 27, 1999. The Trustee
Services Business “TSB”, which is part of the Securities Services Department “SSD” of Bank Mandiri, provides a full range of the following services:
a. Preparing documentation support to bond issuers in complying with required documents for issuance.
b. Signing the trustee agreement and other relevant document together with bond issuers and other related institutions.
c. Monitoring performance of issuers and compliance against required documentation as stipulated in trustee agreements on behalf of bond holders.
d. Facilitating bond holder meetings. e. Following up and executing the results of bond holder meetings as required and necessary.
f. Providing information on issuer’s performance as requested by BAPEPAM or bond holders.
g. Managing the sinking fund and other collateral as required by the bond’s issuance and terms and conditions.
h. Paying agent for dividend and selected coupon payment. i.
Escrow agent and security agent.
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
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131
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55. CUSTODIAL AND TRUST OPERATIONS Continued
Trust Operations continued Bank Mandiri has 24 and 21 trustee customers as of December 31, 2002 and 2001, respectively.
As of December 31, 2002 and 2001 the total value of bonds issued amounted to Rp5,116,300 and Rp5,140,350, respectively, while the sinking funds managed on behalf of bond issuers amounted to
Rp91,480 and Rp39,780, respectively.
Fees earned from trust operations amounted to Rp3,367 and Rp5,925 for the years ended December 31, 2002 and 2001, respectively.
56. CHANNELING LOANS
Channeling loans based on sources of funds and economic sectors are as follows:
2002 2001
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Government: Electricity, gas and water
9,383,357 10,810,036
Transportation and communications 7,259,986
8,034,952 Agriculture
1,559,491 285,209
Industry 635,527
633,735 Mining
134,434 190,506
Construction 20,919
22,265 Others
121,102 124,996
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19,114,816 20,101,699
Bank Mandiri has been appointed to administer channeling loans in various foreign currencies received by the Government of Indonesia from various bilateral and multilateral financing
institutions, such as, The Export Import Bank of Japan, ASEAN Japan Development Fund, Overseas Economic Cooperation Fund, International Bank for Reconstruction and Development,
Nordiska Investeringbanken, Kreditanstalt Fur Wiederaufbau, Sumitomo, US AID, Barclays Bank, Bank of China, CN Lyonnais, Unibank, Bank of Austria, Ryobhin Hong Kong, Export Finance and
Insurance Cooperation - Australia, Mitsubishi Corporation, Chartered West LB, Banque Indosuez, Hitachi Zosen, NEC Corporation, Banque Francais du Comm, US Exim Bank, and Banque Paribas
for financing projects in Indonesia.
Channeling loans are not recognized in the consolidated balance sheets as the credit risk is not borne by the Bank or its Subsidiaries. Bank Mandiri’s responsibilities under the above arrangement
include, among others, the collection from borrowers and the payment to the Government of principal, interest and other charges and the maintenance of loan documentation. As
compensation, Bank Mandiri receives an annual administration fee which varies from 0.15 - 0.4 of the loan balances.
