Corporate income tax expense

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 - 79 -

28. TAXATION Continued c. Corporate income tax expense - current continued

The tax reconciliations for the years ended December 31, 2002 and 2001 were as reported in the Bank’s tax returns. 2002 2001 Subsidiaries: Estimated taxable income 2,747 - Estimated corporate income tax expense - current 824 - Less: Income tax payments - - Corporate income tax payable 824 - Under the Indonesian taxation laws, Bank Mandiri and its Subsidiaries submit tax returns on the basis of self-assessment. The tax authorities may assess or amend taxes within 10 years after the date of the tax filings 5 years for tax years prior to 1995. Tax Assesment On July 5, 2002, the Bank has received tax assessment letter SKPKB No. 000282060005102 dated July 5, 2002 for its 2000 corporate income tax. The assessment stated that the Bank has an underpayment of corporate income tax including interest and penalties totaling Rp2,248,387. The underpayment is due to fiscal positive corrections of its reported taxable income amounting to Rp15,806,521 which is comprised of provision for loan losses due to the transfer of bad loans to IBRA amounting to Rp12,242,846, provision for loan losses over allowable tax provision of Rp3,087,357 and fixed assets depreciation expense of Rp476,318. The Bank agreed in part to the tax auditors’ fiscal corrections on provision for loan losses over allowable tax provision of Rp3,087,357 and correction of the fixed assets depreciation of Rp476,318. These agreed corrections will however not result in taxable income due to the available tax loss carryforwards. In respect of the tax auditors’ fiscal correction on provision for loan losses due to the transfer of bad loans to IBRA amounting to Rp12,242,846 comprised of Rp8,505,300 transferred to IBRA in 2000 and Rp3,737,546 transferred in 2001, the Bank maintains that its claims for tax deductions for such losses is legally appropriate. The Bank is contesting the assessment and sent a letter for reconsideration “Peninjauan Kembali” No. DIR.CIF2152002 dated August 2, 2002 requesting the tax authorities to reassess the results of the tax examination. The Director of Tax Examination, Investigation and Collection, through his letter No. S-352PJ.7332002 dated August 21, 2002, rejected the Bank’s letter for reconsideration and requested the Bank file a Letter of Objection. Bank Mandiri sent a Letter of Objection No. DIR.CIF2582002 on September 26, 2002. On September 30, 2002 the Directorate General of Taxes issued letter of decision No. KEP- 406WPJ.07BD.032002 rejecting all of the Bank’s objections. Based on the Indonesian tax law, taxpayers can only raise applications for appeals to the tax court against tax decisions within a period of 3 three months from the date of the decision. In addition, the appeal letter may be submitted only if the taxpayer has paid 50 of the total tax assessment to the State Treasury. 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 - 80 -

28. TAXATION Continued c. Corporate income tax expense - current continued