Investments in Shares FS Bank Mandiri Tbk 311211 Eng 1 Final opini

PT BANK MANDIRI PERSERO Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 DECEMBER 2011 AND 2010 Expressed in millions of Rupiah, unless otherwise stated Appendix 543 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued

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

Subsidiary’s liability for future policy benefits is stated in the consolidated statement of financial position balance sheet as other liabilities 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 2c 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 statement of financial position 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 interest, gain or loss due to increases or decreases in market value of investments are recorded as income or expense, with a corresponding recognition of increase or decrease 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 statement of financial position balance sheet. Funds received from customers for sharia unit-linked products is recognized as liabilities to sharia unit-linked policyholders in the consolidated statement of financial position balance sheet for the amount received net of the Subsidiary’s fee ujrah portion in managing the revenue from unit-linked products. aa. 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 2c for the accounting policy for financial liabilities at amortised cost. ab. Fund Borrowings Fund borrowings represent funds received from other banks, Bank Indonesia or other parties with the obligation of repayment in accordance with the requirements of the loan agreement. Fund borrowings are initially measured at fair value plus directly attributable transaction costs. Fund borrowings are classified as financial liabilities at amortised cost. Refer to Note 2c for the accounting policy for financial liabilities at amortised cost.