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 5173 57. SIGNIFICANT AGREEMENTS, COMMITMENTS AND CONTINGENCIES continued
c. Value Added Tax VAT on Bank Syariah Mandiri BSM Murabahah Financing Transactions
continued On 1 December 2005, the Directorate General of Taxation rejected BSM’s objection through its
letter No. Kep-277PJ.542005. Based on newly issued Law No. 42 year 2009 dated 15 October 2009 in relation to the third
amendment of Law No. 8 year 1983 regarding Value Added Tax on Goods and Services and Sales Tax on Luxury Goods, it is stated that financing services, which include sharia financing, is
exempted from VAT. This Law started effectively on 1 April 2010.
In 2010, the Government issued Law No. 2 Year 2010 in relation to the Amendment of Law No. 47 Year 2009 regarding State Budget of Revenues and Expenditures APBN 2010 dated 25 May
2010. The article and explanatory paragraph of this Law stated that the Government bear VAT on murabahah transactions of several sharia banks. Based on the explanatory paragraph of this Law,
the BSM’s VAT borne by the Government amounting to Rp25,542 from the total outstanding SKPKB and STP received by BSM of Rp37,649.
BSM management believes that difference between VAT borne by Government and total SKPKB and STP received by BSM will not be billed to BSM which is inline with objective and purposes of
the law.
d. Trade Financing with Asian Development Bank ADB
On 25 November 2009, Bank Mandiri signed a Confirmation Bank Agreement CBA, Issuing Bank Agreement IBA and Revolving Credit Agreement RCA under Trade Finance Facilitation Program
TFFP with ADB.
Based on CBA and IBA, Bank Mandiri can act either as confirming bank or issuing bank for its customer’s LC based export import transactions. As a confirming bank, Bank Mandiri can request a
guarantee from ADB for LC issued by issuing bank and as issuing bank, Bank Mandiri can obtain confirmation guarantee from ADB for LC that has been issued.
TFFP scheme is a program initiated by ADB to facilitate the LC based trade transactions within Asian developing countries to increase the trade-volume growth. Becoming a participant in this
program, Bank Mandiri will have an easier access to increase its trade finance credit lines, its trade volume and to open new business opportunities especially to countries that have low trade volume
with Indonesia.
Pursuant to the RCA, Bank Mandiri received a credit revolving facility up to USD25,000,000 full amount. By using the facility, Bank Mandiri will be charged with interest of total margin plus LIBOR
during the interest period.
e. Settlement Mandatory Convertible Bond MCB PT Garuda Indonesia Persero
In 2000, the debt of PT Garuda Indonesia Persero Garuda at Bank Mandiri was restructured bilaterally, through conversion of Garuda’s borrowing to Bank Mandiri amounting to USD103,000,000
full amount, which consist of loans of USD80,000,000 full amount and Rp168,409, into Mandatory Convertible Bond MCB denominated in Rupiah currency with 4.00 coupon rate per annum, 5 years
tenor and expected IRR of 18.00 per annum. This MCB facility matured on 2 November 2006.
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 5174 57. SIGNIFICANT AGREEMENTS, COMMITMENTS AND CONTINGENCIES continued
e. Settlement Mandatory Convertible Bond MCB PT Garuda Indonesia Persero continued
On 10 November 2009, Bank Mandiri received a letter from Bank Indonesia which stated that Bank Indonesia has no objection on the proposed settlement plan of Garuda’s MCB by converting the MCB
into Bank Mandiri’s temporary investment in Garuda.
On 30 December 2009, Bank Mandiri and Garuda signed the MCB Settlement Agreement based on Notarial Deed No. 272 dated 30 December 2009 in front of Notary Aulia Taufani S.H., as the
substitute of Notary Sutjipto S.H. On the signing date, Garuda made cash payments of 5.00 of MCB principal, amounting to Rp50,940 and converted the remaining MCB balance of 95.00 of MCB
principal into Bank Mandiri’s investment in Garuda’s share, amounting to Rp967,869 or equivalent to 967,869 shares equivalent to 10.60 ownership. In accordance with Letter of Minister of State
Owned Enterprises’, the investment in Garuda’s shares can be divested in conjunction with Garuda’s planned Initial Public Offering IPO which is expected to be done in 2011. Based on regulation of
Capital Market Supervisory Board and Financial Institution No. IX.A.6, Appendix of the Decree of the Chairman of Capital Market and Financial Institution Supervisory Board No. 06PM2001 regarding
Restriction on Shares Issued Prior to Public Offering, the divestment of Garuda’s shares by Bank Mandiri can only be done if the Registration Statement of IPO of Garuda is submitted more than 6
six months after the date of conversion of MCB into temporary investment.
In December 2010, Garuda has submitted its Initial Public Offering IPO registration to the Capital Market Supervisory Board and Financial Institution Bapepam-LK and it has became effective in
February 2011. Through this IPO, Garuda offered 9.3 billion shares or 36.48 of the total issued shares, which consists of 7.4 billion new shares and 1.9 billion Bank Mandiri’s shares in Garuda after
stock split.
See Note 60b Subsequent Events for Completion of Garuda’s IPO. As at 31 December 2010 and 2009, this temporary investment in Garuda’s shares is not recorded in
the Bank’s consolidated balance sheet instead it is recorded as an extra-comtable account Notes 11B.m and 60.
58. GOVERNMENT GUARANTEE FOR THE OBLIGATIONS OF LOCALLY INCORPORATED BANKS
Based on the Decree of the Minister of Finance of the Republic of Indonesia No. 26KMK.0171998 dated 28 January 1998, as amended by Decree of the Minister of Finance of the Republic of Indonesia No.
179KMK.0172000 dated 26 May 2000, the Government of the Republic of Indonesia guarantees certain obligations of locally incorporated banks including demand deposits, saving deposits, time deposits and
deposit on call, bonds, securities, interbank loans, fund borrowings, foreign currency swap transactions and other contingent liabilities such as bank guarantees, standby letters of credit and other liabilities,
excluding subordinated loans and obligations to directors, commissioners and parties that have a special relationship.
In accordance with the Joint Decree of the Chairman of the Board of Directors of Bank Indonesia and IBRA No. 3246KEPDIR and No. 181BPPN0599 dated 14 May 1999, the term of these guarantees
have been extended automatically, unless IBRA issued a notification for not to extend the term of such guarantee at least 6 six months time before the expiry of that period. In 2001, the Joint Decree of the
Chairman of the Board of Directors of Bank Indonesia and IBRA canceled by Bank Indonesia Regulation No. 37PBI2001 and IBRA Chairman Decision No. 1035BPPN0401.
In 2001, the Chairman of IBRA issued Decree No. SK-1036BPPN0401 that regulated specific guidelines for the Government of the Republic of Indonesia guarantees on the obligations of locally
incorporated banks.
