SHARE CAPITAL continued a. Authorised, Issued and Fully Paid Capital continued

PT BANK MANDIRI PERSERO Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2016 and for the year then ended Expressed in millions of Rupiah, unless otherwise stated 177

40. SHARE CAPITAL continued a. Authorised, Issued and Fully Paid-in Capital continued

The Annual General Meeting of Shareholders on May 16, 2005 approved MSOP Stage 2 amounted to 312,000,000 share options. The exercise price for each share is Rp1,190.50 full amount to be exercised in the first year and Rp2,493 full amount to be exercised in the second year and the following year. The nominal value per share is Rp500 full amount. The Bank recorded MSOP Stage 2 in the shareholders’ equity account - Share Options with fair value amounted to Rp642.28 full amount per share options. MSOP Stage 2 has been exercised in total 311,713,697 shares thereby increasing the total issued and fully paid capital by Rp155,857 and share premium by Rp425,233. The fifth period the last period to exercise the MSOP Stage 2 conversion option right start from May 4, 2010 during 30 trading days as published in the Announcement of the Indonesia Stock Exchange formerly Jakarta Stock Exchange No. Peng-97BEJ-PSJP02-2007dated February 2, 2007. The un-exercised MSOP Stage 2 stock option was 286,303 shares or amounting to Rp184 that has expired and recorded as additional paid-in capitalshare premium. The Annual General Meeting of Shareholders on May 22, 2006 approved MSOP Stage 3 amounted to 309,416,215 share options. The General Shareholders’ Meeting also delegated an authority to the Board of Commissioners to determine the execution and monitoring policy of MSOP Stage 3 including the options implementation and report it in the next annual general shareholders’ meeting. The exercise price for each share in the MSOP Stage 3 is Rp1,495.08 full amount with nominal value of Rp500 full amount per share. The Bank recorded MSOP Stage 3 as part of the shareholders’ equity account at fair value amounted to Rp593.89 full amount per share option. The total option that has been exercised in MSOP Stage 3 was 309,415,088 shares thereby increasing the total issued and fully paid capital by Rp154,707 and share premium by Rp491,651. The execution period of MSOP Stage 3 ended in February 2011, before the commencement Bank Mandiri pre-emptive rights trading dated February 14, 2011 until February 21, 2011. The un- exercised MSOP Stage 3 stock option was 1,127 shares or amounting to Rp4 that has expired and recorded as additional paid-in capitalshare premium. On December 27, 2010, Bank Mandiri submitted a first registration to FSA formerly Capital Market Supervisory Board and Financial Institution “Bapepam and LK” in relation to the Limited Public Offering LPO to the Bank’s shareholders in respect to the issuance of pre-emptive rights Rights of 2,336,838,591 shares series B. The limited public offering has been approved by the Board of Commissioners through its letter dated April 29, 2010. The Bank has submitted the notification letter regarding the limited public offering to Bank Indonesia through its letter dated September 17, 2010. The limited public offering has been enacted through the Indonesian Government Regulation No. 75 of 2010 dated November 20, 2010. LPO has been approved by Bapepam and LK through its letter No. S-807BL2011 dated January 27, 2011, and the LPO has become effective after obtaining approval in the Extraordinary General Shareholders Meeting held on January 28, 2011. The pre-emptive rights of 2,336,838,591 shares were traded during the period of February 14 - 21, 2011 with an exercise price of Rp5,000 full amount per share which resulted in an additional of issued and paid-up capital amounted to Rp1,168,420.

b. Additional Paid-In CapitalShare Premium

The additional paid-in capitalshare premium as of December 31, 2016 and 2015 amounted to Rp17,316,192 is derived from LPO and Recapitalisation Program Note 1c and Sale of Bank Mandiri Shareholding in UGM and BDP. The share premium amount of Rp17,316,192 already includes the share premium from LPO Note 40a amounted to Rp10,515,774 before deducted by expenditures related to the LPO amounted to Rp274,078. The additional share premium in 2013 amounting Rp113,817 in the consolidated financial statements Rp273,932 in Parent Entity financial statements is generated from the transfer of share ownership of Bank Mandiri in UGM and BDP to controlling entity, which represents the difference between selling price and book value of shares in consolidated financial statements. PT BANK MANDIRI PERSERO Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2016 and for the year then ended Expressed in millions of Rupiah, unless otherwise stated 178

40. SHARE CAPITAL continued b. Additional Paid-In CapitalShare Premium continued

The difference between selling price and book value of shares recorded as share premium in Parent Entity and consolidated financial statements are amounted to Rp273,932 and Rp113,817, respectively. Based on the results of a due diligence review conducted on behalf of the Government dated December 31, 1999 and Management Contract IMPA dated April 8, 2000, it was decided that there was an excess on recapitalisation amounted to Rp4,069,000. The Bank has refunded Rp2,657,000 of Government Recapitalisation Bonds to the Government on July 7, 2000 pursuant to the Management Contract. The remaining balance of Rp1,412,000 was refunded to the Government on April 25, 2003 based on approval from the shareholders during its meeting on October 29, 2002 and the Ministry of State-Owned Enterprises Decision Letter No. KEP-154M-MBU2002 dated October 29, 2002. The refund for above excess of recapitalisation amounted to Rp1,412,000 includes a portion of issued and fully paid capital of Rp251,000. On May 23, 2003, the Minister of Finance of the Republic of Indonesia issued Decree “KMK-RI” No. 227KMK.022003 dated May 23, 2003, which was amended by KMK-RI No. 420KMK.022003 dated September 30, 2003, which provides further guidance on Government Regulations No. 52 year 1999 and No. 97 year 1999 regarding the additional Government participation in Bank Mandiri’s capital. The following are the matters decided under the KMK-RI: a. The final Bank Mandiri recapitalisation amount is Rp173,801,315; b. The recapitalisation fund of Rp5,000,000 is converted into 5,000,000 new shares issued by Bank Mandiri with a nominal value of Rp1,000,000 full amount per share; c. The remaining recapitalisation fund amount of Rp168,801,315 is recorded as share premium within the capital structure of Bank Mandiri. Through quasi-reorganisation, the Bank’s accumulated losses as of April 30, 2003 amounted to Rp162,874,901 were eliminated against additional paid-in capitalshare premium.

c. Distribution of net income

Based on the Annual General Shareholders’ Meeting held on March 21, 2016 and March 16, 2015, the shareholders approved the distribution of the 2015 and 2014 net income as follows: 2015 2014 Dividends 6,100,490 4,967,968 Retained Earnings Appropriated 2,277,517 2,622,936 Unappropriated 11,956,961 12,280,969 20,334,968 19,871,873 Dividend per share full amount 261.44958 212.91292