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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134
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58. SIGNIFICANT AGREEMENTS, COMMITMENTS AND CONTINGENCIES Continued
a. Management Contract Continued • To take any action as required in respect of the Credit Portfolio to comply with Bank
Indonesia’s requirements, especially for Legal Lending Limit LLL. • To agree to syndicate the current outstanding corporate loans that exceed Legal Lending
Limit LLL and participate in syndication activities to support other banks in resolving Legal Lending Limit LLL problems.
1. Obligations to be fulfilled by Bank Mandiri, among others continued: • To agree to improve its Net Open Position based on the prevailing regulations and
prepare a plan to acquire assets denominated in US Dollars. • To follow the agreement with the Minister of Finance to undertake actions needed to
accelerate the privatization process of Bank Mandiri itself by issuing shares to the public. If Bank Mandiri defaults on its commitments as stipulated in the management contract, the
consequences are: • Replacement of the Boards of Directors and Commissioners.
• Adjustment of the milestones if the reasons for non-achievement are beyond the control of Bank Mandiri.
2. Management and Performance of Bank Mandiri, among others: • The Boards of Directors and Commissioners are required to perform their tasks
conscientiously in line with the requirements prescribed in the Business Plan, Performance Plan and Performance Milestones.
• The Compliance Director is required to undertake actions needed for Bank Mandiri to fully comply with Bank Indonesia regulations, prevailing laws, agreements, and commitments
with Bank Indonesia and monitor the success of the implementation of the Bank Recapitalization Program based on the agreed Business Plan, without prejudice to the
responsibilities of the Boards of Directors and Commissioners of Bank Mandiri. The results of this function’s activities should be submitted quarterly to the Minister of Finance not later
than two 2 weeks after the end of each quarter.
3. Corporate Governance for Bank Mandiri, among others: • The Governance of Bank Mandiri is to be conducted by its Boards of Directors and
Commissioners in accordance with the Articles of Association of Bank Mandiri and prevailing laws.
• The members of the Boards of Directors and Commissioners must not have conflicts of interest in the decision making process involved in governing Bank Mandiri.
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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135
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58. SIGNIFICANT AGREEMENTS, COMMITMENTS AND CONTINGENCIES Continued
b. Earning Assets Transfer Agreement In 1999 Bank Mandiri entered into an Earning Assets Transfer Agreement with IBRA based on the
Decree of Ministry of Finance No. 53KMK.0171999 and Governor of Bank Indonesia No. 3112KEP.GBI1999 dated February 8, 1999.
Under the agreement, Bank Mandiri agreed to transfer to IBRA its loss category earning assets for RpNil consideration.
Bank Mandiri transferred its loss category earning assets to IBRA as follows: • September 4, 2001
Following discussions between Bank Mandiri and IBRA regarding the transfer and repurchase of certain non-performing loans on January 26, 2001, based on notarial deed No.
6 dated September 4, 2001 of Mr. Teddy Anwar, S.H., SpN. and in accordance with the Decree of the Minister of Finance No. S-25MK.012000 dated February 1, 2000 and joint
decision letter of the Committee of Policy and Finance Sector KKSK No. KEP.02K.KKSK022001 dated February 15, 2001 and the Decree of the Minister of Finance
No. SR-110MK.062001 dated May 4, 2001, Bank Mandiri transferred certain of its non- performing loans amounting to Rp4,587,313 to IBRA for RpNil value assets rated as loss
under Bank Indonesia criteria together with the related interest, penalties and claims that may be received by the Bank in the future. In accordance with the agreement, Bank Mandiri
is liable to bear the cost of liabilities which may arise in the future relating to the transferred assets.
Details of assets transferred to IBRA on September 4, 2001 are as follows: Loans
3,737,546 Commercial papers
15,625 Off-balance sheet accounts
262,747 Participation
20,357 Interest and penalties
551,038 4,587,313
No Temporary Assets Administration Agreement was signed in respect of the above assets.
