MANAGEMENT STOCK OPTION PLAN continued

PT BANK MANDIRI PERSERO TBK. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS June 30, 2004 and 2003, and April 30, 2003 Expressed in millions of Rupiah, unless otherwise stated 122

35. MANAGEMENT STOCK OPTION PLAN continued

The fair value of stock options granted as of July 14, 2003 and December 31, 2003 was Rp69.71 full amount based on a valuation report issued by PT Watson Wyatt Indonesia dated March 4, 2004. The fair value of the options granted was estimated using the Black-Scholes option-pricing model with the following assumptions: Risk free interest rate 8.46 Expected period of option 3 years Expected stock’s volatility 24.53 Expected dividend yield 7.63 Employee turnover rate 1.00 Shares options as of June 30, 2004 amounted to Rp19,793 and MSOP expense which was recorded in personnel expenses for the six-month period ended June 30, 2004 was Rp9,896 Note 43. 36. INTEREST INCOME Interest income was derived from the following: For the 6-month For the 6-month For the 2-month For the 4-month period ended period ended period ended period ended June 30, 2004 June 30, 2003 June 30, 2003 April 30, 2003 Government recapitalization bonds 4,554,690 8,832,791 2,780,279 6,052,512 Loans 4,280,921 4,271,018 1,383,148 2,887,870 Securities 525,381 463,090 223,092 239,998 Fees and commissions 263,286 215,945 38,467 177,478 Placements with Bank Indonesia and other banks 206,867 175,393 58,471 116,922 Others 78,957 88,456 43,964 44,492 9,910,102 14,046,693 4,527,421 9,519,272 Included in interest income from loans and others is syariah income for the six-month period ended June 30, 2004, two-month period ended June 30, 2003, and the four-month period ended April 30, 2003 amounting to Rp199,971, Rp69,832 and Rp65,726, respectively, with details as follows: For the 6-month For the 6-month For the 2-month For the 4-month period ended period ended period ended period ended June 30, 2004 June 30, 2003 June 30, 2003 April 30, 2003 Murabahah income 150,332 95,647 36,376 59,271 Musyarakah income 31,286 4,845 2,059 2,786 Others 18,353 35,066 31,397 3,669 199,971 135,558 69,832 65,726 PT BANK MANDIRI PERSERO TBK. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS June 30, 2004 and 2003, and April 30, 2003 Expressed in millions of Rupiah, unless otherwise stated 123

37. INTEREST EXPENSE