PT BANK MANDIRI PERSERO TBK. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2003, April 30, 2003 and December 31, 2002 Expressed in millions of Rupiah, unless otherwise stated
170
61. IMPLEMENTATION OF QUASI REORGANIZATION Continued
At the date of the quasi reorganization, the Bank did not eliminate appropriated retained earnings amounting to Rp1,000,000 million because the Minister of State-Owned Enterprises, as the Bank’s
shareholder, through Decision Letter No. Kep-154M-MBU2002 dated October 29, 2003 approved an increase the Bank’s issued and fully paid-up capital by Rp1,000,000 which increase would be effected
through the conversion of the balance of appropriated retained earnings to issued and fully paid-up capital. In addition, based on deed No. 2 of the Shareholder’s Meeting regarding Changes in the
Articles of Association dated June 1, 2003, prepared in front of Aulia Taufani, SH, as a replacement of Sutjipto, S.H., notary in Jakarta and Government Regulation No. 26 year 2003 dated May 29, 2003
which included the approval for the increase of the said issued and fully paid-up capital, Bank Mandiri has recorded the transfer of the balance of appropriated retained earnings of Rp1,000,000 to issued
and fully paid-up capital.
62. SUBSEQUENT EVENTS
a. Divestment of a 10 ownership interest in Bank Mandiri by the Government of the Republic of Indonesia
Based on a decision of Tim Kebijakan Privatisasi Badan Usaha Milik Negara No. Kep- 05TKP012004 dated January 19, 2004, the divestment of a 10 ownership interest in PT Bank
Mandiri Persero Tbk. by the Government of the Republic of Indonesia will be implemented in the 1st Quarter of 2004 Note 32.
b. Submission of Tax Objection Letter Surat Keberatan dated January 13, 2004 in relation to the Tax Assessment Letter SKPKB dated October 24, 2003 and a Cancellation Request Letter Surat
Gugatan in relation to the Tax Collection Enforcement Letter Surat Paksa dated December 29,
2003. On January 13, 2004, the Bank has sent a Tax Objection Letter Surat Keberatan to the tax office in
relation to the Tax Assessment Letter SKPKB dated October 24, 2003. On the same day, the Bank has also sent a Cancellation Request Letter Surat Gugatan to the tax court in relation to the Tax
Collection Enforcement Letter Surat Paksa from the Tax Office dated December 29, 2003 Note 27c.
c. Sales of
Government Bonds As of February 29, 2004 in relation to the secondary reserve requirement, the Bank entered into
Government Bond sales transactions amounting to Rp17,070,000 unaudited. As of February 29, 2004 the Bank’s secondary reserve ratio is 12.64 unaudited.
d. Government Guarantee Program of Obligations of Locally Incorporated Banks Based on Presidential Decree No.152004 dated February 27, 2004 in relation to the termination of
IBRA’s duties and its dissolution, and Minister of Finance Decree No. 84KMK.062004 dated
February 27, 2004, the Government of Republic of Indonesia established Unit Pelaksana Penjaminan Pemerintah, a new institution replacing IBRA, to continue the Government guarantee
program for obligations of locally incorporated banks Note 60.
e. Repayment Proposal on Subordinated Loan of Bank Mandiri from Bank Indonesia BI On March 9, 2004, the Bank has submitted a new proposal in relation with the settlement of
subordinated loan from BI, through its letter No. COOSPM.0602004 dated March 9, 2004.
PT BANK MANDIRI PERSERO TBK. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2003, April 30, 2003 and December 31, 2002 Expressed in millions of Rupiah, unless otherwise stated
171
62. SUBSEQUENT EVENTS continued
f. Repayment Proposal on Subordinated Loan of PT Bank Syariah Mandiri, a subsidiary of the Bank, from Bank Indonesia.
On March 9, 2004, PT Bank Syariah Mandiri has submitted a proposal in relation with the settlement of subordinated loan from BI, through its letter No. 6105DIR dated March 9, 2004.
63. SUMMARY OF SIGNIFICANT DIFFERENCES BETWEEN ACCOUNTING PRINCIPLES FOLLOWED BY THE BANK “INDONESIAN GAAP” AND INTERNATIONAL FINANCIAL REPORTING
STANDARDS “IFRS” The accompanying consolidated financial statements have been prepared in accordance with
Indonesian GAAP, which varies in certain significant respects from IFRS. The significant differences relate to the items in the following paragraphs:
a. Allowance for Possible Losses on Earning Assets Under Indonesian GAAP, the Bank records allowances for possible losses on earning assets using
general and specific allowances based on management’s estimates and using the guidelines prescribed by Bank Indonesia.
Under IFRS, the Bank records allowances for possible losses on earning assets that are not considered impaired using general and specific allowances in accordance with the provisions of
IAS No. 37 - “Estimated Liabilities, Contingent Liabilities and Contingent Assets”.
Under IAS No. 39 - “Financial Instruments: Recognition and Measurement”, the Bank calculates allowances for possible losses on earning assets based on the net present value of earning assets
that are impaired and based on the expected collection of other earning assets. An earning asset is considered impaired when it becomes probable that the Bank will be unable to collect all
amounts due according to contractual terms.
b. Allowance for Possible Losses on Commitments and Contingencies Under Indonesian GAAP, the Bank records allowances for possible losses on commitments and
contingencies using general and specific allowances based on management’s estimates and using the guidelines prescribed by Bank Indonesia.
Under IFRS, the Bank does not recognize certain of the allowances for possible losses on commitments and contingencies in accordance with the provisions of IAS No. 37-“Estimated
Liabilities, Contingent Liabilities and Contingent Assets”. c. Derivative instruments
Under Indonesian GAAP, the Bank applies SFAS No. 55 - “Accounting for Derivative Instruments and Hedging Activities” which requires that derivative instruments be measured and recognized at
their fair values. As of April 30, 2003 and December 31, 2002, the fair value of the foreign currency forward transactions has been determined based on Reuters spot rates at the reporting
dates in accordance with the reporting guidelines prescribed by Bank Indonesia. On October 23, 2003, Bank Indonesia issued a letter to amend the guidelines and waived the requirement to use
spot rates of exchange to revalue foreign currency forward contracts.
