PT BANK MANDIRI PERSERO TBK. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 2008 and 2007 Expressed in millions of Rupiah, unless otherwise stated
20
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued b. Principles of Consolidation continued
PT Bank Sinar Harapan Bali BSHB was established on November 3, 1992 based on the notarial deed of Ida Bagus Alit Sudiatmika, S.H. in Denpasar. On May 3, 2008, the signing of the acquisition
deed was made between the shareholders of BSHB and Bank Mandiri as covered in the notarial deed No. 04 dated May 3, 2008 of I Wayan Sugitha, S.H. in Denpasar. The signing of deed marked the
beginning of the Bank’s ownership of 80 of BSHB whereby subsequently, the management of BSHB will be made separately from Bank Mandiri and BSHB will be as a stand alone bank to focus mainly in
the expansion of micro business and small business.
For consolidation purposes, the financial statements of the overseas branches and overseas subsidiary of Bank Mandiri denominated in foreign currency are translated into Rupiah based on the
following bases:
1 Assets, liabilities, commitments and contingencies - using the middle rates as published by Bank
Indonesia at the balance sheet date. 2
Revenues, expenses, gains and losses - using the average middle rates during each month in the financial reporting period.
3 Shareholders’ equity accounts - using historical rates.
4 Statements of cash flows - using the middle rates as published by Bank Indonesia at the balance
sheet date, except for income and loss statement balances which are translated using the average middle rates and shareholders’ equity balances which are translated using historical
rates.
The resulting net translation adjustment is presented as “Differences Arising from Translation of Foreign Currency Financial Statements” under the Shareholders’ Equity section of the consolidated
balance sheets.
c. Foreign Currency Transactions and Balances
Bank Mandiri maintains its accounting records in Indonesian Rupiah. Transactions in currencies other than Rupiah are recorded at the prevailing rates of exchange in effect on the date of the transactions.
At balance sheet date, all foreign currency monetary assets and liabilities are translated into Rupiah using the Reuters spot rates at 4.00 p.m. WIB Western Indonesian Time on December 31, 2008 and
2007. The resulting gains or losses are credited or charged to the current year’s consolidated profit and loss.
The exchange rates used against the Rupiah were as follows amounts in full Rupiah:
December 31, 2008 December 31, 2007
Great Britain Pound Sterling 1Rp 15,755.42
18,760.64 Euro 1Rp
15,356.48 13,821.80
US Dollar 1Rp 10,900.00
9,393.00 Japanese Yen 100Rp
12,065.00 8,384.00
d. Transactions with Related Parties
Bank Mandiri and Subsidiaries enter into transactions with related parties as defined in SFAS No. 7 - “Related Party Disclosures”.
All significant transactions with related parties, whether or not conducted under normal terms and conditions as those with third parties, are disclosed in Note 47. Transactions of Bank Mandiri with state
and regionally-ownedcontrolled entities including the Indonesian Bank Restructuring Agency “IBRA”, Unit Pelaksanaan Penjaminan Pemerintah UP3 an institution that replaced IBRA, and the Indonesia
Deposit Insurance Corporation LPS a new institution that replaced UP3 are not considered as transactions with related parties.
PT BANK MANDIRI PERSERO TBK. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 2008 and 2007 Expressed in millions of Rupiah, unless otherwise stated
21
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued e. Cash and Cash Equivalents
Cash and cash equivalents consist of cash, current accounts with Bank Indonesia and current accounts with other banks.
f. Placements with Bank Indonesia and Other Banks
Placements with Bank Indonesia and other banks represent placements in the form of BI deposit facility FASBI, call money, “fixed-term” placements, time deposits and others.
Placements with Bank Indonesia are stated at the outstanding balances, net of the unamortized interest. Placements with other banks are stated at the outstanding balances, net of allowance for
possible losses.
g. Securities
Securities consist of securities traded in the money market such as, Certificates of Bank Indonesia SBI, Wadiah Certificates of Bank Indonesia SWBI, Surat Perbendaharaan Negara SPN,
Negotiable Cerfiticates of Deposits, medium-term notes, floating rate notes, promissory notes, Treasury Bills issued by other country government and Republic of Indonesia’s government,
mandatory convertible bond, export bills, securities traded on the capital market such as mutual fund units and securities traded on the stock exchanges such as shares of stocks and bonds include
Syariah Mudharabah bonds. Investments in mutual fund units are stated at market value, which is the net value of assets of the
mutual funds at the balance sheet date. Any unrealized gains or losses at the balance sheet date are reflected in the current year’s consolidated profit or loss.
The value of securities is stated based on the classification of the securities, as follows: 1 Trading securities are stated at fair value. The unrealized gainslosses resulting from the
increasedecrease in fair value are recognized in the current year’s consolidated profit and loss. Upon the sale of securities in a trading portfolio, the difference between selling price and fair value
per books is recognized as a realized gain or loss on sale. 2 Available for sale securities are stated at fair value. Unrealized gainslosses resulting from the
increasedecrease in fair value are not recognized in the current year’s consolidated profit and loss but are presented as a separate component of shareholders’ equity. Gainslosses are
recognized in income and loss upon realization. 3 Held to maturity securities are stated at cost adjusted for unamortized discounts or premiums.
For securities which are actively traded in organized financial markets, fair value is generally determined by reference to quoted market bid prices by the stock exchanges at the close of business
on the balance sheet date, adjusted for transaction costs necessary to realize the assets. For securities where there is no quoted market price, a reasonable estimate of the fair value is determined
by reference to the current market value of another instrument which is substantially the same or is calculated based on the expected cash flows of the underlying net asset base of securities. Any
permanent decline in the fair value of securities held to maturity and available for sale is charged to current year’s consolidated profit or loss.
Purchase and sale of securities transactions both for the customer and for the Bank are recognized in the consolidated financial statements when there is an agreement on securities transactions.
