Investment in sukuk 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 50 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued e. Foreign currency transactions and balances Subsidiaries and overseas branches Bank Mandiri maintains its accounting records in Indonesian Rupiah. For consolidation purposes, the financial statements of the overseas branches and overseas Subsidiaries of Bank Mandiri denominated in foreign currencies are translated into Rupiah based on the following bases: 1 Assets and liabilities, commitments and contingencies - using the Reuters spot rates at the consolidated statement of financial position date. 2 Revenues, expenses, income and losses - using the average middle rates during each month when the transaction occurs. 3 Shareholders’ equity accounts - using historical rates on the date of transaction. 4 Statements of cash flows - using the Reuters spot rates at the reporting 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 differences arising from the translation adjustment is presented as “Differences arising from translation of foreign currency financial statements” under the Shareholders’ Equity section of the consolidated statement of financial position. Transactions and balances in foreign currencies Transactions in currencies other than Rupiah are recorded into Rupiah by using rates on the date of the transactions. At consolidated statement of financial position date, all foreign currencies 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, 2016 and 2015. The resulting gains or losses are credited or charged to the current year’s consolidated statements of profit or loss and other comprehensive income. The exchange rates used against the Rupiah at the dates of the consolidated statement of financial position are as follows amounts in full Rupiah: December 31, December 31, 2016 2015 Great Britain Pound Sterling 1Rp 16,555.01 20,439.02 Euro 1Rp 14,175.77 15,056.67 United Stated Dollar 1Rp 13,472.50 13,785.00 Japanese Yen 100Rp 11,507.00 11,452.00 Other foreign currencies are not disclosed as above since it is considered not material in the translation of transaction in foreign currencies of the Bank and Subsidiaries.

f. Transactions with related parties

The Bank and Subsidiaries enter into transactions with parties which are defined as related parties in accordance with Statement of Financial Accounting Standards SFAS No. 7 regarding “Related Party Disclosures” and Regulation of Bapepam and LK No. KEP-347BL2012, dated June 25, 2012 regarding “Financial Statements Presentation and Disclosure of Issuers or Public Companies”.