OTHER RECEIVABLES - TRADE TRANSACTIONS

PT BANK MANDIRI PERSERO TBK. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS December 31, 2004 and 2003, and April 30, 2003 Expressed in millions of Rupiah, unless otherwise stated 49

10. DERIVATIVE RECEIVABLES AND PAYABLES

As of December 31, 2004, a summary of derivative transactions is as follows: Notional Amount Fair Value Derivative Derivative Transactions Contract Note 2k Receivables Payables Third parties Cross Currency: 1. Forward - buy US Dollar 623,717 625,424 3,424 1,717 Others 114,801 120,566 5,765 - 2. Forward - sell US Dollar 171,520 173,681 240 2,401 Others 103,076 108,747 - 5,671 3. Swap-buy US Dollar 2,184,989 2,205,520 23,593 3,062 Others 253,335 253,696 361 - 4. Swap - sell US Dollar 4,897,836 4,698,206 229,195 29,565 5. Option Option - buy US Dollar - - 6 127 Others - - 273 - 6. Option - sell US Dollar - - - 210 Others - - 229 - Others Interest rate swaps US Dollar 25,051 24,215 Total 288,137 66,968 Less: Allowance for possible losses 2,881 - 285,256 66,968 Interest Rate Swaps On April 17, 2003 Bank Mandiri entered into interest rate swap agreements with Standard Chartered Bank, London and ABN Amro Bank, London with nominal values amounting to US125 million full amount and US175 million full amount, respectively. The underlying transaction is the Bank’s US300 million full amount fixed interest rate Medium-Term Note MTN issued in April 2003 Note 24. Under this transaction, the Bank receives semi-annual fixed interest at the rate of 7.00 per annum and pays semi-annual floating interest at the rate of Libor 6 months + 3.37 per annum until the maturity of the Note on April 22, 2008. The Libor 6 months interest is stated in arrears. These transactions qualify as hedging for accounting purposes. The background and purpose of the issuance of the hedging instruments are related to interest rate risk management, whereby the Bank’s positive foreign currency interest rate gap position is exposed to downward trends in interest rates in the following five years. The Bank decided to convert its MTN’s fixed interest rate into floating interest rates in order to mitigate the risks of a decrease in net interest margin. The Bank uses the Discounted Cash Flows approach to calculate the fair value of the hedging instruments, while the short-cut method is used to determine their hedging effectiveness. As of December 31, 2004 and 2003, and April 30, 2003, lossesgains amounting to Rp24,215, Rp4,538 and Rp25,970 as a result of the hedging fair value calculation has been offset against the gainslosses from decreaseincrease of the MTNs, a hedged item, based on the fair value calculation Note 24. PT BANK MANDIRI PERSERO TBK. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS December 31, 2004 and 2003, and April 30, 2003 Expressed in millions of Rupiah, unless otherwise stated 50

10. DERIVATIVE RECEIVABLES AND PAYABLES continued

Interest Rate Swaps continued Bank Mandiri entered into an interest rate swap agreement with a notional amount of US125 million with Standard Chartered Bank, Singapore in August 2002. The underlying transaction is the Bank’s US125 million fixed interest rate Subordinated Note issued in 2002 Note 29. Under the transaction, the Bank receives semi-annual fixed interest at the rate of 10.625 per annum and pays semi- annual floating interest at the rate of Libor 6 months + 6.19 per annum for a 5-year period. The Libor 6 months interest is stated in arrears. While the transaction is for the purpose of hedging the fixed rate coupon payments of the Subordinated Note with floating coupon payments, it does not qualify as a hedging transaction for accounting purposes. Cross Currency Swaps Bank Mandiri has entered into cross currency swap contracts, which are associated with the securities sale and repurchase agreements with several counterparty banks. The contract were initiated when Bank Mandiri sold its Government Recapitalization Bonds to the counterparty banks and received Rupiah funds. These funds were used to settle the spot leg of the cross currency swaps and Bank Mandiri will then receive US Dollar funds. On the settlement date, the Bank will receive Rupiah funds and pay US Dollar funds to the counterparty banks. Bank Mandiri is then obliged to use the Rupiah funds to repurchase the Government Recapitalization Bonds it previously sold to counterparty banks Notes 7 and 22. A summary of the cross currency swap contracts is as follows: Bank Effective Maturity Type of Sale Buy counterpart Date Date Transactions full amount full amount Standard Chartered June 4, 2003 June 6, 2005 Spot US100 million Rp1,037,500 million Bank, Jakarta Forward Rp1,037,500 million US100 million HSBC Bank, Nov 3, 2004 Nov 3, 2009 Spot US25 million Rp285,060 million Jakarta Forward Rp285,060 million US25 million Standard Chartered Nov 4, 2004 Nov 4, 2009 Spot US25 million Rp284,062 million Bank, Jakarta Forward Rp284,062 million US25 million As of December 31, 2003 a summary of derivative transactions is as follows: Notional Amount Fair Value Derivative Derivative Transactions Contract Note 2k Recievables Payables Third Parties Cross currency: 1. Forward - buy US Dollar 156,024 154,543 1 1,482 Others 170,500 178,074 8,178 604 2. Forward - sell US Dollar 45,149 44,561 589 1 Others 31,602 32,194 518 1,110 3. Swap - buy US Dollar 2,187,949 2,172,894 - 15,055 Others 52,125 51,952 - 173 4. Swap - sell US Dollar 4,879,016 3,888,550 990,466 - Others 345,921 343,080 3,655 814 Others Interest rate swap US Dollar 46,727 4,538 Total 1,050,134 23,777 Less: Allowance for possible losses 10,343 - 1,039,791 23,777