TAXATION Continued c. Corporate income tax expense - current

PT BANK MANDIRI PERSERO AND SUBSIDIARIES Notes to the Consolidated Financial Statements Continued December 31, 2002 and 2001 Expressed in millions of Rupiah, unless otherwise stated - 80 -

28. TAXATION Continued c. Corporate income tax expense - current continued

Based on the above letter of decision No. KEP-406WPJ.07BD.032002 and in view of the Management’s decision to raise an appeal, Bank Mandiri appealed to tax court and paid 50 of the tax assessment or equivalent to Rp1,124,194, to the State Treasury Kas Negara as of December 31, 2002, which is recorded in Other Assets Note 16. However, on December 31, 2002, the Directorate General of Taxes issued letter of decision No. KEP-546WPJ.07BD.032002 which cancels the previous letter of decision of the Directorate General of Taxes No. KEP-406WPJ.07BD.032002. This has impacted the Bank’s appeal as the previous basis of the appeal was letter of decision No. KEP-406WPJ.07BD.032002 which was not relevant anymore, until the Directorate General of Taxes issued a new letter of decision on the Bank’s objections. On March 14, 2003, the Bank received letter of decision from the Directorate General of Taxes No. KEP-106WPJ.07BD.032003, which has partially accepted the Bank’s objections. The decision letter stated the reduction of the tax assessment from Rp2,248,387 to Rp2,127,144. Again, based on the Indonesian tax law, the Bank may raise an appeal within a period of 3 three months after the date of the latest decision of the Bank’s objection, and can only do so if the Bank has paid 50 of the total tax assessment. The Bank refuses the decision letter and will use the 50 payment of the tax assessment amounting to Rp1,124,194 as of December 31, 2002 as required in the appeal process to the tax court. No liability has been recognized for the potential liability arising from the 2000 tax assessment until upon finalization of the case. Tax loss carry forwards Under current Indonesian tax regulations, tax losses may be carried forward and utilized to offset taxable income for up to five 5 years after the year in which the tax loss was incurred. Movement of tax loss carried forward from 2001 to 2002 is as follows: Amount Expiry year Balance as of December 31, 2000 9,164,103 2004 Utilization of tax loss carryforwards in 2001 4,404,391 Balance as of December 31, 2001 4,759,712 2004 Additional tax loss carryforwards in 2002 6,370,979 2007 Balance as of December 31, 2002 11,130,691 PT BANK MANDIRI PERSERO AND SUBSIDIARIES Notes to the Consolidated Financial Statements Continued December 31, 2002 and 2001 Expressed in millions of Rupiah, unless otherwise stated - 81 -

28. TAXATION Continued c. Corporate income tax expense - current continued