OTHER RECEIVABLES - TRADE TRANSACTIONS continued

PT BANK MANDIRI PERSERO TBK. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Years Ended December 31, 2005 and 2004 Expressed in millions of Rupiah, unless otherwise stated 45

10. DERIVATIVE RECEIVABLES AND PAYABLES continued

Notional Amount Fair Value Derivative Derivative Transactions Contract Note 2k Receivables Payables 4. Swap - sell US Dolar 4,869,156 4,601,502 312,921 45,267 Others 150,000 149,620 - 380 Interest Rate Related 1. Swap - interest rate US Dolar - 97,533 Other 1,442 2,740 2. Forward Rate Agreement US Dolar - 334 Total 318,686 189,546 Less: Allowance for possible losses 3,443 - 315,243 189,546 Interest Rate Swaps On April 17, 2003 Bank Mandiri entered into interest rate swap agreements with counterparty banks with nominal values amounting to US125,000,000 full amount and US175,000,000 full amount, respectively. The underlying transaction is the Bank’s US300,000,000 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 six-month Libor + 3.37 per annum until the maturity of the Note on April 22, 2008. The six-month Libor 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, 2005 and 2004, losses amounting to Rp86,039 and Rp24,215 as a result of the hedging fair value calculation have been offset against the gains from decrease of the MTNs, a hedged item, based on the fair value calculation Note 24. Bank Mandiri entered into an interest rate swap agreement with nominal amount of US125,000,000 full amount with counterparty bank in August 2002. The underlying transaction is the Bank’s US125,000,000 full amount 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 six-month LIBOR + 6.19 per annum for a 5-year period. The six-month Libor 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. PT BANK MANDIRI PERSERO TBK. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Years Ended December 31, 2005 and 2004 Expressed in millions of Rupiah, unless otherwise stated 46

10. DERIVATIVE RECEIVABLES AND PAYABLES continued

Cross Currency Swaps continued A summary of the cross currency swap contracts is as follows: Type of Buy Sell Effective Date Maturity Date Transactions full amount full amount November 3, 2004 November 3, 2009 Spot US25 million Rp285,060 million Forward Rp285,060 million US25 million November 4, 2004 November 4, 2009 Spot US25 million Rp284,062 million Forward Rp284,062 million US25 million May 18, 2005 May 18, 2010 Spot US25 million Rp316,356 million Forward Rp316,356 million US25 million June 7, 2005 January 7, 2008 Spot US50 million Rp617,500 million Forward Rp617,500 million US50 million Bank Mandiri has also entered into cross currency swap contracts with several counterparty banks for funding purposes. A summary of the cross currency swap contracts is as follows: Effective Date Maturity Date Type of Transactions Buy full amount Sell full amount Interest Rate April 28, 2005 October 27, 2006 Spot US25 million Rp239,250 million IDR-Fix 3-Month Forward Rp239,250 million US25 million US-3 - Month LIBOR + 0.70 May 19, 2005 May 19, 2010 2008 Spot US50 million Rp472,500 million IDR-3 - Month SBI Callable putable in 2008 Forward Rp472,500 million US50 million US-3 - Month LIBOR + 1.20 June 7, 2005 June 7, 2008 Spot US50 million Rp475,000 million IDR-SBI 3 Month Forward Rp475,000 million US50 million US-3 - Month LIBOR + 1.30 The agreements require the Bank to maintain the rupiah value that related to cross currency swap transactions, through top-up deposits mechanism, which is calculated based on movement of spot rupiah against US Dolar.