Additional Paid-In CapitalShare Premium

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 180

42. INTEREST EXPENSE AND SHARIA EXPENSE

Interest expense and sharia expense are incurred on the following: Year ended December 31, 2016 2015 Time deposits 15,857,141 18,487,729 Saving deposits 2,932,804 2,918,599 Demand deposits 2,295,767 1,961,379 Fund borrowings 1,771,326 1,206,241 Marketable securities issued 641,132 454,181 Subordinated loans 399,916 424,118 Others 986,433 754,777 24,884,519 26,207,024 Included in interest expense of time deposits, saving deposits, and demand deposits is expense based on sharia principle for the years ended December 31, 2016 and 2015 amounting to Rp2,338,854 and Rp2,438,112, respectively. Included in interest expense and sharia expense above are interest expense from related parties transactions from fund borrowings for the years ended December 31, 2016 and 2015 amounting to Rp971 and Rp3,759, respectively Note 55.

43. OTHER OPERATING INCOME - OTHERS Year ended December 31,

2016 2015 Receptions back on loans which have been written in the last period in accordance with the application of SFAS No. 55 3,480,564 3,186,074 Income from loan written-off 221,370 244,058 Income from penalty 237,825 196,154 Stamp duty income 46,122 47,275 Safety deposit box 38,749 34,954 Others 1,556,559 2,417,255 5,581,189 6,125,770 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 181

44. ALLOWANCE AND REVERSAL FOR IMPAIRMENT LOSSES Year ended December 31,

2016 2015 Allowancereversal for provision of impairment losses on: Current accounts with other banks Note 5d 176 46 Placements with other banks Note 6e 21,415 26,256 Marketable securities Note 7g 24,094 34,394 Other receivables - trade transactions Note 9d 35,085 41,428 Securities purchased under resale agreements Note 10c - 41,941 Loans Note 12B.j 24,277,357 11,460,581 Consumer financing receivables Note 13d 455,025 291,624 Net investment in lease finance Note 14d 196 2,356 Acceptance receivables Note 15d 130,909 16,822 Investments in shares Note 16c 33 7,087 24,943,938 11,664,837 45. REVERSAL OF AND PROVISION FOR OTHER ALLOWANCES Year ended December 31, 2016 2015 Reversal forallowance provision for: Estimated losses arising from fraud cases 45,796 10,266 Estimated losses arising from legal cases 265,390 11,594 Others assets Note 20 101,957 157,382 117,637 179,242

46. UNREALISED GAINSLOSSES

FROM INCREASEDECREASE IN FAIR VALUE OF MARKETABLE SECURITIES, GOVERNMENT BONDS AND POLICYHOLDERS INVESTMENT IN UNIT-LINK CONTRACTS Year ended December 31, 2016 2015 Marketable securities 3,505 992 Government bonds 12,133 19,298 Changes in market value of policyholders’ investment and increasedecrease in liability in unit-link contracts - Change in market value of policyholders’ investment 1,416,023 2,142,173 - Increase in liability in unit-link contracts 1,416,023 2,142,173 15,638 18,306