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
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81
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28. TAXATION Continued c. Corporate income tax expense - current continued
Based on a letter No. S-188PJ.422000 of the Directorate General of Taxes to Bank Mandiri dated May 25, 2000, the Tax Office confirmed that the tax loss carry forward of Bank Mandiri for the period
from August 1, 1999 to December 31, 1999 amounting to Rp26,991,916 can be utilizedapplied against future taxable income of Bank Mandiri through 2004. On November 20, 2001, the Bank
received the final tax assessment based on the Directorate General of Taxes letter No. 001274069905101, indicating an adjusted tax loss carry forward of Rp21,893,726 for the year
ended December 31, 1999. The estimated tax loss carry forward as of December 31, 2002 and 2001 amounted to Rp11,130,691 and Rp4,759,712, respectively.
d. Corporate income tax expense - deferred
The reconciliation between estimated income tax expense, calculated using a tax rate of 30 based on commercial profit before estimated income tax and estimated income tax as reported in
the Statements of Profit and Loss for the years ended December 31, 2002 and 2001 are as follows:
2002 2001
Consolidated profit before corporate income tax expense and minority interests
5,809,970 3,850,438
Less: Income before corporate income tax expense of Subsidiaries 36,897
206 Profit before estimated corporate income tax and minority interest
- Bank only 5,773,073
3,850,232 Estimated income tax expense at the tax rate of 30
1,731,922 1,155,070
Tax effect of permanent differences: Non-taxable incomenon-deductible expenses
42,362 460,686
Non-deductible write-off of loans non-taxable adjustment on provision for loan losses
1,887,876 2,559,800
Non-deductible provisionnon-taxable adjustment on provision for losses on earning assets other than loans
54,356 91,831
Non-deductible provisionnon-taxable adjustment on provision for losses on commitments and contingencies
127,117 56,270
Non-taxable incomenon-deductible loss on investments in mutual funds
- 2,416
Non-taxable gain on investments in shares -
9,818 Others
63,945 169,819
Change in valuation allowance 2,268,272
3,688,651 Correction on tax losses carried forward as a result of
tax assessment related to 1999 -
1,529,458 Estimated deferred income tax expense
reported in the statements of profit and loss - Bank only 2,187,484
1,104,475 Subsidiaries
35,445 -
Deferred tax expense -Consolidated 2,222,929
1,104,475
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
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82
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28. TAXATION CONTINUED e. Deferred tax assets
The tax effects from significant temporary differences between commercial and tax bases are as follows:
2002 2001
Bank Mandiri Deferred tax assets:
Allowance for estimated losses on commitments and contingencies
363,326 1,585,304
Allowance for possible loan losses 1,254,966
921,527 Allowance for possible losses on
earning assets other than loans 642,631
1,187,432 Allowance for possible losses arising
from legal cases 477,455
504,221 Provision for personnel expenses
318,359 320,632
3,056,737 4,519,116
Tax losses carried forward 3,339,207
2,957,371 Correction on tax losses carried forward as a result
of tax assessment related to 1999 -
1,529,458 Tax losses carried forward
3,339,207 1,427,913
Deferred tax assets 6,395,944
5,947,029 Valuation
allowance 3,339,207
1,070,935 Net deferred tax assets
3,056,737 4,876,094
Deferred tax liability: Net book value of fixed assets
32,458 94,230
Mark to market of marketable securities 429,900
- Net deferred tax assets - Bank Mandiri
2,594,379 4,781,864
Net deferred tax assets - Subsidiaries 309
35,753 Total net deferred tax assets
2,594,688 4,817,617
Management believes that the valuation allowances relating to deferred tax assets as of December 31, 2002 and 2001 are adequate. Deferred tax assets arising from tax loss carry forwards that
existed on December 31, 2002 and 2001 amounted to Rp3,339,207 and Rp1,427,913, respectively, prior to the valuation allowance and correction as a result of tax assessment.
