GOVERNMENT GUARANTEE OF OBLIGATIONS OF LOCALLY INCORPORATED BANKS

PT BANK MANDIRI PERSERO TBK. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Years Ended December 31, 2007 and 2006 Expressed in millions of Rupiah, unless otherwise stated 134 59. SUMMARY OF SIGNIFICANT DIFFERENCES BETWEEN ACCOUNTING PRINCIPLES FOLLOWED BY THE BANK “INDONESIAN GAAP” AND INTERNATIONAL FINANCIAL REPORTING STANDARDS “IFRS” continued c. Loans Purchased from IBRA continued Under IFRS, the difference between outstanding loan principal and purchase price is booked as deferred income for all loans purchased from IBRA. For performing loans, the deferred income is accreted into income over the life of the loan using the effective interest rate method in accordance with IAS No. 39 - “Financial Instruments: Recognition and Measurement”. For non-performing loans, the deferred income is only adjusted once the Bank has recovered the original purchase price. d. Premises and Equipment Under Indonesian GAAP, premises and equipment are stated at cost, except for certain premises and equipment used in operations that were revalued in 1979, 1987 and 2003 in accordance with Government regulations, less accumulated depreciation and amortization. In accordance with IAS 16 - “Property, Plant and Equipment”, company could choose cost method or revaluation method as the accounting policy for fixed assets and has to implement the policy to all fixed assets. In the cost method, after recognition of assets, an assets is carried at its cost less any accumulated depreciation and accumulated impairment, if any. In the revaluation method, after recognition of assets, a fixed assets that has a reliable fair value could be reported at the revalued amount, that is the fair value on the revaluation date less any accumulated depreciation and accumulated impairment, if any. The revaluation should be sufficient regularity to ensure book value does not materially different with the fair value on the balance sheet date. For IFRS, the Bank has chosen to adopt cost method on all fixed assets, and therefore, presented the fixed assets at cost less any accumulated depreciation, and did not include the revaluation value, because of IAS 16 requirement for sufficient regularity on fixed assets revaluation. e. Land Rights Under Indonesian GAAP, the costs of acquired land-rights including incidental costs are capitalized. It also provides that the main acquisition costs of land-rights are generally not subject to amortization. However, the incidental costs incurred in connection with the acquisition of the land-rights or renewal or extension of the legal titles should be deferred and presented separately from the main acquisition costs, and amortized over the period of the land-use rights or the land-rights estimated useful lives, whichever is shorter. Under IFRS, if the title of land is not expected to pass to the lessee by the end of the lease term, the lessee normally does not receive substantially all of the risks and rewards incidental to ownership, in which case the lease of land will be classified as an operating lease. A payment made on entering into or acquiring a leasehold that is accounted for as an operating lease represents prepaid lease payments that are amortized over the lease term in accordance with the pattern of benefits provided. f. Deferred Income Taxes The impact on deferred income taxes of the IFRS adjustments has been recognized in accordance with IAS 12 - “Income Taxes”. An effective tax rate of 30 has been applied. PT BANK MANDIRI PERSERO TBK. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Years Ended December 31, 2007 and 2006 Expressed in millions of Rupiah, unless otherwise stated 135 60. RECONCILIATION OF SHAREHOLDERS’ EQUITY AND CONSOLIDATED NET INCOME TO THE AMOUNTS DETERMINED UNDER IFRS The following is a summary of the adjustments to consolidated shareholders’ equity as of December 31, 2007 and 2006 and consolidated net income for the years then ended, which would be required if IFRS had been applied by Bank Mandiri instead of Indonesian GAAP in the preparation of its consolidated financial statements. December 31, December 31, 2007 2006 Shareholders’ equity as reported in the consolidated financial statements prepared under Indonesian GAAP 29,243,732 26,340,670 IFRS adjustments - increasedecrease due to: Allowance for possible losses on earning assets 2,362,038 427,432 Allowance for possible losses on commitments and contingencies 379,847 382,076 Accretion of deferred income arising from the purchase of loans from IBRA 20,760 60,554 De-recognition of revaluation of premises and equipment 2,689,914 2,716,844 Amortization of land rights 123,654 136,937 Deferred income taxes 21,820 554,035 Net decrease in reported shareholders’ equity 72,743 1,429,684 Shareholders’ equity in accordance with IFRS 29,170,989 24,910,986 For the year For the year ended ended December 31, December 31, 2007 2006 Net income as reported in the consolidated financial statements prepared under Indonesian GAAP 4,346,224 2,421,405 IFRS adjustments - increasedecrease due to: Allowance for possible losses on earning assets 1,934,607 1,598,223 Allowance for possible losses on commitments and contingencies 2,229 43,669 Accretion of deferred income arising from the purchase of Ioans from IBRA 17,599 4,457 De-recognition of revaluation of premises and equipment 26,930 30,337 Amortization of land rights 7,851 136,937 Deferred income taxes 582,513 503,006 Net increase in reported net income 1,351,345 1,036,743 Net income in accordance with IFRS 5,697,569 3,458,148 Net earnings per share Basic full amount 275.01 170.06 Diluted full amount 273.09 168.28

61. COMPLETION OF THE CONSOLIDATED FINANCIAL STATEMENTS

The management of the Bank is responsible for the preparation of these consolidated financial statements which were completed on March 4, 2008.