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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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Basis of Preparation of the Consolidated Financial Statements The consolidated financial statements of Bank Mandiri and its Subsidiaries have been prepared
in conformity with the Statement of Financial Accounting Standards “SFAS” No. 31 Revised, “Accounting for the Banking Industry” and other generally accepted accounting principles
established by the Indonesian Institute of Accountants and, where applicable, with prevailing banking industry practices and accounting and reporting guidelines prescribed by the
Indonesian banking regulatory authority.
The consolidated financial statements have been prepared on the historical cost and accrual basis of accounting, except for trading and available-for-sale securities and Government Bonds
which are stated at fair value, hedge bonds which are stated at indexed value, certain investments in shares of stock which are accounted for under the equity method, and certain
premises and equipment which have been revalued.
The consolidated statements of cash flows present cash receipts and payments classified on the basis of operating, investing and financing activities. For the purpose of the consolidated
statements of cash flows, cash equivalents include cash on hand, current accounts with Bank Indonesia and current accounts with other banks.
Significant Changes in Accounting Policies in 2002 SFAS No. 5 Revised - “Reporting Financial Information by Segment”
The Indonesian Institute of Accountants issued SFAS No. 5 Revised effective January 1, 2002 with retroactive implementation. This standard requires publicly listed-companies and
companies that are going to “go public” to report financial information by primary and secondary segments, which generally consists of the industry sectors and geographical areas in which the
company operates.
Industry segments are defined as the distinguishable components of an enterprise engaged in providing a different product or service, or a different group of related products or services,
primarily to customers outside the company. Geographical segments are the distinguishable components of a company engaged in operations in individual countries or groups of countries
within a particular geographical area.
The Bank considers the nature of business as the primary segment, and geographical areas as the secondary segment.
b. Principles of Consolidation The consolidated financial statements include the financial statements of Bank Mandiri and its
majority-owned or controlled Subsidiaries. Significant inter-company balances and transactions have been eliminated.
Subsidiaries included in the consolidated financial statements are as follows:
Percentage of Ownership December 31,
Name of Subsidiary Nature of Business
Domicile 2002
2001 Bank Mandiri Europe Limited “BMEL”
Commercial Banking London
100.00 100.00
PT Asuransi Jiwa Mandiri Insurance
Jakarta 100.00
100.00 PT Bank Syariah Mandiri
Syariah Banking Jakarta
99.99 99.99
PT Usaha Gedung Bank Dagang Negara
Property Management
Jakarta 99.00 99.00 PT Bumi Daya Plaza
Property Management Jakarta
93.33 93.33
PT Mandiri Sekuritas Investment Banking
Jakarta 91.87
28.49
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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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Continued
b. Principles of Consolidation Continued BMEL was incorporated on June 22, 1999 under the Companies Act 1985 of the United
Kingdom. It was established from the conversion of the Bank Exim London Branch to a subsidiary effective July 31, 1999. BMEL was mandated to act as a commercial bank to
represent the interests of Bank Mandiri. The registered office of BMEL is in London, United Kingdom. In July 2002, the Bank injected an additional paid-up capital of US22 million in
BMEL.
PT Asuransi Jiwa Mandiri previously known as PT Asuransi Jiwa Staco Raharja was established in the Republic of Indonesia on September 30, 1991 based on notarial deed No. 179
of Muhani Salim, S.H. dated September 30, 1991. Based on the Extraordinary General Shareholder’s Meeting held on January 31, 2002, the name of the Company was changed from
PT Asuransi Jiwa Staco Raharja to PT Asuransi Jiwa Mandiri Mandiri Life. In accordance with Article 3 of the Company’s Articles of Association, the Company is engaged in life insurance
activities. The head office is located in Jakarta. The Bank increased the paid up capital in PT Asuransi Jiwa Mandiri by Rp10 billion in September 2002 in order to strengthen the capital
structure prior to a proposed joint venture with a foreign insurance company.
PT Bank Syariah Mandiri “BSM”, formerly PT Bank Susila Bhakti, a subsidiary of ex-BDN, was established in the Republic of Indonesia, and is engaged in banking activities in accordance with
“Syariah” banking principles. BSM has applied “Syariah” banking principles, and also has prepared financial statements for consolidation into the December 31, 2002 and 2001
consolidated financial statements of Bank Mandiri in accordance with the same accounting principles applied by Bank Mandiri.
PT Usaha Gedung Bank Dagang Negara was established in the Republic of Indonesia on October 29, 1971 based on notarial deed No. 104 of Abdul Latief, S.H. dated October 29, 1971.
The Company is engaged in property management and office rental activities, which involve the Company and its subsidiaries’ offices, and other offices. It owns 75 of the share capital of PT
Pengelola Harta Tetap Mandiri “PHTM”, a company primarily established to manage and sell the non-core fixed assets of Bank Mandiri, and 25 of the share capital of PT Pengelola
Investama Mandiri “PIM”, a company primarily established to manage the investments in shares of Bank Mandiri.
PT Bumi Daya Plaza was established in Jakarta based on notarial deed No. 33 of Ny. Subagyo Reksodipuro, S.H. dated December 22, 1978. The Company is engaged in property
management and rental activities. It owns 75 of the share capital of PIM and 25 of the share capital of PHTM.
PT Mandiri Sekuritas was established on July 31, 2000 based on notarial deed No. 116 of Ny. Vita Buena, S.H. replacing Sutjipto, S.H. It was established through the merger of PT Bumi
Daya Sekuritas, PT Exim Sekuritas and PT Merincorp Securindo. The merger was approved by the Minister of Laws and Regulations of the Republic of Indonesia on August 25, 2000 based on
decision letter No. C-18762 HT.01.01-TH.2000. The Bank injected an additional paid-up capital of Rp300 billion in December 2002, resulting in an increase in the percentage of ownersip from
28.49 to 91.87.
The total assets of the Subsidiaries as of December 31, 2002 and 2001 amounted to Rp3,371,193 and Rp2,653,048 or 1.35 and 1.01 of the total consolidated assets,
respectively.
