SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued c. Financial instruments continued SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued c. Financial instruments continued

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 39

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued c. Financial instruments continued

E. Classes of financial instruments The Group classifies the financial instruments into classes that reflects the nature of information and take into account the characteristic of those financial instruments. The classification of financial instrument can be seen in the table below: Category Class Sub-classes Financial assets At fair value through profit or loss Financial assets held for trading Marketable securities Government bonds Derivative receivables - Non hedging related Loans and receivables Current accounts with Bank Indonesia Current accounts with other banks Placements with Bank Indonesia and other banks Other receivables - trade transaction Securities purchased under resale agreements Loans and sharia financingreceivables Consumer financing receivables Investment in lease financing Acceptance receivables Other assets Accrued income Receivables from customer transactions Receivables from sale of marketable securities Receivables to policyholders Receivables related to ATM and credit card transaction Receivables on collateralized government bonds Held-to-maturity investments Marketable securities Government bonds Available-for-sale financial assets Marketable securities Government bonds Investments in shares - less than 20 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 40

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued c. Financial instruments continued

E. Classes of financial instruments continued

Category Class Sub-classes At fair value through profit or loss Financial liabilities held for trading Derivative payables - non hedging related At amortised cost Deposits from customers Demandwadiah deposits Savingwadiah deposits Time deposits Deposits from other banks Demandwadiah and savingwadiah deposits Inter-bank call money Time deposits Financial liabilities Securities sold under repurchase agreements Acceptance payables Marketable securities issued Accrued expenses Other liabilities Payable to customers Guarantee deposits Payable from purchase of marketable securities Liabilities related to ATM and credit card transaction Subordinated loans Off-balance sheet financial instruments Committed unused loan facilities granted Outstanding irrevocable letters of credit Bank guarantees issued Standby letters of credit F. Offsetting financial instruments Financial assets and liabilities are offset and the net amount presented in the consolidated statement of financial position when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. This means that the right to set off: a. Must not be contingent on a future event, and b. Must be legally enforceable in all of the following circumstances: i. The normal course of business ii. The event of default iii. The event of insolvency or bankruptcy 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 41

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued c. Financial instruments continued