Subsidiaries and Associates continued

PT BANK MANDIRI PERSERO Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 DECEMBER 2013 AND 2012 Expressed in millions of Rupiah, unless otherwise stated Appendix 513 1. GENERAL continued

h. Structure and Management continued

As at 31 December 2013 and 2012, the members of Bank Mandiri’s Remuneration and Nomination Committees are as follows: 2013 2012 Chairman, concurrently as member : Edwin Gerungan Edwin Gerungan Member : Pradjoto Pradjoto Member : - Muchayat Member : Gunarni Soeworo Gunarni Soeworo Member : Krisna Wijaya Krisna Wijaya Member : - Cahyana Ahmadjayadi Member : Wahyu Hidayat Wahyu Hidayat Member : Agus Suprijanto - Member : Abdul Aziz - Secretary ex-officio : Alex Denni Alex Denni As at 31 December 2013 and 2012, the Risk Monitoring and Good Corporate Governance Committee Bank Mandiri are as follows: 2013 2012 Chairman, concurrently as member : Pradjoto Pradjoto Member : Edwin Gerungan Edwin Gerungan Member : - Muchayat Member : - Cahyana Ahmadjayadi Member : Krisna Wijaya Krisna Wijaya Member : Tama Widjaja Tama Widjaja Secretary ex-officio : Lisana Irianiwati Lisana Irianiwati As at 31 December 2013 and 2012, Head of Internal Audit Bank Mandiri is Riyani T. Bondan. As at 31 December 2013, Corporate Secretary Bank Mandiri is Nixon L.P. Napitupulu 2012: Sukoriyanto Saputro. As at 31 December 2013 and 2012 Bank Mandiri has a total of 33,982 employees and 30,762 employees unaudited, respectively.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The consolidated financial statements of the Bank and Subsidiaries “Group” were authorised to be issued by the Board of Directors on 10 February 2014. The principal accounting policies adopted in preparing the consolidated financial statements of the Bank and Subsidiaries are set out below: The consolidated financial statements have been prepared in accordance with Indonesian Financial Accounting Standards, and the Capital Market Supervisory Agency and Financial Institution Bapepam and LK regulation No. VIII.G.7 Attachment of t he Chairman of Bapepam and LK’s decree No. KEP- 347BL2012 dated 25 June 2012, “Financial Statements Presentation and Disclosure for Issuer or Public Companies”.

a. Basis of Preparation of the Consolidated Financial Statements

The consolidated financial statements have been prepared under the historical cost, except for financial assets classified as available for sale, financial assets and liabilities held at fair value through profit or loss and all derivative instruments which have been measured at fair value. The consolidated financial statements are prepared under the accrual basis of accounting, except for the consolidated statements of cash flows. PT BANK MANDIRI PERSERO Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 DECEMBER 2013 AND 2012 Expressed in millions of Rupiah, unless otherwise stated Appendix 514 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued

a. Basis of Preparation of the Consolidated Financial Statements continued

Consolidated statements of cash flows are prepared using the direct method by classifying cash flows in operating activities, investing and financing activities. The financial statements of a Subsidiary company engaged in sharia banking have been prepared in conformity with the Statement of Financial Accounting Standards SFAS 101, “Presentation of Financial Statement for Sharia Banking”, SFAS 102 “Accounting for Murabahah”, SFAS 104 “Accounting for Istishna”, SFAS 105 ”Accounting for Mudharabah”, SFAS 106 “Accounting for Musyarakah ”, SFAS 107 “Accounting for Ijarah”, SFAS 110 “Accounting for Sukuk” Accounting Guidelines for Indonesian Sharia Banking PAPSI and other Statements of Financial Accounting Standards established by the Indonesian Institute of Accountants and also accounting and reporting guidelines prescribed by the Indonesian banking regulatory authority and Bapepam and LK. The preparation of financial statements in accordance with Indonesian Financial Accounting Standards requires the use of estimates and assumptions. It also requires management to make judgments in the process of applying the accounting policies the Group. The area that is complex or requires a higher level of consideration or areas where assumptions and estimates could have a significant impact on the consolidated financial statements as disclosed in Note 3. All figures in the consolidated financial statements, are rounded and presented in million rupiah Rp unless otherwise stated. b. Changes in accounting policies On 1 January 2013, the Group implemented new statements of financial accounting standards SFAS and the withdrawal of SFAS and revision, effective starting on that date. Changes to the Group’s accounting policies has been made, in accordance with the transitional provisions in the respective standards and interpretations. Implementation of the new or revised standards, which are relevant to the Groups operations and have impacts on the consolidated financial statements, are as follows: b.i. SFAS 60 - Financial Instruments: Disclosures On 19 October 2012, Financial Accounting Standard Board of Indonesian Accountant Institute DSAK-IAI issued enhancement to the SFAS 60 which became effective on 1 January 2013. Early implementation of the enhancements was permitted. The Group has decided to early adopt SFAS 60 in the financial year ended 31 December 2012, and therefore it has no impact to the financial statements for the year ended 31 December 2013. The enhancements mainly relate to the disclosure of financial assets, including the withdrawal of requirements to disclose: 1 Fair value of collateral held as security for financial assets both “past due but not yet impaired” and “impaired”; and, 2 Carrying amount of financial asset that are neither past due nor impaired whose terms have been renegotiated.