Chapter

Appendix X. Financial Statements

Author(s):
International Monetary Fund
Published Date:
September 1996
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Report of the External Audit Committee

Washington, D.C.

June 20, 1996

Authority and Scope of the Audit

In accordance with Section 20(b) of the By-Laws of the International Monetary Fund, we have audited the financial statements of the International Monetary Fund covering the:

  • General Department for the year ended April 30, 1996,

  • SDR Department for the year ended April 30, 1996, and

  • Accounts Administered by the International Monetary Fund for the year ended April 30, 1996, which consist of the:

    • Enhanced Structural Adjustment Facility Trust,

    • Enhanced Structural Adjustment Facility Administered Accounts:

      • —Austria,

      • —Belgium,

      • —Botswana,

      • —Chile,

      • —Greece,

      • —Indonesia,

      • —Islamic Republic of Iran,

      • —Portugal,

      • —Saudi Fund for Development Special Account,

    • Administered Accounts Established at the Request of Members:

      • —Administered Account Japan,

      • —Administered Technical Assistance Account Japan,

      • —Framework Administered Account for Technical Assistance Activities,

      • —Administered Account for Rwanda,

    • Trust Fund,

    • Supplementary Financing Facility Subsidy Account,

    • Retired Staff Benefits Investment Account.

Our audit was conducted in accordance with generally accepted auditing standards and included reviews of accounting and internal control systems and tests of the accounting records. We evaluated the extent and results of the work of the outside accounting firm as well as that of the Office of Internal Audit and Inspection of the International Monetary Fund and also used other audit procedures as deemed necessary.

Audit Opinion

In our opinion, the financial statements of the General Department, the SDR Department, and the Accounts Administered by the International Monetary Fund, including new accounts established in the 1996 financial year, have been prepared in accordance with generally accepted accounting principles applied on a basis consistent with that of the preceding year and give a true and fair view of the respective financial positions and the allocations and holdings of SDRs as at April 30, 1996, and of the financial results of operations and transactions during the period then ended.

EXTERNAL AUDIT COMMITTEE:

/ s / Ioane Naiveli, Chairman (Fiji)

/ s / Richard B. Calahan (United States)

/ s / Jiří Škoda (the Czech Republic)

General Department

Balance Sheets as at April 30, 1996 and 1995

(In thousands of SDRs)(Note 1)
19961995
Assets
General Resources Account
Currencies and securities (Notes 2 and 5)144,181,448145,298,032
SDR holdings (Note 3)824,7281,000,655
Gold holdings (Note 4)3,624,7973,624,797
Charges receivable (Note 5)1,199,7621,517,412
Interest and other receivables (Notes 2 and 5)64,09097,827
Other assets (Note 6)141,673120,064
Total General Resources Account150,036,498151,658,787
Special Disbursement Account
Structural adjustment facility loans1,544,8181,650,737
Interest receivable5,9819,889
Investments184,910
Total Special Disbursement Account1,550,7991,845,536
Total Assets151,587,297153,504,323
Quotas, Reserves, Liabilities, and Resources
General Resources Account
Quotas (Note 2)145,318,800144,954,400
Reserves (Note 7)1,875,8731,786,546
Special Contingent Accounts (Note 5)1,633,4601,369,915
Liabilities
Remuneration payable (Note 5)232,673234,119
Other liabilities141,002230,657
Borrowing (Note 8)1,959,626
Interest payable21,357
373,6752,445,759
Deferred income from charges (Note 5)834,6901,102,167
Total General Resources Account150,036,498151,658,787
Special Disbursement Account
Accumulated resources1,547,1791,842,328
Deferred income (Note 5)3,6203,208
Total Special Disbursement Account1,550,7991,845,536
Total Quotas, Reserves, Liabilities, and Resources151,587,297153,504,323
The accompanying notes and schedules are an integral part of the financial statements.
The accompanying notes and schedules are an integral part of the financial statements.
/s/ David Williams

Treasurer
/s/ M. Camdessus

Managing Director

Income Statements for the Years Ended April 30, 1996 and 1995

(In thousands of SDRs)(Note 1)
19961995
General Resources Account
Operational Income (Note 5)
Periodic charges1,491,4241,282,853
Interest on SDR holdings40,259216,410
Service charges54,13152,958
Stand-by charges, special charges, and other income5,9101,568
Burden-sharing contributions net of refunds (Note 5)
Additional charges(47,661)83,207
Reduction of remuneration99,397192,153
Settlements, net of deferred income267,476(59,232)
1,910,9361,769,917
Operational Expense
Remuneration (Note 5)1,194,7861,053,525
Allocation to the Special Contingent Accounts (Note 5)263,545215,422
Interest on borrowing61,989127,610
1,520,3201,396,557
Net Operational Income390,616373,360
Administrative Expenses (Notes 1 and 9)301,289288,286
Net Income of General Resources Account89,32785,074
Special Disbursement Account
Interest and special charges7,4778,099
Investment income4,9249,091
12,40117,190
Administrative expenses23,70022,524
Net Loss of Special Disbursement Account(11,299)(5,334)
The accompanying notes and schedules are an integral part of the financial statements.
The accompanying notes and schedules are an integral part of the financial statements.

Statements of Changes in Reserves and Resources for the Years Ended April 30, 1996 and 1995

(In thousands of SDRs)(Note 1)
19961995
Reserves—General Resources Account
Special Reserve (Note 7)
Balance, beginning of the year1,420,9661,335,892
Net income89,32785,074
Balance, end of the year1,510,2931,420,966
General Reserve (Note 7)
Balance, beginning and end of the year365,580365,580
Total Reserves of the General Resources Account1,875,8731,786,546
Resources—Special Disbursement Account
Balance, beginning of the year1,842,3282,065,219
Transfers from Trust Fund7,5393,724
Transfers from Supplementary Financing Facility Subsidy Account632
Transfers to ESAF Trust(291,389)(221,913)
1,558,4781,847,662
Net loss(11,299)(5,334)
Total Resources of the Special Disbursement Account1,547,1791,842,328
The accompanying notes and schedules are an integral part of the financial statements.
The accompanying notes and schedules are an integral part of the financial statements.

Notes to the Financial Statements as at April 30, 1996 and 1995

General Department

The General Department consists of the General Resources Account, the Special Disbursement Account, and the Investment Account. The Investment Account had not been activated at April 30, 1996.

General Resources Account

The General Resources Account reflects the receipt of quota subscriptions, purchases and repurchases, collection of charges on members’ use of Fund credit and payment of remuneration on creditor positions in the Fund, and repayment of principal and interest to the Fund’s lenders. Assets held in the General Resources Account include (1) currencies (including securities) of the Fund’s member countries, (2) SDR holdings, and (3) gold.

The Fund makes its resources available to its members under policies on the use of its resources by selling to members, in exchange for their own currencies, SDRs or currencies of other members. When members make purchases, they incur an obligation to repurchase the Fund’s holdings of their currencies, within the periods specified by the Fund, by the payment to the Fund of SDRs or currencies of other members specified by the Fund. The Fund’s policies on the use of its general resources are intended to ensure that their use is temporary and will be reversed within the relevant repurchase periods.

The composition of the Fund’s holdings of members’ currencies changes as a result of the Fund’s transactions, including purchases and repurchases. Currencies and securities consist of holdings of currencies or notes payable on demand that substitute for the members’ currencies, including those of members that make use of the Fund’s resources and those used to finance the Fund’s operations and transactions.

A member has a reserve tranche in the Fund to the extent that the Fund’s holdings of its currency, excluding holdings that reflect the member’s use of Fund credit, are less than the member’s quota. A member’s reserve tranche is considered a part of the member’s external reserves, which it may draw at any time when it represents that it has a need. Reserve tranche purchases are not considered a use of Fund credit and are not subject to repurchase obligations or charges.

A member is entitled to repurchase at any time the Fund’s holdings of its currency on which the Fund levies charges and is expected to make repurchases as and when its balance of payments and reserve position improve.

Special Disbursement Account

The Special Disbursement Account was activated on June 30, 1981 to receive transfers from the Trust Fund, which is in the process of being wound up. A structural adjustment facility (SAF) was established in March 1986 within the Special Disbursement Account to provide balance of payments assistance on concessional terms to qualifying low-income developing country members.

The Special Disbursement Account is a part of the General Department of the Fund. The assets and income of the account are held separate from resources of other accounts of the General Department. Assets that exceed the needs of the account are transferred to the Reserve Account of the Enhanced Structural Adjustment Facility Trust (ESAF Trust), which is separately administered by the Fund as Trustee. Resources of the ESAF Trust Reserve Account that are determined to be in excess of its estimated needs are to be transferred back to the Special Disbursement Account. Upon liquidation of the ESAF Trust, the amounts remaining in the ESAF Trust Reserve Account after the discharge of remaining liabilities shall be transferred to the Special Disbursement Account. In financial years 1995 and 1994, the Fund transferred certain resources derived from the termination of the 1976 Trust Fund to the ESAF Trust Subsidy Account. Upon liquidation of the ESAF Trust, any resources remaining in the ESAF Trust Subsidy Account will be returned to the Special Disbursement Account and the contributors of the ESAF Trust Subsidy Account.

1. Summary of Significant Accounting Practices

Unit of Account

The accounts of the General Department are expressed in terms of the SDR. SDRs are reserve assets allocated to participants in the Fund’s SDR Department. The currency value of the SDR is determined by the Fund each day by summing the values in U.S. dollars, based on market exchange rates, of a basket of five currencies. The Fund reviews the SDR valuation basket every five years. The SDR valuation basket was revised effective January 1, 1996. The currencies comprising the basket and their amounts in the basket are as follows:

CurrencyAmounts
To

December 31, 1995
From

January 1, 1996
U.S. dollar0.5720.582
Deutsche mark0.4530.446
Japanese yen31.827.2
French franc0.8000.813
Pound sterling0.01120.105

Valuation of Currencies

Currencies are valued in terms of the SDR on the basis of the representative exchange rate determined for each currency. Each member is obligated to maintain the value of the balances of its currency held by the Fund in the General Resources Account in terms of the SDR. Whenever the Fund revalues its holdings of a member’s currency, a receivable or a payable is established for the amount of currency payable by or to the member in order to maintain the SDR value of the Fund’s holdings of the currency. The balances of the receivables or payables are reflected in the Fund’s total currency holdings.

Income Recognition

The Fund maintains its accounts on an accrual basis; accordingly, income is recognized as it is earned, and expenses are recorded as they are incurred, except that income from charges from members that are overdue in settling their obligations to the Fund by six months or more is deferred and is recognized as income only when paid unless the member has remained current in settling charges when due (see also Note 5).

Capital Assets

The Fund capitalizes assets with a cost in excess of $100,000. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets.

2. Quotas, Currencies, and Securities

Each member is required to pay to the Fund the amount of its initial quota and subsequent increases partly in the member’s own currency and the remainder in the form of reserve assets, except that in 1978 members were permitted to pay the entire increase in their own currencies. A member’s quota is not increased until the member consents to the increase and pays the subscription. Each member has the option to substitute nonnegotiable and non-interest-bearing securities for the amount of its currency held by the Fund in the General Resources Account that is in excess of ¼ of 1 percent of the member’s quota. These securities, which are part of the Fund’s currency holdings, are encashable by the Fund on demand.

Changes in the Fund’s holdings of members’ currencies and securities for the year ended April 30, 1996 were as follows:

April 30,

1996
April 30,

1995
Net

Change
In millions of SDRs
Members’ quotas145,319144,954365
Members’ outstanding use of Fund
credit in the GRA36,26832,1404,128
Members’ outstanding reserve
tranche positions in the GRA(37,352)(31,720)(5,632)
Other receivables(56)(77)21
Administrative currency balances211
Currencies and securities144,181145,298(1,117)

On December 14, 1992, the Federal Republic of Yugoslavia (Serbia/Montenegro) agreed, as a successor state, to share in the assets and liabilities of the former Socialist Federal Republic of Yugoslavia. As of April 30, 1996, this state had not succeeded to Fund membership. Fund credit outstanding at April 30, 1996 includes overdue credit amounting to SDR 56.1 million with respect to the Federal Republic of Yugoslavia (Serbia/Montenegro) (SDR 77.4 million with respect to two successor states at April 30, 1995). This amount is included in interest and other receivables in the balance sheet.

Each member is obligated to maintain the value of the balances of its currency held by the Fund in the General Resources Account in terms of the SDR, and therefore the Fund periodically revalues its holdings of a member’s currency. At April 30, 1996, when all holdings of currencies of members were last revalued, receivables and payables arising from valuation adjustments amounted to SDR 10,125.4 million and SDR 5,716.9 million, respectively (SDR 21,174.0 million and SDR 2,355.0 million, respectively, at April 30, 1995). At June 14, 1996, the amounts receivable were SDR 6,893.5 million, and the amounts payable were SDR 2,488.9 million.

The Fund’s holdings of members’ currencies at April 30, 1996 are shown in Schedule 1.

3. SDR Holdings

SDRs are reserve assets created by the Fund and allocated to members participating in the SDR Department. Although SDRs are not allocated to the Fund, the Fund may acquire, hold, and dispose of SDRs through the General Resources Account. The Fund receives SDRs from members in the settlement of their financial obligations to the Fund and uses SDRs in transactions and operations between the Fund and its members. The Fund earns interest on its SDR holdings at the same rate as all other holders of SDRs.

4. Gold Holdings

At April 30, 1996 and April 30, 1995, the Fund held 3,217,341 kilograms equal to 103,439,916 fine ounces of gold at designated depositories. Gold held by the Fund is valued on the basis of 0.888671 gram of fine gold per SDR, which is equivalent to SDR 35 per fine ounce, except for 21,396 fine ounces that were acquired at a market value equivalent to SDR 5.1 million.

5. Fund Operations

The Fund’s financial resources are made available to members under a number of policies and facilities that differ in the type of balance of payments need they seek to address, in the length of repurchase period, and in the degree of conditionality attached to them. Changes in the outstanding use of Fund credit under various facilities during the year ended April 30, 1996 were as follows:

April 30,

1995
PurchasesRepurchase,April 30,

1996
In millions of SDRs
Regular facilities12,5599,1273,06318,623
Extended Fund facility6,8601,5549797,435
Enlarged access5,6611,2254,436
Systemic transformation facility3,8481363,984
Compensatory and contingency financing facility3,02191,4281,602
Supplementary financing facility1913188
Total32,14010,8266,69836,268

Members’ use of Fund credit is shown in Schedule 1. Scheduled repurchases are shown in Schedule 2.

Arrangements in the General Department

At April 30, 1996, 31 arrangements were in effect, and undrawn balances under these arrangements amounted to SDR 14,068.5 million. These arrangements are listed in Schedule 3.

Charges

The Fund levies periodic charges on its holdings of members’ currencies that derive from their use of Fund credit. The rate of charge is set as a proportion of the SDR interest rate. This rate is adjusted periodically to offset the effect on income of the deferral of charges and to finance the additions to the Special Contingent Accounts, which are further discussed below. Special charges are levied on holdings that are not repurchased when due, and on overdue charges that are not settled when due, except that these charges do not apply to members that are six months or more overdue to the Fund. A service charge is levied by the Fund on each purchase, except on a reserve tranche purchase; a stand-by fee is charged on stand-by and extended arrangements and is refunded in proportion to purchases made under the arrangement.

At April 30, 1996, the total holdings on which the Fund levied charges amounted to SDR 36,268.4 million (SDR 32,140.4 million at April 30, 1995).

Remuneration

The Fund pays remuneration on a member’s remunerated reserve tranche position. A remunerated reserve tranche position is the amount by which the Fund’s holdings of a member’s currency (excluding holdings that derive from the use of Fund credit) is below the member’s norm. The norm varies for each member and, on average, amounted to 94.5 percent of quota at April 30, 1996 and April 30, 1995. The rate of remuneration is equal to the SDR interest rate and is adjusted subject to a specific floor, to offset the effect of the deferral of charges on income and to finance the additions to the Special Contingent Accounts, as discussed below.

At April 30, 1996, the total creditor positions on which the Fund paid remuneration amounted to SDR 30,955.9 million (SDR 25,332.1 million at April 30, 1995).

Overdue Obligations

At April 30, 1996, five members were six months or more overdue in settling their financial obligations to the Fund (seven members at April 30, 1995); four of these members were overdue to the General Department (six members at April 30, 1995). In addition, the Federal Republic of Yugoslavia (Serbia/Montenegro) was also six months or more overdue in meeting its financial obligations to the Fund. Credit extended to these members and the Federal Republic of Yugoslavia (Serbia/Montenegro) through the General Resources Account and the Special Disbursement Account, including SAF loans, amounted to SDR 1,260.0 million as of April 30, 1996 (SDR 1,851.2 million as of April 30, 1995). During the year ended April 30, 1996, Zambia fully settled its overdue financial obligations to the Fund, which restored this member’s eligibility to use the Fund’s general resources. Bosnia and Herzegovina, a successor state of the former Socialist Federal Republic of Yugoslavia, succeeded to Fund membership during the year ended April 30, 1996, after fully settling its overdue obligations to the Fund.

Repurchases and SAF loan repayments and charges and SAF interest that are six months or more overdue to the General Department were as follows:

Repurchases

and SAF Loans
Charges and

SAF Interest
1996199519961995
In millions of SDRs
Total overdue1,1751,7288271,081
Overdue for six months or more1,1571,7018041,049
Overdue for three years or more1,0071,512660868

The type and duration of the arrears were as follows:

Repurchases

and SAF

Loans
Charges

and SAF

Interest
Total

Obligation
Longest

Overdue

Obligation
In millions of SDRs
Liberia201.4187.9389.3January 1985
Somalia102.966.1169.0July 1987
Sudan577.9523.51,101.4November 1984
Yugoslavia, Federal
Republic of (Serbia/Montenegro)52.110.062.1September 1992
Zaïre240.539.0279.5February 1991
Total1,174.8826.52,001.3

Strengthened Cooperative Strategy

The Fund follows a cooperative strategy aimed at resolving the issue of overdue obligations to the Fund. Three major elements form the basis of the cooperative strategy: (1) preventative measures, (2) remedial and deterrent measures, and (3) intensified collaboration and the rights approach. Under the intensified collaborative approach, the Fund has developed Fund-monitored programs and rights accumulation programs, which permit a member with protracted arrears to the Fund to establish a track record of performance related to policy implementation and payments. A rights accumulation program allows the member to earn rights toward future financing through the implementation of a comprehensive economic program. Rights would be encashed under a successor arrangement after clearance of arrears and when all the requirements for that successor arrangement are met.

Deferred Income and Special Contingent Accounts

It is the policy of the Fund to exclude from current income charges due by members that are six months or more overdue in meeting payments to the Fund unless the member is current in the payment of charges. Charges excluded from income are recorded as deferred income. Charges due and accrued by members that are six months or more overdue and that have been deferred amounted to SDR 834.7 million at April 30, 1996 (SDR 1,102.2 million at April 30, 1995).

Since May 1, 1986, the Fund has adopted decisions whereby debtor and creditor members share the financial consequences of overdue obligations. An amount equal to deferred charges (excluding special charges) is generated and included in the Fund’s income each quarter by an adjustment of the rate of charge and the rate of remuneration. However, the average rate of remuneration is not to be reduced below 85 percent of the SDR interest rate for the financing of deferred charges and the first Special Contingent Account (see following paragraphs). The proceeds from the subsequent settlement of overdue charges are distributed to members that paid additional charges or received reduced remuneration when and to the extent that deferred charges that gave rise to adjustments are paid.

In view of the existence of protracted overdue obligations, the Fund accumulates precautionary balances, inter alia, in the Special Contingent Accounts. At April 30, 1996, SDR 1,633.5 million was held in the first and second Special Contingent Accounts (SCA-1 and SCA-2). SDR 691.6 million was held in the SCA-1 (SDR 602.3 million at April 30, 1995), and SDR 941.9 million was held in the SCA-2 at April 30, 1996 (SDR 767.6 million at April 30, 1995). The Special Contingent Accounts are financed by additional quarterly adjustments to the rate of charge and the rate of remuneration. Balances in the SCA-1 are to be distributed to the members that share the cost of financing it when there are no outstanding overdue charges and repurchases, or at such earlier time as the Fund may decide.

The SCA-2 was established on July 1, 1990 (as part of the strengthened cooperative strategy) so as to accumulate SDR 1.0 billion over a period of approximately five years. It is financed by a further adjustment to the rate of charge and to the rate of remuneration. The resources accumulated in the SCA-2 safeguard against potential losses arising from purchases made under a successor arrangement after a rights accumulation program has been successfully completed by members with protracted arrears to the Fund at the end of 1989, while at the same time providing additional liquidity to assist in the financing of such purchases. Refunds of contributions are to be made after all repurchases under the rights approach have been made, or at such earlier date as the Fund may determine. Use of Fund credit in the General Resources Account following the completion and encashment of rights accumulation programs amounted to SDR 621.3 million at April 30, 1996 and April 30, 1995.

The adjustments to charges and remuneration in respect of the SCA-1 and SCA-2 and the costs of deferred charges during the year ended April 30, 1996 were as follows:

Adjustments to
ChargesRemunerationTotal
In millions of SDRs
Deferred charges32.531.964.4
SCA-145.746.392.0
SCA-213.8160.4174.2
Total59.5206.7266.2
Refunds of deferred
charges139.7139.2278.9
Burden-sharing
contributions net of refunds(47.7)99.451.7

The cumulative charges, net of settlements, that have been deferred since May 1, 1986 and have resulted in adjustments to charges and remuneration amount to SDR 634.3 million (SDR 847.4 million at April 30, 1995). The cumulative refunds for the same period amount to SDR 958.6 million (SDR 679.7 million at April 30, 1995).

6. Other Assets

Other assets include capital assets, which at April 30, 1996 amounted to SDR 105.3 million (SDR 90.0 million at April 30, 1995), net of accumulated depreciation of SDR 68.3 million (SDR 62.2 million at April 30, 1995). These consist of land (SDR 33.7 million), buildings (SDR 29.0 million), equipment (SDR 14.2 million), and construction in progress (SDR 28.4 million).

7. Reserves

The Fund determines annually what part of its net income shall be placed to the General Reserve or to the Special Reserve, and what part, if any, shall be distributed. The Articles of Agreement permit the Fund to use the Special Reserve for any purpose for which it may use the General Reserve, except distribution. An administrative deficit for any financial year must be charged first against the Special Reserve.

8. Borrowing

Outstanding borrowing by the Fund under the bilateral arrangements with Japan was fully repaid during financial year 1996 (outstanding borrowing amounted to SDR 1,960 million at April 30, 1995). Interest on amounts borrowed was based on the weighted average of six-month domestic interest rates in the countries that make up the currency basket of the SDR.

General Arrangements to Borrow

Under the General Arrangements to Borrow (GAB), the Fund may borrow up to SDR 18.5 billion when supplementary resources are needed, in particular, to forestall or to cope with an impairment of the international monetary system. The GAB became effective on October 24, 1962 and has been extended through December 25, 1998. At April 30, 1996, the GAB had not been activated.

9. Administrative Expenses

For the year ended April 30, 1996, the Fund incurred administrative expenses for personnel (SDR 233.1 million), travel (SDR 44.5 million), and other administrative needs (SDR 23.7 million). Administrative expenses, which are net of reimbursements, include pension plan contributions, postretirement benefits other than pensions, and depreciation expense. The General Resources Account is reimbursed for expenses incurred in administering the SDR Department (SDR 4.0 million for the year ended April 30, 1996), the Special Disbursement Account and the Enhanced Structural Adjustment Facility Trust (SDR 23.7 million for the year ended April 30, 1996), and for other services (SDR 17.5 million for the year ended April 30, 1996).

The Fund has a defined-benefit Staff Retirement Plan and a defined-benefit Supplemental Retirement Benefits Plan (“the Plans”). All contributions to the Plans and all other assets, liabilities, and income of the Plans are administered separately from the General Department and can be used only for the benefit of the participants in the Plans and their beneficiaries. Participants contribute a fixed percentage of their pensionable remuneration. The Fund contributes the remainder of the cost of funding the Plans and pays certain administrative costs of the Plans. The Fund uses the aggregate cost method for determining its pension cost and for funding the Plans. Under this method, the Fund’s contributions, including those for cost of living adjustments and for experience gains and losses, are spread over the expected future working lifetimes of the participants in the Plans and are determined annually as a percentage of pensionable remuneration of the participants. The funding and cost of the Plans for the year ended April 30, 1996 are based on an actuarial valuation at April 30, 1995.

The Fund provides certain health care benefits to retirees that elect to continue participation in its medical benefits and group life insurance plans through retirement. Participants and the Fund contribute toward meeting the costs of these benefits. The Fund’s cost, which includes a current-year cost and a past-service obligation, is determined actuarially on the basis of the actual experience of the Fund’s medical and life insurance plans, a discount rate and a long-term rate of return on investments of 8.5 percent, and an increase in medical costs at an annual rate of 10.5 percent, declining to 6 percent over time, and other factors on the demographics of participants. The cumulative cost was actuarially estimated at SDR 112.8 million as of April 30, 1996 (SDR 81.7 million as of April 30, 1995). On April 3, 1995, the Fund established the Retired Staff Benefits Investment Account (“the RSBIA”) to hold and invest the resources contributed by the Fund toward the payment of post-retirement medical and life insurance benefits. The resources of the RSBIA are kept separate from the assets of all other accounts of, or administered by, the Fund. At April 30, 1996, an amount of SDR 84.3 million was held by that account (SDR 73.6 million at April 30, 1995).

Schedule 1 General Department Quotas, Fund’s Holdings of Currencies, Members’ Use of Fund Resources, and Reserve Tranche Positions as at April 30, 1996

(In thousands of SDRs)
MemberGeneral Resources AccountSpecial

Disbursement

Account

Loans
Fund’s holdings

of currencies1
Reserve

tranche

position
QuotaTotalPercent

of quota
Use of

resources2
Afghanistan, Islamic State of120,400115,48895.94,928
Albania35,30046,433131.511,1335
Algeria914,4002,049,143224.11,134,7457
Angola207,300207,445100.1
Antigua and Barbuda8,5008,499100.01
Argentina1,537,1005,904,292384.14,367,167
Armenia, Republic of67,500114,750170.047,2505
Australia2,333,2001,995,58785.5337,640
Austria1,188,300643,80954.2544,441
Azerbaijan117,000197,145168.580,14510
Bahamas, The94,90088,66593.46,239
Bahrain82,80038,76446.844,046
Bangladesh392,500392,410100.09782,369
Barbados48,90068,453140.019,57125
Belarus, Republic of280,400470,600167.8190,20020
Belgium3,102,3002,371,13776.4731,214
Belize13,50010,58778.42,914
Benin45,30043,17395.32,12920,772
Bhutan4,5003,93087.3570
Bolivia126,200117,33993.08,87534,920
Bosnia and Herzegovina121,200152,950126.231,745
Botswana36,60017,32747.319,280
Brazil2,170,8002,250,878103.779,289
Brunei Darussalam150,000114,75076.535,255
Bulgaria464,900858,201184.6425,92532,630
Burkina Faso44,20036,98983.77,22122,120
Burundi57,20051,34389.85,86013,237
Cambodia65,00071,250109.66,250
Cameroon135,100187,855139.053,110356
Canada4,320,3003,468,07180.3852,238
Cape Verde7,0006,999100.01
Central African Republic41,20051,818125.810,7109412,768
Chad41,30051,347124.310,32528013,770
Chile621,700616,68099.25,018
China3,385,2002,507,41974.1877,784
Colombia561,300408,03772.7153,264
Comoros6,5005,96291.75402,250
Congo57,90069,886120.712,500536
Costa Rica119,000112,28894.42,0008,725
Côte d’Ivoire238,200276,042115.937,93595
Croatia, Republic of261,600408,591156.2147,00019
Cyprus100,00074,55474.625,453
Czech Republic589,600589,600100.03
Denmark1,069,900655,81861.3414,106
Djibouti11,50014,375125.02,875
Dominica6,0005,99299.99946
Dominican Republic158,800255,977161.297,1783
Ecuador219,200313,143142.9111,09417,153
Egypt678,400670,32398.845,65053,750
El Salvador125,600125,603100.0
Equatorial Guinea24,30024,309100.010,678
Eritrea11,50011,500100.05
Estonia, Republic of46,500106,703229.560,2086
Ethiopia98,30091,25292.87,05549,420
Fiji51,10041,09180.410,013
Finland861,800595,78869.1265,988
France7,414,6005,558,47575.01,856,181
Gabon110,300173,332157.163,07752
Gambia, The22,90021,41893.51,4854,673
Georgia111,000188,700170.077,70010
Germany8,241,5004,432,06253.83,809,436
Ghana274,000329,741120.373,11717,38091,003
Greece587,600473,91380.7113,687
Grenada8,5008,501100.0
Guatemala153,800153,806100.0
Guinea78,70078,63799.96813,896
Guinea-Bissau10,50010,500100.0*32,025
Guyana67,20080,270119.413,06833,948
Haiti60,70077,056126.916,400451,764
Honduras95,000120,799127.225,798
Hungary754,800957,422126.8258,71656,097
Iceland85,30074,81787.710,483
India3,055,5004,420,212144.71,577,248212,630
Indonesia1,497,6001,209,60180.8288,000
Iran, Islamic Republic of1,078,5001,078,511100.0
Iraq504,000504,013100.0
Ireland525,000310,87159.2214,134
Israel666,200755,524113.489,320
Italy4,590,7003,270,09471.21,320,605
Jamaica200,900342,697170.6141,746
Japan8,241,5003,649,05544.34,592,488
Jordan121,700312,168256.5190,4702
Kazakstan, Republic of247,500584,730236.3337,2305
Kenya199,400187,09193.812,31270,290
Kiribati4,0004,001100.0
Korea799,600334,07741.8465,526
Kuwait995,200857,25586.1137,952
Kyrgyz Republic64,500108,360168.043,8605
Lao People’s Democratic Republic39,10039,100100.018,752
Latvia, Republic of91,500196,248214.5104,7485
Lebanon146,000127,16987.118,833
Lesotho23,90020,39285.33,5127,399
Liberia71,300272,738382.5201,45728
Libya817,600498,62861.0318,980
Lithuania, Republic of103,500275,138265.8171,6385
Luxembourg135,500112,55583.122,945
Macedonia, former Yugoslav Republic of49,60092,393186.342,791
Madagascar90,40090,384100.01831,540
Malawi50,90061,406120.612,7252,22419,530
Malaysia832,700358,81143.1473,892
Maldives5,5004,62184.0879
Mali68,90060,16987.38,73327,432
Malta67,50038,36656.829,155
Marshall Islands2,5002,500100.01
Mauritania47,50047,506100.010,529
Mauritius73,30065,93790.07,366
Mexico1,753,30012,199,780695.810,446,53060
Micronesia3,5003,500100.01
Moldova, Republic of90,000244,850272.1154,8505
Mongolia37,10041,475111.84,3755
Morocco427,700427,00299.829,61530,313
Mozambique84,00084,000100.0718,300
Myanmar184,900184,902100.0
Namibia99,60099,582100.018
Nepal52,00046,27789.05,73014,920
Netherlands3,444,2002,200,56563.91,243,647
New Zealand650,100529,76181.5120,350
Nicaragua96,100100,368104.44,258
Niger48,30050,849105.311,1098,5619,883
Nigeria1,281,6001,281,586100.068
Norway1,104,600471,44142.7633,160
Oman119,40085,53771.633,971
Pakistan758,2001,368,627180.5610,48661305,928
Panama149,600223,472149.485,72011,860
Papua New Guinea95,300128,604134.933,34053
Paraguay72,10057,57879.914,525
Peru466,1001,108,819237.9642,686
Philippines633,400963,405152.1417,09687,104
Poland, Republic of988,500911,37692.277,125
Portugal557,600246,52044.2311,082
Qatar190,500161,27584.729,226
Romania754,1001,352,128179.3598,023
Russian Federation4,313,10011,644,719270.07,332,401772
Rwanda59,50068,443115.08,9258,760
St. Kitts and Nevis6,5006,48899.815
St. Lucia11,00011,000100.01
St. Vincent and the Grenadines6,0005,50091.7500
San Marino, Republic of10,0007,65076.52,351
São Tomé and Príncipe5,5005,503100.1560
Saudi Arabia5,130,6004,561,18188.9569,425
Senegal118,900148,609125.030,9141,20723,488
Seychelles6,0005,19786.6804
Sierra Leone77,20077,189100.02429,336
Singapore357,600152,75142.7204,849
Slovak Republic257,400519,009201.6261,604
Slovenia, Republic of150,500139,42692.61,79512,875
Solomon Islands7,5006,96792.9538
Somalia44,200140,907318.896,7018,840
South Africa1,365,4001,979,767145.0614,43064
Spain1,935,400861,09444.51,074,335
Sri Lanka303,600283,37793.320,250104,857
Sudan169,700747,583440.5577,86311
Suriname67,60067,601100.0
Swaziland36,50033,51291.83,002
Sweden1,614,0001,162,57272.0451,428
Switzerland2,470,4001,408,90857.01,061,506
Syrian Arab Republic209,900209,903100.05
Tajikistan, Republic of60,00060,000100.02
Tanzania146,900136,93293.29,97542,800
Thailand573,900238,21041.5335,692
Togo54,30054,04699.525419,008
Tonga5,0003,79575.91,210
Trinidad and Tobago246,800271,163109.924,37512
Tunisia206,000399,977194.2194,01236
Turkey642,0001,070,228166.7460,50032,275
Turkmenistan, Republic of48,00048,000100.05
Uganda133,900133,907100.034,860
Ukraine997,3002,034,600204.01,037,300*3
United Arab Emirates392,100205,76652.5186,335
United Kingdom7,414,6005,698,96676.91,715,641
United States26,526,80016,101,90660.710,425,288
Uruguay225,300219,91697.69,98415,375
Uzbekistan, Republic of199,500305,450153.1105,9505
Vanuatu12,50010,01280.12,488
Venezuela1,951,3003,284,023168.31,477,671144,950
Vietnam241,600374,560155.0132,9605
Western Samoa8,5007,83092.1672
Yemen, Republic of176,500226,490128.350,00013
Yugoslavia, Federal Republic of
(Serbia/Montenegro)56,066
Zaïre291,000464,608159.7173,607145,500
Zambia363,500363,483100.018181,750
Zimbabwe261,300419,308160.5158,10095
Total145,318,800144,181,44836,268,35937,352,3071,544,818

Includes nonnegotiable, non-interest-bearing notes that members are entitled to issue in substitution for currencies.

Includes the share of the Federal Republic of Yugoslavia (Serbia/Montenegro) in the liabilities of the former Socialist Federal Republic of Yugoslavia, although this state has not succeeded to Fund membership.

Less than SDR 500.

Includes nonnegotiable, non-interest-bearing notes that members are entitled to issue in substitution for currencies.

Includes the share of the Federal Republic of Yugoslavia (Serbia/Montenegro) in the liabilities of the former Socialist Federal Republic of Yugoslavia, although this state has not succeeded to Fund membership.

Less than SDR 500.

Schedule 2 General Department Schedule of Repurchases and Repayments of Loans as at April 30, 1996

(In thousands of SDRs)
Financial

Year

Ending

April 30
General

Resources

Account1
Special

Disbursement

Account
Overdue1,101,69574,025
19973,885,885345,129
19983,583,517328,619
19998,305,579262,643
200010,008,449175,076
20014,470,87979,024
20021,679,66790,679
20031,427,15661,864
2004996,99850,823
2005579,25340,270
2006229,28136,666
Total36,268,3591,544,818

A member is entitled to repurchase at any time the Fund’s holdings of its currency subject to charges and is expected to make repurchases as and when its balance of payments and reserve position improve.

A member is entitled to repurchase at any time the Fund’s holdings of its currency subject to charges and is expected to make repurchases as and when its balance of payments and reserve position improve.

Schedule 3 General Department Status of Arrangements as at April 30, 1996

(In thousands of SDRs)
MemberDate of

Arrangement
ExpirationTotal

Amount

Agreed
Undrawn

Balance
General Resources Account
Stand-By Arrangements
ArgentinaApril 12, 1996January 11, 1998720,000642,000
AzerbaijanNovember 17, 1995November 16, 199658,50036,855
BelarusSeptember 12, 1995September 11, 1996196,280146,280
CameroonSeptember 27, 1995September 26, 199667,60039,400
Costa RicaNovember 29, 1995February 28, 199752,00052,000
DjiboutiApril 15, 1996June 14, 19974,6001,725
El SalvadorJuly 21, 1995September 20, 199637,68037,680
Estonia, Republic ofApril 11, 1995July 10, 199613,95013,950
HungaryMarch 15, 1996February 14, 1998264,180264,180
Kazakstan, Republic ofJune 5, 1995June 4, 1996185,60046,370
Latvia, Republic ofApril 21, 1995May 20, 199627,45027,450
LesothoJuly 31, 1995July 30, 19967,1707,170
Macedonia, former
Yugoslav Republic ofMay 5, 1995June 4, 199622,3004,900
MexicoFebruary 1, 1995August 15, 199612,070,2003,312,180
PakistanDecember 13, 1995March 31, 1997401,850214,320
PanamaNovember 29, 1995March 31, 199784,30055,300
Papua New GuineaJuly 14, 1995January 13, 199771,48038,140
RomaniaMay 11, 1994April 24, 1997320,495226,230
UruguayMarch 1, 1996March 31, 1997100,000100,000
Uzbekistan, Republic ofDecember 18, 1995March 17, 1997124,700118,500
Yemen, Republic ofMarch 20, 1996June 19, 1997132,37582,375
Total Stand-By Arrangements14,962,7105,467,005
Extended Arrangements
AlgeriaMay 22, 1995May 21, 19981,169,280759,680
EgyptSeptember 20, 1993September 19, 1996400,000400,000
GabonNovember 8, 1995November 7, 1998110,30088,240
JordanFebruary 9, 1996February 8, 1999200,800175,800
Lithuania, Republic ofOctober 24, 1994October 23, 1997134,55072,450
PhilippinesJune 24, 1994June 23, 1997474,500438,000
Russian FederationMarch 26, 1996March 25, 19996,901,0006,667,374
Total Extended Arrangements9,390,4308,601,544
Total General Resources Account24,353,14014,068,549
Special Disbursement Account
Structural Adjustment Facility Arrangement ZambiaDecember 6, 1995December 5, 1996181,750
SAF Resources Committed Under ESAF Arrangements1
BeninJanuary 25, 1993May 21, 19967,000
Burkina FasoMarch 31, 1993May 30, 199615,800
Total SAF Resources Committed
Under ESAF22,800
Total Special Disbursement Account204,550
Total General Department24,557,69014,068,549

Resources under enhanced structural adjustment facility (ESAF) arrangements may be provided from the structural adjustment facility (SAF) within the Special Disbursement Account and from the Enhanced Structural Adjustment Facility Trust.

Resources under enhanced structural adjustment facility (ESAF) arrangements may be provided from the structural adjustment facility (SAF) within the Special Disbursement Account and from the Enhanced Structural Adjustment Facility Trust.

SDR Department

Statements of Allocations and Holdings as at April 30, 1996 and 1995

(In thousands of SDRs)(Note 1)
19961995
Allocations
Net cumulative allocations of SDRs21,433,33021,433,330
Overdue charges (Note 2)53,41246,312
Total Allocations21,486,74221,479,642
Holdings
Participants with holdings above allocations
Allocations10,533,7919,974,856
Net receipts of SDRs6,151,7876,141,786
16,685,57816,116,642
Participants with holdings below allocations
Allocations10,899,53911,458,474
Net uses of SDRs7,999,9138,101,888
2,899,6263,356,586
Total holdings of participants19,585,20419,473,228
Holdings of SDRs by prescribed holders1,076,8101,005,759
General Resources Account824,7281,000,655
Total Holdings21,486,74221,479,642
The accompanying notes are an integral part of the financial statements.
The accompanying notes are an integral part of the financial statements.
/s/ David Williams

Treasurer
/s/ M. Camdessus

Managing Director

Statements of Receipt and Use for the Year Ended April 30, 1996 with Comparative Totals for the Year Ended April 30, 1995

(In thousands of SDRs)(Note 1)
ParticipantsGeneral

Resources

Account
Prescribed

Holders
Total
19961995
Total holdings, beginning of the year19,473,2281,000,6551,005,75921,479,64221,484,760
Receipt of SDRs
Transfers among participants and prescribed holders
Transactions by agreement8,881,05050,2858,931,3358,987,212
Operations
Loans889,647889,6476,853
Settlement of financial obligations1,000,64960,6241,061,273116,910
Fund-related operations
SAF/ESAF loans296,436296,43639,190
SAF repayments and interest120,736120,736103,065
Trust Fund repayments and interest6,8216,82127
Special charges on SAF, ESAF, and Trust Fund7047044
ESAF contributions and payments14,803118,953133,75694,853
ESAF repayments and interest145,134145,13463,747
Net interest on SDRs (Note 2)276,94142,418319,359174,267
Transfers from participants to General
Resources Account
Repurchases5,571,8045,571,8041,181,073
Charges1,985,3191,985,3191,385,749
Quota payments69,62569,62523,678
Interest on SDRs (Note 2)52,69652,696261,906
Assessment on SDR allocation (Note 2)4,0224,0224,145
Transfers from General Resources Account to participants and prescribed holders
Purchases6,459,9296,459,9295,969,975
Repayments on Fund borrowings861,904
Interest on Fund borrowings97,352
In exchange for currencies of members Acquisitions to pay charges49,08149,08199,064
Remuneration1,091,6971,091,697814,713
Other
Refunds and adjustments258,686258,68650,650
Total receipts19,218,9197,683,466545,67527,448,06020,336,337
Use of SDRs
Transfers among participants and prescribed holders
Transactions by agreement8,878,95252,3838,931,3358,987,212
Operations
Loans889,647889,6476,853
Settlement of financial obligations950,271111,0021,061,273116,910
Fund-related operations
SAF/ESAF loans296,436296,43639,190
SAF repayments and interest120,736120,736103,065
Trust Fund repayments and interest6,8216,82127
Special charges on SAF, ESAF,
and Trust Fund7047044
ESAF contributions and payments118,95314,803133,75694,853
ESAF repayments and interest145,134145,13463,747
Transfers from participants to General
Resources Account
Repurchases5,571,8045,571,8041,181,073
Charges1,985,3191,985,3191,385,749
Quota payments69,62569,62523,678
Assessment on SDR allocation (Note 2)4,0224,0224,145
Transfers from General Resources Account to participants and prescribed holders
Purchases6,459,9296,459,9295,969,975
Repayments on Fund borrowings861,904
Interest on Fund borrowings97,352
In exchange for currencies of members Acquisitions to pay charges49,08149,08199,064
Remuneration1,091,6971,091,697814,713
Other
Refunds and adjustments258,686258,68650,650
Charges paid in the SDR Department (Note 2)
Net charges due372,055372,055436,174
Charges not paid when due(19,157)(19,157)(19,025)
Settlement of unpaid charges12,05712,05724,142
Total uses19,106,9437,859,393474,62427,440,96020,341,455
Total holdings, end of the year19,585,204824,7281,076,81021,486,74221,479,642
The accompanying notes are an integral part of the financial statements.
The accompanying notes are an integral part of the financial statements.

Notes to the Financial Statements

SDR Department

All transactions and operations involving SDRs are conducted through the SDR Department. Each member of the Fund can become a participant in the SDR Department. At April 30, 1996, all members of the Fund were participants in the SDR Department. SDRs are reserve assets allocated by the Fund to members that are participants in the SDR Department in proportion to their quotas in the Fund. Allocations were made in 1970, 1971, and 1972, totaling SDR 9.3 billion. Further allocations were made in 1979, 1980, and 1981, totaling SDR 12.1 billion. SDRs do not constitute claims by holders against the Fund to provide currency. However, upon termination of participation or liquidation of the SDR Department, the Fund will provide to holders the currencies received from the participants in settlement of their obligations. The Fund is empowered to prescribe certain official entities as holders of SDRs; at April 30, 1996, 15 institutions have been prescribed as holders. These prescribed holders do not receive allocations and cannot use or receive SDRs in designation.

Uses of SDRs

The Fund ensures, by designating participants to provide freely usable currency in exchange for SDRs, that a participant can use its SDRs to obtain an equivalent amount of currency if it has a need because of its balance of payments or its reserve position or developments in its reserves. A participant is not obligated to provide currency for SDRs beyond the point at which its holdings of SDRs in excess of its net cumulative allocation are equal to twice its net cumulative allocation. A participant may, however, provide currency in excess of this limit. Participants and prescribed holders can also use and receive SDRs in transactions and operations by agreement among themselves. Participants can also use SDRs in operations and transactions involving the General Resources Account, such as the payment of charges and repurchases.

1. Unit of Account

The accounts of the SDR Department are expressed in terms of the SDR. The currency value of the SDR is determined by the Fund each day by summing the values in U.S. dollars, based on market exchange rates, of a basket of five currencies. The Fund reviews the SDR valuation basket every five years. The SDR valuation basket was revised effective January 1, 1996. The currencies comprising the basket and their amounts in the basket are as follows:

CurrencyAmounts
To

December 31, 1995
From

January 1, 1996
U.S. dollar0.5720.582
Deutsche mark0.4530.446
Japanese yen31.827.2
French franc0.8000.813
Pound sterling0.08120.105

2. Interest, Charges, and Assessment

Interest is paid on holdings of SDRs. Charges are levied on each participant’s net cumulative allocation plus any negative balance of the participant or unpaid charges. Interest on SDR holdings is paid, and charges on net cumulative allocations are collected, on a quarterly basis. Interest and charges are levied at the same rate and are settled by crediting and debiting individual holdings accounts on the first day of the subsequent quarter. The SDR Department is required to pay interest to each holder, whether or not sufficient SDRs are received to meet the payment of interest. If sufficient SDRs are not received, because charges are overdue, additional SDRs are temporarily created. At April 30, 1996, charges of SDR 53.4 million were overdue (SDR 46.3 million at April 30, 1995), At April 30, 1996, five members (seven members at April 30, 1995) were six months or more overdue in meeting financial obligations to the Fund, and three of these members were six months or more overdue to the SDR Department (four members at April 30, 1995).

In addition, the Federal Republic of Yugoslavia (Serbia/Montenegro) was also six months or more overdue in meeting its financial obligations. While the Federal Republic of Yugoslavia (Serbia/Montenegro) agreed to its share in the assets and liabilities of the former Socialist Federal Republic of Yugoslavia in the Fund, it had not succeeded to membership in the Fund as of April 30, 1996 and, consequently, it is not a participant in the SDR Department.

Charges that are six months or more overdue to the SDR Department were as follows:

19961995
In millions of SDRs
Total overdue charges53.146.3
Overdue for six months or more48.641.1
Overdue for three years or more26.617.4
The duration of arrears were as follows:
The duration of arrears were as follows:
TotalLongest Overdue

Obligation
In millions of SDRs
Iraq25.1November 1990
Liberia13.5August 1988
Somalia4.6February 1991
Yugoslavia, Federal Republic of (Serbia/Montenegro)9.9November 1992
Total53.1

The rate of interest on the SDR is determined by reference to a combined market interest rate, which is a weighted average of yields or rates on short-term instruments in the capital markets of France, Germany, Japan, the United Kingdom, and the United States. The combined market interest rate used to determine the SDR interest rate is calculated each Friday, using the yields or rates of that day. The SDR interest rate, which is set equal to the combined market interest rate, enters into effect on the following Monday and applies until the end of the following Sunday.

The expenses of conducting the business of the SDR Department are paid by the Fund from the General Resources Account, which is reimbursed in SDRs by the SDR Department at the end of each financial year. For this purpose, the SDR Department levies an assessment on all participants in proportion to their net cumulative allocation.

Enhanced Structural Adjustment Facility Trust

Combined Balance Sheets as at April 30, 1996 with Comparative Totals as at April 30, 1995

(In thousands of SDRs)(Note 1)
Loan

Account
Reserve

Account
Subsidy

Account
Combined

1996
Combined

1995
Assets
Loans receivable4,082,6724,082,6722,894,726
Investments (Notes 2 and 4)54,2971,351,4571,691,5573,097,3112,626,077
Interest receivable7,46111,0546,74525,26039,395
Currencies5235513
Accrued account transfers(8,097)43,289(35,192)
Total Assets4,136,3331,405,8521,663,1137,205,2985,560,211
Resources and Liabilities
Resources1,405,8521,425,1472,830,9992,394,321
Borrowing (Note 4)4,093,684235,4824,329,1663,129,468
Interest payable42,4722,48444,95636,352
Other liabilities17717770
Total Resources and Liabilities4,136,3331,405,8521,663,1137,205,2985,560,211
The accompanying notes and schedules are an integral part of the financial statements.
The accompanying notes and schedules are an integral part of the financial statements.
/s/ David Williams

Treasurer
/s/ M. Camdessus

Managing Director

Combined Income Statements for the Year Ended April 30, 1996 with Comparative Totals for the Year Ended April 30, 1995

(In thousands of SDRs)(Note 1)
Loan

Account
Reserve

Account
Subsidy

Account
Combined

1996
Combined

1995
Income
Investment income28246,96673,803121,051114,948
Interest on loans16,98716,98713,163
Exchange valuation gain (loss)59114107280(40)
17,32847,08073,910138,318128,071
Expense
Interest expense125,2883,970129,258101,840
Other expenses17717770
125,4653,970129,435101,910
Net Income (Loss)(108,137)47,08069,9408,88326,161
The accompanying notes and schedules are an integral part of the financial statements.
The accompanying notes and schedules are an integral part of the financial statements.

Combined Statements of Changes in Resources for the Year Ended April 30, 1996 with Comparative Totals for the Year Ended April 30, 1995

(In thousands of SDRs)
Loan

Account
Reserve

Account
Subsidy

Account
Combined

1996
Combined

1995
Balance, beginning of year1,066,0411,328,2802,394,3211,984,976
Contributions (Note 3)136,406136,406161,271
Transfers from Special
Disbursement Account291,389291,389221,913
Net transfers between:
Loan and Reserve Accounts(1,342)1,342
Loan and Subsidy Accounts109,479(109,479)
Net income (loss)(108,137)47,08069,9408,88326,161
Balance, end of year1,405,8521,425,1472,830,9992,394,321
The accompanying notes and schedules are an integral part of the financial statements.
The accompanying notes and schedules are an integral part of the financial statements.

Notes to the Financial Statements as at April 30, 1996 and 1995

Purpose

The Enhanced Structural Adjustment Facility Trust (“the Trust”), for which the Fund is Trustee, was established in December 1987 and was extended and enlarged in February 1994 to provide loans on concessional terms to qualifying low-income developing country members. The resources of the Trust are separate from the assets of all other accounts of, or administered by, the Fund and may not be used to discharge liabilities or to meet losses incurred in the administration of other accounts.

The operations of the Trust are conducted through a Loan Account, a Reserve Account, and a Subsidy Account.

Loan Account

The resources of the Loan Account consist of the proceeds from borrowing and principal and interest payments on loans extended by the Trust. Resources of the Loan Account are committed to qualifying members for a three-year period, upon approval by the Trustee, in support of the member’s macroeconomic and structural adjustment programs. Interest on the outstanding loan balances is currently set at the rate of ½ of 1 percent a year. At April 30, 1996, loans totaling SDR 4,082.7 million are outstanding (SDR 2,894.7 million at April 30, 1995). Member’s outstanding loans are presented in Schedule 1.

Reserve Account

The resources of the Reserve Account consist of amounts transferred by the Fund from the Special Disbursement Account and net earnings from investment of resources held in the Reserve Account and in the Loan Account.

The resources held in the Reserve Account are to be used by the Trustee to pay loan principal and interest on borrowing of the Loan Account in the event that amounts payable from borrowers’ principal repayments and interest together with the authorized interest subsidy are insufficient.

Subsidy Account

The resources held in the Subsidy Account consist of donations to the Trust, including transfers of net earnings from ESAF Administered Accounts and amounts transferred by the Fund from the Special Disbursement Account, the proceeds of loans made to the Trust for the Subsidy Account, and the net earnings from investment of Subsidy Account resources.

The resources available in the Subsidy Account are drawn by the Trustee to pay the difference, with respect to each interest period, between the interest due from the borrowers under the Trust and the interest due on resources borrowed for Loan Account loans.

1. Accounting Practices

The accounts of the Trust are expressed in terms of the SDR. SDRs are reserve assets allocated to participants in the Fund’s SDR Department. The currency value of the SDR is determined by the Fund each day by summing the values in U.S. dollars, based on market exchange rates, of a basket of five currencies. The Fund reviews the SDR valuation basket every five years. The SDR valuation basket was revised effective January 1, 1996. The currencies comprising the basket and their amounts in the basket are as follows:

CurrencyAmounts
To

December 31, 1995
From

January 1, 1996
U.S. dollar0.5720.582
Deutsche mark0.4530.446
Japanese yen31.827.2
French franc0.8000.813
Pound sterling0.08120.105

Members are not obligated to maintain the SDR value of their currencies held in the accounts of the Trust.

The accounts of the Trust are maintained on the accrual basis; accordingly, income is recognized as it is earned, and expenses are recorded as they are incurred. The expenses of conducting the business of the Trust that are paid by the General Resources Account of the Fund are reimbursed on an annual basis by the Special Disbursement Account, and corresponding transfers from the Trust’s Reserve Account are to be made to the Special Disbursement Account, when and to the extent needed.

2. Investments

The resources of the Trust are invested pending their use. Investments are denominated in SDRs or in currency and are carried at cost, which does not exceed net realizable value. Pending their investment, resources may be temporarily held in currency, which also may give rise to valuation gains and losses.

3. Contributions

The Trustee accepts contributions of resources for the Subsidy Account on such terms and conditions as agreed between the Trust and the contributor. Cumulative contributions received, including transfers from the Special Disbursement Account, as at April 30, 1996 amounted to SDR 1,520.7 million (SDR 1,384.3 million at April 30, 1995), and are listed in Schedule 2.

4. Borrowing

The Trust borrows resources for the Loan Account and for the Subsidy Account on such terms and conditions as agreed between the Trust and the lenders.

Schedules 3 and 4, respectively, present members’ borrowing agreements and members’ scheduled repayments of outstanding borrowing. The following summarizes the borrowing agreements concluded as at April 30, 1996:

Amount

Agreed
Amount

Available
In thousands of SDRs
Loan Account9,285,8815,053,949
Subsidy Account243,4817,999

The Trustee has agreed to hold and invest, on behalf of a lender, principal repayments of Trust borrowing in a suspense account within the Loan Account. Principal repayments will be accumulated until the final maturity of the borrowing, when the full proceeds are to be transferred to the lender. Amounts deposited in this account are invested by the Trustee, and payments of interest to the lender are to be made exclusively from the earnings on the amounts invested.

5. Commitments Under Loan Arrangements

At April 30, 1996, undrawn balances under 28 loan arrangements amounted to SDR 1,511.8 million (SDR 1,876.8 million under 27 loan arrangements at April 30, 1995). Loan arrangements are listed in Schedule 5. Scheduled repayments of outstanding loans receivable are shown in Schedule 6.

Schedule 1 Schedule of Outstanding Loans as at April 30, 1996

(In thousands of SDRs)
MemberESAF

Loan

Account
Structural

Adjustment

Facility1
Albania31,060
Armenia16,875
Bangladesh325,68882,369
Benin44,89020,772
Bolivia156,14634,920
Burkina Faso28,40022,120
Burundi17,21013,237
Cambodia42,000
Central African Republic12,768
Chad8,26013,770
Comoros2,250
Côte d’Ivoire238,200
Dominica946
Equatorial Guinea1,65010,678
Ethiopia49,420
Gambia, The12,3214,673
Georgia27,750
Ghana269,34791,002
Guinea46,32013,896
Guinea-Bissau1,5752,025
Guyana70,73233,948
Honduras33,9001,764
Kenya178,32770,290
Kyrgyz Republic39,775
Lao People’s Democratic Republic23,46018,752
Lesotho18,1207,399
Madagascar16,02131,540
Malawi41,11519,530
Mali79,41027,432
Mauritania62,20410,529
Mongolia29,680
Mozambique114,43518,300
Nepal16,78514,920
Nicaragua20,020
Niger12,5289,882
Pakistan172,200305,928
Rwanda8,760
São Tomé and Príncipe560
Senegal171,24723,487
Sierra Leone81,61229,336
Somalia8,840
Sri Lanka280,000104,857
Tanzania85,60042,800
Togo50,43619,008
Uganda232,59134,860
Vietnam181,200
Zaïre145,500
Zambia651,682181,750
Zimbabwe151,900
Total loans outstanding4,082,6721,544,818

Since structural adjustment facility (SAF) loans have been disbursed in connection with ESAF arrangements, the above list includes these loans, as well as loans disbursed to members under SAF arrangements. These loans are held by the Special Disbursement Account, and repayments of all loans are transferred to the ESAF Reserve Account when received.

Since structural adjustment facility (SAF) loans have been disbursed in connection with ESAF arrangements, the above list includes these loans, as well as loans disbursed to members under SAF arrangements. These loans are held by the Special Disbursement Account, and repayments of all loans are transferred to the ESAF Reserve Account when received.

Schedule 2 Contributions to and Resources of the Subsidy Account as at April 30, 1996

(In thousands of SDRs)
Contributor1Amount
Direct Contributions to the Subsidy Account
Argentina4,533
Bangladesh91
Canada46,698
China2,000
Czech Republic2,000
Denmark34,101
Egypt2,000
Finland22,684
Germany83,605
Iceland2,000
India1,288
Italy122,574
Japan271,772
Korea27,961
Luxembourg3,010
Morocco1,348
Netherlands50,915
Norway19,993
Sweden87,579
Switzerland4,120
United Kingdom196,089
United States40,552
Total direct contributions to the Subsidy Account1,026,913
Net Income Transferred from Administered Accounts
Austria25,545
Belgium47,771
Botswana353
Chile1,045
Greece17,255
Indonesia1,424
Iran, Islamic Republic of99
Portugal253
Total net income transferred from Administered Accounts93,745
Total contributions received1,120,658
Transfers from Special Disbursement Account400,000
Total contributions received and transfers from Special
Disbursement Account1,520,658
Cumulative net income of the Subsidy Account309,795
Resources disbursed to subsidize Trust lending(405,306)
Total resources of the Subsidy Account1,425,147

In addition to direct contributions, a number of members also make loans available to the Loan Account on concessional terms. See Schedule 3.

In addition to direct contributions, a number of members also make loans available to the Loan Account on concessional terms. See Schedule 3.

Schedule 3 Schedule of Borrowing Agreements as at April 30, 1996

(In thousands of SDRs)
MemberInterest

Rate

(in percent)
Amount of

Agreement
Amount

Drawn
Outstanding

Balance
Loan Account
Prior to enlargement of ESAF
CanadaFixed1300,000228,969220,925
France0.502800,000700,000657,108
GermanyVariable3700,000529,566525,254
ItalyVariable3370,000312,600312,600
JapanVariable32,200,0001,902,2191,847,921
KoreaVariable365,00063,90262,143
NorwayVariable390,00074,67670,758
SpainVariable3,4220,000216,429206,473
Switzerland200,000200,000136,205
Total prior to enlargement of ESAF4,945,0004,228,3614,039,387
For enlargement of ESAF
CanadaVariable3200,000
ChinaVariable3100,000
EgyptVariable3100,000
France0.502750,000
GermanyVariable3700,000
JapanVariable32,150,000
KoreaVariable327,700
NorwayVariable360,000
OPEC Fund for International DevelopmentVariable3, 534,481
Spain0.5067,000
SwitzerlandVariable3151,700
Total for enlargement of ESAF4,340,881
Resources held pending repayment654,297
Totals—Loan Account9,285,8814,228,3614,093,684
Subsidy Account
Malaysia (1988 and 1989 loans)0.5040,00040,00040,000
Malaysia (1994 loan)2.0040,00040,00040,000
Malta0.502,7302,7302,730
Pakistan0.5010,0002,0012,001
Singapore2.0080,00080,00080,000
Thailand2.0060,00060,00060,000
Tunisia0.503,5513,5513,551
UruguayVariable77,2007,2007,200
Totals—Subsidy Account243,481235,482235,482

The loans under this agreement are made at market-related rates of interest fixed at the time the loan was disbursed.

The agreement with France made before the enlargement of ESAF (SDR 800 million) provides that the interest rate shall be 0.5 percent on the first SDR 700 million drawn, and for variable, market-related rates of interest thereafter. The agreement with France made for the enlargement of ESAF (SDR 750 million) provides that the interest rate shall be 0.5 percent until the cumulative implicit interest subsidy reaches SDR 250 million, and at variable, market-related rates of interest thereafter.

The loans under these agreements are made at variable, market-related rates of interest.

The agreement expired with an undrawn balance of SDR 3.6 million.

The agreement with the OPEC Fund for International Development is for an amount of US$50 million.

This amount represents principal repayments held and invested on behalf of a lender.

The interest rate payable on the borrowing from Uruguay is equal to the rate on SDR-denominated deposits less 2.6 percent a year.

The loans under this agreement are made at market-related rates of interest fixed at the time the loan was disbursed.

The agreement with France made before the enlargement of ESAF (SDR 800 million) provides that the interest rate shall be 0.5 percent on the first SDR 700 million drawn, and for variable, market-related rates of interest thereafter. The agreement with France made for the enlargement of ESAF (SDR 750 million) provides that the interest rate shall be 0.5 percent until the cumulative implicit interest subsidy reaches SDR 250 million, and at variable, market-related rates of interest thereafter.

The loans under these agreements are made at variable, market-related rates of interest.

The agreement expired with an undrawn balance of SDR 3.6 million.

The agreement with the OPEC Fund for International Development is for an amount of US$50 million.

This amount represents principal repayments held and invested on behalf of a lender.

The interest rate payable on the borrowing from Uruguay is equal to the rate on SDR-denominated deposits less 2.6 percent a year.

Schedule 4 Schedule of Repayments of Borrowing as at April 30, 1996

(In thousands of SDRs)
Periods of Repayment,

Financial Year

Ending April 301
Loan

Account2
Subsidy

Account
1997211,583
1998302,221
1999385,09160,000
2000473,15620,000
2001507,31010,000
2002634,08910,000
2003543,4511,365
2004464,68040,000
2005341,80790,751
2006230,296
20081,365
20101,334
2012667
Total4,093,684235,482

Dates of repayment are the dates provided in the borrowing agreements between the Trustee and lenders.

Included in this column is SDR 54.3 million that is held in suspense and is payable to the lender at the final maturity of the individual loans. See Note 4.

Dates of repayment are the dates provided in the borrowing agreements between the Trustee and lenders.

Included in this column is SDR 54.3 million that is held in suspense and is payable to the lender at the final maturity of the individual loans. See Note 4.

Schedule 5 Status of Loan Arrangements1 as at April 30, 1996

(In thousands of SDRs)
MemberDate of

Arrangement
ExpirationAmount AgreedUndrawn Balance
ESAF

Loan

Account
Structural

adjustment

facility
TotalESAF

Loan

Account
Structural

adjustment

facility
Total
AlbaniaJuly 14, 1993July 13, 199642,36042,36011,30011,300
ArmeniaFeb. 14, 1996Feb. 13, 1999101,250101,25084,37584,375
BeninJan. 25, 1993May 21, 199644,8907,00051,890
BoliviaDec. 19, 1994Dec. 18, 1997100,960100,96050,48050,480
Burkina FasoMar. 31, 1993May 30, 199637,24015,80053,0408,8408,840
CambodiaMay 6, 1994May 5, 199784,00084,00042,00042,000
ChadSep. 1, 1995Aug. 31, 199849,56049,56041,30041,300
Côte d’IvoireMar. 11, 1994Mar. 10, 1997333,480333,48095,28095,280
GeorgiaFeb. 28, 1996Feb. 27, 1999166,500166,500138,750138,750
GhanaJune 30, 1995June 29, 1998164,400164,400137,000137,000
GuineaNov. 6, 1991Dec. 19, 199657,90057,90011,58011,580
Guinea-BissauJan. 18, 1995Jan. 17, 19989,4509,4507,8757,875
GuyanaJuly 20, 1994July 19, 199753,76053,76026,88026,880
HondurasJuly 24, 1992July 24, 199747,46047,46013,56013,560
KenyaApr. 26, 1996Apr. 25, 1999149,550149,550149,550149,550
Kyrgyz RepublicJuly 20, 1994July 19, 199788,15088,15048,37548,375
Lao People’s Democratic
RepublicJune 4, 1993May 7, 199735,19035,19011,73011,730
MalawiOct. 18, 1995Oct. 17, 199845,81045,81038,17538,175
MaliApr. 10, 1996Apr. 9, 199962,01062,01051,67551,675
MauritaniaJan. 25, 1995Jan. 24, 199842,75042,75021,37521,375
MongoliaJune 25, 1993June 24, 199640,81040,81011,13011,130
NicaraguaJune 24, 1994June 23, 1997120,120120,120100,100100,100
SenegalAug. 29, 1994Aug. 28, 1997130,790130,79059,45059,450
Sierra LeoneMar. 28, 1994Mar. 27, 1997101,904101,90420,29220,292
TogoSep. 16, 1994Sep. 15, 199765,16065,16032,58032,580
UgandaSep. 6, 1994Sep. 5, 1997120,510120,51066,95066,950
VietnamNov. 11, 1994Nov. 10, 1997362,400362,400181,200181,200
ZambiaDec. 6, 1995Dec. 5, 1998701,682181,7502883,43250,00050,000
Total3,360,046204,5503,564,5961,511,8021,511,802

Resources under enhanced structural adjustment facility (ESAF) arrangements may be provided from the structural adjustment facility (SAF) within the Special Disbursement Account and from the Enhanced Structural Adjustment Facility Trust. The Saudi Fund for Development may also provide resources to support arrangements under the ESAF through loans to qualifying members in association with loans under the ESAF. As at April 30, 1996, SDR 49.5 million in such associated loans has been disbursed.

The SAF portion of the arrangement with Zambia expires on December 5, 1996.

Resources under enhanced structural adjustment facility (ESAF) arrangements may be provided from the structural adjustment facility (SAF) within the Special Disbursement Account and from the Enhanced Structural Adjustment Facility Trust. The Saudi Fund for Development may also provide resources to support arrangements under the ESAF through loans to qualifying members in association with loans under the ESAF. As at April 30, 1996, SDR 49.5 million in such associated loans has been disbursed.

The SAF portion of the arrangement with Zambia expires on December 5, 1996.

Schedule 6 Schedule of Repayments of Loans Receivable as at April 30, 1996

(In thousands of SDRs)
Periods of Repayment,

Financial Year

Ending April 30
Loan

Account
1997196,737
1998293,550
1999375,767
2000463,331
2001511,686
2002648,936
2003552,122
2004468,440
2005341,807
2006230,296
Total4,082,672

Enhanced Structural Adjustment Facility Administered Accounts

Balance Sheets as at April 30, 1996 and 1995

(In thousands of SDRs)(Note 1)
AustriaBelgiumBotswanaChile
19961995199619951996199519961995
Assets
Investments (Note 2)86,00048,000180,000180,0006,8946,89415,00015,000
Interest receivable515394531162661721420
Advance payments to ESAF Subsidy Account509822
Total Assets86,51548,394180,531180,1627,0107,00915,04315,420
Resources and Liabilities
Resources2323123784377
Deposits (Note 3)86,00048,000180,000180,0006,8946,89415,00015,000
Interest payable283821531581161154343
Total Resources and Liabilities86,51548,394180,531180,1627,0107,00915,04315,420
GreeceIndonesiaIran, I. R. ofPortugal
19961995199619951996199519961995
Assets
Investments (Note 2)56,00063,00025,00025,0002,0001,0004,3822,191
Interest receivable701,2283273219122022
Advance payments to ESAF Subsidy Account4771
Total Assets56,07064,22825,50925,7322,0191,0124,4032,213
Resources and Liabilities
Resources599914910711
Deposits (Note 3)56,00063,00025,00025,0002,0001,0004,3822,191
Interest payable65229509583952111
Total Resources and Liabilities56,07064,22825,50925,7322,0191,0124,4032,213
The accompanying notes are an integral part of the financial statements.
The accompanying notes are an integral part of the financial statements.
/s/ David Williams

Treasurer
/s/ M. Camdessus

Managing Director

Income Statements for the Years Ended April 30, 1996 and 1995

(In thousands of SDRs)(Note 1)
AustriaBelgiumBotswanaChile
19961995199619951996199519961995
Investment income3,2532,1397,7297,987292264699442
Interest expense on deposits4262659029001381157543
Net Income2,8271,8746,8277,087154149624399
GreeceIndonesiaIran, I. R. ofPortugal
19961995199619951996199519961995
Investment income2,6243,0311,1561,018814218796
Interest expense on deposits3193296455831052111
Net Income2,3052,702511435713716685
The accompanying notes are an integral part of the financial statements.
The accompanying notes are an integral part of the financial statements.

Statements of Changes in Resources for the Years Ended April 30, 1996 and 1995

(In thousands of SDRs)(Note 1)
AustriaBelgiumBotswanaChile
19961995199619951996199519961995
Balance, beginning of the year3122984377
Net income2,8271,8746,8277,087154149624399
Transfers to Enhanced
Structural Adjustment
Facility Trust Subsidy Account(2,907)(1,860)(6,453)(7,083)(154)(149)(1,001)(22)
Balance, end of the year2323123784377
GreeceIndonesiaIran, I. R. ofPortugal
19961995199619951996199519961995
Balance, beginning of the year999145149711
Net income2,3052,702511435713716685
Transfers to Enhanced
Structural Adjustment
Facility Trust Subsidy Account(3,299)(1,848)(660)(286)(68)(30)(177)(74)
Balance, end of the year599914910711
The accompanying notes are an integral part of the financial statements.
The accompanying notes are an integral part of the financial statements.

Saudi Fund for Development Special Account Statements of Receipts and Uses of Resources as at April 30, 1996 and 1995

(In thousands of SDRs)(Note 1)
19961995
Receipt of Resources
Cumulative transfers from Saudi Fund for Development49,50049,500
Cumulative receipts of interest on associated loans595348
Accrued interest on associated loans8281
50,17749,929
Use of Resources
Associated loans (Note 4)49,50049,500
Cumulative payments of interest on loans595348
Accrued interest on transfers8281
50,17749,929
The accompanying notes are an integral part of the financial statements.
The accompanying notes are an integral part of the financial statements.

Notes to the Financial Statements as at April 30, 1996 and 1995

Purpose

At the request of certain member countries, the Fund has established Administered Accounts for the benefit of the Subsidy Account of the Enhanced Structural Adjustment Facility Trust (the ESAF Trust) for the administration of resources deposited therein. The difference between interest earned by the Administered Accounts and the interest payable on deposits is transferred to the Subsidy Account of the ESAF Trust.

The Saudi Fund for Development (SFD) Special Account was established at the request of the SFD for the disbursement of amounts under loans made in association with loans under the enhanced structural adjustment facility (ESAF) by the SFD to recipient countries (associated loans). Disbursements are made simultaneously with ESAF disbursements, and payments of interest and repayments of principal due to the SFD under associated loans are to be transferred to the SFD. The Fund acts as agent of the SFD in that respect.

The resources of each Administered Account are separate from the assets of all other accounts of, or administered by, the Fund and may not be used to discharge liabilities or to meet losses incurred in the administration of other accounts.

1. Accounting Practices

The Administered Accounts are expressed in terms of the SDR. SDRs are reserve assets allocated to participants in the Fund’s SDR Department. The currency value of the SDR is determined by the Fund each day by summing the values in U.S. dollars, based on market exchange rates, of a basket of five currencies. The Fund reviews the SDR valuation basket every five years. The SDR valuation basket was revised effective January 1, 1996. The currencies comprising the basket and their amounts in the basket are as follows:

Amounts
CurrencyTo

December 31, 1995
From

January 1, 1996
U.S. dollar0.5720.582
Deutsche mark0.4530.446
Japanese yen31.827.2
French franc0.8000.813
Pound sterling0.08120.105

The Administered Accounts are maintained on the accrual basis; accordingly, income is recognized as it is earned, and expenses are recorded as they are incurred.

2. Investments

The resources of each Administered Account are invested in SDR-denominated deposits and valued at cost, which approximates market value.

3. Deposits

The Administered Account Austria was established on December 27, 1988 for the administration of resources deposited in the account by the Austrian National Bank. Two deposits, one of SDR 60.0 million made on December 30, 1988, and one of SDR 50.0 million made on August 10, 1995, are to be repaid in ten equal semiannual installments beginning 5½ years after the date of each deposit and ending at the end of the tenth year after the date of each deposit. The deposits bear interest at a rate of ½ of 1 percent a year.

The Administered Account Belgium was established on July 27, 1988 for the administration of resources deposited in the account by the National Bank of Belgium. Four deposits, one of 1988, one of SDR 35.0 million made on June 30, 1989, and one of SDR 80.0 million made on April 29, 1994, have an initial maturity of six months and are renewable, at the option of the Fund, on the same basis. The final maturity of each deposit, including renewals, will be ten years from the initial date of the individual deposits. The deposits bear interest at a rate of ½ of 1 percent a year.

The Administered Account Botswana was established on July 1, 1994 for the administration of resources deposited in the account by the Bank of Botswana. The deposit, totaling SDR 6.9 million, is to be repaid in one installment ten years after the date of deposit. The deposit bears interest at a rate of 2 percent a year.

The Administered Account Chile was established on October 4, 1994 for the administration of resources deposited in the account by the Banco Central de Chile. The deposit, totaling SDR 15.0 million, is to be repaid in one installment ten years after the date of deposit. The deposit bears interest at a rate of ½ of 1 percent a year.

The Administered Account Greece was established on November 30, 1988 for the administration of resources deposited in the account by the Bank of Greece. Two deposits, of SDR 35.0 million each (December 15, 1988 and April 29, 1994), are to be repaid in ten equal semiannual installments beginning 5½ years after the date of deposit and will be completed at the end of the tenth year after the date of the deposits. The deposits bear interest at a rate of ½ of 1 percent a year.

The Administered Account Indonesia was established on June 30, 1994 for the administration of resources deposited in the account by the Bank Indonesia. The deposit, totaling SDR 25.0 million, is to be repaid in one installment ten years after the date the deposit was made. The interest payable on the deposit is equivalent to that obtained for the investment of the deposit less 2 percent a year.

The Administered Account Islamic Republic of Iran was established on June 6, 1994 for the administration of resources deposited in the account by the Central Bank of the Islamic Republic of Iran (CBIRI). The CBIRI has agreed to make five annual deposits, each of SDR 1.0 million. All of the deposits will be repaid at the end of ten years after the date of the first deposit. Each deposit bears interest at a rate of ½ of 1 percent a year.

The Administered Account Portugal was established on May 16, 1994 for the administration of resources deposited in the account by the Banco de Portugal (BdP). The BdP has agreed to make six annual deposits, each of SDR 2.2 million. Each deposit is to be repaid in five equal annual installments beginning six years after the date of the deposit and will be completed at the end of the tenth year after the date of the deposit. Each deposit beats interest at a rate of ½ of 1 percent a year.

4. Associated Loans

The SFD has agreed to provide resources up to the equivalent of SDR 200.0 million to support arrangements under the ESAF through loans in association with loans under the ESAF. Funds become available under an associated loan after a bilateral agreement between the SFD and the recipient country has been effected. Amounts denominated in SDRs, for disbursement to a recipient country under an associated loan, are placed by the SFD in the Special Account for disbursement by the Fund simultaneously with disbursements under an ESAF arrangement. These loans are repayable in ten equal semiannual installments commencing not later than the end of the first six months of the sixth year and are to be completed at the end of the tenth year after the date of disbursement. Interest on the outstanding balance is currently set at the rate of ½ of 1 percent a year.

Administered Accounts Established at the Request of Members

Balance Sheets as at April 30, 1996 and 1995

(Note 1)
Administered

Account Japan
Administered

Technical Assistance

Account Japan
Framework

Administered

Account

for Technical

Assistance

Activities
Administered

Account for

Rwanda
199619951996199519961996
(In thousands of U.S. dollars)(In thousands of SDRs)
Assets
Investments (Note 2)71,10046,80011,7429,0239701,419
Currency deposit259
Interest receivable1513
Total Assets71,10246,87411,7429,0239701,432
Resources
Total Resources71,10246,87411,7429,0239701,432
The accompanying notes are an integral part of the financial statements.
The accompanying notes are an integral part of the financial statements.
/s/ David Williams

Treasurer
/s/ M. Camdessus

Managing Director

Income Statements and Changes in Resources for the Years Ended April 30, 1996 and 1995

(Note 1)
Administered

Account Japan

for the Years Ended

April 30
Administered

Technical Assistance

Account Japan

for the Years Ended

April 30
Framework

Administered

Account

for Technical

Assistance

Activities

for the Period

September 11, 1995

to April 30, 1996
Administered

Account for

Rwanda

for the Period

November 9, 1995

to April 30, 1996
1996199519961995
(In thousands of U.S. dollars)(In thousands of SDRs)
Balance, beginning of the year/period46,87458,3659,0236,778
Contributions received21,30618,72316,1051,1051,538
Income earned on investments (Note 2)2,9222,7097734711929
71,10261,07428,51923,3541,1241,567
Payments to beneficiaries14,20016,77714,331154135
Balance, end of the year/period71,10246,87411,7429,0239701,432
The accompanying notes are an integral part of the financial statements.
The accompanying notes are an integral part of the financial statements.

Notes to the Financial Statements as at April 30, 1996 and 1995

Purpose

At the request of members, the Fund has established special purpose accounts to administer contributed resources and to perform financial and technical services consistent with the purposes of the Fund. The assets of each account and each subaccount are separate from the assets of all other accounts of, or administered by, the Fund and are not to be used to discharge liabilities or to meet losses incurred in the administration of other accounts.

Administered Account Japan

At the request of Japan, the Fund established an account on March 3, 1989 to administer resources, made available by Japan or other countries with Japan’s concurrence, that are to be used to assist certain members with overdue obligations to the Fund. The resources of the account are to be disbursed in amounts specified by Japan and to members designated by Japan. At April 30, 1996, cumulative resources received amounted to $118.7 million, of which $72.5 million had been disbursed ($97.4 million and $72.5 million, respectively, at April 30, 1995).

Administered Technical Assistance Account Japan

At the request of Japan, the Fund established an account on March 19, 1990 to administer resources contributed by Japan that are to be used to finance technical assistance to member countries. Resources are to be used with the approval of Japan to assist members in resolving, inter alia, debt-related difficulties. Disbursements can also be made from the account to the General Resources Account to reimburse the Fund for qualifying technical assistance projects. At April 30, 1996, cumulative contributions received by the account amounted to $59.6 million (S40.9 million at April 30, 1995), of which S49.6 million had been disbursed ($32.8 million at April 30, 1995). Cumulative contributions included S2.3 million earmarked for scholarships, of which $2.2 million had been disbursed at April 30, 1996 ($1.14 million and $1.08 million, respectively, at April 30, 1995).

Framework Administered Account for Technical Assistance Activities

The Framework Administered Account for Technical Assistance Activities (“the Framework Account”) was established by the Fund on April 3, 1995 to receive and administer contributed resources that are to be used to finance technical assistance consistent with the purposes of the Fund. The financing of technical assistance activities is implemented through the establishment and operation of subaccounts within the Framework Account. The establishment of a subaccount requires the approval of the Executive Board.

Resources are to be used in accordance with the written understandings between the contributor and the Managing Director. Disbursements can also be made from the Framework Account to the General Resources Account to reimburse the Fund for its costs incurred on behalf of technical assistance activities financed by resources from the Framework Account. At April 30, 1996, cumulative contributions received by the account amounted to $1.1 million, of which $0.2 million had been disbursed.

Subaccount for Japan Advanced Scholarship Program

At the request of Japan, the subaccount was established on June 6, 1995 to finance the cost of studies and training of nationals of member countries in macroeconomics and related subjects at selected universities and institutions. The scholarship program will focus primarily on the training of nationals of Asian member countries, including Japan. At April 30, 1996, cumulative contributions received amounted to $0.35 million, of which $0.04 million had been disbursed.

Rwanda—Macroeconomic Management Capacity Subaccount

At the request of Rwanda, the Rwanda—Macroeconomic Management Capacity Subaccount was established on December 20, 1995 to finance technical assistance to rehabilitate and strengthen Rwanda’s macroeconomic management capacity. At April 30, 1996, cumulative contributions received amounted to $0.76 million, of which $0.11 million had been disbursed.

Administered Account for Rwanda

At the request of the Netherlands, Sweden, and the United States (“the donor countries”), the Fund established an account on October 27, 1995 to administer resources contributed by the donor countries in order to provide grants to Rwanda. These grants are to be used for the purpose of reimbursing the service charge and reducing, to the equivalent of a rate of ½ of 1 percent a year, the rate of the quarterly charges payable by Rwanda on its use of the Fund’s financial resources under the compensatory and contingency financing facility (CCFF). At April 30, 1996, cumulative contributions received by the account amounted to SDR 1.54 million, of which SDR 0.13 million had been disbursed.

1. Accounting Practices

The accounts are maintained on the accrual basis; accordingly, income is recognized as it is earned, and expenses are recorded as they are incurred.

Administered Account Japan, Administered Technical Assistance Account Japan, and Framework Administered Account for Technical Assistance Activities

The accounts are expressed in U.S. dollars. All transactions and operations of these accounts, including the transfers to and from the accounts, are denominated in U.S. dollars. Contributions denominated in other currencies are converted into U.S. dollars upon receipt of the funds.

Administered Account for Rwanda

The account is expressed in SDRs. SDRs are reserve assets allocated to participants in the Fund’s SDR Department. The currency value of the SDR is determined by the Fund each day by summing the values in U.S. dollars, based on market exchange rates, of a basket of five currencies. The Fund reviews the SDR valuation basket every five years. The SDR valuation basket was revised effective January 1, 1996. The currencies comprising the basket and their amounts in the basket are as follows;

Amounts
CurrencyTo

December 31, 1995
From

January 1, 1996
U.S. dollar0.5720.582
Deutsche mark0.4530.446
Japanese yen31.827.2
French franc0.8000.813
Pound sterling0.08120.105

Transfers to and disbursements from the account are made in U.S. dollars or in other freely usable currencies. Transactions and operations of the account shall be denominated in SDRs. Contributions denominated in other currencies are converted into SDRs upon receipt of the funds.

2. Investments

The assets of the accounts are invested pending their disbursement and are valued at cost, which approximates market value. Interest received on these assets varies and is market related.

3. Accounts Termination

Administered Account Japan

The account can be terminated by the Fund or by Japan. Any remaining resources in the account at termination are to be returned promptly to Japan.

Administered Technical Assistance Account Japan

The account can be terminated by the Fund or by Japan. Any resources that may remain in the account at termination, net of accrued liabilities under technical assistance projects, are to be returned promptly to Japan.

Framework Administered Account for Technical Assistance Activities

The Framework Account or any subaccount thereof may be terminated by the Fund at any time. The termination of the Framework Account shall terminate each subaccount thereof. A subaccount may also be terminated by the contributor of the resources to the subaccount. Termination shall be effective on the date that the Fund or the contributor, as the case may be, receives notice of termination. Any balances, net of the continuing liabilities and commitments under the activities financed, that may remain in a subaccount upon its termination are to be returned promptly to the contributor.

Administered Account for Rwanda

The account can be terminated at any time by the Fund or by unanimous agreement of the donor countries. The account shall, in any case, be terminated by the Fund when Rwanda’s financial obligations to the Fund under the CCFF have been fully discharged or when the resources of the account have been exhausted, whichever is earlier. Any balance in the account at termination shall be transferred promptly to the donor countries, in proportion to their contribution, or to Rwanda, if so instructed.

Trust Fund

Balance Sheets as at April 30, 1996 and 1995

(In thousands of SDRs)(Note 1)
19961995
Assets
Loans receivable (Note 2)95,135101,784
Interest and charges receivable and accrued (Note 3)25,20125,595
Total Assets120,336127,379
Resources and Deferred Income
Trust resources95,135101,784
Deferred income (Note 3)25,20125,595
Total Resources and Deferred Income120,336127,379
The accompanying notes are an integral part of the financial statements.
The accompanying notes are an integral part of the financial statements.
/s/ David Williams

Treasurer
/s/ M. Camdessus

Managing Director

Income Statements for the Years Ended April 30, 1996 and 1995

(In thousands of SDRs)(Note 1)
19961995
Income
Interest and charges on loans (Note 2)496524
Less income deferred (Note 3)394(490)
Net Income89034
The accompanying notes are an integral part of the financial statements.
The accompanying notes are an integral part of the financial statements.

Statements of Changes in Resources for the Years Ended April 30, 1996 and 1995

(In thousands of SDRs)(Note 1)
19961995
Balance, beginning of the year101,784105,474
Net income89034
Balance before transfers to the Special Disbursement Account102,674105,508
Transfers to the Special Disbursement Account (Note 4)7,5393,724
Balance, end of the year95,135101,784
The accompanying notes are an integral part of the financial statements.
The accompanying notes are an integral part of the financial statements.

Notes to the Financial Statements as at April 30, 1996 and 1995

Purpose

The Trust Fund, for which the Fund is Trustee, was established in 1976 to provide balance of payments assistance on concessional terms to eligible members that qualify for assistance.

In 1980, the Fund, as Trustee, decided that, upon the completion of the final loan disbursements, the Trust Fund would be terminated as of April 30, 1981. After that date, the activities of the Trust Fund have been confined to the completion of the business of the Trust Fund and the winding up of its affairs. The resources of the Trust Fund are separate from the assets of all other accounts of, or administered by, the Fund and cannot be used to discharge liabilities or to meet losses incurred in the administration of other Fund accounts.

1. Accounting Practices

The accounts of the Trust Fund are expressed in terms of the SDR. SDRs are reserve assets allocated to participants in the Fund’s SDR Department. The currency value of the SDR is determined by the Fund each day by summing the values in U.S. dollars, based on market exchange rates, of a basket of five currencies. The Fund reviews the SDR valuation basket every five years. The SDR valuation basket was revised effective January 1, 1996. The currencies comprising the basket and their amounts in the basket are as follows:

Amounts
CurrencyTo

December 31, 1995
From

January 1, 1996
U.S. dollar0.5720.582
Deutsche mark0.4530.446
Japanese yen31.827.2
French franc0.8000.813
Pound sterling0.08120.105

The accounts are maintained on the accrual basis; accordingly, income is recognized as it is earned, and expenses are recorded as they are incurred, except that interest income from members that are overdue in settling their obligations to the Trust Fund by six months or more is deferred and is recognized as income only when paid, unless the member has remained current in settling charges when due (see Note 3). Following the termination of the Trust Fund as of April 30, 1981, residual administrative costs have been absorbed by the General Resources Account of the Fund.

2. Loans

Loans were made from the Trust Fund to those eligible members that qualified for assistance in accordance with the provisions of the Trust Fund instrument. The final Trust Fund loan installment was due on March 31, 1991. Interest on the outstanding loan balances is charged at the rate of ½ of 1 percent a year, although special charges have been levied on overdue payments of interest and principal since February 1986. Beginning May 1, 1993, special charges on overdue obligations to the Trust Fund have been suspended for members who are more than six months overdue.

3. Overdue Obligations

At April 30, 1996, three members with obligations to the Trust Fund were six months or more overdue in discharging their obligations to the Trust Fund (four members at April 30, 1995). The recognition of interest income on the loans outstanding to these members and of special charges due from them is being deferred. At April 30, 1996, total deferred income amounted to SDR 25.2 million (SDR 25.6 million at April 30, 1995). Overdue loan repayments and interest and special charges due from these members were as follows:

LoansInterest and

Special Charges
1996199519961995
In millions of SDRs
Total overdue95.1101.825.025.4
Overdue six months or more95.1101.824.825.2
Overdue three years or more95.1101.823.020.4

The type and duration of the arrears of these members at April 30, 1996 were as follows:

MemberLoansInterest

and Special

Charges
TotalLongest Overdue

Obligation
In millions of SDRs
Liberia24.36.430.7January 1985
Somalia6.41.27.6July 1987
Sudan64.417.481.8December 1984
Total95.125.0120.1

4. Transfer of Resources

The resources of the Trust Fund held on April 30, 1981 or received thereafter have been used to pay interest and principal when due on loan obligations and to make transfers to the Special Disbursement Account.

Supplementary Financing Facility Subsidy Account

Balance Sheets as at April 30, 1996 and 1995

(In thousands of SDRs)(Note 1)
19961995
Assets
Deposits (Note 2)2,3722,268
Interest receivable2327
Total Assets2,3952,295
Resources
Total Resources2,3952,295
The accompanying notes are an integral part of the financial statements.
The accompanying notes are an integral part of the financial statements.
/s/ David Williams

Treasurer
/s/ M. Camdessus

Managing Director

Income Statements and Changes in Resources for the Years Ended April 30, 1996 and 1995

(In thousands of SDRs)(Note 1)
19961995
Balance, beginning of the year2,2952,810
Investment income100117
Balance before transfers2,3952,927
Transfers to the Special Disbursement Account (Note 3)632
Balance, end of the year2,3952,295
The accompanying notes are an integral part of the financial statements.
The accompanying notes are an integral part of the financial statements.

Notes to the Financial Statements as at April 30, 1996 and 1995

Purpose

The Supplementary Financing Facility Subsidy Account (“the Subsidy Account”), which is administered by the Fund, was established in December 1980 to assist low-income developing country members to meet the cost of using resources made available through the Fund’s supplementary financing facility and under the policy on exceptional use. All repurchases due under these policies were scheduled for completion by January 31, 1991, and the final subsidy payments were approved in July 1991. However, two members (Liberia and Sudan), overdue in the payment of charges, remain ineligible to receive previously approved subsidy payments until their overdue charges are settled. Accordingly, the account remains in operation and has retained amounts for payment to these members after the overdue charges are paid.

The resources of the Subsidy Account are separate from the assets of all other accounts of, or administered by, the Fund and cannot be used to discharge liabilities or to meet losses incurred in the administration of other Fund accounts.

1. Accounting Practices

The accounts of the Subsidy Account are expressed in terms of the SDR. SDRs are reserve assets allocated to participants in the Fund’s SDR Department. The currency value of the SDR is determined by the Fund each day by summing the values in U.S. dollars, based on market exchange rates, of a basket of five currencies. The Fund reviews the SDR valuation basket every five years. The SDR valuation basket was revised effective January 1, 1996. The currencies comprising the basket and their amounts in the basket are as follows;

Amounts
CurrencyTo

December 31, 1995
From

January 1, 1996
U.S. dollar0.5720.582
Deutsche mark0.4530.446
Japanese yen31.827.2
French franc0.8000.813
Pound sterling0.08120.105

The accounts are maintained on the accrual basis; accordingly, income is recognized as it is earned, and expenses are recorded as they are incurred.

2. Deposits

The assets of the Subsidy Account, pending their disbursement, are held in the form of interest-earning time deposits denominated in SDRs.

3. Transfer of Resources

Resources in excess of the remaining subsidy payments are to be transferred to the Special Disbursement Account. At April 30, 1996 and April 30, 1995, subsidy payments totaling SDR 2.2 million had not been made to Liberia and Sudan and are being held pending the payment of overdue charges by these members.

Retired Staff Benefits Investment Account

Balance Sheets as at April 30, 1996 and 1995

(In thousands of U.S. dollars)(Note 1)
19961995
Assets
Investments (Note 2)122,310105,289
Interest receivable35
Total Assets122,310105,324
Resources
Total Resources122,310105,324
The accompanying notes are an integral part of the financial statements.
The accompanying notes are an integral part of the financial statements.
/s/ David Williams

Treasurer
/s/ M. Camdessus

Managing Director

Income Statements and Changes in Resources for the Year Ended April 30, 1996 and for the Period April 3, 1995 to April 30, 1995

(In thousands of U.S. dollars)(Note 1)
19961995
Balance, beginning of the year/period105,324
Contributions received (Note 3)10,500104,903
Income earned on investments (Note 2)6,486421
Balance, end of the year/period122,310105,324
The accompanying notes are an integral part of the financial statements.
The accompanying notes are an integral part of the financial statements.

Notes to the Financial Statements as at April 30, 1996 and 1995

Purpose

The Retired Staff Benefits Investment Account (“the RSBIA”) was established on April 3, 1995 to hold, administer, and invest resources contributed by the Fund for meeting post-retirement medical and life insurance benefits to eligible retirees of the Fund and other beneficiaries. The RSBIA accumulates resources to cover benefits to retirees and current staff after their retirement.

The assets of the RSBIA consist of the Fund’s contributions and the income earned thereon. Assets are within the sole ownership of the Fund and are to be used to meet the claims of retirees and the administrative costs of the RSBIA. Contributions are made periodically from the General Resources Account to the RSBIA, taking into consideration the actuarial valuation of the Fund’s cumulative cost of these benefits.

Resources are accumulated to meet the Fund’s share of the cost of life insurance and medical benefits to retirees and other beneficiaries. The portion of the cumulative past-service cost that has been charged to income in the General Resources Account is fully funded.

The assets of the RSBIA are kept separate from the assets of all other accounts of, or administered by, the Fund and are not to be used to discharge liabilities or to meet losses incurred in the administration of other accounts.

1. Accounting Practices

Unit of Account

The RSBIA is expressed in U.S. dollars. All transactions and operations of the RSBIA, including the transfers to and by the RSBIA, are denominated in U.S. dollars. The cost of transactions in other currencies—for example, the payment of future benefits—will be paid by the RSBIA.

The RSBIA is maintained on the accrual basis; accordingly, income is recognized as it is earned, and expenses are recorded as they are incurred.

2. Investments

Resources placed to the RSBIA have been invested by the Fund in income-earning deposits. Investments are recorded at historical cost, which approximates market value.

Cumulative contributions received by the RSBIA amounted to $115.4 million at April 30, 1996 ($104.9 million at April 30, 1995).

3. Actuarial Valuation

Eligible retirees can elect to continue their life insurance coverage and medical coverage. The cost of these benefits is actuarially determined, based on the data in effect at the beginning of the year. The Fund’s actuarially determined cost at April 30, 1996 amounted to $163.6 million. Each year the Fund amortizes a portion of the past-service cost (over a period ol 20 years) and recognizes the increase in the liability during the year as an expense in the General Resources Account. These amounts, less the return on investments, are transferred to the RSBIA to be held and invested pending their use by the Fund. During the year an amount of $10.5 million was transferred to the RSBIA.

It is expected that the RSBIA will be a net recipient of resources until the unfunded cost is fully amortized and its assets meet the cost of benefits to retirees.

4. Account Termination

The RSBIA can be terminated by the Fund at any time. After meeting any existing obligations, the resources remaining in the RSBIA are to be transferred to the General Resources Account of the Fund.

Report of the External Audit Committee

Staff Retirement Plan

Washington, D.C.

June 20, 1996

Authority and Scope of Audit

In accordance with Section 20(b) of the By-Laws of the International Monetary Fund, we have audited the financial statements of the Staff Retirement Plan for the year ended April 30, 1996.

Our audit was conducted in accordance with generally accepted auditing standards and included reviews of the accounting and internal control systems and tests of the accounting records. We evaluated the extent and results of the work of the outside accounting firm as well as that of the Office of Internal Audit and Inspection of the International Monetary Fund and also used other audit procedures as deemed necessary.

Audit Opinion

In our opinion, the financial statements of the Staff Retirement Plan have been prepared in accordance with generally accepted accounting principles applied on a basis consistent with that of the preceding year and give a true and fair view of the financial status of the Staff Retirement Plan as at April 30, 1996 and of the changes in financial status for the year then ended.

EXTERNAL AUDIT COMMITTEE:

/s/ loane Naiveli, Chairman (Fiji)

/s/ Richard B. Calahan (United States)

/s/ Jiři Škoda (the Czech Republic)

Staff Retirement Plan Statements of Accumulated Plan Benefits and Net Assets Available for Benefits as at April 30, 1996 and 1995

(In thousands of U.S. dollars)(Note 1)
19961995
Accumulated Plan Benefits
Actuarial present value of accumulated Plan benefits
Vested benefits
Retired participants547,600496,200
Active participants490,100453,200
Nonvested benefits606,700574,600
Total actuarial present value of accumulated Plan benefits1,644,4001,524,000
Assets Available for Benefits
Investments, at current value (Note 3)
Portfolio denominated in other currencies1,262,772910,750
Portfolio denominated in U.S. dollars1,151,0851,173,648
2,413,8572,084,398
Receivables
Accrued interest and dividends13,06911,783
Contributions1,9571,485
Other2424
15,05013,292
Total assets2,428,9072,097,690
Liabilities
Accounts payable3,2324,611
Net assets available for benefits2,425,6752,093,079
Excess of net assets available for benefits over actuarial present value of accumulated Plan benefits (Note 2)781,275569,079
The accompanying notes are an integral part of the financial statements.
The accompanying notes are an integral part of the financial statements.
/s/ David Williams

Treasurer
/s/ M. Camdessus

Managing Director

Statements of Changes in Accumulated Plan Benefits for the Years Ended April 30, 1996 and 1995

(In thousands of U.S. dollars)(Note 1)
19961995
Actuarial present value of accumulated Plan benefits, beginning of the year1,524,0001,411,600
Increase (decrease) during the year attributable to Benefits accumulated (Note 1)40,18938,306
Increase for interest due to decrease in discount period127,600118,100
Benefits paid(47,389)(44,006)
Net increase120,400112,400
Actuarial present value of accumulated Plan benefits, end of the year1,644,4001,524,000
The accompanying notes are an integral part of the financial statements.
The accompanying notes are an integral part of the financial statements.

Statements of Changes in Net Assets Available for Benefits for the Years Ended April 30,1996 and 1995

(In thousands of U.S. dollars)(Note 1)
19961995
Investment Income
Net gain in current value of investments (Note 3)245,84243,050
Interest and dividends84,85075,608
330,692118,658
Contributions (Note 2)
International Monetary Fund38,32037,102
Participants18,90918,058
Net transfers from retirement plans of other international organizations1,1771,557
Participants restored to service22169
58,42856,886
Total additions389,120175,544
Benefits
Pension37,77133,705
Commutation6,1036,058
Withdrawal3,1023,676
Death413567
47,38944,006
Investment Fees
Manager7,7836,742
Custodian1,3521,358
9,1358,100
Total payments56,52452,106
Net additions332,596123,438
Net Assets Available for Benefits
Beginning of the year2,093,0791,969,641
End of the year2,425,6752,093,079
The accompanying notes are an integral part of the financial statements.
The accompanying notes are an integral part of the financial statements.

Notes to the Financial Statements as at April 30, 1996 and 1995

Description of the Plan

General

The Staff Retirement Plan (“the Plan”) is a defined-benefit pension plan covering nearly all staff members of the International Monetary Fund (“the Employer”). All assets and income of the Plan are the property of the Employer and are held and administered by it separately from all its other property and assets and are to be used solely for the benefit of participants, retired participants, and their beneficiaries.

Benefits

Annual Pension

Participants are entitled to an unreduced pension beginning at normal retirement age of 62. The amount of the pension is based on the number of years of service, age at retirement, and highest average gross remuneration. The provisions for determining gross remuneration are different for benefits earned before and after May 1, 1990. The gross remuneration on which pensions from the Plan are based is limited to a predetermined amount, which is periodically adjusted. Pension benefits attributable to gross remuneration in excess of this amount are paid from the Supplemental Retirement Benefit Plan (“the SRBP”).

The accrual rate of benefits earned before May 1, 1990 was 2 percent of gross remuneration for each year of service, while the accrual rate of benefits earned after May 1, 1990 is 2.2 percent for the first 25 years of service and 1.8 percent for the next 10 years of service. The pensions of participants hired before May 1, 1990 are based on a prorated combination of the old and new accrual rates, using the time period of service before and after May 1, 1990.

Participants between the ages of 50 and 55 may retire with a reduced pension if their age and years of service total at least 75. Participants aged 55 and older may retire with an unreduced pension if the sum of their age and years of service equals 85 or more.

Cost of Living Adjustment

Whenever the cost of living increases during a financial year, pensions shall be augmented by a pension supplement that, expressed in percentage terms, shall be equal to the increase in the cost of living for the financial year. If the cost of living increase for a financial year should exceed 3 percent, the Employer has the right, for good cause, to reduce prospectively the additional supplement to not less than 3 percent. Deferred pensions become subject to cost of living adjustments when the sum of a former participant’s age and years of service is at least 50.

Withdrawal Benefit

Upon termination, a participant with at least three years of eligible service may elect to receive either a withdrawal benefit or a deferred pension to commence after the participant has reached the age of 55 or age 50 if age and years of service add to at least 75. The withdrawal benefit is a percentage of the participant’s highest average gross remuneration.

Commutation

A pensioner entitled to receive a normal, early retirement, or deferred pension may elect to commute up to one third of his or her pension, and receive a lump sum amount at retirement in lieu of the amount of pension commuted. A participant entitled to receive a disability pension may elect to commute one third of the early retirement pension that would otherwise have been applicable.

Disability Pensions, Death Benefits, and Survivor Benefits

The Plan also provides for disability pensions, death benefits, and benefits to surviving spouses and children of deceased participants.

Currency of Pension Payments

A participant may elect to have his or her pension paid in the currency of the country in which he or she has established permanent residence or in a combination of two currencies—the U.S. dollar and the currency of the country in which the participant is a permanent resident. As a result of an amendment to the Plan that became effective on May 1, 1991, the additional cost of paying pensions in local currency, formerly paid by the Employer, is now paid by the Plan.

Contributions

Participants

As a condition of employment, regular staff members are required to participate in, and to contribute to, the Plan. The contribution rate is presently 7 percent of the participant’s gross remuneration. Certain other categories of staff members may elect to participate in the Plan.

Employer

The Employer meets certain administrative costs of the Plan, such as the actuary’s fees, and contributes any additional amount not provided by the contribution of participants to pay costs and expenses of the Plan not otherwise covered. In financial year 1996, the administrative costs met by the Employer were approximately $0.15 million ($0.13 million in 1995).

Plan Termination

In the event of the termination of the Plan by the Employer, the assets of the Plan shall be used to satisfy all liabilities to participants, retired participants, and their beneficiaries, and all other liabilities of the Plan. Any remaining balance of the assets shall be returned to the Employer.

1. Accounting Practices

Accumulated Plan Benefits

The actuarial value of vested benefits is presented for two categories. For retired participants, the amount presented equals the present value of the benefits expected to be paid over the future lifetime of the pensioner, and, if applicable, the surviving spouse of the pensioner. For active participants, the amount presented equals the present value of the deferred pension earned to the valuation date for a participant, or, if greater, the value of the withdrawal benefit for that participant, summed over all participants. For the purpose of determining the actuarial value of the vested benefits at the end of the Plan year, it is assumed that the Plan will continue to exist and that salaries will continue to rise, but that participants will not earn pension benefits beyond the date of the calculation.

The amount of nonvested benefits represents the total of the withdrawal benefits of all participants with less than three years of eligible service together with the estimated effect of projected salary increases on benefits expected to be paid.

In contrast to the actuarial valuation for funding purposes, the actuarial valuation used for the financial statements represents the portion of the benefit obligation that had been accumulated by April 30, 1996. It reflects only the service to that date and does not take into account the fact that the value of accumulated benefits, which are the Plan’s liabilities, is expected to increase each year. Nor does it take into account the fact that the market value of investments may fluctuate from year to year, which is significant because the Employer’s liability is the excess of the present value of accumulated benefits over the value of the assets. Accordingly, the financial statements do not measure the amount that the Employer will be required to fund in the future.

Valuation of Investments

Investments in securities listed on stock exchanges are valued at the last reported market sales price on the last business day of the accounting period. Over-the-counter securities are valued at their bid price on the last business day of the accounting period. Investments in real estate are valued at the last reported appraised value.

In October 1995, the valuation of purchases and sales made by U.S. investment managers was changed from the settlement date basis to the trade date basis. This change was made to be consistent with the valuation basis of international investment managers. The effect of this change is deemed immaterial to these statements.

Trading Instruments

The net gain in the current value of investments represents the gains and losses realized during the year from the sale of investments, the unrealized appreciation and depreciation of the market value of investments, and, for investments denominated in currencies other than the U.S. dollar, valuation differences arising from exchange rate changes of other currencies against the dollar.

Risk-Management Instruments

The face amounts of forward foreign currency exchange contracts, financial futures contracts, and currency options and swaps are not included in net assets available for Plan benefits. The changes in market value of such contracts are recognized currently in the financial statements.

Income Recognition

The Plan maintains its accounts on an accrual basis; accordingly, income is recognized as it is earned, and expenses are recorded as they are incurred.

2. Actuarial Valuation and Funding Policy

Under the actuarial valuation used for funding purposes, it is assumed that the Plan will continue to exist and that active participants will continue to earn pension benefits beyond the date of the valuation until the date of withdrawal, disability, death, or retirement, but that no new participant will join the Plan (the “closed method”).

Funding by the Employer is based on a valuation method, known as the “aggregate cost method,” that expresses liabilities and contribution requirements as single consolidated figures that include provision for experience gains and losses and cost of living increases. Required Employer contributions are expressed as a percentage to be applied to the gross remuneration of participants and are based on the valuation completed 12 months previously. For the financial year that began on May 1, 1994, this rate was 14.43 percent and was 14.25 percent for the year that began on May 1, 1995. The proposed rate for the year beginning May 1, 1996 is 10.56 percent of the new gross remuneration.

The actuarial assumptions used in the valuation to determine the Employer contribution include: (1) life expectancy based on the 1984 and 1982 United Nations mortality tables for men and women, respectively; (2) withdrawal or retirement of a certain percentage of staff at each age, differentiated by sex; (3) an average rate of return on investments of 8.5 percent a year; (4) an average inflation rate of 5 percent a year; (5) salary increase percentages that vary with age; and (6) valuation of assets using a five-year moving-average method.

The results of the April 30, 1995 and 1994 valuations are:

19951994
In millions of U.S. dollars
Present value of benefits payable2,3922,249
Less: Assets for valuation purposes1,9031,689
Required future funding489560
Less: Present value of prospective
contributions from participants
(7 percent of gross remuneration)200194
Present value of future funding required from the Employer289366

3. Investments

In accordance with its investment policy, the Plan invests in equity securities, debt securities, short-term investments, real estate investments, and other financial instruments with potential off balance-sheet risk including futures, forward currency contracts, and currency options and swaps.

A summary of the Plan’s investments at market values is as follows:

19961995
In millions of U.S. dollars
Denominated in U.S. dollars
Equity securities562573
Debt securities157240
Short-term investments244221
Real estate188139
1,1511,173
Denominated in other currencies
Equity securities1,010725
Debt securities243181
Short-term and real estate investments105
1,263911
2,4142,084

The market value of financial instruments with potential off-balance-sheet risk and the related credit exposure are as follows:

19961995
In millions of U.S. dollars
Futures and forward contracts
Long position964906
Short position1,1061,182
Credit exposure due to potential nonperformance by counterparties2,0702,088
Swaps2522
Credit exposure due to potential nonperformance by counterparties2522

Investments in derivatives are aimed at optimizing investment income, given levels of market, credit, counterparty, and foreign currency risk. The Plan’s principal objective in entering into forward foreign currency exchange contracts and swaps ($1,927 million) is to manage foreign currency fluctuations relative to investments in its international portfolio. The Plan enters into financial futures contracts ($168 million) to hedge market price risks, as well as to take leveraged investment positions.

Report of the External Audit Committee

Supplemental Retirement Benefit Plan

Washington, D.C.

June 20. 1996

Authority and Scope of Audit

In accordance with Section 20(b) of the By-Laws of the International Monetary Fund, we have audited the financial statements of the Supplemental Retirement Benefit Plan for the year ended April 30, 1996.

Our audit was conducted in accordance with generally accepted auditing standards and included reviews of the accounting and internal control systems and rests of the accounting records. We evaluated the extent and results of the work of the outside accounting firm as well as that of the Office of Internal Audit and Inspection and also used other audit procedures as deemed necessary.

Audit Opinion

In our opinion, the financial statements of the Supplemental Retirement Benefit Plan have been prepared in accordance with generally accepted accounting principles applied on a basis consistent with that of the preceding year and give a true and fair view of the financial status of the Supplemental Retirement Benefit Plan as at April 30, 1996 and of the changes in financial status for the year then ended.

EXTERNAL AUDIT COMMITTEE:

/s/ loanc Naiveli, Chairman (Fiji)

/s/ Richard B. Calahan (United States)

/s/ Jiři Škoda (the Czech Republic)

Statements of Accumulated Plan Benefits and Assets Available for Benefits as at April 30, 1996 and 1995

(In thousands of U.S. dollars)(Note 1)
19961995
Accumulated Plan Benefits
Actuarial present value of accumulated Plan benefits
Vested benefits15,9008,900
Nonvested benefits100100
Total actuarial present value of accumulated Plan benefits16,0009,000
Assets Available for Benefits
Cash at bank (Note 3)11
Assets available for benefits11
Excess of actuarial present value of accumulated Plan benefits over assets available for benefits15,9998,999
The accompanying notes are an integral part of the financial statements.
The accompanying notes are an integral part of the financial statements.
/s/ David Williams

Treasurer
/s/ M. Camdessus

Managing Director

Statements of Changes in Accumulated Plan Benefits for the Years Ended April 30, 1996 and 1995

(In thousands of U.S. dollars)(Note 1)
19961995
Actuarial present value of accumulated Plan benefits, beginning of the year9,0006,800
Increase (decrease) during the period attributable to
Benefits accumulated7,2312,169
Increase for interest due to decrease in discount period700600
Benefits paid(931)(569)
Net increase7,0002,200
Actuarial present value of accumulated Plan benefits, end of the year16,0009,000
The accompanying notes are an integral part of the financial statements.
The accompanying notes are an integral part of the financial statements.

Statements of Changes in Assets Available for Benefits for the Years Ended April 30, 1996 and 1995

(In thousands of U.S. dollars)(Note 1)
19961995
Contributions
International Monetary Fund931569
Benefits
Pension931569
Assets Available for Benefits
Beginning of the year11
End of the year11
The accompanying notes are an integral part of the financial statements.
The accompanying notes are an integral part of the financial statements.

Notes to the Financial Statements as at April 30, 1996 and 1995

Description of the Plan

General

The Supplemental Retirement Benefit Plan (“the SRBP”) is a defined-bene fit pension plan covering all participants of the Staff Retirement Plan of the International Monetary Fund (“the Employer”) and operates as an adjunct to that Plan. All assets and income of the SRBP are the property of the Employer and are held and administered by it separately from all its other property and assets and are to be used soley for the benefit of participants and retired participants and their beneficiaries.

Benefits

The Staff Retirement Flan has adopted limits to pensions payable from that Plan. The SRBP provides for the payment of any benefit that would otherwise have been payable if these limits had not been adopted.

In financial year 1996, 40 pensioners received benefits from the SRBP (36 in financial year 1995).

Contributions

Before retirement, the Employer partially prefunds the SRBP for non-U.S. citizens who plan to retire in the United States, so that the taxable income of the participant is approximately equal to, but not more than, such income that would have accrued if the entire benefit had been payable from any of the prefunded assets of the Staff Retirement Plan, The prefunded amounts are used to pay any of the benefits payable, whether for U.S. or non-U.S. staff. Should the assets of the SRBF be exhausted, benefits will be paid from current contributions by the Employer.

SRBP Termination

In the event of the termination of the SRBP by the Employer, the assets of the SRBP shall be used to satisfy all liabilities to participants, retired participants and their beneficiaries, and all other liabilities of the SRBP.

1. Accounting Practices

Accumulated SRBP Benefits

The actuarial present value of accumulated SRBP benefits is stated as at the date of the most recent actuarial valuation, which was April 30, 1996, The actuarial value of benefits is presented for two categories. The vested benefits relate to retired participants, and the amount presented equals the present value of the benefits expected to be paid over the future lifetime of the pensioner and, if applicable, of the surviving spouse of the pensioner.

The nonvested benefits relate to active participants, and the amount presented equals the present value of the supplemental deferred pension earned to the valuation date for a participant, taking into account the estimated effect of projected salary increases. For the purpose of determining the actuarial value of the benefits at the end of the period, it is assumed that the SRBP will continue to exist, but that participants will not accumulate further contributory service beyond the date of the calculation.

Income Recognition

The SRBP maintains its accounts on an accrual basis; accordingly, income is recognized as it is earned, and expenses are recorded as they are incurred.

2. Actuarial Valuation

The actuarial assumptions used in the valuation to determine the Employer contribution in recent years include: (1) life expectancy based on the 1984 and 1982 United Nations mortality tables for men and women, respectively; (2) withdrawal or retirement of a certain percentage of staff at each age, differentiated by sex; (3) an average rate of return on investments of 8.5 percent a year; (4) an average inflation rate of 5 percent a year; (5) salary increase percentages, which vary with age; and (6) valuation of assets using a five-year moving-average method.

3. Assets

Assets are maintained in a money market deposit account.

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