Chapter

Appendix VIII: Financial Statements of the General Resources Account, Special Drawing Rights Department, Subsidy Account, Trust Fund, and Staff Retirement Plan

Author(s):
International Monetary Fund
Published Date:
September 1981
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Report of the External Audit Committee General Department General Resources Account

Washington, D.C.

June 19, 1981

Authority for the Audit

The audit for the year ended April 30, 1981 was carried out pursuant to Section 20(b) of the By-Laws of the International Monetary Fund.

Scope of the Audit

We have examined the balance sheet of the International Monetary Fund, General Department—General Resources Account, as at April 30, 1981, and the related statements of income and expense, reserves and changes in financial position for the year then ended.

Our examination was made in accordance with generally accepted auditing standards and accordingly included such tests of the accounting records, after evaluating the extent and results of the tests which we observed to have been carried out by the Internal Auditor, and such other auditing procedures as we deemed necessary in the circumstances.

Audit Opinion

In our opinion, the financial statements referred to above give a true and fair view of the financial position of the International Monetary Fund, General Department—General Resources Account, as at April 30, 1981, and the results of its operations and transactions and changes in reserves and financial position for the year then ended, in conformity with generally accepted accounting principles applied on a basis consistent with that of the preceding year.

External Audit Committee:

/s/ Christian Aubin, Chairman (France)

/s/ David Ralph Hutton (New Zealand)

/s/ Abdulrahman Amin Najmeldine (Saudi Arabia)

General Department (Note 1)

General Resources Account Balance Sheet as at April 30, 1981

Amounts expressed in special drawing rights

(Note 2)

19811980
Assets
Currencies and Securities (Notes 3 and 4)56,025,401,38038,670,821,737
Special Drawing Rights5,445,007,8491,406,997,417
Gold with Depositories (Note 2)3,620,396,1203,635,906,915
Subscriptions to Capital—Receivable2,370,053
Charges Receivable (Note 4)104,291,449116,251,529
Accrued Charges (Note 4)80,526,81618,159,439
Other Assets (Note 2)10,622,9226,748,324
Total Assets65,286,246,53643,857,255,414
Capital, Reserves, and Liabilities
Capital
Subscriptions of Members59,605,500,00039,016,500,000
Reserves (Note 6)843,284,924763,202,027
Liabilities
Borrowing (Note 5)4,323,218,1043,753,464,712
Remuneration Payable to Members (Note 4)372,807,627240,985,666
Interest Payable37,198,76853,636,544
Accrued Interest78,827,40515,183,502
Other Liabilities25,409,70814,282,963
Total Capital, Reserves, and Liabilities65,286,246,53643,857,255,414
The accompanying notes are an integral part of the financial statements.
The accompanying notes are an integral part of the financial statements.
/s/ W.O. Habermeier/s/ J. de LarosiÈre
TreasurerManaging Director
General Resources Account Statement of Income and Expense for the year ended April 30, 1981

Amounts expressed in special drawing rights

(Note 2)

19811980
Operational Income
Periodic charges (Note 4)592,703,657519,350,571
Interest on holdings of special drawing rights265,814,01981,813,361
Service charges21,929,60411,054,011
Other1,828,4961,946,842
882,275,776614,164,785
Operational Expense
Remuneration (Note 4)372,807,627240,985,666
Interest on borrowing329,527,083284,009,947
Other7,705
702,334,710525,003,318
Net Operational Income179,941,06689,161,467
Administrative Expense
Administrative budget
Personnel (Note 7)74,848,36861,893,493
Travel12,472,75610,663,598
Other (Note 2)13,520,93610,404,413
Total administrative budget100,842,06082,961,504
Less recovery of expenses of conducting the business of the Special
Drawing Rights Department and the Trust Fund1,899,9941,700,004
Net administrative budget98,942,06681,261,500
Fixed property (Note 2)1,265,290349,532
Amortization of prior service cost (Note 7)236,8824,392,708
Net valuation adjustment (gain)(586,069)65,159
Total Administrative Expense99,858,16986,068,899
Net Income80,082,8973,092,568
The accompanying notes are an integral part of the financial statements.
The accompanying notes are an integral part of the financial statements.
General Resources Account Statement of Reserves for the year ended April 30, 1981

(Note 6)

Amounts expressed in special drawing rights

(Note 2)

19811980
Special Reserve
Balance at beginning of year397,622,324394,529,756
Add net income for year80,082,8973,092,568
Balance at end of year477,705,221397,622,324
General Reserve
Balance at beginning and end of year365,579,703365,579,703
Total Reserves843,284,924763,202,027
The accompanying notes are an integral part of the financial statements.
The accompanying notes are an integral part of the financial statements.
General Resources Account Statement of Changes in Financial Position for the year ended April 30, 1981

Amounts expressed in special drawing rights

(Note 2)

19811980
Resources were applied to:
Increase in currency holdings:
Changes in holdings which increased amounts
on which the Fund levies charges1,837,995,864(837,368,122)
Changes in holdings which reduced creditor positions
on which the Fund pays remuneration513,255,337379,892,087
Changes in holdings which did not affect amounts
on which the Fund levies charges or pays remuneration15,003,328,442(438,428,909)
17,354,579,643(895,904,944)
Increase in holdings of special drawing rights4,038,010,432117,088,441
Repayments of borrowing:
Oil facility945,692,9791,782,859,156
22,338,283,0541,004,042,653
Resources were provided by:
Subscriptions:
Increases in members’ quotas20,489,000,000
Subscriptions of new members100,000,0005,300,000
20,589,000,0005,300,000
Borrowing:
Supplementary financing facility1,515,446,371502,393,063
Net income80,082,8973,092,568
Sales of gold15,510,795418,615,009
Increase in the excess of other liabilities
over other assets138,242,99174,642,013
22,338,283,0541,004,042,653
The accompanying notes are an integral part of the financial statements.
The accompanying notes are an integral part of the financial statements.

General Department Notes to the Financial Statements

1. General Department

Under the Articles of Agreement, the General Department consists of the General Resources Account, the Special Disbursement Account, and the Investment Account. The Special Disbursement Account and the Investment Account are not operative. All operations and transactions on the account of the Fund are conducted through the General Resources Account.

General Resources Account

Assets held in the General Resources Account comprise gold, currencies of the Fund’s member countries, and special drawing rights (SDRs). The Fund’s resources in the General Resources Account are made available to members in accordance with the Fund’s policies either in the form of currencies or SDRs which members purchase against the payment of their own currencies. The amount of such use is related to a member’s quota in the Fund.

In addition to purchases under the Fund’s regular facilities, members may use the Fund’s resources under decisions on compensatory financing (to assist members, particularly primary exporters, encountering payments difficulties produced by temporary shortfalls attributable to circumstances beyond their control) and buffer stock financing (to assist members in connection with the financing of international buffer stocks of primary products), the extended Fund facility (to provide medium-term assistance to members to make structural adjustments in their economies), and the supplementary financing facility (to assist members facing serious payments imbalances that are large in relation to their quotas). Members were also able to use the oil facility (for balance of payments problems caused by increases in the cost of petroleum and petroleum products). Use of the Fund’s resources is dependent on members having a balance of payments need.

Gold transactions, receipt of SDRs in payment of charges and repurchases by members, and use of SDRs by the Fund take place through the General Resources Account.

2. Accounting Practices

Unit of Account

The accounts of the General Resources Account are expressed in terms of the SDR, the currency value of which is determined by the Fund. Members’ currencies and securities are converted into equivalent amounts of SDRs on the basis of representative rates of exchange determined in accordance with decisions of the Executive Board. Gold with depositories is valued on the basis that one unit of special drawing rights is equivalent to 0.888671 gram of fine gold.

Property, Furniture, and Equipment

The established policy of the Fund is to charge as an expense of each accounting period the total costs incurred for fixed property, furniture, and equipment. For the year ended April 30, 1981, the cost of property, furniture, and equipment charged as an expense amounted to SDR 1,583,646 (SDR 952,633 in 1980).

Income and Expense

The Fund maintains its books of accounts on an accrual basis and accordingly follows a policy of recognizing income as it is earned and of recording expenses as they are incurred. It is the practice of the Fund to make all calculations on the basis of the exact number of days in the accounting period.

3. Currencies and Securities

Each member has the option to substitute nonnegotiable and noninterest-bearing securities for that amount of the member’s currency held by the Fund which is in excess of ¼ of 1 per cent of the member’s quota.

A currency held by the Fund is revalued whenever that currency is used by the Fund in a transaction with another member, or for such other purposes as the Fund may decide. All currency holdings are revalued as at April 30 each year. Whenever the Fund revalues its holdings of a member’s currency, an account receivable or an account payable is established for the amount of currency payable by or to the member in order to maintain the value of the currency in terms of the SDR. The balances of the accounts receivable or payable are reflected in the Fund’s currency holdings. At April 30, 1981, accounts receivable amounted to SDR 2,749,745,358 and accounts payable amounted to SDR 2,058,638,329.

4. Operational Transactions

During the year ended April 30, 1981, members’ purchases amounted to SDR 4,860 million of which SDR 474 million was in the reserve tranche, SDR 2,682 million was under the Fund’s regular policies, SDR 784 million was under compensatory financing, and SDR 920 million was under the extended Fund facility. Of the total purchases, SDR 1,516 million was financed under the supplementary financing facility. Over the same period, repurchases by members totaled SDR 2,853 million. Purchases in the reserve tranche made after April 1, 1978 are not subject to repurchase.

Outstanding purchases of members were as follows (in millions of SDRs):

April 30
19811980
Reserve tranche36144
Regular facilities2,6302,293
Compensatory financing2,6172,873
Buffer stock financing74
Extended Fund facility980504
Oil facility1,5812,494
Supplementary financing facility:
Under stand-by arrangements1,510383
Under extended arrangements508119
Total9,8628,884

The Fund levies charges on its holdings of a member’s currency to the extent that the holdings (i) have been acquired under a policy that has been the subject of an exclusion, or (ii) exceed the member’s quota after deducting holdings that are the subject of an exclusion. Remuneration is paid on the amounts by which 75 per cent of a member’s quota on April 1, 1978, adjusted for increases or decreases in the member’s quota after that date, exceeds the Fund’s holdings of the member’s currency after deducting amounts that are the subject of an exclusion. At April 30, 1981, the total holdings on which the Fund levies charges amounted to SDR 9,544 million and total creditor position on which the Fund pays remuneration amounted to SDR 6,813 million.

Members incur certain obligations to the Fund with the use of Fund resources from the General Resources Account. One member, Democratic Kampuchea, has not fulfilled its financial obligations to repurchase a part of the Fund’s holdings of the member’s currency, to pay charges on currency balances held by the Fund, and to submit information on monetary reserves. At April 30, 1981, unpaid charges receivable from Democratic Kampuchea amounted to SDR 4,132,308 and are included in the balance sheet as charges receivable and as a deferred credit. On December 19, 1978 the Executive Board decided that Democratic Kampuchea may not make use of the general resources of the Fund until such time as Democratic Kampuchea is fulfilling its obligations under the Articles of Agreement to which Article XXVI, Section 2(a) applies.

5. Borrowing

Outstanding borrowing by the Fund at April 30, 1981 and 1980 was as follows:

19811980
Oil facilitySDR 1,528,124,670SDR 2,473,817,649
Supplementary financing facility2,017,839,434502,393,063
General Arrangements to Borrow777,254,000777,254,000
SDR 4,323,218,104SDR 3,753,464,712

Oil Facility

The Fund has entered into borrowing agreements with various members and Switzerland, or institutions within their territories, under which these lenders agreed to provide the Fund with specified currencies to finance purchases of currencies from the Fund by other members under the oil facility. The outstanding borrowings carry interest rates of 7 per cent for amounts called under the 1974 borrowing agreements and 7¼ per cent for amounts called under the 1975 borrowing agreements. Any calls made by the Fund under these agreements are repayable in installments beginning not later than 3½ years, to be completed not later than 7 years, after the date of the calls.

Supplementary Financing Facility (SFF)

The supplementary financing facility entered into force on February 23, 1979. The Fund has entered into borrowing agreements with 14 members, or institutions within their territories, and with the Swiss National Bank under which the lenders have agreed to make resources available to the Fund, at call, up to SDR 7.784 billion over the next four years to finance purchases by members under this facility. Interest paid by the Fund on amounts borrowed under the borrowing agreements is based on the average yield on U.S. Government securities with a constant maturity of five years. The first calls were made under the SFF borrowing agreements during the year ended April 30, 1980.

General Arrangements to Borrow (GAB)

Ten members, or institutions within their territories, have adhered to the General Arrangements to Borrow under which the Fund may borrow their currencies up to specified amounts when supplementary resources are needed to forestall or cope with an impairment of the international monetary system. These arrangements first became effective from October 24, 1962 and were renewed until October 23, 1985. The Swiss Confederation has been associated with the GAB since June 1964. The present arrangement with the Swiss Confederation expires on July 15, 1985. The Fund pays a transfer charge of ½ of 1 per cent on amounts borrowed under these arrangements and, in addition, pays interest at the rates at which the Fund levies charges on the holdings of currencies resulting from purchases for which it incurred the indebtedness, provided that the rate of interest shall be not less than 4 per cent per annum on any part of the indebtedness. Any calls made by the Fund under the GAB are repayable within five years.

At April 30, 1981, the interest rate being paid by the Fund on indebtedness under the General Arrangements to Borrow was 4 per cent per annum.

6. 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 Fund may use the Special Reserve for any purpose for which it may use the General Reserve, except distribution.

Income from investments in U.S. Government securities was placed to the Special Reserve from November 1, 1957 until February 15, 1972 when the investment program was terminated. A decision by the Executive Board provides that any administrative deficit for any financial year must be written off first against this Reserve.

Net income for the year ended April 30, 1981 was placed to the Special Reserve by decision of the Executive Board.

7. Other Compensations and Benefits

The Fund pays various allowances to or on behalf of Executive Directors and staff including the employer’s contribution to the Staff Retirement Plan. All contributions to the Plan and all other assets, liabilities, and income of the Plan are held separately and can be used or incurred only for the benefit of the participants in the Plan and their beneficiaries. The funding of the Plan is based upon a percentage of a notional gross salary, and the employer contributes that part of the costs and expenses of the Plan not provided by the contributions of the participants.

A prior service cost amounting to SDR 17,570,796, resulting from certain improvements in the benefits provisions of the Plan and changes in the rates of contribution and funding arrangements which were approved in August 1976, was discharged on September 1, 1976 by a payment from the General Resources Account to the Staff Retirement Plan. This amount was charged against the income of the General Resources Account over a period of four years. Accordingly, SDR 4,392,696 was charged against income in 1977, 1978, and 1979, and the remaining balance amounting to SDR 4,392,708 was charged against income in 1980. A prior service cost amounting to SDR 236,882 resulting from plan amendments approved in May 1980 was paid and charged against income in the year ended April 30, 1981.

Experience gains and losses of the Plan, as determined by the actuary engaged by the Pension Committee, are amortized over a period of 15 years. The unamortized experience losses at April 30, 1981 amounted to SDR 48.3 million (calculated at the SDR value of the U.S. dollar on that date). Payments over the next 15 years to amortize the actuarial experience losses are estimated to be approximately SDR 66.3 million (at the April 30, 1981 SDR/US$ rate), of which SDR 5.3 million was paid on May 1, 1981.

Contributions by the employer to the Staff Retirement Fund for the year ended April 30, 1981 amounted to SDR 16,882,569, including SDR 4,232,677 for the amortization of actuarial experience losses (SDR 2,845,570 in 1980) and SDR 4,030,794 to fund cost of living supplements to beneficiaries (SDR 1,778,217 in 1980).

Report of the External Audit Committee Special Drawing Rights Department

Washington, D.C.

June 19, 1981

Authority for the Audit

The audit for the year ended April 30, 1981 was carried out pursuant to Section 20(b) of the By-Laws of the International Monetary Fund.

Scope of the Audit

We have examined the balance sheet of the International Monetary Fund, Special Drawing Rights Department as at April 30, 1981, and the related statement of source and use of special drawing rights for the year then ended.

Our examination was made in accordance with generally accepted auditing standards and accordingly included such tests of the accounting records, after evaluating the extent and results of the tests which we observed to have been carried out by the Internal Auditor, and such other auditing procedures as we deemed necessary in the circumstances.

Audit Opinion

In our opinion, the financial statements referred to above give a true and fair view of the allocations and holdings of special drawing rights of the International Monetary Fund, Special Drawing Rights Department as at April 30, 1981, and the source and use of special drawing rights for the year then ended on a basis consistent with that of the preceding year.

External Audit Committee:

/s/ Christian Aubin, Chairman (France)

/s/ David Ralph Hutton (New Zealand)

/s/ Abdulrahman Amin Najmeldine (Saudi Arabia)

Special Drawing Rights Department (Note 1)

Balance Sheet as at April 30, 1981Amounts expressed in special drawing rights
19811980
Allocations
Net cumulative allocations of special drawing rights to participants21,433,330,20017,380,836,200
Holdings
Participants
Holdings above allocations, comprising
Allocations5,381,928,8006,047,044,000
Net receipt of SDRs1,822,601,8342,777,200,395
7,204,530,6348,824,244,395
Holdings below allocations, comprising
Allocations16,051,401,40011,333,792,200
Net use of SDRs7,279,654,3144,184,197,812
8,771,747,0867,149,594,388
Total holdings by participants15,976,277,72015,973,838,783
General Resources Account5,445,007,8491,406,997,417
Other holders12,044,631
21,433,330,20017,380,836,200
The accompanying notes are an integral part of the financial statements.
The accompanying notes are an integral part of the financial statements.
/s/ W.O. Habermeier/s/ J. de LarosiÈre
TreasurerManaging Director
Statement of Source and Use of Special Drawing Rights for the year ended April 30, 1981Amounts expressed in special drawing rights
GeneralTotal
ParticipantsResources

Account
Other

Holders
19811980
Total holdings at beginning of year15,973,838,7831,406,997,417________17,380,836,20013,347,560,200
Source of special drawing rights
Allocations4,052,494,0004,052,494,0004,033,276,000
Transfers among participants and
other holders
Transactions with designation1,882,850,1251,882,850,1251,371,514,932
Transactions by agreement416,965,9261,500,000418,465,926361,787,753
Transfers from participants to
General Resources Account
Repurchases929,956,199929,956,199993,915,153
Charges in General Resources Account12,721,918587,080,210599,802,128560,932,958
Quota payments5,090,640,0005,090,640,000712,575
Assessment1,599,9941,599,9941,000,004
Transfers from General Resources Account
to participants and other holders
Purchases2,033,001,2392,033,001,2391,282,629,970
Remuneration219,497,371219,497,371139,726,705
Reconstitution19,542,20119,542,2015,054,091
Repayments of Fund borrowing
Oil facility151,104,70110,156,250161,260,95164,392,375
Interest on Fund borrowings
Oil facility16,262,20416,262,20413,435,429
General Arrangements to Borrow5,820,5905,820,5906,050,803
Supplementary financing facility28,235,30628,235,3061,695,724
In exchange for currencies of other members
Acquisitions to make quota payments340,738,210340,738,210
Acquisitions to pay charges97,515
Net interest in Special Drawing Rights Department222,863,710265,814,019388,381489,066,110271,501,892
9,402,097,5016,875,090,42212,044,63116,289,232,5549,107,723,879
Use of Special Drawing Rights
Transfers among participants and
other holders
Transactions with designation1,882,850,1251,882,850,1251,371,514,932
Transactions by agreement418,465,926418,465,926361,787,753
Transfers from participants to
General Resources Account
Repurchases929,956,199929,956,199993,915,153
Charges in General Resources Account587,080,21012,721,918599,802,128560,932,958
Quota payments5,090,640,0005,090,640,000712,575
Assessment1,599,9941,599,9941,000,004
Transfers from General Resources Account
to participants and other holders
Purchases2,033,001,2392,033,001,2391,282,629,970
Remuneration219,497,371219,497,371139,726,705
Reconstitution19,542,20119,542,2015,054,091
Repayments of Fund borrowings Oil facility161,260,951161,260,95164,392,375
Interest on Fund borrowings
Oil facility16,262,20416,262,20413,435,429
General Arrangements to Borrow5,820,5905,820,5906,050,803
Supplementary financing facility28,235,30628,235,3061,695,724
In exchange for currencies of other members
Acquisitions to make quota payments340,738,210340,738,210
Acquisitions to pay charges97,515
Net charges paid in Special Drawing Rights Department489,066,110________________489,066,110271,501,892
9,399,658,5642,837,079,990________12,236,738,5545,074,447,879
Total holdings at end of financial year15,976,277,7205,445,007,84912,044,63121,433,330,20017,380,836,200
The accompanying notes are an integral part of the financial statements.
The accompanying notes are an integral part of the financial statements.

Special Drawing Rights Department Notes to the Financial Statements

1. Special Drawing Rights Department

All transactions and operations involving special drawing rights are conducted through the Special Drawing Rights Department. Special drawing rights are allocated by the Fund to members that are participants in the Special Drawing Rights Department in proportion to their quotas in the Fund. Three allocations were made, in 1970, 1971, and 1972, aggregating SDR 9.3 billion. In accordance with Board of Governors Resolution No. 34-3, three further allocations were made as of January 1, 1979, 1980, and 1981, aggregating SDR 12.1 billion. Special drawing rights do not constitute claims by holders against the Fund to provide currency, except in connection with the termination of participation or liquidation.

2. Uses of Special Drawing Rights

A participant can use its special drawing rights in transactions and operations by agreement with another participant, and in operations involving the General Resources Account, such as the payment of charges or repurchases. Special drawing rights may also be used in transactions and operations involving other official entities prescribed by the Fund as other holders of special drawing rights. In addition, the Fund ensures, by designating participants to provide freely usable currency in exchange for special drawing rights, that a participant can use its special drawing rights to obtain such 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 obliged to provide currency for special drawing rights beyond the point at which its holdings of special drawing rights in excess of its net cumulative allocation are equal to twice its net cumulative allocation or such higher limit as may be agreed between a participant and the Fund. A participant may, however, provide currency in excess of the obligatory limit or any agreed higher limit.

3. Reconstitution Requirement

Under the reconstitution requirement, a participant was required to maintain, over five-year periods ending in successive calendar quarters, a minimum level of average daily holdings of special drawing rights of 15 per cent of its average daily net cumulative allocation. This requirement was abrogated with effect from April 30, 1981.

4. Interest, Charges, and Assessment

Interest is paid to each holder on its holdings of special drawing rights and charges are levied at the same rate on each participant’s net cumulative allocation plus any negative balance of the participant or unpaid charges. Interest and charges are settled by crediting and debiting individual holdings accounts on April 30 each year. The Fund is required to pay interest to each holder, whether or not sufficient charges are received. The expenses of conducting the business of the Special Drawing Rights Department are paid by the Fund from the General Resources Account, which is reimbursed in special drawing rights at the end of each financial year. For this purpose, the Fund levies an assessment, at the same rate for all participants, on their net cumulative allocations.

5. Suspension of Right to Use Special Drawing Rights

On December 19, 1978 the Executive Board decided to suspend the right of Democratic Kampuchea to use special drawing rights acquired after the date of the suspension because the Fund found that Democratic Kampuchea had failed to meet certain obligations in the Special Drawing Rights Department.

Report of the External Audit Committee Subsidy Account

Washington, D.C.

June 19, 1981

Authority for the Audit

The audit for the year ended April 30, 1981 was carried out pursuant to Section 20(b) of the By-Laws of the International Monetary Fund.

Scope of the Audit

We have examined the statement of financial position of the Subsidy Account administered by the International Monetary Fund, showing the changes in the Account for the year ended April 30, 1981, and the financial position as at that date.

Our examination was made in accordance with generally accepted auditing standards and accordingly included such tests of the accounting records, after evaluating the extent and results of the tests which we observed to have been carried out by the Internal Auditor, and such other auditing procedures as we deemed necessary in the circumstances.

Audit Opinion

In our opinion, the financial statement referred to above gives a true and fair view of the operations of the Subsidy Account for the year ended April 30, 1981, and its financial position as at that date, in conformity with generally accepted accounting principles applied on a basis consistent with that of the preceding year.

External Audit Committee:

/s/ Christian Aubin, Chairman (France)

/s/ David Ralph Hutton (New Zealand)

/s/ Abdulrahman Amin Najmeldine (Saudi Arabia)

Subsidy Account (Note 1)

Statement of Financial Position Changes during year and Position as at April 30, 1981

Amounts expressed in special drawing rights

(Note 2)

19811980
Balance at beginning of year73,934,61559,735,399
Contributions received (Note 2)6,899,95128,597,963
Interest earned on investments5,316,5425,621,859
12,216,49334,219,822
Valuation gain (loss)3,711,209(921,021)
15,927,70233,298,801
89,862,31793,034,200
Less: Subsidy payments (Note 3)27,772,28319,099,585
Balance at end of year62,090,03473,934,615
Balance represented by:
Currency on deposit1,002,90072,300
Investments in United States Government obligations, at cost
(market value: SDR 58,405,807—1981; SDR 70,936,491—1980)58,711,46471,246,204
Accrued interest receivable2,375,6702,616,111
Total assets62,090,03473,934,615
The accompanying notes are an integral part of the financial statements.
The accompanying notes are an integral part of the financial statements.
/s/ W.O. Habermeier/s/ J. de LarosiÈre
TreasurerManaging Director

Subsidy Account Notes to the Financial Statement

1. Purpose

The Subsidy Account, which is administered by the Fund, was established to assist the most seriously affected members to meet the interest cost of using resources made available through the Fund’s oil facility for 1975. The assets of the Subsidy Account are separate from the assets of all other accounts of the Fund and are not used to discharge liabilities or to meet losses incurred in the administration of other accounts.

2. Accounting Practices

The accounts of the Subsidy Account are expressed in terms of the SDR, the currency value of which is determined by the Fund.

Currency contributions to the Subsidy Account are converted to equivalent amounts of SDRs on the basis of exchange rates against the SDR at the time of receipt. Cumulative contributions to the Subsidy Account at April 30, 1981 amounted to SDR 156,436,225.

It is the practice of the Fund to make all calculations on the basis of the exact number of days in the financial year.

3. Subsidy Payments

The rate of subsidy for the financial years ended April 30, 1976 through 1981 was set by the Fund at 5 per cent per annum of the average daily balances in each year of the Fund’s holdings of recipient members’ currencies subject to the schedule of charges applicable to the 1975 oil facility. Subsidy payments are made after the end of each financial year in U.S. dollars at the SDR/US$ rate determined for the date of payment. Subsidy payments for the financial year ended April 30, 1981 amounted to SDR 50.1 million and were made on June 1, 1981.

Report of the External Audit Committee Trust Fund

Washington, D.C.

June 19, 1981

Authority for the Audit

The audit for the year ended April 30, 1981 was carried out pursuant to Section 20(b) of the By-Laws of the International Monetary Fund.

Scope of the Audit

We have examined the balance sheet of the Trust Fund administered by the International Monetary Fund as at April 30, 1981, and the related statements of income and expense and trust resources for the year then ended.

Our examination was made in accordance with generally accepted auditing standards and accordingly included such tests of the accounting records, after evaluating the extent and results of the tests which we observed to have been carried out by the Internal Auditor, and such other auditing procedures as we deemed necessary in the circumstances.

Audit Opinion

In our opinion, the financial statements referred to above give a true and fair view of the financial position of the Trust Fund as at April 30, 1981, and of the results of its operations for the year then ended, in conformity with generally accepted accounting principles applied on a basis consistent with that of the preceding year.

External Audit Committee:

/s/ Christian Aubin, Chairman (France)

/s/ David Ralph Hutton (New Zealand)

/s/ Abdulrahman Amin Najmeldine (Saudi Arabia)

Trust Fund (Note 1)

Balance Sheet as at April 30, 1981

Amounts expressed in special drawing rights

(Note 2)

19811980
Assets
Sight deposit40,69623,702
Term deposits824,286,202
Investments, at cost (market value SDR 3,337,284—1981; SDR 348,419,267—1980)3,337,284347,840,818
Loans (Note 3)2,991,334,7011,931,442,424
Accrued interest on investments and term deposits1,41836,600,937
Accrued interest on loans4,469,8342,600,669
Total2,999,183,9333,142,794,752
Trust Resources and Liabilities
Trust resources2,993,518,3283,124,497,410
Liabilities—
Undistributed profits from sale of gold (Note 4)3,329,58818,297,342
Borrowing (Note 5)2,332,183
Accrued interest on borrowing3,834
Total2,999,183,9333,142,794,752
The accompanying notes are an integral part of the financial statements.
The accompanying notes are an integral part of the financial statements.
/s/ W.O. Habermeier/s/ J. de LarosiÈre
TreasurerManaging Director
Statement of Income and Expense for the year ended April 30, 1981

Amounts expressed in special drawing rights

(Note 2)

19811980
Income:
Net proceeds realized from the sale of gold156,269,1541,552,631,381
Investment income68,835,54495,809,509
Interest income on loans12,282,9136,467,855
237,387,6111,654,908,745
Expenses:
Administrative expense (Note 2):
Staff salaries and benefits, and other services243,193635,131
Gold weighing and handling charges53,25958,730
Data processing services3,4405,972
Other108167
Total administrative expense300,000700,000
Interest on borrowing (Note 5)19,499
Exchange valuation loss5,411,1186,281,593
5,730,6176,981,593
Net income231,656,9941,647,927,152
The accompanying notes are an integral part of the financial statements.
The accompanying notes are an integral part of the financial statements.
Statement of Trust Resources for the year ended April 30, 1981

Amounts expressed in special drawing rights

(Note 2)

19811980
Balance at beginning of year3,124,497,4101,751,394,949
Net income for the year231,656,9941,647,927,152
Total resources before distribution of profits to developing countries3,356,154,4043,399,322,101
Distribution of profits to developing countries
Amount disbursed400,339,128292,681,719
Amount pending disbursement1,243,6039,802,254
401,582,731302,483,973
Contributions received38,946,65527,659,282
Balance at end of year2,993,518,3283,124,497,410
The accompanying notes are an integral part of the financial statements.
The accompanying notes are an integral part of the financial statements.

Trust Fund Notes to the Financial Statements

1. Purpose

The Trust, which is administered by the Fund as Trustee, was established in 1976 to provide balance of payments assistance on concessional terms to eligible members that qualify for assistance. The resources of the Trust are separate from the assets of all other accounts of the Fund and are not used to discharge liabilities or to meet losses incurred in the administration of other accounts.

2. Accounting Practices

Unit of Account

The accounts of the Trust Fund are expressed in terms of the special drawing right (SDR), the currency value of which is determined by the Fund.

Calculations

It is the practice of the Fund to make all calculations on the basis of the exact number of days in the accounting year.

Administrative Expense

The expenses of conducting the business of the Trust Fund that are paid from the General Resources Account of the IMF are reimbursed by the Trust on the basis of a reasonable estimate of these expenses by the IMF.

3. Loans

Loans are made from the Trust Fund to those eligible members that qualify for assistance in accordance with the provisions of the Trust Instrument. The final loan disbursements were made on March 31, 1981. Each loan disbursement is repayable in ten semiannual installments which shall begin not later than the end of the first six months of the sixth year, and be completed at the end of the tenth year, after the date of disbursement, except that the final loan disbursements made to members on March 31, 1981 are to be repaid in a single installment not later than ten years after the date of that disbursement. Interest on the outstanding loan balances is charged at the rate of ½ of 1 per cent per annum.

4. Direct Distribution of Profits

The International Monetary Fund decided that the Trustee make, through the Trust Fund, the direct distribution of part of the profits from the sale of gold for the benefit of developing members. The share of each developing member in this direct distribution of profits is calculated on the basis of its share in total IMF quotas as of August 31, 1975 and on the basis of the actual profits realized in the gold auctions.

The direct distribution of profits has been completed, except that an amount of US$3,990,776 representing the share of Democratic Kampuchea will continue to be held in the Trust Fund until relations with that member have been restored.

5. Borrowing

One beneficiary of the direct distribution of profits from the Trust Fund has lent a part of its entitlements to the Trust Fund. The amounts borrowed by the Trust Fund are repayable in ten semiannual installments beginning not later than the end of the first six months of the sixth year after the date of borrowing. Interest on the amounts outstanding is paid at the same rate as interest is charged on Trust Fund loans, provided that the rate shall not be less than ½ of 1 per cent per annum.

6. Termination and Transfer of Resources

The Fund, as Trustee, decided that upon the completion of the final loan disbursements, the Trust Fund shall be terminated as of April 30, 1981. After that date, the activities of the Trust Fund shall be confined to the completion of any unfinished business of the Trust Fund and the winding up of its affairs.

The resources of the Trust Fund held on the termination date or subsequently received by the Trustee will be employed firstly to satisfy current administrative expenses, secondly to pay interest and principal as it falls due on loan obligations (Note 5), and thirdly to make transfers to the Special Disbursement Account, the first SDR 750 million of which will flow through to the supplementary financing facility subsidy account.

Report of the External Audit Committee Staff Retirement Plan

Washington, D.C.

June 19, 1981

Authority for the Audit

The audit for the year ended April 30, 1981 was carried out pursuant to Section 20(b) of the By-Laws of the International Monetary Fund.

Scope of the Audit

We have examined the statement of accumulated plan benefits and net assets available for benefits of the Staff Retirement Plan administered by the International Monetary Fund as at April 30, 1981, and the related statements of changes in accumulated plan benefits and net assets for the year then ended.

Our examination was made in accordance with generally accepted auditing standards and accordingly included such tests of the accounting records, after evaluating the extent and results of the tests which we observed to have been carried out by the Internal Auditor, and such other auditing procedures as we deemed necessary in the circumstances.

Audit Opinion

As stated in note 5, the method of accounting and reporting has been changed and the financial statements for the financial year 1980 restated on a comparable basis. We concur in this change. In our opinion, the financial statements referred to above give a true and fair view of the financial position of the Staff Retirement Plan as at April 30, 1981, and of the changes in accumulated plan benefits and net assets for the year then ended, in conformity with generally accepted accounting principles applied on a consistent basis after restatement.

External Audit Committee:

/s/ Christian Aubin, Chairman (France)

/s/ David Ralph Hutton (New Zealand)

/s/ Abdulrahman Amin Najmeldine (Saudi Arabia)

Staff Retirement Plan (Note 1)

Statement of Accumulated Plan Benefits and Net Assets Available for Benefits as at April 30, 1981Amounts expressed in U.S. dollars
1980
1981(Note 5)
Accumulated Plan benefits (Note 2):
Actuarial present value of accumulated Plan benefits
Vested benefits:
Retired participants83,500,00060,500,000
Other participants67,900,00063,000,000
Nonvested benefits23,900,00019,000,000
Total actuarial present value of accumulated Plan benefits175,300,000142,500,000
Net assets available for benefits:
Investments, at current value (Note 2):
Portfolio managed within the United States197,093,295154,084,925
Portfolio managed outside the United States17,758,154
214,851,449154,084,925
Receivables:
Contributions352,352282,885
Accrued interest and dividends (Note 2)1,619,4261,032,751
Other1,388
1,973,1661,315,636
Cash at banks26,306177,994
Total assets216,850,921155,578,555
Liabilities:
Accounts payable819,3393,723
Net assets available for benefits216,031,582155,574,832
Excess of net assets available for benefits over actuarial present value of accumulated Plan benefits40,731,58213,074,832
The accompanying notes are an integral part of the financial statements.
The accompanying notes are an integral part of the financial statements.
/s/ W.O. Habermeier/s/ J. de LarosiÈre
TreasurerManaging Director
Statement of Changes in Accumulated Plan Benefits for the year ended April 30, 1981Amounts expressed in U.S. dollars
19811980
Actuarial present value of accumulated Plan benefits at beginning of year142,500,000121,000,000
Increase (decrease) during the year attributable to:
Benefits accumulated40,655,07127,127,213
Benefits paid(7,855,071)(5,627,213)
Net increase32,800,00021,500,000
Actuarial present value of accumulated
Plan benefits at end of year (Note 2)175,300,000142,500,000
The accompanying notes are an integral part of the financial statements.
The accompanying notes are an integral part of the financial statements.
Statement of Changes in Net Assets Available for Benefits for the year ended April 30, 1981Amounts expressed in U.S. dollars
19811980

(Note 5)
Investment income (Note 2)
Net appreciation in current value of investments (Note 4)28,256,9961,306,846
Interest8,136,0636,892,424
Dividends4,785,4793,828,547
Interest on uninvested funds and other26,270
41,204,80812,027,817
Contributions (Notes 1 and 3):
International Monetary Fund21,748,42715,264,162
Participants5,328,5194,681,022
Participants restored to service61,26315,850
Net transfers to retirement plans of

other international organizations
(31,196)15,683
27,107,01319,976,717
Total additions68,311,82132,004,534
Benefits (Note 1):
Pensions6,254,3124,679,269
Withdrawal benefits800,981789,542
Commutation benefits678,159158,402
Death benefits121,619
Total payments7,855,0715,627,213
Net additions60,456,75026,377,321
Net assets available for benefits at: Beginning of year155,574,832129,197,511
End of year216,031,582155,574,832
The accompanying notes are an integral part of the financial statements.
The accompanying notes are an integral part of the financial statements.

Staff Retirement Plan Notes to the Financial Statements

1. Description of Plan

General

The Staff Retirement Plan (Plan) is a defined benefit pension plan covering nearly all staff members of the International Monetary Fund (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 and retired participants or their beneficiaries. The account is valued in U.S. dollars.

Benefits

Participants are entitled to an annual pension beginning at normal retirement age (65). The amount of the pension is based on number of years of service and highest average gross remuneration. Participants who have reached the age of 55 may retire with a reduced pension (or with an unreduced pension if the sum of their age and years of service equals 90 or more). The Plan also provides for disability retirement and death benefits to a surviving spouse and minor children. Upon termination before age 55 a participant with at least three years of eligible service may elect to receive either a withdrawal benefit (accumulated contributions of the participant plus an amount equal to a percentage of such accumulated contributions, the percentage being based on number of months of eligible service) or a deferred pension to commence after the participant has reached the age of 55. A participant 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 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.

Contributions

As a condition of participation, regular staff members are required to participate in the Plan and to contribute 7 per cent of their gross remuneration to the Plan. Certain other categories of staff members may elect to participate in the Plan. The employer meets the administrative costs of the Plan, such as actuarial, management, and custodial fees, and is to contribute any additional amounts not provided by the contributions of participants to pay costs and expenses of the Plan not otherwise covered.

2. Accounting Practices

Valuation of Investments

Investments in securities listed in stock exchanges are valued at the last reported 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 year. Purchases and sales made by U.S. investment managers are recorded on the settlement date basis and transactions made by the non-U.S. investment manager are recorded on the trade date basis.

Accumulated Benefits—Vested and Nonvested

The actuarial value of vested benefits is shown for two categories. For retired participants, the amount shown 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 other participants, the amount shown 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 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 for all participants with less than three years of eligible service.

Other

Dividend and interest income from investments are recorded as earned.

3. Funding

The employer makes normal contributions to the Plan equal to 14 per cent of gross remuneration. Whenever the cost of living for a financial year increases, pensions shall be augmented by a pension supplement, which shall be the lesser of the increase in the cost of living for the financial year or 2 per cent. If the increase in the cost of living for a year exceeds 2 per cent, pensions shall be augmented by an additional supplement to be paid from contributions from the employer equal to the difference between 2 per cent and the increase in the cost of living. The employer has the right for good cause to reduce the additional supplement to not less than 1 per cent.

4. Investments

The net appreciation in the current value of investments for the periods ending April 30, 1981 and 1980 were as follows (in U.S. dollars):

19811980
Portfolio managed within the United States26,393,3861,306,846
Portfolio managed outside the United States:
—Net market appreciation2,836,790N/A
—Net exchange valuation loss(973,180)N/A
1,863,610
Total net appreciation28,256,9961,306,846

The net exchange loss was calculated by converting the book value of securities in currencies other than U.S. dollars to U.S. dollars at the exchange rates in effect at both the beginning and the end of the accounting period (or at the time a security was purchased or sold if this occurs during the accounting period) and subtracting one from the other to determine the exchange gain or loss.

At April 30, 1981, 11.5 per cent of the net assets available for benefits was held in the Wells Fargo Bank Equity Index Fund, which has underlying investments in approximately 500 equity issues comprising the Standard & Poor’s index. There were no other investments which represented 5 per cent or more of the net assets available for benefits.

5. Accounting Changes

Beginning with the financial year 1981, the method of accounting and reporting for the Plan follows the standards of Statement No. 35, “Accounting and Reporting by Defined Benefit Pension Plans” issued by the Financial Accounting Standards Board in the United States. The financial statements for the financial year 1980 have been restated to present them on a comparable basis.

6. Actuarial Valuation

The most recent valuation of the Plan by the actuary engaged by the Pension Committee was made as at April 30, 1980. Actuarial assumptions used in the valuation were (a) life expectancy of participants as based on the 1960 United Nations Service Tables, (b) certain percentages of staff, differing by sex, would retire at each age between 55 and 65, and (c) an assumed average rate of return on investments of 6 per cent per annum. The purpose of this annual valuation is to determine, on the basis of the actuarial assumptions used, the level of additional employer contributions necessary to fund experience losses and cost of living increases beyond the first 2 per cent. It is further assumed that the Plan will continue to exist and that participants will continue to earn pension benefits beyond the date of the valuation until the date of withdrawal, disability, death, or retirement. This valuation therefore differs from that in which the actuarial value of vested benefits is determined (Note 2).

Experience gains and losses of the Plan, as determined by the actuary, are amortized over a period of 15 years. The most recent valuation (at April 30, 1980) showed an experience loss of $8.7 million for the year then ended. Unamortized experience losses amounted to $57.8 million at April 30, 1981, of which $6.4 million was paid by the employer on May 1, 1981.

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