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Report No :1 11196TitCle: THEAuthor: WORI _ _

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THE WVORLD BANIKANNUAL REPORT 1992

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197

Financial Statements of theInternational Bank forReconstruction and Development

Balance Sheet 198

Statement of Income 200

Statement of Changes in Retained Earnings 200

Statement of Changes in Cumulative Translation Adjustment 200

Statement of Cash Flows 201

Summary Statement of Loans 202

Summary Statement of Borrowings 205

Statement of Subscriptions to Capital Stock and Voting Power 207

Notes to Financial Statements 211

Report of Independent Accountants 217

198 IBRD Financial Statements

Balance Sheet

June 30, 1992 and June 30, 1991Expressed in millions of US dollars

1992 1991

Assets

DUE FROM BANKSUnrestricted currencies ......... ........................................... $ 124 $ 12 'Currencies subject to restrictions-Note A . ................................... 842 589

966 716,INVESTMENTS-Note B

Ob igations of governments and other official entities ......................... .. 17,092 11,898Time deposits and other obligations ot banks and otIer financial nstituftons . . . ...... .:638 8,472

23,730 20,368

CASH COLLATERAL INVESTED-Note B . ...................................... 5.759 4.569

NONNEGOTIABLE, NONNTEREST-BEARING DEMAND OBLIGATIONS ON ACCCONT OFSUBSCRIBED CAPITAL (subject to restrictions-Note A) ................ 17.......... 19 1,604

AMOUNTS REQUIRED TO MAINTAIN VALUE OF CURRENCY HOLDINGS-Note AAmounts recevale ........ 7... ........................................... .700 787Amounts deferred ................. ...................................... 227 343

927 1.130

OTHER RECEIVABLESNet receivables from currency swaps-Note D ....................... 0 4 514Receivables from investment secrifties soid 1,840.......... ... ... .... .. ........ 1 ,84 1,366Accrued income on loans ..... 2... . u ,283 2,139Accrued interest on investments 1.............................................. 94 172

, 001 4,191

LOANS OUTSTANDING(see Summary Statement of Loans and Note C)Total loans .................... ....................................... 154,933 143,607Less loans approved but not yet effective 11,193....... ... ....... ...... ....... 1 IA93 12,790Less undisbursed balance of effective loans 4...............2......... ..... ........ 4493 40.179

100,810 . ....90,638

OTHER ASSETSUnamoftized issuance costs of bofowings .............................. . . \:575 597Miscellaneous ........... 9....................2.......................9 828

1,504 Xlz 1,425

Total assets . .......................................................... , $124.641

Balance Sheet 199

1992 1991

Liabilities

BORROWINGS (see Summary Statement of Borrowings and Note D)Short-term .................. ....................................... $ 5,374 $ 5,388Medium- and long-term . .................................................. 91,682 84,797

97,056 90,185

PAYABLE FOR CASH COLLATERAL RECEIVED .......... ............................ 5,759 4,569

AMOUNTS RE(1UIRED TO MAINTAIN VALUE OF CURRENCY HOLDINGS-Note AAmounts payable .................... ................................. 40 43Amounts deterred ............ ................. 748 395

788 438OTHER LIABILITIES

Accrued charges on borrowings ............................................ 2,942 2,718Net payables for currency swaps- Note D ........... 1............. ........ 1.241 967Payables for investment securities purchased .......... .................. ........ 4,830 1,847Due to the International Development Association and the Debt Reduction Facility for IDA-Only

Countries-Note E . .................................................... 1,112 870Accounts payable and other liabilities .............. .................... ........ 460 398

10,585 6.800

ACCUMULATED PROVISION FOR LOAN LOSSES-Note C ....... ...................... 2,540 1,990Total liabilities ....................................................... 116,728 103,982

Equity

CAPITAL STOCK (see Statement of Subscriptions to Capital Stock and Voting Power and Note A)Authorized capital (1,525,659 shares-June 30, 1992; 1,448,500 shares-June 30, 1991)

Subscribed capital (1,262,054 shares--June 30, 1992: 1,153,231 shares-June 30, 1991) . 152,248 139,120Less uncalled portion of subscriplions ........................................ 142,188 129,727

10,060 9,393

PAYMENTS ON ACCOUNT OF PENDING SUBSCRIPTIONS ............................. 48 49

RETAINED EARNINGS (see Statement of Changes in Retained Earnings and Note E) t .......... 13,202 11,937

CUMULATIVE TRANSLATION ADJUSTMENT (see Statement of Changes in Cumulative TranslationAdjustment) ......................... I ......... ... ... 378 (720)

Total equity ........................................................ 23,688 20,659

Total liabilities and equity ....... ....................................... $140,416 $124,641

The Notes to Financial Statements are an integral part of these Statements.


Statement of Income

For the fiscal years ended June 30, 1992 and June 30, 1991Expressed in millions of US dollars

1992 1991Income -__ -__

Income from loans-Note CInterest . .......................................................... $7,773 $7,699Commitment charges . ..................................................... 115 104

Income from investments-Note B............ ....... ......... 1,771 1,908Other income ............................................................... 15 12

Total income ......................................................... 9,674 9,723

ExpensesBorrowing expenses

Interest on borrowings-Note D ..... ....... ....... 6,653 6,779Amortization of issuance costs and other borrowing costs .. . .... . .. f.211 119

Interest on payable for cash collateral received .... .... 127 210Administrative expenses-Notes F, G andH ... . . . . .. 615 574Provision for loan losses-Note C . ...... 3............. ........ ...... 353 775Other expenses ... ............... 6 3

Total expenses . ... . ........ 7,965 8,460

Operating Income 1,709 1,263Contributions to special programs-Note F ............ ....................... . 64 63

Net Income ............................................................... $1,645 $1,200

Statement of Changes in Retained Earnings


1992 1991

Retained earnings at beginning of fiscal year .... ...... . $11,937 $11,033Transfer to International Development Association-Note E ............. .. ).............. (267)Transfer to Global Environment Trust Fund-Note E ........ .......-........... ;7 (29)Transfer to Technical Assistance Trust Fund for the Union of Soviet Socialist Republics-Note E . . (30) -Net Income for fiscal year . .. .. ... . .. . . . ..... 1,64.5 1,200

Retained earnings at end of fiscal year ................... $13,202............ . $11,937

Statement of Changes in CumulativeTranslation AdjustmentFor the fiscal years ended June 30, 1992 and June 30, 1991Expressed in millions of US dollars

|:19092 ... 1991

Cumulative translation adjustment at beginning of fiscal year . (12.......0(7. .) $(499)Translation adjustments for fiscal year 1.. . . . . . 1:098 (221)

Cumulative translation adjustment at end of fiscal year ....... ........... . .. ...... . $ 378 $(720)


Statement of Cash Flows 201

Statement of Cash Flows


1992 1991

Cash flows from lending and development activitiesLoan disbursements ... ........ ............. . . .. ... .. $(11,727) $(11,582)Loan pr ncipal repayments ........ ... . 9,488 9,080Loan principal prepayments 330 .. . 201Payments to International Deve opment Associaion . . . . (211) (322)Payments to Global Environment Trust Fund ......... . . .. . ... . - (29)Payments to Debt Reduction Facdhty for IDA-Only Countries .. . (10) (8)Payments to Technical Assistance Trust Fund for the Union of Sosiet Socialist Repubics . (30)

Net cash used in lend ng ard development acfivities . .(2,160) (2.660)

Cash flows from financing actvitiesMedium- and long-term borrowings

New issues .. ...... ... ............... ......... ... .. ... .. 11,754 10,841Retirements .... . ... . . . . . . . (12,471) (7,139)

Net casn flows from short-term borrowings . . . . .. (142) (80)

Net cash flows from currency swaps . ...... ... . ..... ...... ......... ... (96) (404)

Net cash tiows from capital transactiors . . . . . . . . . . . 471 331

Net cash flows from financing activities . (484) 3,549

Cash flows from operat ng activ tiesNet income .1,645 1,200Adjustments to reconcile net income to net cash provided by operatng act v ties

Depreciation and amortizat on .309 373Provision for loan losses ..................... ...... .. .. ..... 353 775Changes in assets and liabi ities

Decrease (increase) in accrued Income on loans and investments 32 (2)Increase in miscetlaneous assets ... (.......1... .............. . (152) (230)(Decrease) increase in accrued charges on borrowings . . ......... (13) 120Increase (decrease) n accounts payable and other iabilt es ...... ... . ...... 63 (95)

Net cash provided by operating activities . 2.237 2,141

Effect of exchange rate changes on unrestricted cash and iquid imvestments .. 1,257 (261)

Net increase in unrestricted cash and liquid nvestments ........ ... ......... 850 2,769Unrestricted cash and liquid investments at beginnirg of fiscal year .20.014 17,245

Unrestricted cash and iquid investments at end of t scal year .$ 20,864 $20,014

Composed ofInvestments . ............. ....... ... . ... . ... .... ... ... ... $ 23.730 $ 20,368Unresfricted currencies 124 127Net oayab e for investment securities purchased/sold ... ... . . . ... ... . . . . . (2,990) (481)

$ 20,864 $20,014

Supplemental disclosureIncrease (decrease) resulting trom exchange rate fluctuations

Loans cutstanding S.. . .. . $ 8,263 $ (714)Borrowings . . . . ... 7..... . . . . . . . 7.516 (280)Net payable for currency swaps 200 (324)



Summary Statement of Loans

June 30, 1992Expressed in millions of US dollars

Loansapproved Percentage of

Total but not yet Undisbursed Loans total loansBorrower or guarantor loans effectivel loansb outstanding0 outstanding

Algeria ........... .................. $ 2,976 $ 131 $1,345 $ 1.500 1.49Argentina ............................. 4,021 20 1,413 2,588 2.57Australia .............................. 3 - - 3Bahamas, The .......... ............. 28 - 9 19 0.02Bangladesh ........................... 63 - - 63 0.06Barbados ............................. 56 21 5 30 0.03Belize ............................. 33 7 7 19 0.02Bolivia .......... ................... 159 - - 159 0.16Botswana ............................. 168 - 26 142 0.14Brazil ............................. 12,713 1,443 3,596 7,674 7.61Bulgaria .................... ...... 272 - 123 149 0.15Cameroon ............................. 1,044 - 325 719 0.71Chile ..... ........................ 2,558 95 487 1,976 1.96China ............................. 7,187 613 2,950 3,624 3.59Colombia ............................. 4,753 566 796 3,391 3.36Congo . ........................ 183 16 4 163 0.16Costa Rica ........................... . 541 64 74 403 0.40C6te d'ivoirel .......... ................ 2,396 - 431 1,965 1.95Cyprus ... ........... ............... 172 17 119 36 0.04Czechoslovakia ........ ............. 704 246 198 260 0.26Dominican Republic ........ .............. 406 94 60 252 0.25Ecuador .............................. 1,264 89 375 800 0.79Egypt ............................. 2,426 349 707 1,370 1.36El Salvador ............. ............... 291 - 103 188 0.19Ethiopia ............................. 16 - - 16 0,02Fiji .................... ......... 95 15 20 60 0.06Gabon ............................. 97 - 14 83 0.08Ghana ............................. 96 - - 96 0.09Greece ............................. 8 - - 8 0.01Guatemala ............................. 414 62 117 235 0.23Guinea ............................. 7 - - 7 0,01Guyana ............................. 50 - - 50 0.05Honduras ............................. 568 - 44 524 0.52Hungary 2............................. 2909 - 947 1,962 1.95Iceland ............................. 5 - - 5 0.01India ........... ........... 16,020 502 6,576 8,942 8.87Indonesia ............................. 15,855 1,150 4,000 10,705 10.62Iran, Islamic Republic of .... .............. 416 134 249 33 0.03Iraq ............................. 48 - - 48 0.05Ireland .............................. 8 - - 8 0.01Jamaica .... ............ ... 749 - 110 639 0.63Jordan ............... ............ 751 - 216 535 0.53Kenyar ............................. 727 - 4 723 0.72Kenya, Tanzania, and Ugandag ........ ....... 1 - - 1

Korea, Republic of ........................ 3,416 120 554 2,742 2.72Lebanon ............................. 26 - - 26 0.03Lesotho 10............................... l - 110- -

Liberia ............................. 142 - 142 0.14Madagascar ............................ 22 -- 22 0.02Malawi .............................. 82 - 1 81 0.08Malaysia .............................. 1,638 294 255 1,089 1.08Mauritania .............. .............. 37 - - 37 0.04Mauritius ............................. 231 25 48 158 0.16Mexico ............................. 15,830 839 2,986 12,005 11.91Morocco ..... ........................ 4,825 114 1,269 3,442 3.41

Statement of Loans 203

Loansapproved Percentage of

Total but not yet Undisbursed Loans total loansBorrower or guarantor oans ettectivea loansb outstandingc outstanding

Nicaragua .................... 113 $ - $ - $ 113 0.11Nigeria ................. ........... 5,401 366 1,740 3,295 3.27Oman .......... .................. 80 - 30 50 0.05Pakistan ............................ 3,969 180 1,440 2,349 2.33Panama ............................ 380 - 60 320 0.32Papua New Guinea, ........0 ........ 399 27 100 272 0.27Paraguay ............................ 282 29 15 238 0.24Peru ............. ............... 2,031 1,000 - 1,031 1.02Philippines ............................ 6,158 159 1,842 4,157 4.12Poland . ........................... 2,621 445 1,663 513 0.51Portugal .. .......................... 231 - 84 147 0.15Romania . ........................... 831 500 288 43 0.04St. Kitts and Nevis ....................... 1 - 1St. Lucia ........................... 3 - 3St. Vincent ........................... 1 - 1Senegal .................. ...... 70 - - 70 0.07Seychelles ............................ 5 - - 5 0.01Sierra Leone ........................... 4 - - 4Singapore .............................. 3 - - 3Sri Lanka ............................ 71 - - 71 0.07Sudan ............................ 12 - - 12 0.01Swaziland ............................ 31 - - 31 0.03Syrian Arab Republic ............. . . 466 - - 466 0.46Tanzania' ............................ 190 - - 190 0.19Thailand ............................ 2,710 210 190 2,310 2.29Trinidad and Tobago ....... ............. 101 27 41 33 0.03Tunisia ................ ............ 2,151 135 498 1,518 1.51Turkey .......... .................. 8,896 334 2,632 5,930 5.88Uganda ............................ 26 - - 26 0.03Jruguay ..... ....................... 728 65 257 406 0.40Venezuela ............ ................ 2,128 98 617 1,413 1.40Yugoslaviah . ................ . . .". 2,755 592 142 2,021 2.00Zaire ............................ 88 - * 88 0.09Zambia . ........................... 323 - - 323 0.32Zimbabwe ............................ 757 - 332 425 0.42

Subtotal members ............. 153,632 11,193 42,649 99,790 98.99Caribbean Development Bank ....... 46 - 20 26 0.03West African Development Bank' . ............. 19 - 15 4International Finance Corporation ............. 1.236 - 246 990 0.98Total-June 30, 1992 ............. ... $154,933 $11,193 $42,930 $100,813 100.00

Total-June 30, 1991 .. ................. $143.607 $12,790 $40,179 $ 90,638

Indicates amounts less than $0.5 milion or 0.005 percenta Loan agreements totaling $3,806 million ($4,362 mi lion-June 30, 1991) have been signed, but the loans do not become effective and disbursementsthereunder do not start until the borrowers and guarantors, If any, take certain actions and furnish certain documents to the 1RID. Loans totaling $7,387 million($8,428 mil ion-June 30, 1991) have been approved by the IBRD but the related agreements have not been signed.b. Of the undisbursed balance the IBRD has entered into irrevocable commitments to disburse $1,634 mil ion ($1,456 million-june 30, 1991).c. Total loans outstanding as of June 30, 1992 ocludes $72,124 ml on ($59,662 mi lion-June 30, 1991) at variabe interest rate, and $28,686 ($30,976millio-June 30, 1991) at fixed interest-rate.d. In some instances loans were made, with the guarantee of a member, in countries which at the time were inc uded in that member's territories but whichsubsequently became indepenoent and separate members of the IBRD. Liabilities for these loans are shown under the name of the original member (whose

(continued)


Summary Statement of Loans (continued)


guarantee continues unaffected). Loans with outstanding balances equivalent to $3 million ($5 milion-June 30. 1991) are shown under Australia, theguarantor, but represent obligations of Papua New Guineae. One loan with an outstanding balance equivalent to $5 million ($8 milion-uJne 30, 1991) is shown under Cote d'lvoire (Guarantor) but is also partia yguaranteed by BuTkina Faso.f. Incldes portions of loans made to corporations of the former East African Community.g Members are ointy and severally liabie.h. See Notes to Financlal Statements-Note C.i These loans are for the benefit of The Bahamas, Barbados Grenada, Guyana Jamaica, Trinidad and Tobago, and territories of the United Kingdom (AssociatedStates and Dependencies) in the Caribbean Region, who are severally liable as guarantors to the extent of subloans made in their territoriesj The loan is for the benefit of Cote d'lvoire and Senegal, who are severaly iiable as guarantors to the extent of sub oans made in the r territories.

Summary of Currencies Repayable on Loans OutstandingCurrency 1992 1991 Currency 1992 1991

Australian dollars ......... $ 7 $ 94 Luxembourg francs .......... $ 101 $ 88Austrian schiltings .......... 195 100 Malaysian r inggit ...... 43 35Belgian francs ............. 247 212 Netherlands guilders . . .4.337 4,108Canadian dollars ........... 192 202 Norwegian kroner ......... 75 64Danish kroner ........... . 76 64 Portuguese escudos ....... 25 18

Deutsche mark .......... ... 23,483 19,060 Pounds sterling 321 281European currency units ...... 26 44 Saudi Arabian r iyals A:.....92 92Finnish markkaa ............ 58 55 South African rand ran d 44 40French francs ........... . 749 433 Spanish pesetas ...... . . 157 123Indian rupees .............. 27 27 Swedish kronor . . 103 89

Iranian rials .b . ........... 14 15 Swiss francs 14,697 13,926Irish pounds ........... . 29 24 Un ited States do lars 26,554 25,416Italian lire ..... .......... 242 176 Other currencies ........... 2 30Japanese yen .............. 28,724 25,649Kuwaiti dinars ....... ..... 170 173 Loans outstanding $100,810 $90,638

Maturity Structure of Loans*Period

July 1, 1992 tnrough June 30, 1993 ................. ............. $11l,124July 1,1993 through June 30, 1994 .............. ................... 1................... 10,554July 1,1994 through June 30, 1995 ................... 1..............................1....... 0 9 :01July 1,1995 through June 30, 1996 ........................ . 11,550July 1, 1996 through June 30, 1997 .................................. 1............... ......... 11,864July 1, 1997 through June 30, 2002 ............................................................ 49,805July 1, 2002 through June 30, 2007 ............................................................ 28,959July 1,2007 through June 30, 2012 ......................................................... .. 8,8July 1, 2012 through June 30, 2017 .......................... .................... 15Undetermined" . . . . . 119Total .$.1437. ... 4

Total loans less oans approved but not effective** Represents cancellations and other adjustments that have not been allocated to specific maturities

Statement of Borrowings 205

Summary Statement of Borrowings


Medium- and Long-term Borrowings and Swaps

Medium- and Long-term Borrowings Swap agreements' Net currency obt gations

We ghted Weightedaverage curmncy swap average cost

Princ pal. tstand ng' cost 10 payables (receivables) (return) (%)

1992 1991 1992 1992 19t 1t992 1992 1991

Austrafan dollars . 689 $ 886 13 76 $ (1088 $ (900) (13 77 $ (10) $ (14)Ausiian sch lings 405 348 783 (167) (143) 18021 238 205Be gian trancs 584 501 8 63 t518) (445) (186 f 66 56Canadlan dollars . 1,255 1576 1055 11110) (1306) (10667 ( 145 270Dash kroner 224 220 9 91 (222t (218) (9.93) 2 2Deuesche mark . 12,893 12526 729 7.722 4,802 7510

(54) (46) (590)0 20,561 17,282Euorpean currency units 2.731 1,710 8 72 (2,513) (1,320) 18 80 218 390F nish markkaa . 358 353 9 79 (354) (350) (9.81 I 4 3French francs . . . 1,194 853 9.50 (608) (357) (9 58)0 586 496Hong Kong dlelars 272 208 9.41 (2709 (208) (9 42) 2rian ire 4,1101 2.1668 1105 (4,088) 12,156) 11 121 12 10eapanese yen . . 28,7750 25705d 592 941 862 5.910

(1,612) (1,461) (6 081 28.t4 25.106Kuwait dinars 103 111 765 - - - 103 111Luxembourg francs . . 186 160 791 (93) (80) (8.21 9 93 80Netherlands guilders 3,374 3505 765 827 712 671

1886) (639) (7 721 3,315 3,578New Zealand dollars . 177 187 1265 (178) (188) (12.67) (1) (1)Norwegian kroner . 41 72 s55 - - - 41 72Portuguese escudos 249 - 1159 (247) - (11 61) 2 -Pounds sterlng . 2,711 2,338 1068 (1,088) (947) (1083)0 1,623 1391Spanish pesetas 1,245 939 1193 (1,229) (926) 11195) 16 13Swed sh kronor , 402 268 1057 1394) (2611 (1067 8 7Swiss francs . 6,717 7,033 633 5,867 4,814 5330 12,584 11,847Un ted States do ars . 22,96205 23,042' 871 4,046 3,878 8380

__ __ 84_ _ 70717 72 (2,506) (2,664) (9 29 )c 24,502 24 256Princ pal at face vaoe . 91,957 84707 772'Plus net unamortzed discounts

end premiums . 25 90Tota . 91.682 $ 84,797

a. See Notas to Financial Statements-Note D.b Includes zero-coupon borrowings wh ch have been recorded at their discounted va ues. The aggregate face amounts and discounted values of theseborrowings are

In mi lions of US-dollar equiva ents Aggregate face amount Discounted va ueCurrency 1992 1991 1992 1991Austraian dollars $ - $ 115 $- $104Canadian dol ars .... ... 168 175 115 109Deutsche mark . .. 1,295 1,115 289 234Italian lire . .. . . 86 - 55Swiss francs 933 837 218 185United States dol ars . 3,127 3170 569 553

c. Includes income and expense from interest rate swaps The lBRD has entered into interest rate swap agreements with respect to notional principal amountsas follows

In Millions Currency amount US-dollar equ valentCtrrency 1992 1991 1992 1991Canadian dollars . 149 149 $ 125 $ 131Deutsche mark . . . . . . . . . 8,269 4,866 5,353 2,712French francs . . . 984 - 190Japanese yen 97,500 35 000 777 253Pounds sterling . .. . . . . 100 100 189 163Swedish kronor 300 300 54 46Swiss francs 1,124 483 806 311United States dollars 4,260 3,725 4,260 3,725

(continued)

206 IBRD Financicl Statements

Summary Statement of Borrowings


As of June 30, 1992, 93 percent (92 percent-June 30, 1991) of above notional principal amounts of these interest rate swap agreements are trom floablngrates into fixed rates.d. Includes the following variable interest rate borrowings which through swaps have been transformed into the financial equivalent of fixed rate borrowings:

In Millions

Currency amount US-dollar equivalentCurrency 1992 1991 1992 1991European currency units .............. 575 - $764 $-Italian lire ......... ..... . . . 2130,000 200,000 171 149Japanese yen ..... .. .... . 97,500 35,000 777 253United States dollars ...... . .. ... ... . 380 - 380 -

e. Includes $99 million ($99 milliona-June 30, 1991) of variable rate borrowings and $172 million ($173 million-June 30, 1991) borrowed from the InterestSubsidy Fund. The Interest Subsidy Fund, which obtained its resources from voluntary contributions from member governments, was established to subsidizethe interest payments to the IBRD on selected loans.f. The weighted average cost of medium- and long-term borrowings outstanding at June 30, 1992, after adjustment for swap activities, was 710 percent (7.43percent-June 30, 1991).

Maturity Structure of Medium-and Long-term Borrowings

Period

July 1, 1992 through June 30, 1993 .............................. ..... $894July 1, 199 3 through June 30, 1994 . ..................... . . . . . . . . . . . 8,460July 1,1994 through June 30, 1995 .............. .... . . . . .. .. ....... .... .. ........... ... ... . 1.,0Jluly 1,1995 through June 30, 1996 ....................................... 10,426July 1 ,1996 through June 30, 1997 ....................... .. .. .. . . . ..... .. .. .. . . . ..... 1,762July 1,1997 through June 30, 2002 . . .. .. .. .. .30,762July 1,12002 through June 30, 2007 .................. .. 3,620.July 1,1997 throu gh June 30, 20l2 . . .. . . .. . . .. . . . . . . . . . . . . . .3..0.8.8....... . . .. : 0July 1, 2012 through June 30, 2017 . 3.505 . .......... ........... . . . . . ... .. ..... . 3,505July 1 , 2017 through June 30, 2022 ..................... .. .. .. .. .. .. . .. . . . :715Theteaftet ...................................... 328Total .................................... .... $91,657

Short-term BorrowingsWeightedaverage

Principal outstanding cost (%)A1992 1991 1992

Short-term Notes (US dollars)Principal outstanding at face value ................ .. .. .. . . $2,,750 $2,750Net unamortized discounts and premiums .(.1.). . ... .......... .. .... 21

Subtotal .......................................... .. 2 ., 2,771 t3.20Central Bank Facility (US dollars) ........... . . 2,600 2,583 4. 30Continuously Offered Payment-Rights (Swiss francs) .2.5..... . . . 34 7.66

Total . . . ..... . . .. ..... .. ... $5,374.. $5,388 3.75



Statement of Subscriptions toCapital Stock and Voting PowerJune30, 1992Expressed in millions of US dollars

Subscr ptions Voting Power

Percertage Amourts Number Percentageof Total paid ir Amounts subject of of

Member Shares total amounts (Note A) to cal (Note A) votes total

Afghanistan ..... ........... 300 0.02 S 36 $ 3.6 $ 33 550 0.04Albania .830 0.07 100 3.6 97 1,080 0.08A gera .. . ......... ..... 5,192 0.41 626 52.4 574 5,442 0.42Angola .2,676 0.21 323 17 5 305 2.926 0.22Ant gua and Barbuda .292 002 35 0.4 35 542 0.04

Argentina .10,052 0.80 1,213 103.8 1,109 10,302 0.79Australia ... 21.610 1.71 2,607 171.4 2,435 21,860 1.68Austria sa. . . 11,063 0.88 1,335 80.7 1,254 1,313 0.87Bahamas, The 1,071 0.08 129 5.4 124 1,321 0.10Bahrain .. . ...... 619 0.05 75 3 9 71 869 0.07

Bangladesh 3,576 0.28 431 29.3 402 3.826 0.29Barbados ... 948 0.08 114 4.5 110 1,198 009Belgim . . 26.796 2.12 3,233 207.9 3,025 27,046 2.08Beize . . 329 0.03 40 0.8 39 579 0.04Benin ... ...... ......... 487 0.04 59 2 5 56 737 0.06

Bhutan ... . 479 0.04 58 1.0 57 729 0.06Bolivia .. 1,002 0.08 121 8.0 113 1.252 0.10Botswana . 615 0.05 74 2.0 72 865 0.07Brazil 24,946 1.98 3,009 185.1 2,824 25,196 1.94Bulgaia ... 2,927 023 353 28.3 325 3,177 0.24

Burkina Faso . 487 0.04 59 2 5 56 737 0.06Burundi . . . 402 0.03 48 1.8 47 652 0.05Camboda .. 214 0.02 26 2.6 23 464 0.04Cameroon . 857 0.07 103 6.6 97 1,107 0.09Canada .... 40.321 3.19 4,864 318.7 4,545 40,571 3.12

Cape Verde .285 0.02 34 0.4 34 535 0.04Centra African Republ c 484 0.04 58 25 56 734 0.06Cnad . . .. .... . . 484 0.04 58 2 5 56 734 0.06Chle .6,931 0.55 836 49.6 787 7.181 0.55China .34.971 2.77 4,219 299.5 3,919 35,221 2.71

Colombia . 6,352 0.50 766 45.2 721 6,602 0.51Comoros . .. 282 0.02 34 0.3 34 532 0.04Congo .. .. ..... ..... 520 0 04 63 2.9 60 770 0.06Costa Rica .. 233 0.02 28 1.9 26 483 0.04Cote d Ivo re ..... 2,516 0.20 304 16 4 287 2,766 0 21

Cyprus .. 820 0.06 99 6.0 93 1,070 0.08Czechoslovakia 5,345 0.42 645 53.8 591 5,595 0.43Denmark . 10,251 0.81 1,237 74.6 1,162 10,501 0.81Djibouti . . .... . ... 314 0 02 38 0.7 37 564 0.04Domin ca . ..... ..... ... 283 0 02 34 0.4 34 533 0.04

Dominican Republ c. 1.174 0.09 142 9.8 132 1,424 0.11Ecador. 1.555 0.12 188 13.8 174 1,805 0.14Egypt .... .......... 3,989 0.32 481 39.6 442 4,239 0.33El Savador .141 0.01 17 1.7 15 391 0.03Equatorial Guinea .401 0.03 48 1 6 47 651 0.05

(continued)

208 IBRD Finrancial Statements

Statement of Subscriptions toCapital Stock and Voting Power[cnnudJune 30, 1992Expressed in millions of US dollars

Subscript ons Vuting PowerPercentage Amounts Nurnber Percentage

a' Tota gain * n AnioLnts subject cf ormemuer Shares Iota amcunts 1Note A) to cao (Nate A) votes tora

Estonia ......... 518 0.04 S 62 S 2.8 60 768 0.26Etnuopia ........ .. 978 0.38 118 4.7 113 1,228 0.09Fiji ... . . . .. . . . .. 728 0.06 88 3.9 84 978 0.08Finlano ........... 7.808 0.62 942 59.1 883 8,058 0.62France .... ...... 69,397 5.50 8,372 520.4 7,851 69,641 5.35

Gabon ..... .. .... 554 0.04 61 3.6 63 804 0.06Gambia, The .... ...... 305 0.02 37 0.7 36 555 0.04Germany .... .. ..... 72,399 5.74 8,734 542 9 8:191 72,649 5.58Ghana ... .... .... 856 0.01 103 10.3 93 1,106 0.08Greece ....... ...... 945 0.07 114 11.4 103 1.195 0.09

Grenada ....... .... 531 0.04 60 1.4 63 781 0.06Guat emala .. .. .... .. 1,123 0.09 135 9.3 126 1.313 0.11Guinea ..... ...... I 725 0.06 87 5.0 82 975 0.07Gci nea-B ssaL .. ... . 303 0.02 37 0.6 36 553 0.04Snyasa ......... ... 1.058 0.08 128 5.3 122 1,308 0.10

Haiti ...... 58.... .~ 9 0.05 72 3.7 69 849 0.07Hondutas ... ....... 360 0.03 43 1.3 42 610 0.05Hungary ....... .... 8,050 0.64 971 58.0 913 8,300 0.64Iceland ... .. ..... 1,258 0.10 152 6.8 145 1,508 0.12India ........ .... 44.795 3.55 5 404 333.7 5.210 45,045 3.46

Indones a .......... 13.666 1.08 1,648 105.5 1,543 15,916 1.07Jran, 'slam: ReDj~: ic of ..... 13.293 r305 1,604 138.2 1,465 13,543 1.04raqg . ... .. .... 2,808 2.22 339 27.1 312 3.058 0.23l'elad ..... ...... 5,271 0 42 636 37.1 599 5,521 0.42lsrae ...... ... ... 2.656 0.21 322 25 7 296 2,916 0.22

Italy . .... .. . ...... 44 795 3.55 5.404 334.8 5.068 45,045 3.46.1amaica.... . ..... 2,201 0.17 266 15.4 250 2,451 0.19Japan . ...... ... . 93,770 703 11,312 703.5 10,608 94,020 7.22Jcoran ...... ... . . 1,388 0.11I 167 7 8 160 1.638 0.13Kenya .... ... ..... 2,461 0.i9 297 15.9 281 2.711 0.21

K ribati ..... ..... 261 0.02 31 0.1 31 511 0.04Korea, RepLLn0o of ... ... 9,372 0.74 1,131 67.9 1,063 9,622 0.74Kuwat .. . ...... 7,453 0.59 889 76.3 823 7,703 0.59Lao People's Demnocratoc Repub ic 100 2.01 12 1.2 11 350 0.03ebno...... .... 340 0.03 41 1.40 590 0.05

Lesctho ...... .... 372 0.03 45 1.3 44 622 0.05Liber a ..... ..... 463 0.04 56 2.6 53 713 0.05Lbya .. .. ...... .. 7,840 0.62 846 57.0 889 8,090 0.62

Luxemtbourg.......... 1.652 0 13 195 9.8 188 1,902 0.15Madagascar .. .. .. ... 798 0.06 96 5.8 90 1,048 3.08

Ma av .. .... .. ... 614 0.05 74 3.9 70 864 0.07Maaysi~a .. ....... . 8.244 0.65 995 59.5 935 8,494 0.65Maio ves.. .. .. .... . 263 0.02 32 0.1 32 513 0.04Mal ..... ... II... 652 0.05 79 0.3 74 902 3.07Ma ta ... ... ... .... 903 2 07 109 4.8 104 1.153 0.09


Subscriptions Voting PowerPercentage Amounts Number Percentage

ot Total paid in Amounts subject of ofMember Shares total amounts (Note A) to call (Note A) votes total

Marshall Islands .. ......... 263 0.02 $ 32 $ 0.1 $ 32 513 0.04Mauritania . ................ 505 0.04 61 2.7 58 755 0.06Mauritius ................... 697 0.06 84 4.7 79 947 0.07Mexico .................. . 10,553 0.84 1,273 109.1 1,164 10,803 0.83Mongolia ..... ........... 466 0.04 56 2.3 54 716 0.05

Morocco ................... 2,791 0.22 337 26.9 310 3,041 0.23Mozambique ................ 522 0.04 63 3.3 60 772 0.06Myanmar ........ .......... 2.120 0.17 256 14.8 241 2,370 0.18Namibia .................... 855 0.07 103 6.4 97 1,105 0.08Nepal .................. . 543 0.04 66 3.1 62 793 0.06

Netherlands ................. 35,503 2.81 4,283 264.8 4,018 35,753 2.75New Zealand ................ 5,966 0.47 720 47.3 672 6,216 0.48Nicaragua ................. 608 0.05 73 2.1 71 858 0.07Niger .................... 478 0.04 58 2.4 55 728 0.06Nigeria ........... ...... 7,102 0.56 857 72.6 784 7,352 0.56

Norway ................. 9.982 0.79 1,204 72.6 1,132 10,232 0.79Oman ................... 876 0.07 106 6.6 99 1,126 0.09Pakistan .................. 7,701 0.61 929 61.8 867 7,951 0.61Panama .................... 216 0.02 26 2.6 23 466 0.04Papua New Guinea ........ .... 726 0.06 88 5.0 83 976 0.07

Paraguay . ................. 690 0.05 83 4.7 79 940 0.07Peru ... ................. 2,992 0.24 361 29.1 332 3,242 0.25Philippines ................. 3,841 0.30 463 38.0 425 4,091 0.31Po and ....... ............ 6,122 0.49 739 62.3 676 6.372 0.49Portugal .................... 5,460 0.43 659 38.5 620 5,710 0.44

Qatar ..................... 1.096 0.09 132 9.0 123 1,346 0.10Romania ................... 2,251 0.18 272 24.1 247 2,501 0.19Russian Federation ......... ... 25,140 1.99 3,033 262.7 2,770 25,390 1.95Rwanda ............... ... 587 0.05 71 3.6 67 837 0.06St. Kitts and Nevis ........ .... 275 0.02 33 0.3 33 525 0.04

St. Lucia .................. 552 0.04 67 1.5 65 802 0.06St. Vincent .................. 278 0.02 34 0.3 33 528 0.04Sao Tome and Principe ...... ... 278 0.02 34 0.3 33 528 0.04Saudi Arabia ............. ... 25,140 1.99 3,033 263.8 2.769 25,390 1.95Senegal ........... ........ 1,163 0.09 140 9.7 131 1,413 0.11

Seychelles ..... ............ 263 0.02 32 0.2 32 513 0.04Sierra Leone ................ 403 0.03 49 1.8 47 653 0.05Singapore .................. 320 0.03 39 3.9 35 570 0.04Solomon Islands ... ......... 288 0.02 35 0.4 34 538 0.04Somalia .. ................. 552 0.04 67 3.3 63 802 0.06

South Africa ................. 13,462 1.07 1,624 98.8 1,525 13,712 1.05Spain ......... .......... 23,686 1.88 2,857 175.6 2,682 23,936 1.84Sri Lanka . . . . 3,482 0.28 420 24.9 395 3,732 0.29Sudan ..... .............. 850 0.07 103 7.2 95 1,100 0.08Suriname ................... 412 0.03 50 2.0 48 662 0.05

(continued)


Statement of Subscriptions toCapital Stock and Voting Power (continued)


Subscriptions Voting Power

Percentage Amounrts Number Percentageof Total paid in Amounts sub ect of of

Member Shares total amounts (Note A) to call (Note Al votes total

Swaziland ..... 440 ......... 0.03 $ 53 $ 2.0 $ 51 690 0.05Sweden .14.974 1.19 1.806 110.2 1,696 15.224 1.17Switzerland ................. 26,606 2.11 3.210 197.2 3.012 26,856 2.06Syrian Arab Republic .1,236 0.10 149 10.5 139 1,486 0.11Tanzania .727 0.06 88 7.9 80 977 0.08

Thailand . .4,957 0.39 598 40.2 558 5,207 0.40Togo .. . 620 0.05 75 3.9 71 870 0.07Tonga .. 277 0.02 33 0.3 33 527 0.04Trinidad and Tobago . .1.495 0.12 180 13.4 167 1,745 0.13Tunisia . .719 0.06 87 5.7 81 969 0.07

Turkey .7,379 0.58 890 52.9 837 7,629 0.59Uganda .617 0.05 74 4.4 70 867 0.07United Arab Emirates .2,385 0.19 288 22.6 265 2,635 0.20United Kingdom .69,397 5.50 8,372 539.5 7,832 69,647 5.35United States .225,928 17.90 27,255 1,857.1 25,398 226,178 17,37

Uruguay .1,578 0.13 190 14.1 176 1,828 0.14Vanuat u .329 0.03 40 0.8 39 579 0.04Venezuela .11,427 0.91 1,378 118.5 1.260 11.677 0.90Viet Nam .543 0.04 66 6.6 59 793 0.06Western Samoa .298 0.02 36 0.5 35 548 0.04

Yemen, Republic of .1,241 0.10 150 10.5 139 1,491 0.11Yugoslavia .4,381 0.35 529 46.5 482 4,631 0.36Zaire .2,643 0.21 319 25.4 293 2.893 0.22Zambia ............. ...... 1.577 0.12 190 15.6 175 1,827 0.14Zimbabwe .1,866 0.15 225 17.1 208 2.116 0.16

Tottal-une 30, 1992 .1,262,0 54 100.0;0 $152,248 $1M000 O$142,1881,302,054 100 O00Total-June 30, 1991 .......... 1,153,231 $139,120 $ 9,393 $129.727 1,191,981

May differ from the sum of individua figures shown because of roundingThe Notes to Financial Statements are an integral part of these Statements.


Notes to Financial Statements

Summary of Significant Accounting allocation of such commrissions to the Special Reserve was discontinued inand Related Policies 1964 with respect to subsequent oans and no further additions are being

made to nThe IBRD's princpal tinancal statements are prepared a conformiy with the The General Reserve consists of earn ngs from pror fiscal years that, in theaccounting principles generally accepted n the United States and with judgment at the Executive Drectofs, shoald be retained *n the BRDsInternationa Accounting Standards. businoss.

Translation of Currencies Surp us consists of earnings from pr or fiscal years that are retamed by theIBRD unti a further decision s made on their disposition

The IBRD's principa financial statements are expressed in terms of USdol ars solely for the purpose of summarizing the IBRD's financial position Unallocated Net Income consists of earn ngs in the current fisca yearand the results of ts operations for the convenience of its members and Commencing in 1950, a portion or olat rfthe Unallcated Net Income hasother interesred panties been allocated toathe General Reserve Addjitina y, upon approval of the

Board of Govemors, transfers have been made out of Unallocated NetThe IBRD is an international organization that conducts its operations in the Income to the Internat onal Development Association (IDA) (or faci itiescurrencies of all of its members. The IBRD's resources are derived from its administered by IDA) and Surplus, and from Surplus to the Globalcapital, borrowings, and accumulated earnings in those various currencies. Environment Trust Fund and the Techncal Assistance Trust Fund for theThe IBRD has a number of general policies aimed at minimizing exchange- Union of Soviet Socialist Republics.rate risk in a multicurrency environment The IBRD matches its borrowingobligations in any one currency (after swap actvities) with assets in the Loanssame currency, as prescribed by its Articles of Agreement, primarily byholding or lending the proceeds of its borrowings in the same currencies in All the IBRD's loans are made to or guaranteed by members, except loanswhich they are borrowed. In addition, the IBRD periodically undertakes to the International Finance Corporation (IFC) The principal amounts ofcurrency conversions to more closely match the currencies underlying its loans are repayable in the currencies lent. For loans negotiated s nce Julyreserves with those of the outstanding loans With respect to ts other 1980 (and for portions of certain ear ier loans), the repayment obligationsresources, the IBRD does not convert one currency into another except for of borrowers in various currencies are determined on the basis of a currencysmall amounts required to meet certain obligations and operational needs. pooling system, which is designed to equalize exchange-rate nsks among

Assets and liabilit es are translated at market exchange rates at the end ot borrowers Interest on loans is accrued in the currencies lentthe period. Income and expenses are translated at the market exchange rate Incremental direct costs associated with originating loans are expensed asat the dates on which they are recognized or at average market exchange incurred, as such amounts are considered immateriarates in effect durng each month Translation adlustments, with theexception of those re ating to capital subscriptions described in Note A, are The IBRD does not reschedu e interest or principa payments on its loans orcharged or credited to Equ ty parmic pate in debt reschedul ng agreements with respect to its loans In

exceptional cases, however, such as when imp ementation of a financedValuation of Capital Stock project has been de ayed, the loan amortization schedule may be modified

to avoid substantial repayments prior to prolect completion. It is the policyIn the Antic es of Agreement, the capital stock of the IBRD s expressed in of the IBRD to place in nonaccrual status a I oans made to or guaranteedterms of "US dollars of the weight and fineness in effect on July 1, 1944' by a member of the IBRD it principal, nterest, or other charges with respect(1944 dollars). Following the abo ition of gold as a common denominator to any such oan are overdue by more than sx months, unless IBRDof the monetary system and the repeal of the provision of the US law management determines that the overdue amourt wi I be collected in thedefining the par value of the US dol ar in terms of gold, the pre-existing immediate future On the date a member's loans are p aced in nonaccrualbasis for translating 1944 dollars into current dollars or into any other status interest and other charges that had been accrued on loanscurrency disappeared On October 14 1986, the Executive Directors of the outstanding to the member which remained unpaid are deducted from theIBRD decided, effective June 30, 1987 unti such time as the relevant income of the current period. In addition, it deveiopment credits by IDA toprovisions of the Articles of Agreement are amended, to interpret the words a member government are placed in nonaccrual status, al oans to that"US dollars of the weight and fineness in effect on July 1, 1944" in Article member government wd aiso be placed in nonaccrual status by the IBRD11, Section 2(a) of the Articles of Agreement of the IBRD to mean the Special Interest and other charges on nonaccruing loans are included in incomeDrawing Right (SDR) introduced by the International Monetary Fund as the only to the extent that payments have actually been received by the IBRDSDR was va ued in terms of US dollars immediately before the introduction The IBRD determmes the Accumulated Provision for Loan Losses based onof the basket method of valuing the SDR on July 1, 1974, such value being an assessment of collectibility risk of the total loan pondoliol, including loans$1 20635 for one SDR in nonaccrual status The Accumulated Provision is periodically adjusted

based on a review of the prevailing circumstances and will be used to meetRetained Earnings actual losses on oans Should such losses occur in amounts in excess of

the Accumu ated Provision (and of the amount of the Special Reserve) theRetained Earnings consists of allocated amounts (Special Reserve, General excess would be included in the determination of net income AnnualReserve, and Surplus) and Unal ocated Net Income. The IBRD has not adjustments to the Accumulated Provision are recorded asa charge or creditdeclared or paid any dividends to its members. to income.

The Special Reserve cons sts of loan commiss ons set aside pursuant toAricle IV, Section 6, of the Aricles of Agreement which are to be he d in Investmentsliquid assets. These assets may bh used only for the purpose of meetingliatilities of the IBRD on 'ts borrowings and guarantees in the event of The lBRD carries its mvestment secunties at market value Both realized anddefaults on loans made, participated in, or guaranteed by the IBRD The unrealized gains and osses are included in income from investments FromSpecia Reserve assets, comprising obligations of the United StatesGovernment and its instrumentalities, are included under Investments The (continued)


Notes to Financial Statements (continued)

time to time. the IBRD enters into forward contracts for the sale or purchase With respect to restricted currencies out on loan maintenance-of-valueof investment securit es; these transactions are recorded at the time of obligations become effective only as such currencies are recovered by thecommitment. IBRD The maintenance-of-value amounts relating to restricted currencies

out on loan are included in Amounts Required to Maintain Value of CurrencyDue to the nature of the investments held by the IBRD and its policies Holdings-Amourts Deferred.governing the level and use of such investments the IBRD cassifies theonvestment portfolio as an element ot liquidity in the Statement of Cash Capital Increase: On April 24, 1992, the Board of Governors approvedF ows. a capital increase of 77,159 shares increasing the Bank's authorized capital

to 1,525,659 shares to provide for the membership of tre Republics of theformer Soviet Union. In the event that any new member fails to subscribe to

Reclassifications 'ts a located shares the authorized capital will be reduced by the cumber otshares such member failed to subscribe.

Certain reclassifications of the prior year s information have been made toconform to the current year's presertation. Note B-Investments and Cash Collateral

InvestedNote A-Capital Stock, Restricted Currencies, A summary of the currency compos tion of Investments and Cash Collateraand Maintenance of Value nvested at June 30 1992 and June 30 1991 is as follows:

Capital Stock: At June 30, 1992, the IBRD's captal comprised1525,659 (1,448,500-June 30, 1991) authorized shares, of which1,262 054 (1 153,231-une 30 1991) shares had been subscribed Each In mil ions of US-dollar equivalentshare has a par vasue of 0.1 milan 1974 SDRs velued at the rate ot$1 20635 per 1974 SDR Of the subscribed capitai, $10,060 million ($9,393 Currency 1992 1991mi lion-June 30, 1991) has been paid in, and the remaining $142,188 Deutsche mark ........ . $ 1,946 $ 1,631mlHion ($129,727 million-une 30, 1991) is subject to call only ohen Japanese yen ...... .... 4,989 3,999required to meet the obligations of the IBRD created by borrowng or Puguaranteeing loans. As to $121 798 ml lion ($111,296 millIona-une 30 ods string 1,689 1,4631991) the restriction on calls is rmposed by the Artices of Agreement and United States dollars ..... . 18,861 15,554as to $20,390 million ($18 431 million--June 30, 1991). by resolutions of Other currencies ...... . . . 2,004 2,290the Board of Governors Total ......... ........ $29,489 $24,937

Restricted Currencies: The porton of capita subscriptions paid into the IBRD is divided irto two parts: (1) $1 006 mi ion ($939 mi 9on-June 30, 1991) initially paid in go d or US dollars and (2) $9,054 million($8,454 mllionm-une 30, 1991) paid in cash or nointerest-bearingdemand obl gations denominated either in the currencies of the respective As part of 'ts overal portfolio management strategy, the IBRD is party tomembers or in US dollars The amounts mentioned in (1) above and (i) financia instruments with off-balance-sheet risk, inc uding futures, forward$646 milion ($506 mli,ni-J uce 30, 1991) which were repurchased by corroacts covered forward contracts, options, and short sales. Futures andmembers with US do ars and (ii) $122 million (S96 million-June 30, forward contracts are contracts for delayed de ivery of securities or money1991) which were the proceeds from encashments of US-dollar-denomi- market instruments in which the sel er agrees to make delivery ata specifiednated notes which are ncluded in the amourts menrtioned in (2) above, are future date of a specified instrument, at a specified price or yie d. At Junefreely usable by the IBRD in any of its operations. The portion ot the 30, 1992, the total contract value of tutures contracts was $17 803 millionamounts paid in US-dol ar-denominated notes are encashed by the BRD ic ($8,445 min ion-June 30, 1991) and the IBRD's exposure to credit oss onaccordance with the schedules agreed between the members ard the IBRD. futures contracts due to potential nonpertormance of counterparties was $40The remaining amounts paid in the currencies of the memoers, referred to milion ($26 million-une 30 1991). On June 30, 1992, the total contractas restricted currencies, are usab e by the IBRD in its ending operations vasue of forward contracts was $474 million ($449 million-Jne 30, 1991).only with the consent of the respective members and for administrative Dn Juce 30, 1992, IBRD had no exposure to credit loss in the event ofexpenses. The equivalent of $5,465 million ($4,876 million-,ne 30, nonperformance by counterparties ($0.3 millIon-Jaune 30, 1991).1991) has been used tot ending purposes, with such consent. Covered forwards are agreements in which cash in one currency isMaintenance of Value: Atice II, Section 9 of the Articles of converted into a different currency and, simultaceouslyp a forward exchangeAgreemert provides for maintenance of value, as of the time of subscription agreement is executed providing for a future exchange of the two currenciesof such restricted currencies requiring (1) the nember to make additiona in order to recover the currency converted. At June 30, 1992, the IBRD hadpayments to the IBRD in the event that the par value of ts currency is gross receivables from covered forward agreements of $328 million ($92reduced or the foreign exchange value of its currency has, in the opinion of mi lio-June 30, 1991) and gross payables from covered forwardthe IBRD. depreciated to a significant extent in its territories and (2) the IBRD agreements of $376 mil ion ($86 ml ion-eune 30, 1991). At June 30to reimburse the member in the evert that the par value of its currency is 1992, the IBRD's exposure to credit loss in the event of nonperformance byincreased. counterparties was $0.1 millon ($5 milicn-une 30,1991).

Since currercies no longer have par va ues maintenance-of-value amounts Options are contracts that a low the holder of the option to purchase or sellare determined by measuring the foreign exchange va ue of a member's a financial instrument at a specified price and within a specified period ofcurrency against the standard of value af 3BRD capital based on the 1974 time from the seller or to the purchaser of the option As a seller of options,SDR. Members are required to make payments to the BRD if the'r currencies the IBRD receives a premium at the outset and then bears the risk of andepreciate signoficantly relative to the standard of value. Furthermore, the unfavorable change in the price of the financial instrument underlying theExecutive Directors decided to adopt a poicy of reimbursing members option. The total contract value of options sod at June 30, 1992 was $1,020whose currencies appreciate significantly ir terms of the standard of va ue million ($407 mi lion-June 30, 1991).

Notes to Finoncicl Statements 213

Short sales are sales of securit es not he d n th-e BRD s portfo oat the imeof the sa e The BRD must purchase the seur ty at a ater date and bears Ir nil onsthe risk tnat tne market vanuo of thn security wilt mone adversely between thetime of the sale and mhe t me the secur ty must be delivered The tota Jtune 30 1992contract anount of short salos at June 30 1992 was $2,598 mi on ($210 Pr ncpalm[lion-uone 30, 1991) This amount is included in Payables for Princ so and cnargesInvestment Secur ties Purchased Member counpry orsrandirg oserdue Noraccrua snce

For botr on- ann off-balarce-sheet securities, the IBRD limits trad ng to aist of authorzed dealers and counterparties Credit imts have been Congo . . . 163 S 37 September 1991estab shed for each counterparty by type of nstrurmenrt and maturity Guatema a . . . 235 67 July 1990category Iraq 48 25 December 1990

The annua ized rate of return on average investments net of cash collateral itera . . . 142 144 June 1987received, he d during the Viscal year ended June 30, 1992 oclud ng both Peru 1,031 923 August 1987realized and unrealized gairs and losses oas 807 percent (9.23 per- Syrian Arabcent-June 30, 1991) Republi. . 466 395 February 1987

Total .$2,085 $1,591Note C-Loans, Cofinancing and Guarantees ---

Loans: On July 23, 1991, the Bank's Executive Directors approves aore-year waiver ot 25 basis po nts of interest on disbursed and outstandingloans for al payment periods commencng n the fiscal year ending June 30 Ouring the fiscal year 1992. Panama, Nicaragua, and Sierra Leone paid off1992 for al e igib e borrowers Eligible borrowers means borrowers who pay al ot the r arrears and therefore loans to then cane out of nonaccrualthe BRD n a time y manner For the year ended June 30 1992 $160 status As a resu t, ncome from oans for the f scal year ended June 30,million was set as de as a reduction of ncome due to the estimated ettect 1992 increased by $222 m Ilion corresponding to income that would haveof the oterest waiver Of th s amount $132 nillion has been ref ected as a been accrued in previous t sca years. For the fisca year ended June 30reduct on n b s sent to the borrowers. '991 mcrease ir noan mcome due to loans tc countrnes coming out ofAt June 30, 1992, no 0ans payable to the BRD other than those referred nonaccrual status dur ng that year was $147 mi 'iorto n the following paragraphs were overdue by more than three months An analys s ot the changes to the accumu ated prov s on for oan osses

At June 30 1992 pr nc pal nstaliments of $13 m lion and nterest and appears belowother charges ot $3 nillion payable to the IBRD on oans made to orguaranteed by the Federal Republic of Yugosavia, excuding loans toborrowers in cr for the beneft of Croatia and Slovenia, were overdue by In m iuorsmore than three months The aggregate principal amount outstand ng on a 1992 1991loans to or guaranteed by the Federal Repub ic of Yugos av a exc udingloars to borrowers in or for the benetit of Croatia and S oven a was S1,709 Balance, beginning of fiscal year S1,990 $1,250million The IBRD reached agreements in February 1992 on an inter n basis Provision for loan losses . . .. 353 775with the Socialist Federal Repub c of Yugoslavia (SFRY) (then consisting ot Trans ation adjustments .3.... . 197 (35)Serbia, Montenegro, Bosnia-Herzegovina, and Macedonia) and with Croat aand Slovenia for the service of debt due to the 9IRD on loans directly Balance. end of fiscal year . . . $2,540 $1990benefit ng each of them. subject to the overa I guarantee of the SFRY Giventhese agreements, the IBRD treats loans benefiting Croatia and S oveniaseparate y from oans made to or guaranteed by, the Federa Republic otYugoslavia At June 30 1992 no oans beret t ng Croatia or Slovenia were Cofinancing and Guarantees: The IBPD has entered nto agree-overdue bv more than three months ments for loans syndicated by other ftianciai nstitutons either by a direct

parlicipation if or a partial guarantee ot loans for the benefit of memberAt June 30, 1992, the oans made to or guaranteed by certain member countr es or a partial guarantee of secur ties issued by an ent ty eligile forcountries with an aggregate principa balance outstanding of $2.085 m Ilion IBRD loans. The IBRD's direct part c pations in syrd cated loans are($2,496 mil ion-une 30, 1991), of wh ch $861 m lion ($950 nil on- nc uded n reported loan balancesJone 30, 1991) was overdoe, were in nonaccroal status As of soch dateoverdue interest and other charges in respect of these loans tota ed $730 Guarantees of S1,136 mi or at June 30 1992 ($1,134 m lion-June 30,mil on ($833 million--une 30 1991) It these loans had not been in 1991) were not n uded in reported oan baances A total of $150 mil onnonaccrua status ncome from loans for the fica year ended June 30 of these guarartees was subnect to cah at June 30, 1992 None of the1992 would have been higher by $61 mi ior ($149 mill on-une 30 guarantees was subject to cal at June 30, 1991.1991). A summary of member countries w;th loans or guarantees n The IBRD thas partially goaranteed the brmely paymert ot nterest amounts onnonaccrual status follows certa n loans that have been sold At june 30, 1992 these guarantees,

approx mating S8 mil on (S10 m ion-June 30, 1991), were subject toca

Statutory Lending Limit: Under the Art c es of Agreement, the totalamount outstanding ot guarantees, participations in oans, and direct oansmade by the IBRD may not be increased to an amount exceeding 100

(confinuOed)


Notes to Financial Statements (continued)

percent of tne sunr of subscribed capital, reserves, and SLrP us On the dateofthe respectve bond AtJurne30, 1992andeJne30 1991,therewereIBRD s Baaonce Sheer reserves and surDILs correspcnd to items labelled no outstanding foRward sales Lnder such agreements ard the BRD had noRetaned Earnings Cumuative Transiat on Adoustment, and AccLmulated exposire to cred t loss on tte agreements.Provision for Lcan Losses The iBRD's Executive Directors have issuedguidelnes nursiant to which aol guarantees 'ssued oy the IBRD wi be Note E-Retained Earnings andcounted towards this mit at the time tmev tfrst beccre 0a ab e irrespective Allocation of Net Incomeof the ike ihood of an actua call Ir March 1991, the IBRD's ExecutiveD'rectors decided that discussiors on an addit onal capital increase would Retained Earnings: Retained Earrings compr ses the fol owingbe initiated if the tota amount outstarding of callabe guarantees. ements as ot June 30. 1992 and JLne 30 1991:parric pations i loars, and direct oans were to exceed 80 percent of thesum of subscribed capital, reserves, and surp us At June 30, 1992 sucntotal aoount was $100 818 m llion or 60 percent (60 percenrt-June 30 n miions1991) of such sum

199Arl§27At f 1991

Note D-Borrowings and Swaps Special Reserve.$.293. . . 29 $ 293General Reserve. .1. ..... 0,894 10.444

The IBRD has entered into currency swaps n wnich proceeds ot a borrowing SoupIus -: 5 t h,are converted into a dofferent currency and sim taneously a forNard Unaslocated Net Income for theexchange agreement is executed providing tor a schedule ot futureexchanges of the toc currercies n order to recover the currency converted. fiscal year ... . 16 . .. 45 1,200The combination of a borrowing and a currency swap produces the finarcial $93,202 $11,937equivalent of substituting a borrowing in the currency obtained in the nitialconversion for the origina borrowing. The IBRD also undertakes interest rateswaps. which transtorm a fixed-rate payment obligation in a particularcurrency ntc a flcat ng-rate obligat on ir that currency and vice-versa Theaverage cost of borrowings outstand ng, includ ng short-term borrowings,during the f scal year ended JLne 30, 1992 was 7.29 oercent (7.41percent--une 30 1991. )reflect ng a reduction in interest expense of $483mi ion (S403 m' lionn-ne 30 1991) 0s a result of swaps. On July 23,1991, the Executive Directors a located $450 i ior of the net

ncome earned in the fisca year ended June 30, 1991 to the General ReserveAt June 30 1992, the iBRD had gross receivables from currercy swaps ao ard proposed the transfers of $350 mi ion and the remaining $400 mi iona book value of S18 846 million (S14 615 million-Aune 30, 1991) and of the ret ncome earned in that period to DA and Surplus, respectively. Thegross payables from currency swaps at a book value of S19.403 mi ion transfers to IDA and Surp us were made upon approval by the Board of($15 068 m'llion-,une 30 1991) In addition, the 9BR0 had interest rate Governso on October 17 1991 In addition, a transfer of $30 mnion fromswap contracts covering a notiona principa amount of $11 754 million on Surplus to the Techn cal Ass stance Trust Fund for the Union of the SovietJune 30 1992 (S7,341 rmillion une 30 1991). Soc:a ist RepLblics was approved by the Board ot Goverrors, as described

At June 30, 1992 the IBRD was exposed to credit loss ir the event of belownonperformance by 'ts counterparies in an aggregate amount of $1 400 Transfers to International Development Association: Themillion ($1 027 mirion-Ane 30, 1991) for outstanding currency swaps, Board of Governors approved transfers to IDA Iota ing $3,241 mi ion fromand $79 mihion ($26 million--June 30, 1991) for outstanding interest rate Una ocoaen Net Income for the fiscaI years ended June 30 1964 throughswaps representing the est mated cost of replacing, at current market rates, June 30 1987; June 30. 1989: and June 30, 1991. The Board of Governorsa those outstanding swaps for which the IBRD would incur a loss in approved a transfer from Unallocated Net Income for the fisca year endedreplacirg the contracts June 30 1990 to Sirplus, and, on May 13 1991 approved the sibsequent

transfer trom Surplus ot the eguiva ent ot SD9200 m lien ($267 m' lione) tnThe BRD follows gude 'nes regarding the cointerdrni'es witn whom e wil IDA Of these transters, $1,03 m' ionr remained payab e at June 30, 1992enter into swap agreements and establishes c-eo,r hinits ofo each of Ithose ($778 m ion--Jure 30, 1 991)counterparties. The iBRD does not art cpoate norperformance by any of itscounterparties Transfers to Debt Reduction Facility for IDA-Only Coun-

tries: In September 1989 the Board of Governors approved a transfer toThe IBRD enters nto deferred rate setting agreements in conjunction with the Debt Reduction Facility for IDA-On y Countries of $100 m' lion from netseme of 'ts bond issues These agreements prowide for payments to be made income earned in the tiscai year ended June 30 1989 Ot these funds, $82to or by the BRD reflecting gain or loss on one or more government m lion remaired payable at June 30, 1992 ($92 m ion-June 30, 1991).securities These agreements allow nee BRD Io tix the effective interest costto the IBRD of ai or a port'on of the issues over a specified period of time Transfer to Global Environment Trust Fund: On May 13after the issue date of the respective bond. The otentia credit oss to the 1991, the Board of Governors approved a trarsfer from Surplus of $29IBRD from nonperformance is imted to any amounts due hut unsett ed mill'on to the Giobal Env ronmert Trust Fund Tbis amount was paid in Junefrom the financia intermediary However per odic mark-to-market sen e- 1991ments or these agreements mnit this risk. At JLne 30, 1992 and June 301991 the effective interest cost had been fixed or a tranches of the deferred Transfer to Technical Assistance Trust Fund for therate seting agreements and the IBRD had no exposure to credit oss on the Union of the Soviet Socialist Republics: On Seplember 18agreemerts 1991, the Board of Governors authrozed a troansfer from Surplis of $30

mil 'on to the Technical Assistance Trust Fund for the Union of the Sov etThe IBRD also enters into anticipatory rate setting agreements n con unction Socialist Republics for the benefit of the USSR and its repub ics On Oc-with some of its bond issues. These agreements allow the IBRD, through a tober 17, 1991 the Board of Governors approved a transfer to Surplus ofseries of forward sales of U.S. Treasury securities, to fix the effective interest that amount from Unallocated Net ncome for the fisca year ended June 30,cost of alt or a portor of the issues over a period of time prior to the issue 1991. This amount was paod in October 1991


Note F-Expenses In milions

Adoinistrative expenses are net of the management fee of $395 million 1992 1991($328 millionu--Jne 30, 1991) charged to IDA and $101 mill on ($65million-,une 30, 1991) charged to reimbursab e programs Service and Actuarial present value of benefitsuppoe tees of $9 milon ($7 mllion-June 30, 1991) charged to IFC and oblgations$0.5 million ($05 milliona-une 30 1991) charged to the Multilateral Accumulated benefit obligationInvestment Guarantee Agency (M GAt are included in reimbursable programs Vested ...... . $(2,664) $(2,41 1)

Contributions to special programs represent grants for agricultural research, Nonvested ., (35) (42)the control of onchocerciasis, and other deve opmenta activities Subtotal ..... ......... (2,699) (2,453)

Effect of projected compensationNote G-Staff Retirement Plan levels . ........... (1,387) (1,126)

The IBRD has a defined benefit retirement plan covering substantia ly all of Projected benefit obligation (..... 4,086) (3,579)its staff. The Plan also covers the staff of IFC and MIGA Under the Pan, Plan assets at fair value ...... ...... 4,274 3,728benefits are based on the years of contributory service and the highest Plan assets in excess of projected benefitthree-year average of pensionable remuneration as defined in the Plan, with obligation .1... . f 88 149the staff contributing afixed percentage ot pensonabt e remuneration and tre Remaining unrecognized net asset .(... . 143) (155)IBRD contribufing the remainder at the actuarially determined cost of ftutre Uneoizdporsvceot10 15Plan benefits, The IBRD uses the aggregate method for determining Ls Unrecognized prior service cost ... . 107 115contribution to the P an The amount of that contribution approx mates the Unrecognized net gain ............ . (152) (1 09)net periodic pension cost as detailed below All contributions to the Plan Prepaid pension cost . ...... . $ 0 $ 0and all other assets and income held for the purposes of the Plan are hed _d_ =by the IBRD separately from the other assets and income of the IBRD IDA,IFC, and MIGA and can be used only for the benefit of the part cipants .0the P an and the r beneficiaries, until all iabilities to them have been paid The weighted-average discount rate used in determiring the actuaralor provided for Plan assets consist primarily of equity and ̀ixed income present value of the projected benefit obligation was 8 25 percent (8.25securities, with smaller hold ngs of cash, real estate and other investments percent-June 30, 1991) The effect of projected compensation levels wasNet periodic pension cost for IBRD participants for the fiscal years ended calculated based on a scale that provides for a decreasing rate of salaryJune 30, 1992 and June 30, 1991 consisted ot the followirig components. increase depending on age, beginning with 13 percent at age 20 and

decreasing to 7 6 percent at age 64. The expected long-term rate of retornon assets was 9 percent (9 percent-June 30 1991)

In milions Note H-Retired Staff Benefits Plan1992 1991

The IBRD has a Retired Staff Benefits Plan jRSBP) that provides certainService cost benefits earned during health care and life insurance benefits to retirees. Al staff who are enrolled

the fiscal year ............ . . $145 $122 in the insurance programs whi e in active service and who meet certainInterest cost on projected benefit requirements are eligible for benefits when they reach early or normal

obligation .261 230 ret rement age while working for the IBRD The RSBP also covers the staffActual return on plan assets (422) (194) of IFC and MIGANet amortization and deferral .1.0.9.. 109 (91) Retirees contribute a level amount toward life insurance based on theNet periodic pension cost ...... $ 93 $ 67 amount of coverage Retiree contributions toward health care are based on

- - oength of service and age at retirement The IBRD annually contributes theremainder of the actuarially determined cost for future benefits. Allcontributions to the RSBP and all other assets and income held for purposes

The portion of th s cost that re ates to the IBRD and is included in of the RSBP are held by the IBRD separately from the other assets andAdministrative Expenses for the fiscal year ended June 30, 1992 is $59 income of the IBRD, IDA, IFC, and MIGA and can be used only for them lion $44 mil on-Jaune 30, 1991). The ba ance has been charged to benefit of the participants in the RSBP and their beneficiaries until allIDA lablities to them have been paid or provided for. RSBP assets consist

primari y of fexed income and eqoity secoritiesThe following table sets forth roe Plan's funded status at June 30 1992 andJune 30 1991:

(continued)


Notes to Financial Statements (continued]

Net periodic postretrrement benefits cost for IBRD participants for the fiscalyear ended June 30, 1992 consisted of the following components: In mi lions

Accumulated postreti-ement benefit obl gation:Retires .................. . $(115)Fully el g ble active plan palicipants . (51)Other active plan participants .(.1.. . ... ..... (146)

(31 2)

In mi lions Plan assets at fair va ue ...... . .... ........ . 230

Service coso-beofetis earned during the Accumuiated postretirement benefit ooigation infiscal year .................... . $10 excess of plan assets. . . ....... . (82)

Interest cost on accumulated postretirement Unrecognized transition obligation .31oenefit obligation .............. . 20 Unrecognized net loss .53

Actual return on plan assets . . . .1. (15) Prepaid postretirement benetit cost .$ 2Net amortization and deterrai . . . . .. . .. . .

Net periodic post-retirement benefits cost. . $15= For meosuremert purposes an inrtial annual rate of ncrease n the per

cap 'a cost of covered health care benefits of 13 percent was assumed: therate was assumed to decrease gradua y over 12 years to an ultimate rate of7 percent The health care cost trend rate assumpt on has a significant effecton the amounts reported To ihustrate, increosng tne assumed heath carecost trend rates by one percentage point would increase the accumulatedpcstrerrement berefit oigatioc as of June 30, 1992 by $65 m lion and thenet periodic postretiremert benefrt cost for the fisca pear then ended by $7

The porb on of ftis cost rhat re ates to the IBRD ano s nc udeo n I nAdmirnstratlive Expenses for the fiscal sea, ended June 30, 1992 is $9 mi omilion. The balance has been charged to DA The weiohted averace discoun rate tsed in deterr in ng the accumulated

postretirement benef t ebligation was 9 percent The expected long-term rateThe follcwirg table sets forth, te RSBP's funded status at une 30 1992: of return on o :an assets was 9 percent.

217

Report of Independent Accountants

Price Waterhouse The Hague Tokyo(International Firm) London Washington

New York

Price Waterhouse

July 30. 1992

President and Board of GovernorsInternational Bank for Reconstructionand Development

In our opinion, the financial statements appearing on pages 198 through 216 of this Report present fairly, inall material respects, in terms of United States dollars. the financial position of the International Bank forReconstruction and Development at June 30. 1992 and 1991. and the results of its operations and its cashflows for the years then ended in conformity with generally accepted accounting principles in the UnitedStates and with International Accounting Standards. These financial statements are the responsibility ofmanagement of the International Bank for Reconstruction and Development. our responsibility is to expressan opinion on these financial statements based on our audits. We conducted our audits of these statementsin accordance with generally accepted auditing standards, including International Auditing Guidelines, whichrequire that we plan and perform the audit to obtain reasonable assurance about whether the financialstatements are free of material misstatement. An audit includes examining. on a test basis, evidencesupporting the amounts and disclosures in the financial statements, assessing the accounting principles usedand significant estimates made by management, and evaluating the overall financial statement presentation.We believe that our audits provide a reasonable basis for the opinion expressed above.

( CA~ )i

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