ITF

NOTES (CONT.) (FORMING PART OF THE FINANCIAL STATEMENTS) 41. Related parties 42. Changes in accounting policies IFRS 16 Leases Measurement of lease liabilities 2019 $000 Operating lease commitments disclosed as at 31 December 2018 2,629 Discounted using the lessee's incremental borrowing rate of 2.5% at the date of initial application (108) Lease liability recognised as at 1 January 2019 2,521 Of which are: Current lease liabilities 602 Non-current lease liabilities 1,919 Measurement of right-of-use assets 43. Liabilities from financing activities Leases $000 Net debt as at 1 January 2018 - Net debt as at 31 December 2018 - Recognised on adoption of IFRS 16 (see note 26) (2,521) Net debt as at 1 January 2019 (2,521) Cash flows 714 Interest expense (65) Foreign exchange movements (124) Net debt as at 31 December 2019 (1,996) The ITF is a member organisation and undertakes routine transactions every year with its members such as subscription income and prize money payable for team competitions. Where the group enters into a transaction with a member organisation which is not routine it shall be disclosed separately in the financial statements. During the year, the Kazakhstan Tennis Federation, whose president Mr Bulat Utemuratov is a director of ITF Limited, provided funding to the group of $697,000 for the 12-and-under team competition development programme. No other non-routine member organisation transactions arose during the year. This note explains the impact of the adoption of IFRS 16 Leases on the group's financial statements. As indicated in note 26 above, the group has adopted IFRS 16 Leases from 1 January 2019, but has not restated comparatives for the 2018 reporting period, as permitted under the specific transition provisions in the standard. The reclassifications and the adjustments arising from the new leasing rules are therefore recognised in the opening balance sheet on 1 January 2019. The new accounting policies are disclosed in note 5(m). On adoption of IFRS 16, the group recognised lease liabilities in relation to leases which had previously been classified as 'operating leases' under the principles of IAS 17 Leases . These liabilities were measured at the present value of the remaining lease payments, discounted using the lessee's incremental borrowing rate as of 1 January 2019. The weighted average lessee's incremental borrowing rate applied to the lease liabilities on 1 January 2019 was 2.5%. The associated right-of-use assets for property leases were measured at the amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments relating to that lease recognised in the balance sheet as at 31 December 2018. 33

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