2020 ITF Annual Report and Financial Statements

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Page 33 of 34

NOTES (CONT.) (FORMING PART OF THE FINANCIAL STATEMENTS) 35. Financial instruments (continued) (e) Market risk (continued) Sensitivity (f) Capital management 36. Equity The following table shows a breakdown of the balance sheet line item 'Equity' and the movements during the year. Hedging Foreign Retained Total reserve currency earnings translation $000 $000 $000 $000 Equity Balance at 1 January 2019 (1,630) (183) 51,283 49,470 Surplus for the year - - 5,893 5,893 Other comprehensive income 2,348 13 - 2,361 Balance at 31 December 2019 718 (170) 57,176 57,724 Balance at 1 January 2020 718 (170) 57,176 57,724 Deficit for the year - - (6,928) (6,928) Other comprehensive income 1,350 181 - 1,531 Balance at 31 December 2020 2,068 11 50,248 52,327 After consolidation, the group has no share capital or equivalent balances within equity. 37. Contingencies and capital commitments There were no contingencies provided for at 31 December 2020. There were no capital commitments at 31 December 2020. 38. Subsequent events 39. Related parties 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 $59,000 for the 12-and-under team competition development programme. No other non-routine member organisation transactions arose during the year. Increases and decreases in the world equity markets have a material effect on the group's post-tax surplus for any year. The group has identified the MSCI World Index to be reflective of movements in world equity prices. Based on recent volatility an increase of 26.6% and a decrease of 21.7% are reasonably possible for which the impact on the group's post-tax surplus is estimated to be: There were no material subsequent events after the balance sheet date. The group's main assets are its investments and deposits, the management of which is charged to specialist investment managers who operate under investment guidelines which are regularly reviewed by the directors. There is a combined risk on these assets – firstly, the performance of the investment managers, and secondly, the performance of the bond and equity markets. The directors have taken a prudent view of future returns from the investments in their long-term financial planning and estimates. MSCI increase 26.6% - 2020 post-tax deficit increases by $8,072,000; MSCI decrease 21.7% - 2020 post-tax deficit decreases by $7,512,000. In addition, the ITF is in receipt of payment of $7,000 to secure accomodation for Tokyo 2020 for a Director of ITF Limited's personal use. As the Olympic Games have been postponed, this has been deferred to offset against accomodation costs of the Olympics in 2021. 32

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