ITF

STRATEGIC REPORT See the Report of the Chairman of the Finance Committee on page 1 for further details. By order of the Board David Haggerty René Stammbach President Chairman of the Finance Committee ITF, Bank Lane, Roehampton, London SW15 5XZ, United Kingdom - Significant continued disruption from the Covid-19 global pandemic to all tennis events for a sustained period · Commercial - Billie Jean King Cup hosting fee: $5.0m (2019: $0.0m) - Corrupt players, officials or 'unauthorised persons' manipulating match results for personal gain - The risk of the partnership with Kosmos or the new Davis Cup format being unsuccessful - The risk of the Billie Jean King Cup hosting agreement or the new Billie Jean King Cup format being unsuccessful The overall result in 2020 sees equity decrease by only $5.4m to $52.3m, despite the effects of the global pandemic and spending on Strategic Initiatives, due to the result of the investment portfolio. The ITF implements as many reasonable mitigating actions as possible to reduce the inherent risks within the business. Performance During the Financial Year The ITF Trust made a net deficit after taxation on ongoing operating activities of $9.2m (2019: surplus $1.7m), a planned deficit on Strategic Initiative expenditure of $1.9m (2019: $3.8m) and a net surplus on the investment activities of $4.1m (2019: deficit $8.1m) making a total deficit after tax of $6.9m (2019: surplus $5.9m). Further details of the financial performance of the ITF Trust during the financial year can be found in the Report of the Chairman of the Finance Committee on page 1. Position at the End of the Year In June 2017 the ITF Board of Directors reaffirmed their agreement to a revised reserves policy which identified $10.5m of funding for investment in Strategic Initiatives in pursuance of the objectives of ITF2024. Throughout the period of investment, prudent financial management was maintained to ensure that reserves were not unnecessarily diminished. At the time of writing this Annual Report, the sporting world continues to grapple with the coronavirus pandemic which has been referenced throughout the Chairman of the Finance Committee's Report. The ITF Trust was prepared for the pandemic financially due to the comfortable level of reserves held coming into 2020. To reduce the impact of the pandemic, the directors took swift action to reduce and curtail discretionary expenditure and negotiate with all affected customers, and will continue to do so over the coming year as the longer-term ramifications of the virus on sport and society become ever more certain. A review of the group's business is outlined in the Report of the Chairman of the Finance Committee on page 1. The ITF prepares and reviews its risk register on a biannual basis. The major risks identified in the risk register, reviewed by the Finance and Audit Committee and the Board, include: Principal Risks and Uncertainties The Board remains confident that the strong balance sheet, closely managed expenditure and long-term revenue contracts will adequately meet the challenges ahead. Despite the postponement to 2021, the Davis Cup licensing agreement, signed for a 25- year period, sees revenues which are annually linked with inflation, and the Billie Jean King Cup will see further increases in revenue for a two-year period. This guarantees the ITF's main income streams for a significant length of time. Key Performance Indicators: · Commercial - Sponsorship income: $2.8m (2019: $5.7m) · Commercial - Broadcast income: $0.6m (2019: $3.0m) · Commercial - Data rights income: $6.3m (2019: $12.6m) · Corporate services - Operating deficit: $9.1m (2019: Surplus $2.3m) · Corporate services - Investment portfolio return: 7.6% (2019: positive 16.6%) 16 March 2021 · Commercial - Davis Cup licence fee: $10.3m (2019: $40.3m) The group has $48.5m of net current assets (2019: $53.6m) helped by the investment portfolio valued at $49.4m (2019: $53.8m), and a cash position of $14.2m (2019: $5.5m). - Tennis events at the Tokyo 2020 Olympic and Paralympic Games are cancelled or not completed - Sponsorship packages remain unsold and existing packages are not renewed - Non-recent allegations of abuse are discovered that were either not reported or not dealt with appropriately Business Review 4

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