ITF

ITF Trust Annual Report and Financial Statements 2021 5 The investment por olios are invested for long-term growth but include strategies for mi ga ng short-term vola lity. This diversified strategy foregoes an element of gains in rising markets for less exposure to falling markets, reflected by a slight underperformance to benchmark. Consolidated Statement of Financial Posi on Net assets of the ITF Group have decreased from $52.3m at 31 December 2020 to $44.4m at 31 December 2021. Investment in digital transforma on projects and upgraded equipment amounted to $1.4m in 2021 (2020: $2.0m) split between $1.3m intangible assets (so ware development) and $0.1m tangible assets (computer hardware). Capitalised so ware development includes work performed on the IPIN pla orm, new data warehouse and modernising the ITF's IT systems. Total trade and other receivables increased by $4.8m to $15.8m in the year (2020: $11.0m). Trade receivables rose by $3.7m in line with the increase in revenue compared to 2020. In addi on, contract assets increased by $2.2m with the accrual of the final tranche of revenue from Tokyo 2020 due in March 2022. Financial assets of $65.4m (2020: $49.7m) represent the ITF investment por olios and Olympic deposits. The ITF investment por olios total $53.6m, a $4.2m increase from 2020 being the gross gain in income as discussed above. Of the por olios, $17.3m is held as cash deposits (2020: $6.2m) either awai ng withdrawal to support working capital, or awai ng reinvestment. Olympic deposits total $11.8m, an increase of $11.6m with the investment of money received from Tokyo 2020 during the year. The ITF reserves policy provides for holding funds for long-term financial stability and for investment in Strategic Ini a ve projects. The investment guidelines reflect the long-term objec ve and returns should therefore be viewed in this context. Deriva ve financial instruments of a $0.2m liability (2020: $2.1m asset) represent currency forward contract cash flow hedges and have been treated in the accounts as described in note 5(o), with the fair value adjustment arising at 31 December 2021 being taken to reserves in line with hedge accoun ng requirements. Further detail is provided in notes 33 and 36(e) to the financial statements. Cash at bank and in hand has remained rela vely flat, increasing by $0.8m in the year to $15.0m (2020: $14.2m) but investment cash deposits have increased by $19.5m to $25.7m (2020: $6.2m). Net cash from opera ng ac vi es was an inflow of $17.7m represen ng money received from Tokyo 2020 which is held as deferred income. There was a cash inflow from inves ng ac vi es of $6.5m with the liquida on of non-liquid por ons of the por olio, due to be reinvested. A cash ou low from financing ac vi es of $3.7m is offset against this and is due to the repayment of the IOC loan received in 2020. See the Consolidated Cash Flow Statement for further detail. The ITF is in receipt of $25.4m in lieu of guarantees required by the Davis Cup licensing agreement with Kosmos Tennis. This cash is held as a security deposit against default or termina on but in the absence of either is to be held separately and not for use within the business. It is therefore held as restricted cash and not included within the cash flow statement. Total trade and other payables increased by $21.2m in the year to $46.5m (2020: $25.3m). Within the increase is $3.7m of trade payables to $6.3m (2020: $2.6m), $11.2m of accruals to $14.6m (2020: $3.4m) and $6.3m of deferred income to $25.0m (2020:$18.7m). In addi on to this, long- term deferred income has increased to $7.8m (2020: nil). Trade payables and accruals increases are caused by the Davis Cup Finals which took place in December in 2021 resul ng in accrued par cipa on payments and a greater level of expenditure in trade payables at the year-end. Deferred income is driven mainly by the Olympic deferred income a er the receipt of Tokyo 2020 revenues during the year. Conclusion and Outlook As an cipated in 2020, in 2021 we experienced the con nua on of the challenges caused by the global Covid-19 pandemic. However, despite restric ons on travel and ac vi es, a comprehensive programme of events was successfully delivered including the conclusion of the Davis Cup and Billie Jean King Cup compe ons, the Olympic and Paralympic Tennis Events, over 40,000 matches on the ITF World Tennis Tour and 10 World Championship events across four circuits. The programme of strategic investment has con nued to deliver vital projects from which the ITF, its member na ons, and the global tennis community will benefit for years to come. Diligent financial discipline has allowed these ac vi es to take place through judicious use of reserves, whilst maintaining sufficient reserves to allow for ongoing investment and financial stability. I would like to take this opportunity to thank the execu ve, the staff and my fellow members of the Finance and Audit Commi ee for their hard work and commitment to the ITF. René Stammbach Chairman of the Finance Commi ee

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