ITF

Consolidated statement of financial position Investment in Information & Communication Technology continued in 2014 at $0.7m (2013: $1.1m), with expenditure on projects which either support income generating activity or improve the efficiency of business operations; these included major enhancements to the ITF Officiating portal with the introduction of membership registrations for national officials and online applications for schools; a range of improvements and new features on the Davis Cup and Fed Cup websites to support the "Show Your Colours" campaign, as well as the continued development and enhancement of our other websites, online services, and core operations and data management systems. Total Trade and Other Receivables decreased by $1.8m to $10.9m in the year (2013: $12.7m). This reduction has been largely caused by the change in the Hopman Cup for which we would normally expect a debtor balance at year end in relation to the coming event. However, from the 2015 event there is a license arrangement with Tennis Australia. As a result these balances fall under their remit and are therefore not reflected in the accounts of the ITF as at 31December 2014. In addition to this, new debtor management processes have been established which has improved cash collection. Other Financial Assets represent the ITF investment portfolio, Olympic deposits and assets on forward contracts entered into for hedging purposes. Further detail is provided in note 26 to the financial statements. The forward contracts are cash flow hedges and have been treated in the accounts as described in note 5(m), with the fair value adjustment arising at 31 December 2014 being taken to reserves due to Hedge Accounting being adopted. The value of the investment portfolio at 31 December 2014 was $40.8m, an increase of $0.9m in the year. The ITF Reserves Policy was revised in March 2014 giving greater emphasis on the portfolio being invested to provide long term financial stability as well as holding some funds for investment in strategic initiatives. The investment guidelines reflect the long term objective; returns, whether positive or negative, should therefore be viewed in this context. The Olympic deposits are invested in high quality bonds and cash deposits which will mature and be utilised evenly over the Olympic cycle to meet operating requirements. Cash and Cash Equivalents reduced by $3.0m due to the timing of cash received from the short term investment of the 2012 Olympic income. Cash required for 2014 was drawn down in December 2013, whereas cash required for 2015 was drawn down after year end. Total Trade and Other Payables reduced by $3.4m to $22.4m in the year (2013: $25.8m). As shown in note 27, deferred income fell by $3.5m due to the new Hopman Cup licensing arrangements as mentioned above. Hopman Cup Pty Ltd no longer invoice commercial customers directly and therefore no deferred income balance is generated. The remainder of the balance is consistent with 2013. Other Financial Liabilities represent the liabilities arising on forward contracts entered into for hedging purposes. The forward contracts are treated as described above. Further detail is provided in note 31e. The remainder of the Olympic income, which will be recognised in 2015, is shown as Deferred Income under the heading Non-current liabilities. This has reduced from 2013 as funds have been released to the income statement to support operational expenditure. Rene Stammbach Chairman of the Finance Committee 44 REPORT OF THE CHAIRMAN OF THE FINANCE COMMITTEE REPORT OF THE CHAIRMAN OF THE FINANCE COMMITTEE

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