ITF

46 I ITF FINANCIAL STATEMENTS INTERNATIONAL TENNIS FEDERATION • ANNUAL REPORT AND ACCOUNTS 2015 Strategic Report Business Review A review of the group's business is outlined in the Report of the Chairman of the Finance Committee above. Principal Risks and Uncertainties The ITF prepares and reviews its Risk Register on an annual basis. The major risks identifi ed in the Risk Register for 2015 include: • Loss of a major sponsor or inability to sell high value sponsorship packages • Security issues at ITF tournaments • Players or spectators injured at an ITF event • Quality of player fi eld is diminished at ITF tournaments • Players or offi cials manipulating match results for personal gain • Information, Communication and Technology risks – software failure, data loss, virus/attack Development and Performance during the fi nancial year The Data Sales project continued to experience increasing income levels throughout 2015 generating $5.4m in the year (2014: $4.2m). The net income from this activity is shared with the member nations. Income from Data Sales is recorded as income and the distribution to the nations recorded as an expense. Position at the End of the Year In 2013 the Board of Directors of ITF Limited agreed to the utilisation of up to $6m of reserves to cover losses expected in 2014 and 2015. Due to the positive result in 2014 no such utilisation was required last year. The result for 2015 of an operating loss of $1.4m is in line with the original budget of $1.5m defi cit which was set to a level where it was possible that it may be covered by investment returns. However, poor market conditions have led to an investment defi cit of a further $1.3m resulting in overall defi cit after taxation of $2.9m, which reduced reserves, but was in the range of the approved utilisation. In recognition of continuing challenges to generating commercial revenues, the Board have agreed to cover potential operating losses budgeted for 2016 of $1.0m. This is partly to fund a new initiative to provide partial funding for an increase in prize money of the ITF Futures tournaments from $15,000 to $25,000. Despite the current situation the Board remains confi dent that the strong balance sheet it holds, closely managed expenditure, and income generating opportunities from commercial properties, will help meet the challenges ahead. As well as the new global TV licence agreement signed in 2014 with BeIN, a new global Data Rights agreement has been signed with Sportradar this year. Both come into effect in 2017 and see signifi cant increases in revenues, allowing the current 2017 forecasts to show a budgeted surplus. Key Performance Indicators: • Commercial – Sponsorship Income: Actual $17.6m • Commercial – Broadcast Income: Actual $8.0m • Commercial – Data Rights Income: Actual $5.4m • Corporate Services – Operating Surplus / (Defi cit): Actual ($1.4m) • Corporate Services – Investment Portfolio Return: Actual: negative 2.5% By order of the board Bank Lane, Roehampton, London SW15 5XZ 20 March 2016 David Haggerty President Rene Stammbach Chairman of the Finance Committee

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