Company Registration No. 80469689 (Scotland) GOLF RECREATION SCOTLAND LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2017 GOMPANIES EDINBURGE-IUSE 2 8 SEP 2013 DESK ll SCT 28/09/2018 #5 COMPANIES HOUSE GOLF RECREATION SCOTLAND LIMITED COMPANY INFORMATION Director Trump Secretary Graff-Riccio Company number 80469689 Reglstered office Bishop's Court 29 Albyn Place ABERDEEN A310 1YL Auditor Johnston Carmichael LLP 227 West George Street GLASGOW G2 2ND GOLF RECREATION SCOTLAND LIMITED CONTENTS Page Strategic report 1 - 2 Director's report 3 - 4 Independent auditor's report 5 - 7 Pro?t and loss account 8 Statement of comprehensive income 9 Group balance sheet 10 Company balance sheet 11 Group statement of changes in equity 12 Company statement of changes in equity 13 Consolidated statement of cash ?ows 14 Notes to the ?nancial statements 15 3O GOLF RECREATION SCOTLAND LIMITED STRATEGIC REPORT FOR THE YEAR ENDED 31 DECEMBER 2017 The director presents the strategic report for the year ended 31 December 2017. Falr review of the business 2017 was the ?rst full year of operations of Turnberry under Trump Hotels ownership. The resort was comprehensively redeveloped. but retained its signature classic style and grandeur. entrenched in over a century of history. whilst being updated to such a standard to meet the requirements of the modern luxury market. The addition of a new ballroom offers unparalleled facilities in the Scottish market, and we feel the venue is well placed to become Scotland's leading destination for weddings. conferences and events. Fresh off the successful opening of both the luxury hotel and world renowned Ailsa course in June 2016, the new ?King Robert the Bruce' golf course opened in June 2017. Leading golf architects Mackenzie and Ebert have once again overseen the transformation of this course. which has combined many of the ?nest holes from the Kintyre and Arran courses, to create an exciting new experience which will prove to be the perfect accompaniment to the Ailsa course. The Trump Organisation remains fully committed to the resort and further redevelopments are ongoing. We are proud of the work undertaken to date and look forward to welcoming our guests to Turnben'y and to experience this unique resort for themselves. Principal risks and uncertainties The director and group management have undertaken a comprehensive review of the risks facing the group. The group operates in an industry which is both competitive and challenging. factors which can be heightened by adverse weather conditions. The director considers that the principal risk factor that could materially affect the group's future operating pro?t or ?nancial position is customer demand for luxury travel. The director and group management have detailed knowledge and experience of the sector, and have established business policies and an organisation structure to limit these risks. which are regularly reviewed and reassessed to proactively limit their impact. Development and performance The pro?t and loss account and balance sheet are set out on pages 8 and 9. In the ?rst full year of operations since the successful refurbishment and re-opening of the property. Turnberry managed to post one of the most robust ?nancial results in a decade. The property will continue to drive ?nancial performance improvement and build on the 2017 result. Signi?cant Capital Expenditure. including investment in energy efficient assets. continued through 2017 albeit not to the extent of 2016, with major refurbishment having been completed in 2016. Fixed Asset Additions in 2017 amounted to ?4.433k (2016: ?31.917k). However. a signi?cant amount of capital expenditure that were deemed as ?assets under construction? at the end of 2016 were brought into Fixed Assets in 2017 and as such. there was increased depreciation charge (2017: ?4,530 and 2016: ?3,380). GOLF RECREATION SCOTLAND LIMITED STRATEGIC REPORT (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2017 2017 2016 Variance ?000 ?000 ?000 Turnover 15.342 8.998 6,344 Cost of Sales (9.729) (7.156) (2.573) Gross Pro?t 5.613 1.842 3,771 Administrative expenses (6.580) (5.723) (857) Operating loss before depreciation. amortisation and foreign exchange (967) (3.881) 2.914 Key performance indicators Management of the group provides the director with management information at the end of each month. The assessed by the director are changes in revenue. costs and operating pro?t before depreciation. amortisation and foreign exchange. Having seen a decline in turnover of 21% in 2016 due to the resort only being open for 6 months, 2017 saw an increase in revenue year over year of 70%. It is expected that revenue will continue to increase in subsequent years as the property is re-established as an industry-leading resort. Tumberry already won Scottish Hotel of the Year at the recent Scottish Hotel Awards 2018 and in addition to the top accolade. the property also received national awards for Luxury Hotel. Golf Hotel and Events Hotel of the Year. The directors believe that in the short to medium terms. the resort will have operating pro?tability for the ?rst time in 10 years. Non-?nancial KPl's include the number of repeat customers to the resort and guest satisfaction. We strive to ensure that Tumberry remains established as a world?leading destination golf resort and are con?dent that the work undertaken will encourage new visitors to experience the resort, as well as driving repeat custom from our previous guests. In the period since opening. we have received excellent reviews from our guests. with the resort recording an overall satisfaction level of 9.0 out of 10 (2016: 8.6). Direct eel). 10m GOLF RECREATION SCOTLAND LIMITED REPORT FOR THE YEAR ENDED 31 DECEMBER 2017 . The director presents his annual report and ?nancial statements for the year ended 31 December 2017. Principal activities The principal activity of the group continued to be that of the operation of the Tumberry Resort and associated leisure facilities. Director The director who held of?ce during the year and up to the date of signature of the ?nancial statements was as follows: . Trump (Resigned 19-January 2017) Trump Results and dividends The results for the year are set out on page 8. No ordinary dividends were paid. Disabled persons Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled. every effort is made to ensure that their employment within the group continues and that the appropriate training is arranged. it is the policy of the group that the training, career development and promotion of disabled persons should, as far as possible. be identical to that of other employees. Employee Involvement The group's policy is to consult and discuss with employees. through unions, staff councils and at meetings. matters likely to affect employees' interests. Information about matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the ?nancial and economic factors affecting the group's performance. Auditor The auditor. Johnston Carmichael LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006. GOLF RECREATION SCOTLAND LIMITED REPORT (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2017 Statement of director's responsibilities The director is responsible for preparing the Annual Report and the ?nancial statements in accordance with applicable law and regulations. Company law requires the director to prepare ?nancial statements for each ?nancial year. Under that law the director has elected to prepare the ?nancial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the director must not approve the ?nancial statements unless he is satis?ed that they give a true and fair view of the state of affairs of the group and company, and of the pro?t or loss of the group for that period. in preparing these ?nancial statements. the director is required to: - select suitable accounting policies and then apply them consistently; - make judgements and accounting estimates that are reasonable and prudent; state whether applicable UK Accounting Standards have been followed. subject to any material departures disclosed and explained in the ?nancial statements; . prepare the ?nancial statements on the going concern basis unless it is inappropriate to presume that the group and company will continue in business. The director is responsible for keeping adequate accounting records that are suf?cient to show and explain the group?s and company?s transactions and disclose with reasonable accuracy at any time the ?nancial position of the group and company and enable them to ensure that the ?nancial statements comply with the Companies Act 2006. He is also responsible for safeguarding the assets of the group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. Statement of disclosure to auditor So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the auditor of the company and group is unaware. Additionally. the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the auditor of the company and grovp is aware of that information. Items included In the strategic report Disclosure in respect of the future developments of the group has been included within the strategic report. On behalf of the board Director gore GOLF RECREATION SCOTLAND LIMITED INDEPENDENT REPORT TO THE MEMBERS OF GOLF RECREATION SCOTLAND LIMITED Opinion We have audited the ?nancial statements of Golf Recreation Scotland Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2017 set out on pages 8 to 30. The ?nancial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards. including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice). in our opinion the ?nancial statements: - give a true and fair view of the state of the group's and the parent company's affairs as at 31 December 2017 and of the group's loss for the year then ended; - have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and - have been prepared in accordance with the requirements of the Companies Act 2006. Basis for opinion We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the ?nancial statements section of our report. We are independent of the group in accordance with the ethical requirements that are relevant to our audit of the ?nancial statements in the UK. including the Ethical Standard. and we have ful?lled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is suf?cient and appropriate to provide a basis for our opinion. Conclusions relating to going concern We have nothing to report in respect of the following matters in relation to which the lSAs (UK) require us to report to you where: - the director's use of the going concern basis of accounting in the preparation of the ?nancial statements is not appropriate; or - the director has not disclosed in the ?nancial statements any identi?ed materlal uncertainties that may cast signi?cant doubt about the group's or the parent companys ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the ?nancial statements are authorised for issue. Other information The director is responsible for the other information. The other information comprises the information included in the annual report. other than the ?nancial statements and our auditor's report thereon. Our opinion on the ?nancial statements does not cover the other information and. except to the extent othenrvise explicitly stated in our report. we do not express any form of assurance conclusion thereon. In connection with our audit of the ?nancial statements, our responsibility is to read the other information and. in doing so. consider whether the other information is materially inconsistent with the ?nancial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. if we identify such material inconsistencies or apparent material misstatements. we are required to determine whether there is a material misstatement in the ?nancial statements or a material misstatement of the other information. If. based on the work we have performed. we conclude that there is a material misstatement of this other information. we are required to report that fact. We have nothing to report in this regard. Opinions on other matters prescribed by the Companles Act 2006 In our opinion. based on the work undertaken in the course of the audit: - the information given in the Strategic Report and the Director's Report for the ?nancial year for which the ?nancial statements are prepared is consistent with the ?nancial statements; and - the Strategic Report and the Director?s Report have been prepared in accordance with applicable legal requirements. GOLF RECREATION SCOTLAND LIMITED INDEPENDENT REPORT (CONTINUED) TO THE MEMBERS OF GOLF RECREATION SCOTLAND LIMITED Matters on which we are required to report by exception In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit. we have not identi?ed material misstatements in the Strategic Report and the Director?s Report. We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if. in our opinion: - adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or - the parent company ?nancial statements are not in agreement with the accounting records and returns; or - certain disclosures of directors' remuneration speci?ed by law are not made; or - we have not received all the information and explanations we require for our audit. Responsibilities of director As explained more fully in the Directors Responsibilities Statement set out on pages 3 - 4. the director is responsible for the preparation of the ?nancial statements and for being satis?ed that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of ?nancial statements that are free from material misstatement. whether due to fraud or error. In preparing the ?nancial statements, the director is responsible for assessing the group's and the parent company?s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the director either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so. Auditor's responsibilities for the audit of the ?nancial statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor?s report that includes our opinion. Reasonable assurance is a high level of assurance. but is not a guarantee that an audit conducted in accordance with lSAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if. individually or in the aggregate. they could reasonably be expected to in?uence the economic decisions of users taken on the basis of these ?nancial statements. GOLF RECREATION SCOTLAND LIMITED INDEPENDENT REPORT (CONTINUED) TO THE MEMBERS OF GOLF RECREATION SCOTLAND LIMITED Auditor's responsibilities for the audit of the financial statements (continued) As part of an audit in accordance with ISAs (UK). we exercise professional judgment and maintain professional scepticism throughout the audit. We also: - Identify and assess the risks of material misstatement of the ?nancial statements, whether due to fraud or error. design and perform audit procedures responsive to those risks. and obtain audit evidence that is suf?cient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error. as fraud may involve collusion. forgery. intentional omissions. misrepresentations. or the override of internal control. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. but not for the purpose of expressing an opinion on the effectiveness of the group's internal control. 0 Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. Conclude on the appropriateness of the directors' use of the going concern basis of accounting and. based on the audit evidence obtained. whether a material uncertainty exists related to events or conditions that may cast signi?cant doubt on the group?s or the parent company?s ability to continue as a going concern. If we conclude that a material uncertainty exists. we are required to draw attention in our auditor's report to the related disclosures in the ?nancial statements or. if such disclosures are inadequate. to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However. future events or conditions may cause the group or the parent company to cease to continue as a going concern. Evaluate the overall presentation. structure and content of the ?nancial statements. including the disclosures. and whether the ?nancial statements represent the underlying transactions and events in a manner that achieves fair presentation. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the group to express an opinion on the consolidated ?nancial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion. We communicate with those charged with governance regarding. among other matters. the planned scope and timing of the audit and significant audit findings. including any signi?cant de?ciencies in intemai control that we identify during our audit. Use of our report This report is made solely to the company?s members. as a body. in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body. for our audit work, for this report. or for the opinions we have formed. Broken? (amiMI Barry Masson (Senlor Statutory Auditor) f? 2618' for and on behalf of Johnston Carmichael LLP Chartered Accountants Statutory Auditor 227 West George Street GLASGOW GZ 2ND GOLF RECREATION SCOTLAND LIMITED CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 DECEMBER 2017 31 December 31 December 2017 2016 Notes ?000 ?000 Turnover 3 15.342 8,998 Cost of sales (9,729) (7,156) Gross profit 5,613 1,842 Administrative expenses (6.580) (5.723) Operating loss before depreciation, amortlsation and foreign exchange (967) (3,881) Depreciation and amortisation (6,943) (5.793) on foreign exchange 4.431 (7.974) Operating loss 4 (3,479) (17,648) Taxation 7 96 28 Loss for the ?nancial year 19 (3,383) (17.620) The consolidated pro?t and loss account has been prepared on the basis that all operations are continuing operations. GOLF RECREATION SCOTLAND LIMITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2017 31 December 31 December 2017 2016 ?000 ?000 Loss for the year (3,383) (17,620) Other comprehensive expenditure Currency translation differences 5.428 (9.633) Total comprehensive incOmeI(expenditure) for the year 2,045 (27,253) GOLF RECREATION SCOTLAND LIMITED GROUP BALANCE SHEET AS AT 31 DECEMBER 2017 Ixed assets Goodwill Tangible assets Current assets Stocks Debtors Cash at bank and in hand Creditors: amounts falling due within one year Net current liabilities Total assets less current liabilities Creditors: amounts falling due after more than one year Net liabilities Capital and reserves Called up share capital Other reserves Pro?t and loss reserves Total equity The ?nancial statements were approved by the board of directors and authorised for issue on QHSE-WQM 5115? and are Signed on its behalf by: Notes ?000 334 1 .394 577 2,305 (3.331) Trump Director ?000 3.482 67,465 70.947 (1.026) 69.921 (107.152) (37.231) (37.231) 2016 ?000 ?000 5.895 67.583 73,473 343 1.007 701 2.051 (3.037) (986) 72.492 (111.951) (39.469) 1.014 (10.864) (29.619) (39.469) -10- GOLF RECREATION SCOTLAND LIMITED COMPANY BALANCE SHEET AS AT 31 DECEMBER 2017 Fixed assets investments Current assets Debtors Cash at bank and in hand Creditors: amounts falling due within one year Net current assets Total assets less current liabilities Creditors: amounts falling due after more than one year Net assetsl(lla billties) Capital and reserves Called up share capital Other reserves Pro?t and loss reserves Total equity Notes 10 14 16 18 19 19 2017 ?000 56,493 56,494 ?000 51,471 56 .494 107,965 (107,152) 813 2016 ?000 51,361 74 51,435 ?000 56,104 51 .435 107,539 (111,961) (4,422) As permitted by 5408 Companies Act 2006, the company has not presented its own pro?t and loss account and related notes. The company's pro?t for the year was ?4.453k (2016 - ?7.949k loss), primarily as a result of foreign currency movements. The ?nancial statements were approved by the board of directors and authorised for issue on ?113?; 010?? and are signed on its behalf by: Director Company Registration No. 30469689 -11- GOLF RECREATION SCOTLAND LIMITED GROUP STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2017 Share Other Pro?t and Total capital reserves loss reserves ?000 ?000 ?000 ?000 Balance at 1 January 2016 1.014 (2.697) (11.999) (13.682) Perlod ended 31 December 2016: Loss and total comprehensive expenditure for the year - (9.633) (17.620) (27,253) Equity component of ?nancing loans - 1.466 - 1,466 Balance at 31 December 2016 1.014 (10.864) (29.619) (39.469) Year ended 31 December 2017: . Loss and total comprehensive income for the year - 5.428 (3.383) 2.045 Equity component of ?nancing loans - 194 - 194 Balance at 31 December 2011 1.014 (5.242) (33.002) (37.230) -12- GOLF RECREATION SCOTLAND LIMITED COMPANY STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2017 Share capital ?000 Balance at 1 January 2016 1.014 Period ended 31 December 2016: Loss and total comprehensive expenditure for the year - Equity component cf ?nancing loans - Balance at 31 December 2016 1,014 Year ended 31 December 2017: Pro?t and total comprehensive income for the year - Equity component of ?nancing loans - Balance at 31 December 2017 1.014 Other reserves ?000 2.467 (31 5) 1 .466 3.618 Profit and loss reserves ?000 (1.105) (7.949) (9,054) -13- GOLF RECREATION SCOTLAND LIMITED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2017 2017 Notes ?000 Cash flows from operating activities Cash absorbed by operations 24 Income taxes refunded/(paid) Net cash outflow from operating activities investing activities Purchase of tangible fixed assets (4.433) Proceeds on disposal of tangible ?xed assets 21 Net cash used in Investing activities Financing activities Proceeds from borrowings from related party 5.269 Net cash generated from financing activities Net decrease in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year ?000 (1.009) 28 (981) (4.412) 5,269 (124) 701 577 2016 ?000 (31,914) 36,656 ?000 (5,867) (5.867) (31,914) 36,656 (1,125) 1 .826 701 -14- GOLF RECREATION SCOTLAND LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2017 1.1 1.2 Accounting policies Company Information Golf Recreation Scotland Limited (?the company") is a private limited company domiciled and incorporated in Scotland. The registered of?ce is Bishop's Court, 29 Albyn 1YL. The group consists of Golf Recreation Scotland Limited and all of its subsidiaries. Accounting convention These financial statements have been prepared in accordance with FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" 102") and the requirements of the Companies Act 2006. The ?nancial statements are prepared in Sterling, however due to the majority of company transactions being in US Dollars, the functional currency of the company is US Dollars. The functional currency of other group companies is Sterling. Monetary amounts in these ?nancial statements are rounded to the nearest ?000. The ?nancial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below. The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated ?nancial statements, including this company. which are intended to give a true and fair view of the assets, liabilities, ?nancial position and pro?t or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated ?nancial statements: - from the requirements to present a statement of cashllows. - from the requirements of FRS 102 Section 11 paragraphs 11.39 to 11.48A relating to certain ?nancial instrument disclosures as equivalent disclosures are included within the consolidated ?nancial statements; - from the requirements of FRS102 Section 33 paragraph 33.7 relating to the disclosure of key management personnel compensation. Basis of consolidation The consolidated ?nancial statements incorporate those of Golf Recreation Scotland Limited and all of its subsidiaries entities that the group controls through its power to govern the ?nancial and operating policies so as to obtain economic bene?ts). Subsidiaries acquired during the year are consolidated using the purchase method. Their results are incorporated from the date that control passes. All ?nancial statements are made up to 31 December 2017. All intra?group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Where necessary. adjustments are made to the ?nancial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group. The cost of a business combination is the fair value at the acquisition date of the assets given. equity instruments issued and liabilities incurred or assumed. plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identi?able assets. liabilities and contingent liabilities acquired is recognised as goodwill. -15- GOLF RECREATION SCOTLAND LIMITED NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2017 1.3 1.4 1.5 1.6 Accounting policies (Continued) Going concern These ?nancial statements are prepared on the going concern basis. The group is dependent on continuing ?nance being made available by its ultimate owner to enable it to continue operating and to meet its liabilities as they fall due. The Trump Organisation have con?rmed that it will ensure all necessary ?nancial support is provided to the group for the foreseeable future to enable it to meet its ?nancial obligations as they fall due for at least a period of 12 months from the date of signing the ?nancial statements. Turnover Turnover is derived from the operation of the Tumberry hotel and golf resort and is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business. net of discounts and VAT. Room revenue is recognised at the point at which the rooms are occupied, whilst food and beverage sales are recognised at the point of sale. Revenue frcim the provision of services is recognised at the point that the service is provided. Golf green fees and golf membership income are recognised in the period to which they relate. Intangible ?xed assets - goodwill Goodwill represents the excess of the cost of acquisition of a business over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a ?nite useful life and is amortised on a systematic basis over its expected life. which is 5 years. Goodwill is reviewed at each reporting date for any indicators of impairment. as explained more fully in note 1.8. Tangible fixed assets Tangible ?xed assets are initially measured at cost and subsequently measured at cost. net of depreciation and any impairment losses. Depreciation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following bases: Land and buildings 10 - 40 years Aircraft 25 years Fixtures. ?ttings and equipment 2 - 20 years Assets in the course of construction are not depreciated. The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the canying value of the asset, and is recognised in the pro?t and loss account. -16- GOLF RECREATION SCOTLAND LIMITED NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2017 1.7 1.8 1.9 1.10 Accounting policies (Continued) Fixed asset investments Equity investments are measured at fair value through pro?t or loss. except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably. which are recognised at cost less impairment until a reliable measure of fair value becomes available. In the parent company ?nancial statements, investments in subsidiaries. associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. A subsidiary is an entity controlled by the group. Control is the power to govern the ?nancial and operating policies of the entity so as to obtain bene?ts from its activities. Impairment of ?xed assets At each reporting end date. the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. if any such indication exists. the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset. the company estimates the recoverable amount of the cash-generating unit to which the asset belongs. Recognised impairment losses are reversed if. and only if. the reasons for the impalnnent loss have ceased to apply. Where an impairment loss subsequently reverses. the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount. but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in pro?t or loss. unless the relevant asset is carried at a revalued amount. in which case the reversal of the impairment loss is treated as a revaluation increase. Stocks Stocks are valued on a ?rst in. ?rst out basis and are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and. where applicable. direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition. Net reallsable value is the estimated selling price less all estimated costs of completion and costs to be incurred in marketing. selling and distribution. Provision is made for obsolete. slow-moving or defective items where appropriate. Cash and cash equivalents Cash and cash equivalents are basic ?nancial assets and include cash in hand. deposits held at call with banks. other short-term liquid investments with original maturities of three months or less. and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities. Financial instruments The group has elected to apply the provisions of Section 11 'Basic Financial Instruments' and Section 12 ?Other Financial Issuesits ?nancial instruments. Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument. Financial assets and liabilities are offset and the net amounts presented in the ?nancial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously. -17. GOLF RECREATION SCOTLAND LIMITED NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2017 1 Accounting policies (Continued) Basic financial assets Basic ?nancial assets. which include trade and other debtors and cash and bank balances. are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a ?nancing transaction. where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Trade debtors, loans and other receivables that have ?xed or determinable payments that are notquoted in . an active market are classi?ed as 'loans and receivables'. Loans and receivables are measured at amortised cost using the effective interest method. less any impairment. Interest is recognised by applying the effective interest rate. except for short-term receivables when the recognition of interest would be immaterial. The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating the interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the debt instrument to the net carrying amount on initial recognition. Impairment of financial assets Financial assets. other than those held at fair value through pro?t and loss, are assessed for indicators of impairment at each reporting end date. Financial assets are impaired where there is objective evidence that. as a result of one or more events that occurred after the initial recognition of the ?nancial asset. the estimated future cash flows have been affected. If an asset is impaired. the impairment loss is the difference between the carrying amount and the present value of the estimated cash ?ows discounted at the asset?s original effective interest rate. The impairment loss is recognised in the pro?t and loss account. if there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current canying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in the pro?t and loss account. Derecognition of financial assets Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the ?nancial asset and substantially all the risks and rewards of ownership to another entity. or if some signi?cant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party. Classification of financial liabilities Financial liabilities and equity instruments are classi?ed according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities. Basic ?nancial liabilities Basic ?nancial liabilities, including trade and other creditors and loans from parent are initially recognised at transaction price unless the arrangement constitutes a ?nancing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Debt instruments are subsequently carried at amortised cost, using the effective interest rate method. Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classi?ed as current liabilities if payment is due within one year or less. if not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method. -18- GOLF RECREATION SCOTLAND LIMITED NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2017 1.12 1.13 1.14 1.15 1.16 Accounting policies (Continued) of ?nancial liabilities Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled. - Equity instruments Equity instruments issued by the group are recorded at the proceeds received, net of direct issue costs. Taxation The tax expense represents the sum of the tax currently payable and deferred tax. Current tax The tax currently payable is based on taxable pro?t for the year. Taxable pro?t differs from net pro?t as reported in the pro?t and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date. Deferred tax Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable pro?ts. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax pro?t nor the accounting pro?t. The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that suf?cient taxable pro?ts will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the pro?t and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if. there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority. Employee bene?ts The costs of short?term employee bene?ts are recognised as a liability and an expense. unless those costs are required to be recognised as part of the cost of stock or ?xed assets. The cost of any unused holiday entitlement is recognised in the period in which the employee's services are received. Termination bene?ts are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination bene?ts. Retirement bene?ts Payments to de?ned contribution retirement bene?t schemes are charged as an expense as they fall due. Leases Rentals payable under operating leases, including any lease incentives received, are charged to income on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic bene?ts from the lease asset are consumed. -19- GOLF RECREATION SCOTLAND LIMITED NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2017 1.17 Accounting policies (Continued) Foreign exchange Transactions in currencies other than the functional cUrrency are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation are included in the pro?t and loss account for the period. The functional currency of Golf Recreation Scotland Limited is US Dollars and the presentational currency is Sterling. Foreign exchange differences arising upon presentation are taken to other reserves. Judgements and key sources of estimation uncertainty in the application of the group's accounting policies. the director is required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period. or in the period of the revision and future periods where the revision affects both current and future penods. Critical Judgements The following judgements (apart from those involving estimates) have had the most signi?cant effect on amounts recognised in the ?nancial statements. Assets held as construction in progress Due to the resort-wide renovation, certain ?xed asset additions have been categorised as 'construclion in progress'. As work remains on-going at the balance sheet date. no depreciation charge has been recognised in the current year for such assets. An assessment is made on the completion status of these assets and, when considered complete, the asset is re-categorised based on its type and depreciated accordingly as set out in note 9. -20- GOLF RECREATION SCOTLAND LIMITED NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2017 2 Judgements and key sources of estimation uncertainty (Continued) Key sources of estimation uncertainty The estimates and assumptions which have a signi?cant risk of causing a material adjustment to the amount of assets and liabilities are as follows. Goodwill The group establishes a reliable estimate of the useful life of goodwill arising on business combinations. This estimate is based on a variety of factors such as the expected use of the acquired business and the expected useful life of the cash generating units to which the goodwill is attributed. In addition, the directors review goodwill at each balance sheet date for indicators of impairment. Given the recent nature of the acquisition which gave rise to the goodwill included in the accounts, and also the fact that there remains assets under construction in the resort. it is the directors view that no indicators of impairment exist at this time. At 31 December 2017, the Group had goodwill of ?3.483k (2016: ?5.895k). Fixed asset investments Fixed asset investments are measured at cost. less any impairment. The investments are assessed for any indicators of impairment. based on the assets acquired as part of the investment. At 31 December 2017, the Company had ?xed asset investments of ?51 ,471k (2016: ?56.104k). lntercompany loans Loans advanced from the parent and to subsidiaries are ?nancing transactions attracting no interest and are repayable one year and one day after the end of the ?nancial period. As such the directors are required to assess a market rate of interest for similar borrowing that may be available from lenders at arms length. in order to quantify the carrying amount upon initial recognition at fair value. and the corresponding equity component. Market rates of interest are estimated by the directors by comparison with interest rates offered by banks for lending of comparable risk pro?le. At 31 December 2017, the Company bad loans to subsidiaries of ?56.493k (2016: 51.361k) and a loan from the parent of ?1 07,152k (2016: 111 .961k). Tangible assets Fixed asset are measured at cost. less any impairment. The assets are assessed for any indicators of impairment. based on the economic viability and expected future ?nancial performance of the assets. 3 Turnover and other revenue 2017 2016 ?000 ?000 Turnover - Sale of goods 5.949 3.373 Provision of services 9.393 5.625 15.342 8,998 -21- GOLF RECREATION SCOTLAND LIMITED NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2017 3 Turnover and other revenue Turnover analysed by geographical market United Kingdom 4 Operating loss Operating loss is stated after charging: Exchange (gains) I losses Depreciation of owned tangible ?xed assets Amortisation of intangible assets Cost of stocks recognised as an expense Operating lease charges 5 Auditor's remuneration Fees payable to the company's auditor and associates: For audit services Audit of the ?nancial statements of the groUp and company Audit of the ?nancial statements of the company's subsidiaries For other services Taxation compliance services Other taxation services 201 7 ?000 1 5.342 2017 ?000 (4.431) 4,530 2,413 1,852 386 2017 ?000 Ll.? (Continued) 2016 ?000 8,998 2016 ?000 7.990 3.380 2.413 1,315 2016 ?000 20 -22- GOLF RECREATION SCOTLAND LIMITED NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2017 6 Employees The average number of persons (including directors) employed by the group and company during the year was: Group 2017 Number Operating 343 Administrative 52 395 Their aggregate remuneration comprised: Group 2017 ?000 Wages and salaries 7,114 Social security costs 514 Pension costs 142 7.770 7 Taxation Adjustments in respect of prior periods 2016 Number 265 48 313 2016 ?000 Company 2017 Number Company 2017 ?000 2017 ?000 (96) 2016 Number 2016 ?000 2016 ?000 (28) -23.. GOLF RECREATION SCOTLAND LIMITED NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2017 7 Taxation (Continued) The actual charge for the year can be reconciled to the expected charge based on the pro?t or loss and the standard rate of tax as follows: 2017 2016 ?000 ?000 Loss before taxation (3.479) (17,648) Expected tax charge based on the standard rate of corporation tax in the UK of 19.25% (2016: 20.00%) (670) (3.530) Tax effect of expenses that are not deductible in determining taxable pro?t 5 1 Adjustments in respect of prior years (96) (28) Other permanent differences - 102 Rate adjustment on deferred tax 327 Deferred tax movement not recognised (803) 2.364 Depreciation and amortisation permanent differences 1.141 1.063 Tax credit for the year (96) (28) The group has a deferred tax asset of ?8.5m (2016: certainty of taxable pro?ts in the future. 8 Intangible ?xed assets Group Cost At 1 January 2017 and 31 December 2017 Amortisatton and impairment At 1 January 2017 Amortisation charged for the year At 31 December 2017 Can?ying amount At 31 December 2017 At 31 December 2016 ?9.0m) that has not been recognised as there is no Goodwill ?000 12.063 6.168 2.413 8.581 The company had no intangible ?xed assets at 31 December 2017 or 31 December 2016. -24- GOLF RECREATION SCOTLAND LIMITED NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2017 10 Tangible fixed assets Group Cost At 1 January 2017 Additions DiSpOSals Transfers from assets under construction At 31 December 2017 Depreciation and impairment At 1 January 2017 Depreciation charged in the year At 31 December 2017 Carrying amount At 31 December 2017 At 31 December 2016 The company had no tangible ?xed assets assets at 31 December 2017 or 31 December 2016. The canying value of land comprises: Freehold Fixed asset investments Investments in subsidiaries Land and buildings ?000 65,521 56 4 .497 70,074 6.494 3.654 10.148 Notes 11 Assets under Aircraft construction ?000 ?000 1,077 1,260 3.998 - (4,868) - 207 1.260 - 100 50 - 150 207 1 .110 1.077 1,160 Group 2017 2016 ?000 ?000 9.674 9,674 Group 2017 2016 ?000 ?000 Fixtures, ?ttings and equipment ?000 8,512 379 (21) 371 9,241 2,193 826 3,019 Company 2017 ?000 Total ?000 76,370 4,433 (21) 80,782 8.787 4.530 13,317 2015 ?000 -25- GOLF RECREATION SCOTLAND LIMITED NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2017 10 Fixed asset investments Movements In fixed asset Investments Company Cost At 1 January 2017 Additions Effect of foreign exchange At 31 December 2017 Carrying amount At 31 December 2017 At 31 December 2016 11 Subsidiaries Details of the company's subsidiaries at 31 December 2017 are as follows: Name of undertaking Registered Nature of business Class of office shares held DT Connect Europe Limited See below Helicopter operations Ordinary Nitto World 00.. Limited See below Dormant Ordinary SLC Tumberry Limited See below Golf and leisure facilities Ordinary (Continued) Shares in group undertakings ?000 56.104 197 (4.830) 51,471 Held Direct Indirect 100.00 100.00 100.00 The registered address of the above subsidiaries is as follows. Trump Turnberry Resort, Maidens Road. Turnberry, Ayrshire, United Kingdom, KA26 9LT. The share capital of Nitto World Co., Limited is 100% owned by SLC Turnberry Limited 1 2 Financial instruments Group Company 2017 2016 2017 2016 ?000 ?000 ?000 ?000 Carrying amount of financial assets Cash and cash equivalents 577 701 74 Debt instruments measured at amortised cost 917 566 56,493 - 51.360 Equity instruments measured at cost less impairment - - 51.471 56.104 Carrying amount of financial liabilities Measured at amortlsed cost 110.041 113.689 107.152 111.961 ~26- GOLF RECREATION SCOTLAND LIMITED NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2017 13 14 15 16 Stocks Goods for resale Debtors Amounts falling due within one year: Trade debtors Corporation tax recoverable Other debtors Prepayments and accrued income Amounts falling due after more than one year: Amounts due from subsidiary undertakings Total debtors Creditors: amounts falling due within one year Trade creditors Other taxation and social security Accruals and deferred income Group 2017 ?000 334 3,331 Creditors: amounts falling due after more than one year AmOUnt due to parent 201 6 ?000 343 Company 2017 ?000 Company 2017 ?000 Company 2017 ?000 2016 ?000 201 6 ?000 51.361 51.361 2016 ?000 2016 ?000 111.961 Intercompany loans are repayable one year and one day after the ?nancial year end. on a rolling basis in accordance with agreements in place between the two parties. -27- GOLF RECREATION SCOTLAND LIMITED NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2017 17 18 19 20 Retirement bene?t schemes 2017 2016 Defined contribution schemes ?000 ?000 Charge to pro?t or loss in respect of de?ned contribution schemes 142 116 A de?ned contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund. Share capital Group and company 2017 2016 Ordinary share capital ?000 ?000 Issued and fully paid 1,013,515 Ordinary shares of?1 each 1,014 1,014 Reserves Other reserves Other reserves represents amounts taken to equity as a result of the release of inter-company creditors. and the equity component of ?nancing loans received from the parent company. Certain currency translation differences are also included in other reserves. Profit and loss reserves The pro?t and loss reserves account represents the accumulated comprehensive loss for the period and from prior periods. excluding certain currency translation differences which are included in other comprehensive income and other reserves. Operating lease commitments Lessee At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases. which fall due as follows: Group Company 2017 2016 2017 2016 ?000 ?000 ?000 ?000 Within one year 358 324 - - Between two and ?ve years 136 479 - In over ?ve years 1,756 - - - 2,250 803 - - -28- GOLF RECREATION SCOTLAND LIMITED NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2017 21 22 23 Capital commitments Amounts contracted for but not provided in the ?nancial statements: Group Company 2017 2016 2017 2016 ?000 ?000 ?000 ?000 Acquisition of tangible ?xed assets - 22 - - Related party transactions Remuneration of key management personnel The director is considered to be the key management of the group. There is no remuneration of key management personnel from the group. The following amounts were outstanding at the reporting end date: Amounts owed to related parties 2017 2016 ?000 ?000 Group and company Parent 107.152 111.961 No guarantees have been given or received. The group has taken advantage of the exemption within FRS 102 Section 33 paragraph 33.1A from the requirement to disclose transactions with wholly owned companies within the group. Controlling party The ultimate parent undertaking is The Donald J. Trump Revocable Trust, a New York state grantor trust registered in New York. USA. The ultimate controlling parties are the Trustees of The Donald J. Trump Revocable Trust. Golf Recreation Scotland Limited is the smallest and largest group of companies for which group accounts are prepared. .29- GOLF RECREATION SCOTLAND LIMITED NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2017 24 Cash generated from operations Loss for the year after tax Adjustments for: Taxation credited Amortisation and impairment of intangible assets Depreciation and impairment of tangible ?xed assets (Gain)ILoss on foreign exchange Movements in working capital: Decrease in stocks (lncrease)/decrease in debtors Increase/(decrease) in creditors Cash absorbed by operations 2017 ?000 (3.333) (96) 2,413 4,530 (4,431) 2016 ?000 (17.620) (28) 2.413 3.380 7.949 11 1.753 (3.725) (5.867) -30- a; .. I war - - Wm imnamanl Emu Ii?m If n. 1: .My . magi-nluiunuunun-muinn-