Castle Stuart Golf LLP (SO300920) is a limited liability partnership domiciled and incorporated in Scotland . The registered office is Kinburn Castle, Doubledykes Road, St Andrews, Fife, KY16 9DR and the business address is Balnaglack Farmhouse, Inverness, IV2 7JL.
These financial statements have been prepared in accordance with the Statement of Recommended Practice "Accounting by Limited Liability Partnerships" issued in December 2018, together with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006 as applicable to entities subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
The financial statements are prepared in sterling , which is the functional currency of the limited liability partnership. Monetary a mounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared on the historical cost convention. The principal accounting policies adopted are set out below.
The limited liability partnership has taken advantage of the exemption under section 400 of the Companies Act 2006 not to prepare consolidated accounts. The financial statements present information about the limited liability partnership as an individual entity and not about its group .
The Members have prepared the financial statements on the going concern basis. The LLP has recorded a loss in this financial period but had a net assets position at the balance sheet date. Subsequent to the year-end, the Members have continued to consider carefully the risks and uncertainties brought on from the COVID-19 pandemic, and have taken all necessary actions to ensure the safety of their customers and employees, and for the long-term financial stability of the LLP.
Careful cash management has ensured that working capital has remained a priority. Together with cost control measures and government support, the LLP has maintained a strong working capital position, ensuring all liabilities are met as they fall due.
Therefore, the Members consider, after making appropriate enquiries and taking into consideration the economic outlook resulting from COVID-19, that the LLP is well placed to adapt to any future challenges, and will have adequate resources to continue in operation as a going concern for at least 12-months from the approval date of these financial statements. Consequently, the Members consider the going concern basis to remain appropriate.
Turnover represents amounts receivable for green fees and related facility provision, merchandise sales and food and beverage sales net of VAT and trade discounts. Turnover is recognised at the point of sale for merchandise, food and beverage sales and when a round of golf has been played for green fees and related facility provision.
Revenue for golf membership is recognised on the first date of the membership period, as no refunds are given on unused membership. Where this is paid in advance, income is deferred until the membership start date.
Turnover also includes the share of profits or losses arising from the investment in Castle Stuart Resort Ownership LLP.
Members' participation rights are the rights of a member against the LLP that arise under the m embers' agreement (for example, in respect of amounts subscribed or otherwise contributed , remuneration and profits).
Members' participation rights in the earnings or assets of the LLP are analysed between those that are, from the LLP's perspective, either a financial liability or equity, in accordance with section 22 of FRS 102. A member's participation rights including amounts subscribed or otherwise contributed by members, for example members' capital, are classed as liabilities unless the LLP has an unconditional right to refuse payment to members, in which case they are classified as equity.
All amounts due to members that are classified as liabilities are presented within 'Loans and other debts due to members' and, where such an amount relates to current year profits, they are recognised within ‘Members' remuneration charged as an expense’ in arriving at the relevant year’s result. Undivided amounts that are classified as equity are shown within ‘Members' other interests’. Amounts recoverable from members are presented as debtors and shown as amounts due from members within members’ interests.
Where there exists an asset and liability component in respect of an individual member’s participation rights, they are presented on a gross basis unless the LLP has both a legally enforceable right to set off the recognised amounts, and it intends either to settle on a net basis or to settle and realise these amounts simultaneously, in which case they are presented net.
Tangible fixed assets are initially 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:
No depreciation has been charged on the hotel, second course and fractional development costs as the assets are still under construction.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account .
Interests in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and a ny impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the limited liability partnership. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
Fixed asset investments represent an interest in a limited liability partnership and has been accounted for using the equity method of accounting at cost plus any drawings met on behalf of the partnership and share of profits not drawn from the partnership.
At each reporting end date, the limited liability partnership reviews the carrying amounts of its tangible 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).
Stocks 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.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit and loss account . Reversals of impairment losses are also recognised in profit and loss account .
Cash and cash equivalents include cash in hand, deposits held at call with banks and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
The limited liability partnership has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the limited liability partnership's balance sheet when the limited liability partnership becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and the net amounts presented in the financial 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.
Basic financial assets, which include 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 financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Financial assets are assessed for indicators of impairment at each reporting end date.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the limited liability partnership transfers the financial asset and substantially all the risks and rewards of ownership to another entity .
Financial liabilities and equity instruments are classified 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 limited liability partnership after deducting all of its liabilities.
Basic financial liabilities, including trade and other creditors and bank loans, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payment s 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. A m ounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade payables are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as fair value th r ough profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Financial liabilities are derecognised when the limited liability partnership’s obligations expire or are discharged or cancelled.
The taxation payable on the partnership profits is solely the personal liability of the individual members . C onsequently neither partnership taxation nor related deferred taxation arising in respect of the partnership are accounted for in these financial statements .
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets .
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to profit and loss account 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 benefits from the lease asset are consumed.
Government grants are recognised at the fair value of the asset receive d or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
Government grants are recognised in accordance with the accruals model. Government grants relating to turnover are recognised as income over the periods when the related costs are incurred . Grants relating to an asset are recognised in income systematically over the asset's expected useful life. If part of such a grant is deferred it is recognised as deferred income rather than being deducted from the asset's carrying amount.
The average number of persons (excluding members) employed by the partnership during the year was:
Included within land and buildings are assets under construction with a carrying value of £2,064,769 (2020 - £2,064,409) which have not been depreciated.
Net obligations under finance leases and hire purchase contracts totalling £44,761 (2020 - £62,077) are secured over the assets which the agreements relate to.
As at 31 December 2020 and 31 December 2021 the LLP was in breach of its EBITDA to Debt Service covenant related to its bank loan. Subsequent to each year end, a waiver of this breach was received from the bank, who have confirmed that no action will be taken in relation to the covenant breach for the periods until 31 December 2021 and 31 December 2022 respectively, and that the loan will not be called for repayment within that period.
However, FRS 102 requires that where there are technical breaches of covenants for which waivers are only received subsequent to the year end, then the related borrowings shall be reclassified as current liabilities at the balance sheet date. Accordingly the 2020 balance sheet has been restated to reclassify £1,972,992 of bank loans as current liabilities at 31 December 2020. The bank loan of £1,919,459 at 31 December 2021 has also been classified as current liabilities at that date. As confirmed in the waiver, these breaches will not impact on the repayment profile of the debt.
Included within other creditors is a balance due to Highlands & Islands Enterprise of £500,000 (2020 - £500,000) which is subject to a standard security over the LLP's interest in the lease over Balnaglack Farm, Dalcross, Inverness.
Net obligations under finance lease and hire purchase contracts totalling £21,152 (2020 - £68,173) are secured over the assets which the agreements relate to.
Bank loans have been reclassified as current liabilities as explained in note 7.
The bank loans are secured by a bond and floating charge over the whole assets of the LLP and a standard security over Phase 1 & 2, Balnaglack Farm, Dalcross, Inverness.
Included within loans due to members are loans of £5,270,078 (2020 - £4,863,957) which rank ahead of members' base funding amounts, but which will rank equally with unsecured creditors in the event of a winding up. The priority loans are unsecured and accrue interest at 7.5% above LIBOR base rate. Convertible loans are unsecured and accrue interest at 4% above LIBOR base rate. The base funding from each member is also unsecured, but subordinated to all other amounts due and accrues interest at 3.5%.
Whilst balances due to members do have certain repayment profiles, they are ultimately repayable only to the extent that sufficient available distributable cash is available.
At the reporting end date the limited liability partnership had outstanding commitments for future minimum lease payments under non-cancellable operating leases, as follows:
The Limited Liability Partnership rents land under a long term operating lease agreement.
The following amounts were outstanding at the reporting end date:
Included within Creditors are loans due to Members that are unsecured, interest free and that have no fixed terms of repayment.