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2 ARTHURANDERSEN SLE Turnberry Limited Financial stataments for the year ended 31 December 1999 together with directors’ and aucitors’ reports Pajstered rumbor SC177810 Cf i sor STUN OT onranes nose 20200 Directors’ report For the year ended Decerrbor 1988 ‘Tho vectors prosant thot port on the affats of ha compary together wih he Francia statomsnis and audters! raportter Wa year aed 31 Daceanter 1960, Principal activity and businoas vient “Tha company wea incorporated an7 August 1007 ae Randate (no 44) Lid. On23 Dacember 1007 ne company ‘hanged its name wm SLC Tumbery Linited, Or 28 Deserber 1897 tha company acquired the entire sued share capital of Nite World Co, Limited bing the Tamer Hota ara gol courses and spa, fem Nite Keygo Lined, On ‘90 Deoember 1907 tha bade and aasats of Nilo World Co, Limited was battered ne SL Tumbomy Linitad, “The prnapal aed ef SLC Tumbety Limit fe now the ownereh and management of hott and asec ure tates “Two conpany recorded an operating pottin the yaar oF 1,731,980 (pened to 31 Deventer 1888 ~ 2,008,858). Results and dlvidends “Tas trvover forthe yoar was E11 900,848 £209,275 (1888 - 485.267 8 -£10,811,882) and ie poften onary zoos afte tae nas rectors and thet intrest The diectots ofthe company during the year wer! TW. Dama FF. Coner Kotlar (resigned 6 Cesenber 1598) wr. Wale S.Sebie (eepointed 26 Jenaery 2000), RL Soalt (appoint 28 January 2000) no rector had a ssnetii inmrest the shares of te cormaay al any time cng the year. 1 SLOTURNBERRY LIMITED Directors! report (continued) Direct’ recponsibitnies ‘Comany low requires te deters Yo propane fanclal tater fr each tancial year union go @ DUR a er ‘ew of he site a fas of he company a te pret ole ferthatpevod. In propaing tot sharia ‘statements, he drectors ave requrago: “+ select suitable aveountngpollas ana then apely them consistent, ‘+ make judgertents and estimates tat aro roasorable and pradent ‘© sta whatherarplictle aocountng standards nave haan flowed, subject to any matafal departures dotegod nd explained the nancial sstererts nd + prepare th facial sistant. the going concem basic unis Its Mapprapras 0 prasiene tht the busines. company i continue “Tee diavtors am raspensbls fr kagping proper encoun receads whic dsclos wih reasonable accutey at ary lene the taal poston of te company and to enatle ther lo ensure thatthe finale silemnts oomoly withthe ‘Companfes Act 1980. They ae also responsi for satequartng the assets ofthe compary and hence fr toking reasonable step er the prevention art dotecon of fad ard ar Images. Year 2000 ‘Aer anna! assessment of te potential Impact othe ¥ ‘hat all ignicant sks ware addressed wollinakance of the cial tsa wi in 1800 on me company, a plan was davelopetto ensure pum disruption toh tusines. “The Loar is comtidenl Tal we achiaved Yaar 2600 compliance nal areas which had a poten pact on ne slags nd mathe chet flog so ld at ae a material Impact onthe commpeny. uditors A tesolton wll be subnitiad atthe annual general meeting to reappoint Athur Ardersor. Chartered Ascoutarts, 25 ucitor for he ensuing yen. “Tumbeny Heat ‘order of tha Board yrsire kagsoLT - . Sable 4 December 2000, 2 SLC TURNBERRY LINITED > Autre! report ARTHURANDERSEN ‘To the Sharoholders of SLC Turnberry Lites va have aul he finarcelstetementson pages (0 47 wnich nave bean prepared under te Hstocal cost ‘pnventicn and tp aeceumng polls set ou on pages 6 ana 7. Respactive reapensibilites ot dreotars and sudliors ‘As described an page 2, the compari sectors are raepansiia fr tne praparaon ofthe francial stoners, sosordanee wih applicatta Urited Kingdom law and aeceunting standards, Cur respons, as independert cto, ar establish the Unted Kingdom by stato, the Audring Practices Board ard iy cur professes sical guidance Betia of opinion We conducted our audtin accordance wh Acting Siendardsiseved by he Auiting Practices Board, An audit includes examination, on fet basis, ob svisence evant the amounts and leeloeures Inthe finance eters, IRals inoue an assaeemen of the sgnionnteatimatie a dgérarts ade hy the creetes I the preparation of Ibe trencialstatemats and of whathor te accountg pales ave appropiate fo the cumstances of the eampany, consistently applied and adequately alee io plaaned aad perfonred ow suit go a9 to obtsin a the inforraton and explanstons wrich we considered ‘ecaseary In oer to provide un wth cufifan evdence m gle reasonable assurance tha he tnancalstetemants ato feo from mater isstatement, whether caused by aud o other regulary ar emer, In fonring ur onion we also eraunled the cyral adequacy of he presentlon nf information inh tnancal tstemeris. Opinion In our option the Hevea staternnts ga tus and flr Wow ol the stato of nls of he company st 31 December 1998 and of is profit or he year then ended and have beea properly oreparainsncordence withthe Companies Act 1968. Artur Andasen Arthur Andersen (Gherreved Accountants spd Regietered AULore 195 West Georga Suest Giasgo eas 4 Dacembar 2000, 2 SLG TURNBERRY LBNTED. Profil and loss account For Ie yoar ended 31 Dooombsr 1889 Yearto —_Petiodio 31 December $1 Oacenber Netos 1099 1080 ® € Tumover 2 ‘Tigeoams soar! gee oot ot salen (6.866.080) (5.981 144) Grose prot snsa7es 5.420830 ‘tar operating expenses (8) 3 Gate78 (9410.08) ‘Operating pect “7asay —— 2009,886 snestmant come ‘ + 16.086 Inlveot payable ana sina changes 5 9.442,705) (4.691.561) Proton ordinary actimes before tax, 2a9g7s 496284 Toxation 8 : : etined profit or petod ” 250275 06281 “The eccomparying notee ave an integra patois wot and toss account, “The company has n= recogni ans o losses ether then he pri othe fnencal pros [All of te above uporting resus derive from tha acque'ion ofthe shares of Kita World Ca, Livtedan 2% Decerbor 197 and tre euasequent ancfer of te tade and agsots of hat company to SLU Tumby Liked an 30 acember 1907, 4 SLC TURNBERRY LINITED Balance sheet 11 December 1998 Nowes 1099 1990 £ £ Fixedacsets Tangible assets 8 50,315,810 Investmanis 10 2.573.056 33,288,664 Current maneta ‘Stock 1" 438,170, Debors: Arnountsfaltng due watin one yeat ” me708 775,873 ‘cagn a bank ano Inna Steed 268,966 ror ere (Crectore: Amoumm fling de within ana yoor 13 (see.12) (6.909.759 Not currant abies 6.000.269) (2.960,898) ‘Total eageta lesa current bites muna 20319008 (Creators: Amoum fling cve afi mare ten ane year 14 _asrisa7a) _fe21097) Not nasote 14s0a282 une 957 Capital and reserves Equy shave capital 16 2 2 ‘retionn palin eet 17 tgsige7d1g8ts3674 Prot and logs asoount 7 7eASSE 405,284 ‘Total capitat employed tageea98 14,100,987 Sigged on behalt ofthe Boer 8. Seb Director 44 Denember 2000 ‘The accompanying nols ar an inlagralpartot tis balance shast 5 SLC TURNBERRY LIMITED Noles to financial statamants For he year ended 31 December 1990 11 Stetemnent of szcounting policies ‘Aaummay of he Finczal secourting palces, aa of which have been appfed consistent troughout ihe year and the preceding patiod i st cut below. 9) Basis of accountng ‘The financial tates have ben prparad under the histo cos! convert and in oconfance with appoable accounting standards. “The company has elected under Section 228 of tho Companies Act 1885 rot Wo consoidate Nite World Co, Lite 5 ncuslon isnot matortal (rth purpose of ghing a tue and llr ve 2} ash few statemeet ‘The cernpeny haa taken arventage of the exempllon in PAS | ta Hansa withthe requirement luda mcaah Rowe slajament ints franc stators as is eats ara inceporakd nto ts nancial latamants ol Starwood Hotels snd Resorts Worldyide In, which ar avalabl tothe publi Tangible tod assets “Tongite fed enact are stated at costes Reoumulaad depreiatn aa sat ct Innate, [Depretation on angle te soso Is provide rtas calculate owe of the cast loss enlnatod eslual vata cf each assetan# stsigh ne bees using the following annual rates wbich are based on tha expected useta economia ves of the esate: uisings 25% Plat and quent 5% 50% Feciqual vuoi calculated on pices prevaling atthe date of anquatian or revaluation, 1) tvs Food asset mvasment are sho¥m at cost age proelon le npatirant, ©) Stocks ‘Stocka are slated at lie lower of enn and net reafeable valu, 2) orsign ctnrency “Traneactioes denominated in fotsige currencies ea recordedin atering at excharge rea as athe dats o the Momaacton, Monetary assets and iaaltes denarinated in toalgn curencles a the yaar ona atevapvted et the rave of exchange prevalng atthe yeer end. Any gant loss arising ftom a change in cxchangs ents senvequert a ‘tha tate of he tansacton js reponed es an exchenge gen orloas inthe profi and lose oun, 4. SLC TUFNBERRY LMTED Notes to financial statements (continued) 1. Statement of socounting polices (continuech ob Turnover “TumoveIs sated atthe Involced valuo of woods and soross proved, exclusive of VAT andnet of counts raced, fy Leases Assets scquted user ance leases are Ila reporid tte fair vlue of ha assat with an ecvielen obligation categurised as appropriate under crectors de whn orate ope year. Tho assl is deprasieted aver the hoe of ‘he lense tem and ia useful ecanome Me, Cblgaons velating te france leases represen the total fs miner lease paymerts eustardng tthe ante of hebelance spas. Futur nance charges ere etinciuded. Fiance charges ae scat tp ancourtng periods are poled othe lease t preduce constant rate of retum 2 tho ‘outstanding balance, nla undor operating aasas are charged on a sta‘ghelns basis over Olas ton, Furterinfonation on ‘charge inthe you ard utr cerita in given inne $8 0 Taxation Corporation ie payin is paleo taxable prot athe eurent rate ‘efoned tsuston (which arses fom aivences ne tring of he recogni of tame, prircaaly depreciation, in ‘he Financial tasomenis and by the tax suhoritas) hss own calsuio6 on Ih abil shee, Detemad mx prvicee on tring cterances wich. nth elon of he rectors, wit Frohaely towns, ath tas chtaxllesyta oe In fore atthe sof roverzal Osta isnot provider on ining difernces which inthe -allon oft cracters, na pranahly not revere, 1) Pension contibutions “The campary opsratee a defined tenet pensien achema. Pension contthutons ave charged ota pelt ond oes avcount on th basi of <peeacig ts Coat ef Frowalng pentons ove the avid af employace’ sendcos tote ‘company. Furtner Information on tis scheme raided note 1 7 SLGTURNSEARY LIMITED. Notes to financial statements (continued) 2 Segmentinformetion Trine opinion of th ductors the company has ony cre market sepa and thus no Saytental analysis ronda ther operating expenses (nat) Yeurty Patio 91 Deceriber 31 Dscember 1998 1998 € £ Setng a markatng coats 701619 Aesmtlstatve expenses 4 Invantnent income 1208 1098 € € Bank nest = __ 116868 4 Interert payable and aimtor chergoa Yoarlo __Peredio Si December 1 Decemear 1002 098 € £ Onbankloana repayable within fve yours, not by nstalmans - 1786 1616708 Onintrcorspeny loans ‘On promissory notes ‘yeni 501 SC TURNBERAY LIMITED Notes to financial statements (continued) {Profit on ordinary settles before taxation Profit on onary acthésa before texation for he yoo is alatod str chargng/(recting) Doprecauon ‘Adltos'reraneration aud senices mon-aul sendees Stef costs facta 7) Hi ol plat and machinery under operaing leases 7 Sta come Prous of employees ae as shown het: Emplyce costs ding tne yet around es Wages and selves ‘Soc aenurly coats ‘Other pension coats Yearto ‘1 December 1392 € seuss 25,000 45000 8.180489 9580 Year 11 December 1908 € 2paneis 217901 nave 3.189.056 "The average marshy numberof persone eerpiyed bythe ompany uring the year waa 2e Fallows: ‘cministraion and managencent Gasual 9 SLC TURNEERAY LIMITED. Yoatto 31 Decerar 1998 Nurtar 51 Ee 28 Petiod 31 December 1998, € 01788 27,000 15000 aziesne 2 202.580 28,800, site 202,992 Petodto 91 December p98 umbee 48 13 173