The directors present their annual report and the audited consolidated financial statements of C3 Investments in Ayrshire College Education Holdco Limited ("the Company") for the year ended 31 March 2025.
The results for the year are set out on page 8.
The directors are satisfied with the overall performance of the Group and do not foresee any significant change in the Group's activities in the coming financial year.
Ordinary dividends were paid amounting to £nil (2024: £nil). The directors do not recommend payment of a final dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The independent auditors, Johnston Carmichael LLP, are deemed to be reappointed under section 487(2) of the Companies Act 2006.
In its role as a holding company there are no key performance indicators for the directors to monitor. However, from a group point of view the performance of the investment is assessed every six months by testing the cash resources against the bank lending covenants. The key indicator being the debt service cover ratio. The investment has been compliant with the covenants laid out in the Group's loan agreement.
Financial instruments
The financial risk management objectives of the Group are to ensure that financial risks are mitigated by the use of financial instruments. The Group has interest bearing liabilities with fixed interest rates.
Many of the cash flow risks are addressed by means of contractual provisions. The financial risk management objectives of the Group are to ensure that financial risks are mitigated by the use of financial instruments.
Climate change
The directors recognise that it is important to disclose their view of the impact of climate change on the Company. As a holding company, the Company itself does not trade. The Company's investments have key operational contracts that are long-term and with a small number of known counterparties. In most cases, the cashflows from these contracts can be predicted with reasonable certainty for at least the medium-term. Having considered the operations of investments, their contracted rights and obligations and forecast cash flows, there is not expected to be a significant impact upon the Company's operational or financial performance arising from climate change.
These financial statements have been prepared on the going concern basis for the reasons set out in the
Accounting Policies
This report has been prepared in accordance with the special provisions applicable to small companies within Part 15 of the Companies Act 2006. Exemption has also been taken from the requirement to prepare a Strategic Report.
The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have prepared the group and company financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland", and applicable law).
Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the group and company and of the or of the group for that period. In preparing the financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
state whether applicable United Kingdom Accounting Standards, comprising FRS102 have been followed, subject to any material departures disclosed and explained in the financial statements;
make judgements and accounting estimates that are reasonable and prudent; and
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the group and company will continue in business.
They are 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.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group's and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and company and enable them to ensure that the financial statements comply with the Companies Act 2006.
The financial statements were approved and signed by the director and authorised for issue on 31 October 2025
Steven McGhee
Director
Basis for opinion
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group or parent company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this report.
Other information
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
The information given in the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
The Directors' Report has been prepared in accordance with applicable legal requirements.
We assessed whether the engagement team collectively had the appropriate competence and capabilities to identify or recognise non-compliance with laws and regulations by considering their experience, past performance and support available.
All engagement team members were briefed on relevant identified laws and regulations and potential fraud risks at the planning stage of the audit. Engagement team members were reminded to remain alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
We obtained an understanding of the legal and regulatory frameworks that are applicable to the group and the parent company and the sector in which they operate, focusing on those provisions that had a direct effect on the determination of material amounts and disclosures in the financial statements. The most relevant frameworks we identified include:
Companies Act 2006;
UK Tax legislation; and
UK Generally Accepted Accounting Practice.
We gained an understanding of how the group and the parent company are complying with these laws and regulations by making enquiries of management and those charged with governance. We corroborated these enquiries through our review of expenses incurred in relation to legal and professional services procured during the year and through our review of Board meeting minutes.
We assessed the susceptibility of the group’s and parent company’s financial statements to material misstatement, including how fraud might occur, by meeting with management and those charged with governance to understand where it was considered there was susceptibility to fraud. This evaluation also considered how management and those charged with governance were remunerated and whether this provided an incentive for fraudulent activity. We considered the overall control environment and how management and those charged with governance oversee the implementation and operation of controls. In areas of the financial statements where the risks were considered to be higher, we performed procedures to address each identified risk. We identified a heightened fraud risk in relation to:
Management override of controls
Revenue recognition
In addition to the above, the following procedures were performed to provide reasonable assurance that the financial statements were free of material fraud or error:
Reviewing minutes of meetings of those charged with governance for reference to: breaches of laws and regulation or for any indication of any potential litigation and claims; and events or conditions that could indicate an incentive or pressure to commit fraud or provide an opportunity to commit fraud;
Reviewing the level of and reasoning behind the group’s and parent company’s procurement of legal and professional services;
Performing audit procedures over the risk of management override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and assessing judgements made by management in their calculation of accounting estimates for potential management bias;
Recalculating the unitary charge using the method and assumptions set out in the project agreement;
Agreeing a sample of monthly income receipts to invoice and bank statements;
Performing an assessment on the service margins used in the year and agreeing margins used to the active financial models;
Reconciling the finance income and amortisation to the finance debtor reconciliation to ensure allocation methodology is in line with the contractual terms and relevant accounting standards;
Completion of appropriate checklists and use of our experience to assess the group’s and parent company’s compliance with the Companies Act 2006; and
Agreement of the financial statement disclosures to supporting documentation.
Our audit procedures were designed to respond to the risk of material misstatements in the financial statements, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve intentional concealment, forgery, collusion, omission or misrepresentation. There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it.
Use of our report
This report is made solely to the parent 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 parent 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 parent company and the parent company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
The notes on pages 14 to 26 form part of these financial statements.
The notes on pages 14 to 26 form part of these financial statements.
The notes on pages 14 to 26 form part of these financial statements.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £0 (2024 - £0 profit).
These financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.
The notes on pages 14 to 26 form part of these financial statements.
The notes on pages 14 to 26 form part of these financial statements.
The notes on pages 14 to 26 form part of these financial statements.
C3 Investments in Ayrshire College Education Holdco Limited (“the company”) is a private company limited by shares domiciled and incorporated in Scotland. The registered office is 2nd Floor, Drum Suite, Saltire Court, 20 Castle Terrace, Edinburgh, EH1 2EN.
The group consists of C3 Investments in Ayrshire College Education Holdco Limited and its subsidiary.
The principal activity of the Company and Group continued to be that of financing, operation and maintenance of a college on a single site campus under a Scottish Futures Trust Non Profit Distributing (NPD) program for the benefit of The Board of Management of Ayrshire College. The construction of the college commenced in June 2014, becoming operational on 30 September 2016. The contract is in the eleventh year of it's term, expiring in May 2041.
These financial statements have been prepared in accordance 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.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below and have been consistently applied to the years presented, unless otherwise stated.
This 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 financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group.
The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 7 ‘Statement of cash flows’: Presentation of a Statement of cash flows and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; details of collateral, loan defaults or breaches.
The Company Statement of financial position has been restated due to an error being identified:
The Company Statement of financial position has been restated due to a presentational error being identified regarding the split of amounts owed by group undertakings and other borrowings being incorrect. They both should have reflected a capital balance of £229,814 being due within one year. This has been corrected and the Company Statement of financial position and corresponding notes have been adjusted accordingly to reflect the restated balance.
There is no adjustment to the consolidated figures or the Company Statement of changes in equity line items as the adjustments have £nil impact on the Statement of comprehensive income.
Please see note 20 for further detail on the prior year adjustment.
The consolidated financial statements include the Company and its subsidiary undertaking. Where subsidiary undertakings are acquired during the period their results are included in the consolidated financial statements from the date of acquisition up to the date of the financial period end.
The parent company has applied the exemption contained in section 408 of the Companies Act 2006 and has not included its individual Statement of comprehensive income.
Non-controlling interests
Minority interests in the net assets of consolidated subsidiary are identified separately from the Group’s equity. Minority interests consist of the amount of those interests at the date of the original business combination and the minority’s share of changes in equity since the date of the combination.
The proportions of profit or loss and changes in equity allocated to the owners of the parent and to the minority interests are determined on the basis of existing ownership interests and do not reflect the possible exercise or conversion of options or convertible instruments.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
The financial statements are prepared on a going concern basis which the directors believe to be appropriate for the following reasons.
The Group prepares cash flow forecasts covering the expected life of the asset and so including the 12 month period from the date the financial statements are signed. In drawing up these forecasts, the Directors have made assumptions based upon their view of the current and future economic conditions that will prevail over the forecast period. Based on these forecasts the Directors have a reasonable expectation that the Group and Company has adequate resources to continue in operational existence for the foreseeable future.
In light of this, the Directors continue to adopt the going concern basis of accounting in preparing the Group and Company's annual financial statements.
Turnover represents the services' share of the management services income received by the Group for the provision of a Private Finance Initiative (PFI) asset to the customer. This income is received over the life of the concession period. Management service income is allocated between turnover, finance debtor interest and reimbursement of finance debtor so as to generate a constant rate of return in respect of the finance debtor over the life of the contract.
Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments in equity and loans are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
The group 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 group's Statement of financial position 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 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.
Financial assets, other than those held at fair value through profit 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 financial 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 flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
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 carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
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 financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant 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.
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 group after deducting all of its liabilities.
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, 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 payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
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. Amounts 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 creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement 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 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 profits. 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 profit nor the accounting profit.
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 sufficient taxable profits 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 income statement, 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.
Finance debtor
The Group has taken the transition exemption in FRS102 Section 35.10(i) that allows the Group to continue the service concession arrangement accounting policies from previous UK GAAP.
The Group accounts for the concession asset based on the ability to substantially transfer all the risks and rewards of ownership to the customer, with this arrangement the costs incurred by the Group on the design and construction of the asset have been treated as a finance debtor within these financial statements.
Borrowings
Borrowings are recognised at amortised cost using the effective interest rate method. Under the effective interest rate method, any transaction fees, costs, discounts and premiums directly related to the borrowings are recognised in the Statement of comprehensive income over the life of the borrowings. Borrowings with maturities greater than twelve months after the reporting date are classified as non-current liabilities.
Provisions
Provisions are recognised when the entity has an obligation at the reporting date as a result of a past event, it is probable that the entity will be required to transfer economic benefits in a settlement and the amount of the obligation can be estimated reliably. Provisions are recognised as a liability in the Statement of financial position and the amount of the provision as an expense.
Provisions are initially measured at the best estimate of the amount required to settle the obligation at the reporting date and subsequently reviewed at each reporting date and adjusted to reflect the current best estimate of the amount that would be required to settle the obligation. Any adjustments to the amounts previously recognised are recognised in profit or loss unless the provision was originally recorded as part of the cost of an asset. When a provision is measured at present value of the amount expected to be required to settle the obligation, the unwinding of the discount is recognised as a financial cost in profit or loss in the period it arises.
In the application of the group’s accounting policies, the directors are 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 periods.
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Accounting for the service concession contract and finance debtors requires estimation of service margins, finance debtor interest rates and associated amortisation profile which is based on forecast results of the contract. These were forecast initially within the operating model at financial close and are closely monitored throughout the duration of the project.
The carrying value of those investments recorded in the Company's Statement of financial position, could be materially reduced where circumstances exist which might indicate that an asset has been impaired and an impairment review is performed. Impairment reviews consider the fair value and/or value in use of the potentially impaired asset or assets and compare that with the carrying value of the asset or assets in the Statement of financial position. Any reduction in value arising from such a review would be recorded in the Statement of comprehensive income. Impairment reviews involve the significant use of assumptions. Consideration has to be given as to the price that could be obtained for the asset or assets, or in relation to a consideration of value in use, estimates of the future cash flows that could be generated by the potentially impaired asset or assets, together with a consideration of an appropriate discount rate to apply to those cash flows.
The whole of the turnover is attributable to the principal activity of the group wholly undertaken in the United Kingdom.
Included in the fee above is £3,155 (2024: £3,035) for the audit of the Company.
The average number of persons employed by the Group during the financial year amounted to nil (2024: nil). The directors are not employed by the Group, and two directors receive remuneration from another company for their services as directors of the group entities and a number of fellow subsidiaries. It is not possible to make an accurate apportionment of their remuneration in respect of each of the subsidiaries.
During the year, the Group paid £30,009 (2024: £23,171) to a third party for the services of a director of the subsidiary company. The directors did not receive any remuneration from the Company during the year (2024: nil).
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
Details of the company's subsidiaries at 31 March 2025 are as follows:
The 2024 Company comparative figures above have been restated. Please see note 20 for further detail on the prior year adjustment.
Group Loan stock balances are stated net of debt issue costs of £50,793 (2024: £10,702) whereas these costs do not relate to the Company.
Amounts owed to group undertakings relate to accrued subordinated loan stock interest of £180,677 (2024: £418,771). Interest is charged on the subordinated loan stock at a 9.4% per annum and is payable six monthly in March and September.
The 2024 Company comparative figures above have been restated. Please see note 20 for further detail on the prior year adjustment.
The 2024 Company comparative figures above have been restated. Please see note 20 for further detail on the prior year adjustment.
Bank loans comprise senior debt which is secured by floating charges over all the assets, rights and undertakings of the Group. The bank loan is repayable by quarterly instalments. These commenced in June 2016 and end in 2040. The loan bears an interest rate of 4.92% per annum. The Group's full amount of loan drawdown at 31 March 2025 is £29,456,848 (2024: £30,930,344). Issue costs of £518,000 (2024: £571,000) have been set off against total loan drawdowns.
Other borrowings in notes 12 and 13 relate to Loans from Group undertakings. Loans from group undertakings comprise subordinated debt from the parent company, being fixed 9.40% coupon unsecured loan notes. The loan notes are due for repayment on a semi-annual basis on 31 March and 30 September. The terms of the loan notes state that payments of interest and repayments of the loan principal are only to be made if sufficient funds are available to avoid a breach of covenants in the Company’s banking facilities and whilst the Group is not in the process of liquidation or other such winding-up proceedings. The amount of loan drawdown at 31 March 2025 was £4,352,700 (2024: £4,463,700). Group issue costs of £212,000 (2024: £183,000) have been set off against the group loan drawdowns. These costs do not apply to the Company balances.
The 2024 Company comparative figures above have been restated. Please see note 20 for further detail on the prior year adjustment.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
The Company's ordinary shares, which carry no right to fixed income, each carry the right to one vote at general meetings.
Group
The Group has undertaken the following transactions with related parties during the year.
C3 Investments in Ayrshire College Education Holdco Limited, a company who own 99.9% of the share capital of C3 Investments in Ayrshire College Education Limited, received £111,000 (2024: nil) in respect of capital and £604,000 (2024: £387,970) in respect of interest on loan notes issued (see note 13). Accrued interest as at 31 March 2025 amounted to £180,677 (2024: £418,771).
The Group paid £108,338 (2024: £102,048) to BIIF Bidco Limited and its subsidiaries for the provision of management services. A total of £9,169 (2024: £8,928) was outstanding at the year end.
The Directors have considered the provisions contained within section 33 of FRS 102 "Related Party Disclosures" and are satisfied that there are no further disclosures required.
Company
The Company is wholly owned by Ednaston Project Investments Limited, a company registered in England and Wales, and has taken advantage of the exemption in section 33 of FRS 102 'Related Party Disclosures', that allows it not to disclose transactions with wholly owned members of a group.
During the year it was identified that £229,814 of the Company's Amounts due from group undertakings falling due within one year and Other borrowings falling due within one year were included within debtors falling due after more than one year and creditors falling due after more than one year, respectively. These amounts have been represented as debtors falling due within one year and creditors falling due within one year, respectively, in the financial statements via a prior year adjustment.
The impact of these adjustments is a £229,814 decrease in debtors falling due after more than one year and an equivalent increase in debtors falling due within one year, and a £229,814 decrease in creditors falling due after more than one year and an equivalent increase in creditors falling due within one year, within the Company's Statement of financial position as at 31 March 2024.
The restatement is a reclassification of the Company's Statement of financial position between line items from debtors falling due after more than one year to debtors falling due within one year, and from creditors falling due after more than one year to creditors falling due within one year. This has not impacted the Company's Statement of comprehensive income or the Company's Statement of changes in equity.