Company Registration No. 10375476 (England and Wales)
Gymfinity Kids Limited
Annual report and financial statements
for the year ended 31 December 2021
Gymfinity Kids Limited
Company information
Directors
Brian Scurrah
Julian Richmond-Watson
Peter Roberts
Hazel Hutchinson
Jacques De Bruin
Adam Bellamy
Company number
10375476
Registered office
Manor Farm
East Tanfield
Ripon
North Yorkshire
HG4 5LN
Independent auditor
Saffery Champness LLP
Mitre House
North Park Road
Harrogate
North Yorkshire
HG1 5RX
Gymfinity Kids Limited
Contents
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 8
Statement of comprehensive income
9
Statement of financial position
10
Statement of changes in equity
11
Statement of cash flows
12
Notes to the financial statements
13 - 29
Gymfinity Kids Limited
Strategic report
For the year ended 31 December 2021
Page 1

The directors present the strategic report for the year ended 31 December 2021.

Fair review of the business

Gymfinity Kids (GK) is a business that provides combined offer of activity clubs and nurseries under one roof to enhance overall wellbeing in children. GK clubs offer a mix of child-based activities such as gymnastics, ninja (non-contact martial arts) and pre-school classes as well as birthday parties and holiday camps. The nurseries provide full time child- care for babies from 3months-5years old.

GK operated from 6 clubs during 2021 with new club in Chatham open in Dec 21. 3 clubs have nurseries.

 

Our research indicates the current UK operators of gymnastic centres have large waiting lists of children wishing to participate in similar classes.

 

In general, the business performed well in 2021. We achieved good growth in all our clubs and nurseries and as a result of which 6 clubs made profit in 2021. Despite shorter trading period the company continue to follow it plans to increase performance of existing sites and introduce more location in next few years.

 

We are continuing to learn and adopt our strategy in line with our 3 pillars of excellence – MOVEMENT, DEVELOPMENT and NOURISHMENT. To date people have responded very well to both our products and we have a decent length of membership and low attrition levels for a non-contracted membership option.

We have also invested a significant amount of money and time in designing and building our own bespoke CRM system – which will set us apart from any other operator.

Principal risks and uncertainties

The Company operates in 2 markets which is children education and care in the form of Nurseries and leisure in the form of Gymnastics.

The Nurseries do operate in a very competitive environment and subject to external factors like economy and unemployment which would influence yield and volume.

 

The Gymnastics side of the business is operating in a much less competitive market and have lower risks relating to competition but similar external risks as per Nurseries.

 

The management Board have reviewed the activities of the company and the controls that are in place to manage the exposure to risk. These controls are reviewed by the Board from time to time in order to ensure that the controls are appropriate and are being applied in a consistent manner.

 

The directors have a reasonable and proper expectation that the company has and will have adequate resources to continue to adopt the going concern basis in preparing these financial statements. The directors base this expectation on the budget and cash flow forecasts prepared for the period 12months following the date of approval of these accounts.

 

The Company meets its day to day working capital requirements through a mixture of financial instruments including Loans, cash and medium-term leasing for fixed assets.

 

 

Gymfinity Kids Limited
Strategic report (continued)
For the year ended 31 December 2021
Page 2

The existence of these financial instruments exposes the company to a number of financial risks, which are described in more detail below.

 

Liquidity Risk

The directors control and monitor the company’s cash flow on a weekly basis.

 

Interest rate risk

The company finances its operations through a mixture of Bank Loan, Convertible Loan Agreement, and hire purchase agreements. The company exposure to interest rate fluctuations on its borrowings is mitigated by the use of fixed interest CLA and fixed interest leasing.

Key performance indicators

The Company’s core strategy places emphasis on never ending improvements on employees, customer and supplier focused KPI’s across the entire business, in order to deliver higher levels of loyalty, increase value and help develop and maintain efficient trading partnerships with all parties involved.

 

The Board sets financial KPI’s through an annual budget process and monitors performance by reviewing monthly management accounts and forecasts. In addition, a range of financial KPI’s are monitored relating to profitability, cash and working capital management and various other elements of the business.

 

The Company also measures its non-financial performance in a number of ways. These include quality and service levels to customer, standards and cleanliness of the facilities and new customer acquisition in both Nurseries and Gymnastics. Targets and objectives are also set in respect of Health and Safety, Employee Wellbeing and Corporate Social Responsibility. The Directors are pleased to report the majority of these targets have been met but continue to strive for improvement.

Post year end finance raise

On 1st July 2022, 761,056 ordinary A shares and 4,017,242 ordinary C shares each with a nominal value of £1.00 were issued for an aggregate consideration of £4,778,298.

As a result of the above share issue, per the terms of the Futures Fund agreement, the loan of £2,000,000 was converted into D ordinary shares at 20% discount. 2,5000,000 D shares were issued during the conversion. In additional £304,653 of accrued interest in that debt was converted into C shares at par.

On behalf of the board

Peter Roberts
Director
15 August 2022
Gymfinity Kids Limited
Directors' report
For the year ended 31 December 2021
Page 3

The directors present their annual report and financial statements for the year ended 31 December 2021.

Principal activities

The principal activity of the company continued to be that of facilities for children's gymnastics and the provision of nursery childcare.

Results and dividends

The results for the year are set out on page 9.

No ordinary dividends were paid. The directors do not recommend payment of a final dividend.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

Brian Scurrah
Julian Richmond-Watson
Peter Roberts
Hazel Hutchinson
Jacques De Bruin
Adam Bellamy
Auditor

The auditor, Saffery Champness LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

Gymfinity Kids Limited
Directors' report (continued)
For the year ended 31 December 2021
Page 4
Statement of directors' responsibilities

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 elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards 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 company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

 

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the 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 company’s auditor 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 company’s auditor is aware of that information.

Going concern

At the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future.

 

Further details are set out within note 1 of these financial statements.

On behalf of the board
Peter Roberts
Director
15 August 2022
Gymfinity Kids Limited
Independent auditor's report
To the members of Gymfinity Kids Limited
Page 5
Opinion

We have audited the financial statements of Gymfinity Kids Limited (the 'company') for the year ended 31 December 2021 which comprise the statement of comprehensive income, the statement of financial position, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion, the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our 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 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.

Gymfinity Kids Limited
Independent auditor's report (continued)
To the members of Gymfinity Kids Limited
Page 6

Other information

The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

 

Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of 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 this gives rise to a material misstatement in the financial statements themselves. 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 Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

 

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

 

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

 

Responsibilities of directors

As explained more fully in the directors' responsibilities statement set out on page 5, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

 

In preparing the financial statements, the directors are responsible for assessing the 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 directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Gymfinity Kids Limited
Independent auditor's report (continued)
To the members of Gymfinity Kids Limited
Page 7
Auditor's responsibilities for the audit of the financial 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 ISAs (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 influence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud are detailed below.

 

Identifying and assessing risks related to irregularities:

We assessed the susceptibility of the company’s financial statements to material misstatement and how fraud might occur, including through discussions with the directors, discussions within our audit team planning meeting, updating our record of internal controls and ensuring these controls operated as intended. We evaluated possible incentives and opportunities for fraudulent manipulation of the financial statements. We identified laws and regulations that are of significance in the context of the company by discussions with directors and by updating our understanding of the sector in which the company operates.

 

Laws and regulations of direct significance in the context of the company include The Companies Act 2006, and UK Tax legislation.

 

Audit response to risks identified:

We considered the extent of compliance with these laws and regulations as part of our audit procedures on the related financial statement items including a review of financial statement disclosures. We reviewed the company's records of breaches of laws and regulations, minutes of meetings and correspondence with relevant authorities to identify potential material misstatements arising. We discussed the company's policies and procedures for compliance with laws and regulations with members of management responsible for compliance.

During the planning meeting with the audit team, the engagement partner drew attention to the key areas which might involve non-compliance with laws and regulations or fraud. We enquired of management whether they were aware of any instances of non-compliance with laws and regulations or knowledge of any actual, suspected or alleged fraud. We addressed the risk of fraud through management override of controls by testing the appropriateness of journal entries and identifying any significant transactions that were unusual or outside the normal course of business. We assessed whether judgements made in making accounting estimates gave rise to a possible indication of management bias. At the completion stage of the audit, the engagement partner’s review included ensuring that the team had approached their work with appropriate professional scepticism and thus the capacity to identify non-compliance with laws and regulations and fraud.

Gymfinity Kids Limited
Independent auditor's report (continued)
To the members of Gymfinity Kids Limited
Page 8

There are inherent limitations in the audit procedures described above 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. Also, 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 deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

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.

Jonathan Davis (Senior Statutory Auditor)
For and on behalf of Saffery Champness LLP
7 September 2022
Chartered Accountants
Statutory Auditors
Mitre House
North Park Road
Harrogate
North Yorkshire
HG1 5RX
Gymfinity Kids Limited
Statement of comprehensive income
For the year ended 31 December 2021
Page 9
2021
2020
Notes
£
£
Turnover
3
3,449,342
1,794,405
Cost of sales
(175,893)
(132,876)
Gross profit
3,273,449
1,661,529
Administrative expenses
(6,232,971)
(5,871,388)
Other operating income
595,317
1,191,765
Operating loss
5
(2,364,205)
(3,018,094)
Interest payable and similar expenses
8
(89,433)
(94,579)
Other gains and losses
9
(476,600)
(377,787)
Loss before taxation
(2,930,238)
(3,490,460)
Tax on loss
10
57,025
-
0
Loss for the financial year
(2,873,213)
(3,490,460)

The income statement has been prepared on the basis that all operations are continuing operations.

Gymfinity Kids Limited
Statement of financial position
As at 31 December 2021
Page 10
2021
2020
Notes
£
£
£
£
Fixed assets
Intangible assets
11
348,775
364,775
Tangible assets
12
4,347,130
5,008,365
4,695,905
5,373,140
Current assets
Stocks
13
27,074
32,475
Debtors
14
560,527
622,357
Cash at bank and in hand
1,597,260
2,753,796
2,184,861
3,408,628
Creditors: amounts falling due within one year
15
(2,272,643)
(1,589,258)
Net current (liabilities)/assets
(87,782)
1,819,370
Total assets less current liabilities
4,608,123
7,192,510
Creditors: amounts falling due after more than one year
16
(3,746,560)
(3,461,734)
Provisions for liabilities
20
(428,314)
(424,314)
Net assets
433,249
3,306,462
Capital and reserves
Called up share capital
22
9,780,936
9,780,936
Share premium account
1,423,963
1,423,963
Profit and loss reserves
(10,771,650)
(7,898,437)
Total equity
433,249
3,306,462
The financial statements were approved by the board of directors and authorised for issue on 15 August 2022 and are signed on its behalf by:
Peter Roberts
Director
Company Registration No. 10375476
Gymfinity Kids Limited
Statement of changes in equity
For the year ended 31 December 2021
Page 11
Share capital
Share premium account
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 January 2020
9,055,935
1,423,963
(4,407,977)
6,071,921
Year ended 31 December 2020:
Loss and total comprehensive income for the year
-
-
(3,490,460)
(3,490,460)
Issue of share capital
22
725,001
-
0
-
725,001
Balance at 31 December 2020
9,780,936
1,423,963
(7,898,437)
3,306,462
Year ended 31 December 2021:
Loss and total comprehensive income for the year
-
-
(2,873,213)
(2,873,213)
Balance at 31 December 2021
9,780,936
1,423,963
(10,771,650)
433,249
Gymfinity Kids Limited
Statement of cash flows
For the year ended 31 December 2021
Page 12
2021
2020
Notes
£
£
£
£
Cash flows from operating activities
Cash absorbed by operations
27
(644,779)
(1,815,669)
Interest paid
(89,433)
(94,579)
Income taxes refunded/(paid)
57,025
-
0
Net cash outflow from operating activities
(677,187)
(1,910,248)
Investing activities
Purchase of intangible assets
(27,885)
(115,284)
Purchase of tangible fixed assets
(486,317)
(1,703,834)
Proceeds on disposal of tangible fixed assets
78,358
-
0
Net cash used in investing activities
(435,844)
(1,819,118)
Financing activities
Proceeds from issue of shares
-
0
1,477,990
Issue of convertible loans
-
0
2,000,000
Proceeds from borrowings
-
0
200,000
Repayment of borrowings
(34,051)
-
0
Payment of finance leases obligations
(9,454)
(376,128)
Net cash (used in)/generated from financing activities
(43,505)
3,301,862
Net decrease in cash and cash equivalents
(1,156,536)
(427,504)
Cash and cash equivalents at beginning of year
2,753,796
3,181,300
Cash and cash equivalents at end of year
1,597,260
2,753,796
Gymfinity Kids Limited
Notes to the financial statements
For the year ended 31 December 2021
Page 13
1
Accounting policies
Company information

Gymfinity Kids Limited is a private company limited by shares incorporated in England and Wales. The registered office is Manor Farm, East Tanfield, Ripon, North Yorkshire, HG4 5LN.

1.1
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” (“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, modified to include certain financial instruments at fair value. The principal accounting policies adopted are set out below.

1.2
Going concern

Due to Covid-19, the company only traded for 8 out of 12 months of the year. Despite the shorter trading year, the company experienced growth in 2021 and was able to open a new site in Chatham in Dec 21. true

The company’s cash balance at the end of 2021 was £1.59m and the directors are confident that this leaves the company with sufficient cash to be able to continue trading for a period of at least 12 months post the approval of these financial statements.

Additionally, as stated within note 25, during the post year end period the company successfully completed an additional fundraise in line with the business’s strategic growth plan, raising £4.778m in additional equity. The directors are satisfied with this outcome and have reasonable expectation that the company has adequate resource to continue in operations for the foreseeable future.

Management have prepared forecasts for the foreseeable based on the fund raise and are satisfied that cash reserves will remain sufficient for at least 12 months following the signing of the accounts.

As a result, the Company continues to adopt the going concern basis of accounting when preparing these financial statements.

 

1.3
Turnover

Turnover is derived from the provision of sport and leisure facilities for children in the United Kingdom, as well as the provision of nurseries. Turnover is measured 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.

Revenue from the sale of goods, such as vending machine sales, cafe sales and clothing sales is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually at point of sale).

Gymfinity Kids Limited
Notes to the financial statements (continued)
For the year ended 31 December 2021
1
Accounting policies (continued)
Page 14

Membership income is recognised on a straight-line basis over the relevant term.

1.4
Intangible fixed assets other than goodwill

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Software
10 years

Amortisation is charged when the asset is brought into use.

1.5
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Leasehold improvements
Over the term of the lease
Fixtures and fittings
25% straight line
Gym equipment
25% straight line
Equipment
25% straight line

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 credited or charged to profit or loss.

1.6
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to sell, which is equivalent to net realisable value.

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 or loss. Reversals of impairment losses are also recognised in profit or loss.

1.7
Cash and cash equivalents

Cash and cash equivalents are basic financial 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.

Gymfinity Kids Limited
Notes to the financial statements (continued)
For the year ended 31 December 2021
1
Accounting policies (continued)
Page 15
1.8
Financial instruments

The company 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 company's statement of financial position when the company becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset, with 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

Basic financial assets, which include debtors, 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

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.

Impairment of financial assets

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.

Gymfinity Kids Limited
Notes to the financial statements (continued)
For the year ended 31 December 2021
1
Accounting policies (continued)
Page 16
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 company 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.

Classification of financial liabilities

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 company after deducting all of its liabilities.

Basic financial 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.

Other financial liabilities

Other financial liabilities, including debt instruments that do not meet the definition of a basic financial instrument, are measured at fair value through profit or loss.

Convertible loan notes

The convertible loan notes issued by the company under the government supported Futures Fund initiative are classified as financial liabilities in accordance with the substance of the contractual arrangement. At the date of issue, the fair value of the liability is recognised in long-term liabilities and is measured on a fair value basis through profit or loss until extinguished upon conversion or at the instrument's maturity date.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

Gymfinity Kids Limited
Notes to the financial statements (continued)
For the year ended 31 December 2021
1
Accounting policies (continued)
Page 17
1.9
Equity instruments

Equity instruments issued by the company are recorded at the proceeds received or receivable, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.

1.10
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 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 company’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 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. Where items recognised in other comprehensive income or equity are chargeable to or deductible for tax purposes, the resulting current or deferred tax expense or income is presented in the same component of comprehensive income or equity as the transaction or other event that resulted in the tax expense or income. Deferred tax assets and liabilities are offset when the company has 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.

1.11
Provisions

Provisions are recognised when the company has a legal or constructive present obligation as a result of a past event, it is probable that the company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation. The amount included within provisions relates to the company's best estimate of future dilapidations costs.

Gymfinity Kids Limited
Notes to the financial statements (continued)
For the year ended 31 December 2021
1
Accounting policies (continued)
Page 18
1.12
Employee benefits

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.

 

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.13
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.14
Leases

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 statement of financial position 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 or loss 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 leases asset are consumed.

1.15
Government grants

Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

 

A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.

 

Government grants relate to amounts received under the Coronavirus Job Retention Scheme, Coronavirus Business Interruption Loan Scheme and Coronavirus business support grants.

Gymfinity Kids Limited
Notes to the financial statements (continued)
For the year ended 31 December 2021
Page 19
2
Critical accounting judgements and key sources of estimation uncertainty

In the application of the company’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.

Key sources of estimation uncertainty

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.

Valuation of the convertible loan (Future Fund)

During 2019, the company obtained £2m of finance by issuing convertible loan instruments as part of the Government supported Futures Fund. These instruments are accounted for under Chapter 12 of FRS 102 and as such are held at fair value at the balance sheet date. The instrument has been professionally valued by Pegasus Capital LLP using the binomial lattice valuation methodology. This methodology requires the input of certain assumptions such as discount rates for future cash flows, price volatility and probability assumptions for the company share price increasing and decreasing.

 

Gymfinity Kids Limited
Notes to the financial statements (continued)
For the year ended 31 December 2021
Page 20
3
Turnover and other revenue

All turnover is derived from the United Kingdom from the principal activities of the company.

4
Exceptional item
2021
2020
£
£
Expenditure
Onerous contract costs
-
64,964

Exceptional items above related to an onerous contract provision following the decision not to re-open one of the sites in the prior year. The amount above reflected the future rent payable, net of any expected receipts to the end of the rent agreement.

5
Operating loss
2021
2020
Operating loss for the year is stated after charging/(crediting):
£
£
Government grants
(595,317)
(866,765)
Fees payable to the company's auditor for the audit of the company's financial statements
37,950
19,500
Depreciation of owned tangible fixed assets
655,120
599,875
Depreciation of tangible fixed assets held under finance leases
159,743
237,822
Impairment of owned tangible fixed assets
271,554
-
0
Profit on disposal of tangible fixed assets
(17,223)
-
0
Amortisation of intangible assets
43,885
41,096
Operating lease charges
894,455
868,414
6
Employees

The average monthly number of persons (including directors) employed by the company during the year was:

2021
2020
Number
Number
198
247
Gymfinity Kids Limited
Notes to the financial statements (continued)
For the year ended 31 December 2021
6
Employees (continued)
Page 21

Their aggregate remuneration comprised:

2021
2020
£
£
Wages and salaries
2,713,334
2,562,704
Social security costs
157,401
125,674
Pension costs
39,074
35,750
2,909,809
2,724,128
7
Directors' remuneration
2021
2020
£
£
Remuneration for qualifying services
76,067
73,537
Company pension contributions to defined contribution schemes
2,276
2,941
78,343
76,478

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2020 - 1).

8
Interest payable and similar expenses
2021
2020
£
£
Other finance costs:
Interest on finance leases and hire purchase contracts
89,433
94,579
9
Other gains and losses
2021
2020
£
£
Other gains and (losses)
(476,600)
(377,787)

Other gains and losses relates to the fair value movement on convertible loan notes.

Gymfinity Kids Limited
Notes to the financial statements (continued)
For the year ended 31 December 2021
Page 22
10
Taxation
2021
2020
£
£
Current tax
Adjustments in respect of prior periods
(57,025)
-
0

The actual credit for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:

2021
2020
£
£
Loss before taxation
(2,930,238)
(3,490,460)
Expected tax credit based on the standard rate of corporation tax in the UK of 19.00% (2020: 19.00%)
(556,745)
(663,187)
Unutilised tax losses carried forward
556,745
663,187
Research and development tax credit
(57,025)
-
0
Taxation credit for the year
(57,025)
-
11
Intangible fixed assets
Software
£
Cost
At 1 January 2021
410,964
Additions
27,885
At 31 December 2021
438,849
Amortisation and impairment
At 1 January 2021
46,189
Amortisation charged for the year
43,885
At 31 December 2021
90,074
Carrying amount
At 31 December 2021
348,775
At 31 December 2020
364,775
Gymfinity Kids Limited
Notes to the financial statements (continued)
For the year ended 31 December 2021
Page 23
12
Tangible fixed assets
Leasehold improvements
Fixtures and fittings
Gym equipment
Equipment
Total
£
£
£
£
£
Cost
At 1 January 2021
4,275,669
377,538
1,200,968
637,697
6,491,872
Additions
116,223
96,554
144,654
128,886
486,317
Disposals
(54,630)
-
0
(33,082)
-
0
(87,712)
At 31 December 2021
4,337,262
474,092
1,312,540
766,583
6,890,477
Depreciation and impairment
At 1 January 2021
472,475
142,051
599,850
269,131
1,483,507
Depreciation charged in the year
243,949
118,860
304,698
147,356
814,863
Impairment losses
271,554
-
0
-
0
-
0
271,554
Eliminated in respect of disposals
(15,550)
-
0
(11,027)
-
0
(26,577)
At 31 December 2021
972,428
260,911
893,521
416,487
2,543,347
Carrying amount
At 31 December 2021
3,364,834
213,181
419,019
350,096
4,347,130
At 31 December 2020
3,803,194
235,487
601,118
368,566
5,008,365

The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.

2021
2020
£
£
Gym equipment
673,453
621,997

Finance leases are secured by charges over the relevant assets.

13
Stocks
2021
2020
£
£
Finished goods and goods for resale
27,074
32,475
Gymfinity Kids Limited
Notes to the financial statements (continued)
For the year ended 31 December 2021
Page 24
14
Debtors
2021
2020
Amounts falling due within one year:
£
£
Trade debtors
279,574
107,764
Other debtors
99,916
464,512
Prepayments and accrued income
181,037
50,081
560,527
622,357
15
Creditors: amounts falling due within one year
2021
2020
Notes
£
£
Obligations under finance leases
18
359,499
215,538
Other borrowings
17
35,008
30,700
Trade creditors
562,123
378,595
Taxation and social security
183,901
47,781
Deferred income
93,200
60,207
Other creditors
40,910
19,816
Accruals and deferred income
998,002
836,621
2,272,643
1,589,258
16
Creditors: amounts falling due after more than one year
2021
2020
Notes
£
£
Convertible loans
19
2,854,387
2,377,787
Obligations under finance leases
18
761,232
914,647
Other borrowings
17
130,941
169,300
3,746,560
3,461,734
Gymfinity Kids Limited
Notes to the financial statements (continued)
For the year ended 31 December 2021
Page 25
17
Loans and overdrafts
2021
2020
£
£
Other loans
165,949
200,000
Payable within one year
35,008
30,700
Payable after one year
130,941
169,300

Other loans relate to amounts borrowed under the Coronavirus Business Interruption Loan Scheme and are unsecured.

18
Finance lease obligations
2021
2020
Future minimum lease payments due under finance leases:
£
£
Within one year
359,499
215,538
In two to five years
761,232
914,647
1,120,731
1,130,185

Finance lease payments represent rentals payable by the company for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 4 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

Gymfinity Kids Limited
Notes to the financial statements (continued)
For the year ended 31 December 2021
Page 26
19
Convertible loan notes
2021
2020
£
£
Convertible loan notes
2,854,387
2,377,787

£2,000,000 of convertible loan notes were issued on 16 July 2020 as part of the Futures Fund scheme. The notes are convertible into ordinary shares of the company upon a triggering event within 3 years of issue or at the end of the 3 year maturity period. The conversion price is at a 20% discount to the share price used in the triggering event, or the last price of the last investment raise if conversion takes place at maturity (subject to certain terms and conditions).

 

If the convertible loan notes have not been converted, and notice has been served, they will be redeemed in cash on 16 July 2023 at a premium of 100%.

 

Interest at 8% per annum is accrued until conversion or redemption and will be converted or paid at that date at par.

20
Provisions for liabilities
2021
2020
£
£
Dilapidations provision
363,350
359,350
Onerous contract provision
64,964
64,964
428,314
424,314
Movements on provisions:
Dilapidations provision
Onerous contract provision
Total
£
£
£
At 1 January 2021
359,350
64,964
424,314
Additional provisions in the year
58,630
-
58,630
Reversal of provision
(54,630)
-
(54,630)
At 31 December 2021
363,350
64,964
428,314
Gymfinity Kids Limited
Notes to the financial statements (continued)
For the year ended 31 December 2021
Page 27
21
Retirement benefit schemes
2021
2020
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
39,074
35,750

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

22
Share capital
2021
2020
£
£
Ordinary share capital
Issued and fully paid
9,780,926 Ordinary A shares of £1 each
9,780,926
9,780,926
950 (2020: 990) Ordinary B shares of 1p each
10
10
9,780,936
9,780,936

Both A ordinary and B ordinary shares carry full voting rights and full rights to receive dividends.

 

In the event of a capital distribution, an amount equal to twice the issue price will be paid to the holders of shares of both classes. Prior to the fifth anniversary of the adoption date of the articles of the company, 25% of the remaining sum will be distributed to the holders of B ordinary shares and the balance to the holders of A ordinary shares. After the fifth but prior to the seventh anniversary, 20% of the remaining sum will be paid to holders of B ordinary shares and the balance to holders of A ordinary shares.

On 13 May 2021, the company repurchased and cancelled a total of 40 B ordinary shares of £0.01 each at par value.

 

All of the shares issued have been fully paid at the balance sheet date.

Gymfinity Kids Limited
Notes to the financial statements (continued)
For the year ended 31 December 2021
Page 28
23
Operating lease commitments
Lessee

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

2021
2020
£
£
Within one year
908,220
976,912
Between two and five years
3,954,645
3,415,358
In over five years
5,596,356
4,919,610
10,459,221
9,311,880
24
Capital commitments

Amounts contracted for but not provided in the financial statements:

2021
2020
£
£
Acquisition of tangible fixed assets
324,696
-
25
Events after the reporting date

On 1st July 2022, 761,056 ordinary A shares and 4,017,242 ordinary C shares each with a nominal value of £1.00 were issued for an aggregate consideration of £4,778,298. 

As a result of the above share issue, per the terms of the Futures Fund agreement, the loan of £2,000,000 was converted into D ordinary shares at 20% discount. 2,5000,000 D shares were issued during the conversion. In additional £304,653 of accrued interest in that debt was converted into C shares at par.

 

26
Related party transactions

During the year the company paid £119,139 (2020: £203,762) for management services to companies in which directors of the company have significant influence or control. At the balance sheet date, a balance of £17,587 (2020: £Nil) was due to related parties.

Gymfinity Kids Limited
Notes to the financial statements (continued)
For the year ended 31 December 2021
Page 29
27
Cash absorbed by operations
2021
2020
£
£
Loss for the year after tax
(2,873,213)
(3,490,460)
Adjustments for:
Taxation credited
(57,025)
-
0
Finance costs
89,433
94,579
Gain on disposal of tangible fixed assets
(17,223)
-
0
Amortisation and impairment of intangible assets
43,885
41,096
Depreciation and impairment of tangible fixed assets
814,863
837,697
Impairment of tangible fixed assets
271,554
146,234
Other gains and losses
476,600
377,787
Increase in provisions
4,000
64,964
Movements in working capital:
Decrease in stocks
5,401
2,011
Decrease/(increase) in debtors
61,830
(197,976)
Increase in creditors
502,123
314,910
Increase/(decrease) in deferred income
32,993
(6,511)
Cash absorbed by operations
(644,779)
(1,815,669)
28
Analysis of changes in net debt
1 January 2021
Cash flows
Market value movements
31 December 2021
£
£
£
£
Cash at bank and in hand
2,753,796
(1,156,536)
-
1,597,260
Borrowings excluding overdrafts
(200,000)
34,051
-
(165,949)
Obligations under finance leases
(1,130,185)
9,454
-
(1,120,731)
Convertible loan notes
(2,377,787)
-
(476,600)
(2,854,387)
(954,176)
(1,113,031)
(476,600)
(2,543,807)
2021-12-312021-01-01falseCCH SoftwareCCH Accounts Production 2022.100Mr Brian ScurrahBrian ScurrahJulian Richmond-WatsonPeter RobertsHazel HutchinsonJacques De Bruin103754762021-01-012021-12-3110375476bus:Director22021-01-012021-12-3110375476bus:Director32021-01-012021-12-3110375476bus:Director42021-01-012021-12-3110375476bus:Director52021-01-012021-12-3110375476bus:Director62021-01-012021-12-3110375476bus:Director72021-01-012021-12-3110375476bus:Director12021-01-012021-12-3110375476bus:RegisteredOffice2021-01-012021-12-31103754762021-12-31103754762020-01-012020-12-3110375476core:RetainedEarningsAccumulatedLosses2020-01-012020-12-3110375476core:RetainedEarningsAccumulatedLosses2021-01-012021-12-3110375476core:OtherResidualIntangibleAssets2021-12-3110375476core:OtherResidualIntangibleAssets2020-12-3110375476core:ComputerSoftware2021-12-3110375476core:ComputerSoftware2020-12-31103754762020-12-3110375476core:LeaseholdImprovements2021-12-3110375476core:FurnitureFittings2021-12-3110375476core:Non-standardPPEClass1ComponentTotalPropertyPlantEquipment2021-12-3110375476core:Non-standardPPEClass2ComponentTotalPropertyPlantEquipment2021-12-3110375476core:LeaseholdImprovements2020-12-3110375476core:FurnitureFittings2020-12-3110375476core:Non-standardPPEClass1ComponentTotalPropertyPlantEquipment2020-12-3110375476core:Non-standardPPEClass2ComponentTotalPropertyPlantEquipment2020-12-3110375476core:CurrentFinancialInstrumentscore:WithinOneYear2021-12-3110375476core:CurrentFinancialInstrumentscore:WithinOneYear2020-12-3110375476core:CurrentFinancialInstruments2021-12-3110375476core:CurrentFinancialInstruments2020-12-3110375476core:Non-currentFinancialInstruments2021-12-3110375476core:Non-currentFinancialInstruments2020-12-3110375476core:ShareCapital2021-12-3110375476core:ShareCapital2020-12-3110375476core:SharePremium2021-12-3110375476core:SharePremium2020-12-3110375476core:RetainedEarningsAccumulatedLosses2021-12-3110375476core:RetainedEarningsAccumulatedLosses2020-12-3110375476core:ShareCapital2019-12-3110375476core:SharePremium2019-12-3110375476core:RetainedEarningsAccumulatedLosses2019-12-31103754762019-12-3110375476core:ShareCapitalOrdinaryShares2021-12-3110375476core:ShareCapitalOrdinaryShares2020-12-3110375476core:ShareCapital2020-01-012020-12-3110375476core:SharePremium2020-01-012020-12-311037547612021-01-012021-12-311037547612020-01-012020-12-31103754762020-12-3110375476core:IntangibleAssetsOtherThanGoodwill2021-01-012021-12-3110375476core:ComputerSoftware2021-01-012021-12-3110375476core:LeaseholdImprovements2021-01-012021-12-3110375476core:FurnitureFittings2021-01-012021-12-3110375476core:Non-standardPPEClass1ComponentTotalPropertyPlantEquipment2021-01-012021-12-3110375476core:Non-standardPPEClass2ComponentTotalPropertyPlantEquipment2021-01-012021-12-3110375476core:Non-standardPPEClass1ComponentTotalPropertyPlantEquipment2020-01-012020-12-3110375476core:Non-standardPPEClass2ComponentTotalPropertyPlantEquipment2020-01-012020-12-3110375476core:UKTax2021-01-012021-12-3110375476core:UKTax2020-01-012020-12-3110375476core:ComputerSoftware2020-12-3110375476core:ComputerSoftwarecore:InternallyGeneratedIntangibleAssets2021-01-012021-12-3110375476core:LeaseholdImprovements2020-12-3110375476core:FurnitureFittings2020-12-3110375476core:Non-standardPPEClass1ComponentTotalPropertyPlantEquipment2020-12-3110375476core:Non-standardPPEClass2ComponentTotalPropertyPlantEquipment2020-12-3110375476core:WithinOneYear2021-12-3110375476core:WithinOneYear2020-12-3110375476core:BetweenTwoFiveYears2021-12-3110375476core:BetweenTwoFiveYears2020-12-3110375476core:MoreThanFiveYears2021-12-3110375476core:MoreThanFiveYears2020-12-3110375476bus:PrivateLimitedCompanyLtd2021-01-012021-12-3110375476bus:FRS1022021-01-012021-12-3110375476bus:Audited2021-01-012021-12-3110375476bus:FullAccounts2021-01-012021-12-31xbrli:purexbrli:sharesiso4217:GBP