Blink Animation Limited
Annual Report and Financial Statements
For the year ended 31 May 2024
Company Registration No. 12804706 (England and Wales)
Blink Animation Limited
Company Information
Directors
M Sneade
J Studholme
B Yates
Secretary
M Sneade
(Appointed 14 August 2024)
Company number
12804706
Registered office
77 Dean Street
London
United Kingdom
W1D 3SH
Auditor
Moore Kingston Smith LLP
Charlotte Building
17 Gresse Street
London
W1T 1QL
Blink Animation Limited
Contents
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 8
Statement of income and retained earnings
9
Balance sheet
10
Notes to the financial statements
11 - 21
Blink Animation Limited
Strategic Report
For the year ended 31 May 2024
Page 1
The directors present the strategic report for the year ended 31 May 2024.
Fair review of the business
Blink Animation, trading as BlinkInk, is an award-winning advertising and entertainment production company specialising in animation and multi-media moving image.
The year ended 31st May 2024 was somewhat a more difficult year than the year 22/23. Revenues were very slightly up by £82,095. The advertising Industry in the UK began a slowdown that is only just starting to lift at the time of writing (Jan 2025), but BlinkInk was able to makes strides in the US market to make up for the diminished UK market.
Blink Animation has a particularly fine roster of outstanding talents just reaching maturity. We constantly focus on refreshing the roster and developing new directors through music video and experimental pieces. Blink Animation is umbilically connected to the long form division Blink Industries with talent moving seamlessly between the two.
Advertising clients included Lego, Chick-fil-a, Ore Ida, Axe, Spotify, BBC and Lunchables.
There has also been an uptick in significant direct to brand projects. Notably Lego, Devolver and Chick-Fil-A. This trend is set to continue, particularly with commissions from the USA.
Principal risks and uncertainties
Whilst the company enjoys short term payment terms, credit risk on longer projects is a factor. The company minimises exposure to credit risk by taking a 50% pre-billed advance on all jobs providing partial funding and carefully assessing the financial robustness of our clients.
Blink Animation continues to be very adaptable to changing market needs and has diversified to defray some of the risks of operating in a highly competitive and volatile market. Blink Animation has benefited from its strong heritage and reputation for reliable production, creative excellence, and financial solidity to be a reassuring production partner for advertising agencies and clients. A considerable risk is that the economy continues to struggle and that confidence in the future remains low meaning that less work is commissioned. Blink Animation’s position in the Zingiber Group lends a degree of reassurance from temporary turbulence.
Brexit was already adversely affecting us in closing down free movement of high level European creative talent and making them feel unwelcome in the UK. This continues.
Given the size of the company, the directors have not delegated the responsibility of monitoring financial risk management and actively manage these risks individually with a hands-on approach.
The preparation of quarterly management accounts also allows the directors to make key financial decisions in a timely manner.
Whilst political uncertainty is set to continue for a while due to the unpredictable long-term effects of Brexit, the war in Ukraine, political conflict and war in the Middle East, and lowering consumer confidence, we are well placed to do well in the long term. With very high standards of creative output, proven ability to produce safely and efficiently under the prevailing conditions, and a particularly strong talent development pipeline, we are ensuring that the future remains bright.
Blink Animation Limited
Strategic Report (Continued)
For the year ended 31 May 2024
Page 2
Development and performance of the company based on key performance indicators
Based on the results achieved the company has held steady on turnover but has lost ground on profitability during the last year. Operating profit is down by £514,169 in consequence.
Key performance indicators for Blink Animation are:
Turnover: £11,063,065 (2023: £10,980,970) an increase of £82,095 against 2023
Gross profit: £3,179,425 (2023: £3,196,651) a decrease of £17,226 against 2023
Gross profit margin: 28.74% (2023: 29.11%) a decrease of 0.37% against 2023
Operating profit: £516,261 (2023: £1,030,430) a decrease of £514,169 against 2023
Cash: £3,663,286 (2023: £5,528,024) a decrease of £1,864,738 against 2023
J Studholme
Director
29 January 2025
Blink Animation Limited
Directors' Report
For the year ended 31 May 2024
Page 3
The directors present their annual report and financial statements for the year ended 31 May 2024.
Principal activities
The principal activity of the company is that of animated film production.
Results and dividends
The results for the year are set out on page 9.
Ordinary dividends were paid amounting to £700,000. 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:
M Sneade
J Studholme
B Yates
Auditor
In accordance with the company's articles, a resolution proposing that Moore Kingston Smith LLP be reappointed as auditor of the company will be put at a General Meeting.
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.
On behalf of the board
J Studholme
Director
29 January 2025
Blink Animation Limited
Directors' Responsibilities Statement
For the year ended 31 May 2024
Page 4
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:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
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.
Blink Animation Limited
Independent Auditor's Report
To the Members of Blink Animation Limited
Page 5
Opinion
We have audited the financial statements of Blink Animation Limited (the 'company') for the year ended 31 May 2024 which comprise the Statement of Income and Retained Earnings, the Balance Sheet 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 FRS 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:
give a true and fair view of the state of the company's affairs as at 31 May 2024 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
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.
The other information comprises the information included in the annual report, other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. 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.
Blink Animation Limited
Independent Auditor's Report (Continued)
To the Members of Blink Animation Limited
Page 6
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
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:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the Directors' Responsibilities Statement, 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.
Blink Animation Limited
Independent Auditor's Report (Continued)
To the Members of Blink Animation 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.
As part of an audit in accordance with ISAs (UK) we exercise professional judgement and maintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purposes of expressing an opinion on the effectiveness of the company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
Blink Animation Limited
Independent Auditor's Report (Continued)
To the Members of Blink Animation Limited
Page 8
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud
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 extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.
The objectives of our audit in respect of fraud, are; to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses to those assessed risks; and to respond appropriately to instances of fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both management and those charged with governance of the company.
Our approach was as follows:
We obtained an understanding of the legal and regulatory requirements applicable to the company and considered that the most significant are the Companies Act 2006, UK financial reporting standards as issued by the Financial Reporting Council, and UK taxation legislation.
We obtained an understanding of how the company complies with these requirements by discussions with management and those charged with governance.
We assessed the risk of material misstatement of the financial statements, including the risk of material misstatement due to fraud and how it might occur, by holding discussions with management and those charged with governance.
We inquired of management and those charged with governance as to any known instances of non-compliance or suspected non-compliance with laws and regulations.
Based on this understanding, we designed specific appropriate audit procedures to identify instances of non-compliance with laws and regulations. This included making enquiries of management and those charged with governance and obtaining additional corroborative evidence as required.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. 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.
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.
Francesca Robe
Senior Statutory Auditor
for and on behalf of Moore Kingston Smith LLP
29 January 2025
Chartered Accountants
Statutory Auditor
Charlotte Building
17 Gresse Street
London
W1T 1QL
Blink Animation Limited
Statement of Income and Retained Earnings
For the year ended 31 May 2024
Page 9
2024
2023
Notes
£
£
Turnover
3
11,063,065
10,980,970
Cost of sales
(7,883,640)
(7,784,319)
Gross profit
3,179,425
3,196,651
Distribution costs
(122,437)
(114,233)
Administrative expenses
(2,540,727)
(2,051,988)
Operating profit
4
516,261
1,030,430
Interest receivable and similar income
8
50,260
20,340
Interest payable and similar expenses
9
(1,623)
Profit before taxation
566,521
1,049,147
Tax on profit
10
133,967
77,559
Profit for the financial year
700,488
1,126,706
Retained earnings brought forward
3,601,707
2,475,001
Dividends
11
(700,000)
Retained earnings carried forward
3,602,195
3,601,707
The Profit and Loss Account has been prepared on the basis that all operations are continuing operations.
Blink Animation Limited
Balance Sheet
As at 31 May 2024
Page 10
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
12
54,633
89,701
Current assets
Work in progress
13
703,610
573,917
Debtors
14
3,156,293
2,280,605
Cash at bank and in hand
3,663,286
5,528,024
7,523,189
8,382,546
Creditors: amounts falling due within one year
15
(3,959,071)
(4,853,984)
Net current assets
3,564,118
3,528,562
Total assets less current liabilities
3,618,751
3,618,263
Provisions for liabilities
Deferred tax liability
16
(16,555)
(16,555)
(16,555)
(16,555)
Net assets
3,602,196
3,601,708
Capital and reserves
Called up share capital
18
1
1
Profit and loss reserves
3,602,195
3,601,707
Total equity
3,602,196
3,601,708
The financial statements were approved by the board of directors and authorised for issue on 29 January 2025 and are signed on its behalf by:
J Studholme
Director
Company Registration No. 12804706
Blink Animation Limited
Notes to the Financial Statements
For the year ended 31 May 2024
Page 11
1
Accounting policies
Company information
Blink Animation Limited is a private company limited by shares incorporated in England and Wales. The registered office is 77 Dean Street, London, United Kingdom, W1D 3SH.
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. The principal accounting policies adopted are set out below.
1.2
Exemptions for qualifying entities under FRS 102
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 flow 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; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The company has taken advantage of the exemption under section 400 of the Companies Act 2006 not to prepare consolidated accounts. The financial statements present information about the company as an individual entity and not about its group.
Blink Animation Limited is a wholly owned subsidiary of Zingiber London Limited and the results of Blink Animation Limited are included in the consolidated financial statements of Zingiber London Limited which are available from 77 Dean Street, London, United Kingdom, W1D 3SH.
1.3
Going concern
Atruet 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. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
Blink Animation Limited
Notes to the Financial Statements (Continued)
For the year ended 31 May 2024
1
Accounting policies
(Continued)
Page 12
1.4
Turnover
Turnover is in respect of the provision of services including fees, commissions and rechargeable expenses.
Revenue is recognised in respect of the production of commercials from the point at which the company has obtained the right to consideration in return for performance. This is considered to be when all necessary approvals during the process of pre-production have been obtained from the commissioning agency and normally equates to the date at which shooting of the commercial commences. No profit element is recognised until the company is able to estimate the profit on the commercial reliably.
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:
Plant and equipment
3 years straight line
Fixtures and fittings
3 years 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
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
1.7
Stock
Work in progress represents costs incurred on productions which are shot post year end and is valued at the lower of cost and net realisable value.
1.8
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.
Blink Animation Limited
Notes to the Financial Statements (Continued)
For the year ended 31 May 2024
1
Accounting policies
(Continued)
Page 13
1.9
Financial instruments
The company only has basic financial instruments measured at amortised cost, with no financial instruments classified as other or basic financial instruments measured at fair value.
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.
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.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
Blink Animation Limited
Notes to the Financial Statements (Continued)
For the year ended 31 May 2024
1
Accounting policies
(Continued)
Page 14
1.10
Equity instruments
Equity instruments issued by the company 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 company.
1.11
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 profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The 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. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset 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.
1.12
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
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.
Blink Animation Limited
Notes to the Financial Statements (Continued)
For the year ended 31 May 2024
1
Accounting policies
(Continued)
Page 15
1.15
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
2
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.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Revenue recognition
Significant management judgement is required in determining the point at which revenue should be recognised. Revenue is recognised in respect of each production from the point at which the Company has obtained the right to consideration in return for performance. This is considered to be when all necessary approvals during the process of pre-production have been obtained from the commissioning agency and normally equates to the date at which shooting commences. No profit element is recognised until the Company is able to estimate the profit on the production reliably. In arriving at this point of recognition, management have considered the liabilities and amounts that would be due if at different points of the contract, the project were to be pulled.
Depreciation
The annual depreciation charge for property, plant and equipment is sensitive to changes in the estimated useful economic lives and residual values of the assets. The useful economic lives and residual values are re-assessed annually. They are amended when necessary to reflect current estimates, based on technological advancement, future investments, economic utilisation and the physical condition of the assets.
3
Turnover and other revenue
2024
2023
£
£
Turnover analysed by geographical market
United Kingdom
5,035,184
6,437,254
United States
5,412,110
4,527,225
Rest of the World
615,771
16,491
11,063,065
10,980,970
Blink Animation Limited
Notes to the Financial Statements (Continued)
For the year ended 31 May 2024
3
Turnover and other revenue
(Continued)
Page 16
2024
2023
£
£
Other significant revenue
Interest income
50,260
20,340
4
Operating profit
2024
2023
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange gains
(13,667)
(23,792)
Depreciation of owned tangible fixed assets
50,897
43,080
Operating lease charges
153,198
153,431
5
Auditor's remuneration
2024
2023
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
21,350
16,800
For other services
Taxation compliance services
2,300
2,000
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
23
23
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
1,339,751
1,286,271
Social security costs
151,233
151,114
Pension costs
23,861
24,193
1,514,845
1,461,578
Blink Animation Limited
Notes to the Financial Statements (Continued)
For the year ended 31 May 2024
6
Employees
(Continued)
Page 17
The employee costs are recharged from Blink Productions, a fellow subsidiary in the Zingiber group.
7
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
232,956
230,000
Company pension contributions to defined contribution schemes
1,321
440
234,277
230,440
Remuneration disclosed above include the following amounts paid to the highest paid director:
2024
2023
£
£
Remuneration for qualifying services
232,956
230,000
Company pension contributions to defined contribution schemes
1,321
440
8
Interest receivable and similar income
2024
2023
£
£
Interest income
Interest on bank deposits
50,260
20,340
9
Interest payable and similar expenses
2024
2023
£
£
Other interest
1,623
10
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
61,345
Adjustments in respect of prior periods
(133,967)
(138,904)
Total current tax
(133,967)
(77,559)
Blink Animation Limited
Notes to the Financial Statements (Continued)
For the year ended 31 May 2024
10
Taxation
(Continued)
Page 18
The actual credit 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:
2024
2023
£
£
Profit before taxation
566,521
1,049,147
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 20.00%)
141,630
209,829
Tax effect of expenses that are not deductible in determining taxable profit
11,352
772
Group relief
(161,749)
(146,832)
Permanent capital allowances in excess of depreciation
8,767
(2,424)
Research and development tax credit
(133,967)
Under/(over) provided in prior years
(138,904)
Taxation credit for the year
(133,967)
(77,559)
11
Dividends
2024
2023
£
£
Interim paid
700,000
12
Tangible fixed assets
Plant and equipment
Fixtures and fittings
Total
£
£
£
Cost
At 1 June 2023
115,210
28,314
143,524
Additions
15,829
15,829
At 31 May 2024
131,039
28,314
159,353
Depreciation and impairment
At 1 June 2023
44,022
9,801
53,823
Depreciation charged in the year
41,459
9,438
50,897
At 31 May 2024
85,481
19,239
104,720
Carrying amount
At 31 May 2024
45,558
9,075
54,633
At 31 May 2023
71,188
18,513
89,701
Blink Animation Limited
Notes to the Financial Statements (Continued)
For the year ended 31 May 2024
Page 19
13
Stock
2024
2023
£
£
Work in progress
703,610
573,917
14
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
1,063,126
419,362
Corporation tax recoverable
133,967
Amounts owed by group undertakings
900,857
25,770
Other debtors
1,509
Prepayments and accrued income
1,056,834
1,835,473
3,156,293
2,280,605
15
Creditors: amounts falling due within one year
2024
2023
£
£
Trade creditors
711,472
1,213,957
Amounts owed to group undertakings
460,042
327,989
Corporation tax
61,345
Other taxation and social security
85,154
90,134
Accruals and deferred income
2,702,403
3,160,559
3,959,071
4,853,984
16
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2024
2023
Balances:
£
£
Accelerated capital allowances
16,555
16,555
There were no deferred tax movements in the year.
The deferred tax liability set out above is expected to reverse within 3 years and relates to accelerated capital allowances that are expected to mature within the same period.
Blink Animation Limited
Notes to the Financial Statements (Continued)
For the year ended 31 May 2024
Page 20
17
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
23,861
24,193
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.
18
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary Share of £1 each
1
1
1
1
19
Operating lease commitments
Lessee
In November 2019, Blink Productions Limited signed a lease agreement on behalf of it's subsidiaries. Blink Productions hold the contractual obligation and the rental payments are recharged to it's subsidiaries. The below represents the obligation Blink Animation has to future lease payments to Blink Productions.
At the reporting end date the company had contracted with tenants for the following minimum lease payments:
2024
2023
£
£
Within one year
82,932
161,395
Between two and five years
69,526
177,549
152,458
338,944
20
Related party transactions
The company has taken the exemption available under FRS 102 section 33 and not disclosed transactions with 100% group companies.
During this period, Blink Animations Limited made sales of £1,524,105 (2023: £63,478) to Blink Productions Limited, a related party by virtue of common ownership and made purchases of £3,237,488 (2023: £2,286,210). At the year end, a balance of £460,042 (2023: £327,989) was owed to Blink Productions Limited.
Blink Animation Limited
Notes to the Financial Statements (Continued)
For the year ended 31 May 2024
Page 21
21
Ultimate controlling party
The company's immediate and ultimate parent company is Zingiber London Limited, a company incorporated in England and Wales.
The company's ultimate controlling party is J Studholme by virtue of his control of the company's ultimate controlling parent, Zingiber London Limited.
The smallest and largest group of financial statements in which the company is consolidated are those of Zingiber London Limited. These financial statements are available from Companies House.
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