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Registered number: 04220936 (England and Wales)














DREAMTEK LIMITED


DIRECTORS' REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2022

 
DREAMTEK LIMITED
 
 
COMPANY INFORMATION


Directors
T Gregory 
G Lignelli 
D J Moran  




Registered number
04220936



Registered office
The Orchard Elvetham Lane

Elvetham

Hook

England

RG27 8AJ




Independent auditors
ZEDRA Corporate Reporting Services (UK) Limited





 
DREAMTEK LIMITED
 

CONTENTS



Page
Strategic Report
 
1 - 2
Directors' Report
 
3 - 4
Independent Auditors' Report
 
5 - 8
Statement of Comprehensive Income
 
9
Balance Sheet
 
10
Statement of Changes in Equity
 
11
Statement of Cash Flows
 
12 - 13
Notes to the Financial Statements
 
14 - 28


 
DREAMTEK LIMITED
 
 
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022

Introduction
 
The board of directors of Dreamtek Limited (the "Company") present their Strategic Report for the year ended 31 December 2022.
Principal activity
Dreamtek Limited provides creative video production, staffing, broadcast technology, live and virtual event streaming and production and technical innovation solutions and services to a cross section of corporate customers in varying industries. 

Business review
 
On 3 January 2022, Dreamtek Limited, and its affiliates, were acquired by System One Holdings, LLC.
The Company’s performance exceeded expectations set by its Parent Company which was to maintain its 2021 position.
              
 2022              2021             % Change
Turnover            £13,931k          £11,127k                  25.2%
Operating Profit                £920k                £93k                889.2%
Total Employees              84             59              42.4%
The Company closed the year 2022 in a cash positive position, debt free, and was able to support the working capital needs of the business without relying on the parent company.

Principal risks and uncertainties
 
The Company does not carry credit risk as it is owned and supported by a strong parent company. 
The business is cautious of changes in client demand for its services in the current economic environment. 
The Company has not been impacted by Brexit as the Company only provides services, and does not manufacture, export or import goods. 
COVID has only had a positive impact on the business due to its capabilities to produce the same service as a virtual production.
The Company ensure that its quality of service and client relationships are of an exceptionally high standard and that its service becomes a key dependency for its customers. 

Financial key performance indicators
 
Dreamtek Limited considers its Key Performance Indicators to be Turnover (increase of £2,803,708) and Operating Profit (increase of £826,650).

Page 1

 
DREAMTEK LIMITED
 

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022

Other key performance indicators
 
The Company considers employee headcount to be its only significant non-financial key performance indicator, which has increased by 25 from the prior financial year.


This report was approved by the board and signed on its behalf.


G Lignelli
Director

Date: 5 February 2024

Page 2

 
DREAMTEK LIMITED
 
 
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022

The directors present their report and the financial statements for the year ended 31 December 2022.

As permitted by s414c (11) of the Companies Act 2006 certain information that is required to be included in the Directors' Report has otherwise been provided in the Strategic Report.

Directors

The directors who served during the year were:

T Gregory (appointed 3 January 2022)
G Lignelli (appointed 3 January 2022)
D J Moran (appointed 3 January 2022)
T Blakley (resigned 3 January 2022)
G Doyle (resigned 3 January 2022)
V Heuerman (resigned 3 January 2022)
M P Wicks (resigned 3 January 2022)

Results and dividends

The profit for the year, after taxation, amounted to £755,742 (2021 - £171,619).

No dividends were declared, paid or payable during the reporting period (2021: £1,497,245)

Directors' responsibilities statement

The directors are responsible for preparing the Strategic Report, the Directors' 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 for the Company's financial statements and then apply them consistently;

make judgments and accounting estimates that are reasonable and prudent;

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 to enable them to ensure that the financial statements comply with the Companies Act 2006They 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.

Page 3

 
DREAMTEK LIMITED
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022

Future developments

The Company is targeting growth in 2023 over the year 2022 by 38% on revenue and 6.5% on profit. The Company also believes it can continue to operate in a cash positive position without relying on the parent company.

Disclosure of information to auditors

Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:
 
so far as the director is aware, there is no relevant audit information of which the Company's auditors are unaware, and

the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditors are aware of that information.

Post balance sheet events

In September 2023, the trade and assets of fellow group company, Teampeople UK Limited, were transferred to Dreamtek Limited, including the transfer of UK employees as well as other administrative functions. This has been detailed in note 22 to the accounts.

This report was approved by the board and signed on its behalf.
 



G Lignelli
Director

Date: 5 February 2024

Page 4

 
DREAMTEK LIMITED
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF DREAMTEK LIMITED
 

Opinion


We have audited the financial statements of Dreamtek Limited (the 'Company') for the year ended 31 December 2022, which comprise the Statement of Comprehensive Income, the Balance Sheet, the Statement of Cash Flows, the Statement of Changes in Equity and the related notes, including a summary of significant accounting policiesThe 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:


give a true and fair view of the state of the Company's affairs as at 31 December 2022 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.


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 Auditors' 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 United Kingdom, including the Financial Reporting Council'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.


Page 5

 
DREAMTEK LIMITED
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF DREAMTEK LIMITED (CONTINUED)

Other information


The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' Report thereon. The directors are responsible for the other information contained within the Annual ReportOur 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.


Opinion on other matters prescribed by the Companies Act 2006
 

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


the information given in the 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 directors' 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 set out on page 3, 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.


Page 6

 
DREAMTEK LIMITED
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF DREAMTEK LIMITED (CONTINUED)

Auditors' 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 Auditors' 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 extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:

the responsible individual ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
we identified the laws and regulations applicable to the Company through discussions with directors and other management, and from our commercial knowledge and experience of the specific sector;
we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the Company, including the Companies Act 2006 and taxation;
we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence;  and
identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.

We assessed the susceptibility of the Company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

making enquiries of management as to where they considered there was susceptibility to fraud,  their knowledge of actual, suspected and alleged fraud; and
considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations 

We identified that fraud risk in relation to revenue is a significant risk in line with ISA 240 and designed and implemented appropriate audit procedures in this area. Audit procedures included but were not limited to substantive testing from sales quotes through to the general ledger, reviewing the bank statements for large or unusual transactions external to the normal customer base and performing appropriate year end cut off testing.
 
To address the risk of fraud through management bias and override of controls, we:

performed analytical procedures to identify any unusual or unexpected relationships; 
tested journal entries to identify unusual transactions ;
assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias  ;  and
investigated the rationale behind significant or unusual transactions. 

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

agreeing financial statement disclosures to underlying supporting documentation; 
enquiring of management as to actual and potential litigation and claims ; and
Page 7

 
DREAMTEK LIMITED
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF DREAMTEK LIMITED (CONTINUED)

reviewing correspondence with HMRC and the Company’s legal advisors.

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.


A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' Report.


Other matters 
 

The financial statements of Dreamtek Limited for the year ended 31 December 2021 were unaudited.


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 2006Our 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 Auditors' 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.





Dominic King ACA (Senior Statutory Auditor)
for and on behalf of
ZEDRA Corporate Reporting Services (UK) Limited
Chartered Accountants and Statutory Auditors
Birchin Court
5th Floor
19-25 Birchin Lane
London
United Kingdom
EC3V 9DU

 
Date: 
7 February 2024
Page 8

 
DREAMTEK LIMITED
 
 
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2022

As restated
2022
2021
Note
£
£

  

Turnover
 4 
13,930,871
11,127,163

Cost of sales
  
(12,618,696)
(9,641,308)

Gross profit
  
1,312,175
1,485,855

Administrative expenses
  
(1,339,776)
(1,889,184)

Exceptional administrative expenses
  
-
(205,719)

Other operating income
 5 
947,471
702,268

Operating profit
 6 
919,870
93,220

Interest payable and similar expenses
  
8,533
(29,884)

Profit before tax
  
928,403
63,336

Tax on profit
 9 
(172,661)
108,283

Profit for the financial year
  
755,742
171,619

There was no other comprehensive income for 2022 (2021:£NIL).

The notes on pages 14 to 28 form part of these financial statements.

Page 9

 
DREAMTEK LIMITED
REGISTERED NUMBER:04220936

BALANCE SHEET
AS AT 31 DECEMBER 2022

As restated
2022
2021
Note
£
£

Fixed assets
  

Intangible fixed assets
 11 
403,332
475,507

Tangible assets
 12 
59,376
75,582

  
462,708
551,089

Current assets
  

Stocks
  
93
15,122

Debtors Within One Year
 13 
1,664,448
1,014,827

Bank and cash balances
  
2,109,873
176,263

  
3,774,414
1,206,212

Creditors: amounts falling due within one year
 14 
(3,235,449)
(1,497,650)

Net current assets/(liabilities)
  
 
 
538,965
 
 
(291,438)

Total assets less current liabilities
  
1,001,673
259,651

Provisions for liabilities
  

Deferred tax
  
-
(13,720)

  
 
 
-
 
 
(13,720)

Net assets
  
1,001,673
245,931


Capital and reserves
  

Called up share capital 
 16 
50,000
50,000

Capital contribution reserve
 17 
199,265
199,265

Profit and loss account
 17 
752,408
(3,334)

  
1,001,673
245,931


The financial statements were approved and authorised for issue by the board and were signed on its behalf on 5 February 2024.


G Lignelli
Director

The notes on pages 14 to 28 form part of these financial statements.

Page 10

 
DREAMTEK LIMITED
 

STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022


Called up share capital
Capital contribution reserve
Profit and loss account
Total equity

£
£
£
£


At 1 January 2021
50,000
-
1,322,292
1,372,292


Comprehensive income for the year

Profit for the year

-
-
171,619
171,619

Dividends: Equity capital
-
-
(1,497,245)
(1,497,245)

Capital contribution (note 17, 18)
-
199,265
-
199,265



At 1 January 2022
50,000
199,265
(3,334)
245,931


Comprehensive income for the year

Profit for the year
-
-
755,742
755,742


At 31 December 2022
50,000
199,265
752,408
1,001,673


The notes on pages 14 to 28 form part of these financial statements.

Page 11

 
DREAMTEK LIMITED
 

STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2022

As restated
2022
2021
Note
£
£

Cash flows from operating activities
  

Profit for the financial year
  
755,742
171,619

Adjustments for:
  

Intangible asset capitalisation
 11 
-
(147,808)

Amortisation of intangible assets
 11 
72,175
57,394

Depreciation of tangible assets
 12 
42,323
26,100

Interest paid
  
-
29,884

Interest received
  
(8,533)
-

Taxation charge
 9 
172,661
(108,283)

Decrease in stocks
  
15,029
1,733

(Increase)/decrease in debtors
 13 
(647,875)
589,964

(Increase) in amounts owed by groups
 13 
(119,804)
(1,892)

(Decrease) in creditors
 14 
(298,372)
(442,123)

Increase in amounts owed to groups
 14 
1,846,812
223,976

Increase in capital contribution reserve
 17 
-
199,265

Corporation tax received
  
121,037
23,378

Net cash generated from operating activities

  

1,951,195
623,207

  

Cash flows from investing activities
  

Purchase of tangible fixed assets
 12 
(26,118)
(92,485)

Interest received
  
8,533
(29,884)

Net cash from investing activities

  

(17,585)
(122,369)

Cash flows from financing activities
  

Dividends paid
 10 
-
(1,497,245)

Net cash used in financing activities
  
-
(1,497,245)
Page 12

 
DREAMTEK LIMITED
 

STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022


As restated


2022
2021

Note
£
£



Net increase/(decrease) in cash and cash equivalents
  
1,933,610
(996,407)

Cash and cash equivalents at beginning of year
  
176,263
1,172,670

Cash and cash equivalents at the end of year
  
2,109,873
176,263


Cash and cash equivalents at the end of year comprise:
  

Cash at bank and in hand
  
2,109,873
176,263

  
2,109,873
176,263


Page 13

 
DREAMTEK LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

1.


General information

Dreamtek Limited is a private company limited by shares and incorporated in England and Wales. The registered office is The Orchard Elvetham Lane, Elvetham, Hook, England, RG27 8AJ.
The principal activity of the Company is set out in the Strategic Report.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3).

The following principal accounting policies have been applied:

 
2.2

Going concern

The Company is in a net asset position of £1,001,673, having generated a net profit of £755,742 in the year ended 31 December 2022, indicating that the Company is self-sufficient and will be able to continue in operation for at least 12 months from the date of approval of the financial statements. The Company has also been in a positive cash flow position for both 2022 and 2021. 
Should the Company require further financial support, System One Holdings, LLC., has provided written confirmation that it will continue to provide financial support for a period of at least 12 months from the date of signing these financial statements. 
In assessing the Company's ability to continue as a going concern, the directors have considered the availability of financing from the ultimate parent company, through a review of the their financial position and the budgeted cash requirements for the Company. The directors are confident that the Company will continue to meet its obligations as liabilities fall due. For these reasons, the directors continue to adopt the going concern basis in preparing the financial statements. 

Page 14

 
DREAMTEK LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)

 
2.3

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is GBP.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss.

 
2.4

Turnover

The majority of Company's turnover is principally recognised from contracts with customers for provision of staff services, where staff of the Company provide video and media production support to customers. These contracts are typically for service periods of 12 months. Turnover associated with these contracts is recognised upon delivery of the services on a monthly basis, once the performance obligations are met. 
Turnover generated from the remaining streams are recognised both from contracts with customers, also recognised upon delivery of the services on a monthly basis, in addition to sales of video production and media services. Turnover relating to invoiced services is recognised upon the invoices being sent to customers, once all performance obligations have been met.

Turnover is recognised to the extent that it is probable that the economic benefits will flow to the Company and the turnover can be reliably measured. Turnover is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before turnover is recognised:

Rendering of services

Turnover from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
the amount of turnover can be measured reliably;
it is probable that the Company will receive the consideration due under the contract;
the stage of completion of the contract at the end of the reporting period can be measured reliably; and
the costs incurred and the costs to complete the contract can be measured reliably.

Page 15

 
DREAMTEK LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)

  
2.5

Other operating income

Other operating income represents costs borne by the UK recharged to the parent company.

 
2.6

Operating leases: the Company as lessee

Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.

Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.

 
2.7

Research and development

In the research phase of an internal project it is not possible to demonstrate that the project will generate future economic benefits and hence all expenditure on research shall be recognised as an expense when it is incurred. Intangible assets are recognised from the development phase of a project if and only if certain specific criteria are met in order to demonstrate the asset will generate probable future economic benefits and that its cost can be reliably measured. The capitalised development costs are subsequently amortised on a straight-line basis over their useful economic lives, which range from 3 to 6 years.
If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only.

 
2.8

Pensions

Defined contribution pension plan

The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Balance Sheet. The assets of the plan are held separately from the Company in independently administered funds.

Page 16

 
DREAMTEK LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)

 
2.9

Current and deferred taxation

The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company operates and generates income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

 
2.10

Intangible assets

Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.

 The estimated useful lives range as follows:

Development expenditure
-
10
years

 
2.11

Research and development costs

Research and development costs are expensed in the period that they are incurred.

 
2.12

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Page 17

 
DREAMTEK LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)


2.12
Tangible fixed assets (continued)

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.

The estimated useful lives range as follows:

Plant and machinery
-
5
years
Office equipment
-
5
years
Computer equipment
-
3
years

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.

 
2.13

Debtors

Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

 
2.14

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions.

 
2.15

Creditors

Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

 
2.16

Dividends

Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.

Page 18

 
DREAMTEK LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

3.


Judgments in applying accounting policies and key sources of estimation uncertainty

The preparation of the financial statements in accordance with FRS 102 requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believe to be reasonable under the circumstances.
The estimates and assumptions that have a significant risk of causing material adjustment to the carrying amounts of assets and liabilities are addressed below.
Useful Economic Life of Tangible and Intangible Fixed Assets
The directors have reviewed the asset lives and associated residual values of all fixed asset classes, and have concluded that asset lives and residual values are appropriate.
The actual lives of the assets and residual values are assessed annually and may vary depending on a number of factors. In re-assessing asset lives, management consider factors such as technological innovation, product life cycles and maintenance programs.
Intangible Fixed Asset Capitalisation
The directors have confirmed that the capitalisation of intangible fixed assets is calculated on the basis of 15% of allowable R&D expenditure, based on the estimated R&D staff and contractor costs. These estimated R&D costs have been deemed to be a reasonable estimation of the research and development activity that should have been capitalised, as a proportion of staff costs.

Page 19

 
DREAMTEK LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

4.


Turnover

An analysis of turnover by class of business is as follows:


As restated
2022
2021
£
£

Systems integration and production services
888,975
1,228,774

Provision of staff
11,585,931
7,195,787

Conferencing services
59,673
237,411

UK virtual solutions revenue
165,145
796,579

Video production and events
1,231,147
1,668,612

13,930,871
11,127,163


Analysis of turnover by country of destination:

As restated
2022
2021
£
£

United Kingdom
5,036,918
3,982,763

Rest of Europe
2,716,336
1,977,369

Rest of the world
6,177,617
5,167,031

13,930,871
11,127,163



5.


Other operating income

As restated
2022
2021
£
£

Other operating income
947,471
702,268

947,471
702,268


Other operating income represents costs borne by the UK, recharged to Dreamtek, Inc., an affiliate company.

Page 20

 
DREAMTEK LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

6.


Operating profit

The operating profit is stated after charging:

2022
2021
£
£

Research & development charged as an expense
136,986
218,193

Exchange differences
80,968
58,526

Other operating lease rentals
81,516
59,266

Depreciation - tangible fixed assets
42,323
27,901

Amortisation - intangible fixed assets
72,175
57,394

Auditors' remuneration
11,650
-


7.


Employees

Staff costs were as follows:


2022
2021
£
£

Wages and salaries
4,120,196
3,678,340

Social security costs
539,153
398,305

Cost of defined contribution scheme
84,324
73,468

4,743,673
4,150,113


The average monthly number of employees, including the directors, during the year was as follows:


        2022
        2021
            No.
            No.







Employees
84
59

Page 21

 
DREAMTEK LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

8.


Directors' remuneration

2022
2021
£
£

Company contributions to defined contribution pension schemes
-
12,000

-
12,000


During the year retirement benefits were accruing to no directors (2021 - NIL) in respect of defined contribution pension schemes.

During the year, the directors of Dreamtek Limited were paid by other group entities. Management determine that the share of remuneration relevant to the services performed in their capacity as directors of Dreamtek Limited is insignificant to the business.


9.


Taxation


2022
2021
£
£

Corporation tax


Corporation tax payable
189,361
(123,225)


189,361
(123,225)


Total current tax
189,361
(123,225)

Deferred tax


Origination and reversal of timing differences
(16,700)
14,942

Total deferred tax
(16,700)
14,942


Tax on profit
172,661
(108,283)
Page 22

 
DREAMTEK LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
 
9.Taxation (continued)


Factors affecting tax charge for the year

The tax assessed for the year is lower than (2021 - lower than) the standard rate of corporation tax in the UK of 19% (2021 - 19%). The differences are explained below:

2022
2021
£
£


Profit on ordinary activities before tax
928,403
63,336


Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2021 - 19%)
176,397
12,034

Effects of:


Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
14,036
(284,477)

Capital allowances for year in excess of depreciation
(1,617)
-

Adjustment in research and development tax credit leading to an increase (decrease) in the tax charge
-
164,160

Changes in provisions leading to an increase (decrease) in the tax charge
(16,155)
-

Total tax charge for the year
172,661
(108,283)


Factors that may affect future tax charges

On 24 May 2021, Finance Bill 2021 was substantively enacted. The result of this is that the main rate of corporation tax for the UK will increase to 25% from 1 April 2023.


10.


Dividends

2022
2021
£
£


Ordinary dividends paid
-
1,497,245

-
1,497,245

Page 23

 
DREAMTEK LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

11.


Intangible assets




Development expenditure

£



Cost


At 1 January 2022
721,751



At 31 December 2022

721,751



Amortisation


At 1 January 2022
246,245


Charge for the year on owned assets
72,175



At 31 December 2022

318,420



Net book value



At 31 December 2022
403,331



At 31 December 2021
475,507



Page 24

 
DREAMTEK LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

12.


Tangible fixed assets





Plant and machinery
Office equipment
Computer equipment
Total

£
£
£
£



Cost or valuation


At 1 January 2022
60,362
6,685
105,541
172,588


Additions
-
-
26,118
26,118



At 31 December 2022

60,362
6,685
131,659
198,706



Depreciation


At 1 January 2022
10,069
5,279
81,659
97,007


Charge for the year on owned assets
20,121
869
21,333
42,323



At 31 December 2022

30,190
6,148
102,992
139,330



Net book value



At 31 December 2022
30,172
537
28,667
59,376



At 31 December 2021
50,294
1,405
23,883
75,582


13.


Debtors

As restated
2022
2021
£
£


Trade debtors
1,278,621
777,658

Amounts owed by group undertakings
121,696
1,892

Other debtors
20,323
152

Prepayments and accrued income
240,828
111,900

Tax recoverable
-
123,225

Deferred tax
2,980
-

1,664,448
1,014,827


Page 25

 
DREAMTEK LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

14.


Creditors: Amounts falling due within one year

As restated
2022
2021
£
£

Trade creditors
180,125
280,321

Amounts owed to group undertakings
2,070,787
223,975

Corporation tax
189,361
-

Other taxation and social security
401,792
285,054

Other creditors
105,429
26,199

Accruals and deferred income
287,955
682,101

3,235,449
1,497,650



15.


Deferred taxation




2022


£






At beginning of year
(13,720)


Charged to profit or loss
16,700



At end of year
2,980

The deferred taxation balance is made up as follows:

2022
2021
£
£


Fixed asset timing differences
(14,153)
(13,720)

Short term timing differences
17,133
-

2,980
(13,720)


16.


Share capital

2022
2021
£
£
Allotted, called up and fully paid



50,000 (2021 - 50,000) Ordinary shares of £1.00 each
50,000
50,000


Page 26

 
DREAMTEK LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

17.


Reserves

Capital contribution reserve

Amounts recognised in the capital contribution reserve relate to amounts paid by affiliate company, Dreamtek, Inc., on behalf of the Company. There is no intention for this amount to be repaid and therefore has been considered as a capital contribution.


18.


Prior year adjustments

In the prior year, there were a number of transactions that were erroneously accounted for. In order to correctly account for these transations, the financial statements have been restated as described below.
Turnover and expenditure
The Company had previously recognised provision of staff sales at a value offset against the applicable cost of sales expenditure, decreasing the revenue and expenditure recognised in relation to these transactions. The following entries were made to correct this:
- Turnover increased by £3,164,114
- Cost of sales increased by £3,164,114
Management recharge income
The Company had previously offset expenditure paid by Dreamtek Inc., an affiliate company, through the intercompany liability, reversing these expenditure items from the profit and loss. The following entries were recorded to correct this:
- Other income increased by £702,268
- Cost of sales increased by £617,705
- Administrative expenditure increased by £84,563
Capital contribution reserve
The Company previously recognised a balance paid by Dreamtek, Inc., an affiliate company, on behalf of the Company as an intercompany liability, however later confirmed there was no intention for this balance to be repaid. The following entries were recorded to correct this:
- Capital contribution reserve increased by £199,265
- Liabilities reduced by £199,265
Intercompany liabilities and assets
The Company had previously been recognising intercompany receivable balances within trade debtors, and intercompany payable balances within trade creditors. The following entries were posted to reclassify these:
- Reclassification of £1,892 to amounts owed by group companies
- Reclassification of £223,976 to amounts owed to group companies
Due to the netting off of amounts owed by and to the same group companies, the overall movement in liabilities and debtors were as follows:
- Debtors reduced by £292,280
- Liabilties reduced by £292,280
Summary:
The total effect of the above adjustments on retained earnings brought forward is £nil. 

Page 27

 
DREAMTEK LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

19.


Commitments under operating leases

At 31 December 2022 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:

2022
2021
£
£


Not later than one year
63,517
52,856

Later than one year and not later than five years
15,334
-

78,851
52,856


20.


Related party transactions

The Virtual Forge Limited
A company in which G Doyle, who resigned as a UK Director on 03 January 2022, is a shareholder.
During the year, Dreamtek Limited purchased services totalling £89,478 (2021: £473,089) from The Virtual Forge Limited and provided services totalling £97,405 (2021: £70,559) for services to The Virtual Forge Limited.
The amount due to The Virtual Forge Limited at the balance sheet date is £6,153 (2021: £nil) and the amount due from The Virtual Forge Limited at the balance sheet date is £7,943 (2021: £nil).


21.


Controlling party

System One Holdings, LLC, is the parent company of the smallest group for which consolidated financial statements are drawn up of which the Company is a member. The registered office of the parent company is 850 New Burton Road, Suite 201, Dover, DE, 19904. 


22.


Post balance sheet events

On 1 September 2023, the trade and assets of Teampeople UK Limited, a fellow group company within the System One group, were transferred to Dreamtek Limited to consolidate UK operations, including the transfer of UK exmployees as well as other administrative functions. This has been deemed as a non-adjusting post balance sheet event.
The financial impact of the transfer was inconsequential, as the main purpose of the restructure was to consolidate two existing UK entities and reduce any unnecessary administrative responsibilities.
There were no adjusting or other non-adjusting events occuring between the end of the reporting period and the date these financial statements were approved.

 
Page 28