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Registered number: 11434241












CHAINALYSIS UK LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024

 

CHAINALYSIS UK LIMITED

CONTENTS



Page
Company information
 
1
Strategic report
 
2 - 3
Director's report
 
4
Director's responsibilities statement
 
5
Independent auditor's report
 
6 - 9
Profit and loss account
 
10
Balance sheet
 
11
Statement of changes in equity
 
12
Notes to the financial statements
 
13 - 25


 

CHAINALYSIS UK LIMITED
 
COMPANY INFORMATION


Director
J Levin 




Registered number
11434241



Registered office
2nd Floor Office
77 Kingsway

London

England

WC2B 6SR




Independent auditor
Blick Rothenberg Audit LLP
Chartered Accountants & Statutory Auditor

16 Great Queen Street

Covent Garden

London

WC2B 5AH




Page 1

 

CHAINALYSIS UK LIMITED
 
STRATEGIC REPORT
FOR THE YEAR ENDED 31 JANUARY 2024

The director presents the strategic report together with the audited financial statements for the year ended 31 January 2024.
Strategic review of the business
The director has reviewed and is satisfied with the results for the financial year.

2024
2023
£
£
Revenue

29,023,813

27,915,500

Operating profit

1,460,963

1,397,206

Cash at bank and in hand

1,372,776

1,765,913


All KPls are monitored and reviewed by the executive team and by the director each quarter and help to drive business decisions. The director is pleased with the increase in turnover for the year.  The smaller increase in operating profit is due to significant headcount investment throughout the year as the company looks to significantly grow the companies revenues in the next 12-24 months. 

Future Developments
 
The director intends that the company will continue to expand due to the investment in headcount in all areas of the business especially Sales and Marketing.

Principal risks and uncertainties
 
The company is exposed to the general economic conditions in each of the countries it operates in. The business, like many others, is facing increased labour costs and has reacted accordingly to ensure we retain and hire the best talent within the business. Management regularly monitors the performance of the company against agreed targets to ensure that the company is able to continue to meet its obligations as they fall due.
Credit risk
The company's principal financial assets are cash and trade debtors. The credit risk associated with the cash is managed by the company monitoring the financial position of the counterparties involved. The principal credit risk arises from its trade debtors. In order to manage credit risk, the director sets limits for customers based on a combination of payment history and third-party credit references. This has resulted in minimal payment defaults during the year.
Liquidity risk
Current and projected working capital demands in the company are reviewed in conjunction with the wider group's existing financing facilities to determine cash requirements as part of the routine reporting process. These are reviewed by both the executive team and director regularly. The cash levels of the company have lightly decreased due to paying down of Intercompany pre year-end.
Cash flow risk
Management continually monitors the liquidity risk of the company by regularly preparing cashflow forecasts to fund the working capital of the company.

Page 2

 

CHAINALYSIS UK LIMITED

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024

Employees
 
The company is committed to protecting the health and wellbeing of its employees; by ensuring we operate in a safe, welcoming, diverse and challenging environment, in which employees can enhance their careers in a spirit of individual and collective development. We provide access to physical and mental health support services as part of our competitive benefits package. We provide an environment in which the work life balance of our employees is enhanced as much as possible. Through our Voluntary Time Off Initiative, we permit employees to take time from work to assist in the community in which they live. This enhances both our employees and their communities and the environments in which the company operates.
Suppliers
We act with integrity with our suppliers, carrying out security checks, ensuring we adhere to all laws and regulations as they impact our relationships and ensuring payments are remitted to suppliers in line with agreed terms.  We see a vibrant and successful supplier community as critical to the sustainable development of our company

Customers
 
We are committed to providing a full engagement with our customers, through the full cycle of our relationship with them - field, services, support and back office. Customer Satisfaction is at the forefront of all functions within our company.


The report was approved and signed by the sole director. 



J Levin
Director

Date: 9 October 2024

Page 3

 

CHAINALYSIS UK LIMITED

DIRECTOR'S REPORT
FOR THE YEAR ENDED 31 JANUARY 2024

The director presents his report and the financial statements for the year ended 31 January 2024.

Results and dividends

The profit for the year, after taxation, amounted to £1,089,889 (2023 - £1,505,040).

There were no dividends paid or declared during the current financial year (2023 - £Nil).

Director

The director who served during the year was:

J Levin 

Matters covered in the Strategic report

As permitted by s414c(1) of the Companies Act 2006, the director has elected to disclose information, required to be in the director's report by Schedule 7 of the 'Large and Medium-sized Companies and Groups (accounts and Reports) Regulations 2008', in the strategic report.

Disclosure of information to auditor

The director at the time when this director's report is approved has confirmed that:
 
so far as he is aware, there is no relevant audit information of which the company's auditor is unaware, and

he 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 auditor is aware of that information.

The report was approved and signed by the sole director. 
 





J Levin
Director

Date: 9 October 2024

Page 4

 

CHAINALYSIS UK LIMITED
 
DIRECTOR'S RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 JANUARY 2024

The director is responsible for preparing the strategic report, the director's report and the financial statements in accordance with applicable law and regulations.

Company law requires the director to prepare financial statements for each financial year. Under that law the director has 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 director must not approve the financial statements unless he is 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 director is required to:

select suitable accounting policies for the company's financial statements 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 director is 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 him to ensure that the financial statements comply with the Companies Act 2006He is 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 5

 

CHAINALYSIS UK LIMITED

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF CHAINALYSIS UK LIMITED
FOR THE YEAR ENDED 31 JANUARY 2024

Opinion


We have audited the financial statements of Chainalysis UK Limited (the 'company') for the year ended 31 January 2024, which comprise the profit and loss account, the balance sheet, 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 January 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.


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 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 director's 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 director with respect to going concern are described in the relevant sections of this report.


Other information


The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The director is 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.


Page 6

 

CHAINALYSIS UK LIMITED

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF CHAINALYSIS UK LIMITED (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024

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 director's report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the director's 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 director's 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 director's 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 director's responsibilities statement set out on page 5, the director is 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 director determines 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 director is 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 director either intends to liquidate the company or to cease operations, or have no realistic alternative but to do so.


Page 7

 

CHAINALYSIS UK LIMITED

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF CHAINALYSIS UK LIMITED (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024

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 extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
 
the engagement partner 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 the director and other management, and from our commercial knowledge and experience of the company's sector;
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 an understanding of how fraud might occur, by:
 
making enquiries of management as to where they considered there was a 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.

To address the risk of fraud through management bias and override of controls, we:
 
performed analytical procedures to identify any unusual or unexpected relationship;
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
review of legal and professional expenditure in order to identify any undisclosed actual and potential litigation and claims.
 
Page 8

 

CHAINALYSIS UK LIMITED

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF CHAINALYSIS UK LIMITED (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024

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 managemnet and inspection of regulatory and legal correspondence, if any.
Material misstatement 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 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 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 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.





Nicholas Winters (senior statutory auditor)
  
for and on behalf of
Blick Rothenberg Audit LLP
 
Chartered Accountants
Statutory Auditor
  
16 Great Queen Street
Covent Garden
London
WC2B 5AH

 
Date: 
9 October 2024
Page 9

 

CHAINALYSIS UK LIMITED
 
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 JANUARY 2024

2024
2023
£
£

  

Turnover
 4 
29,023,813
27,915,500

Administrative expenses
  
(27,562,850)
(26,518,294)

Operating profit
 5 
1,460,963
1,397,206

Interest receivable and similar income
  
277
566

Interest payable and similar expenses
  
(34,458)
-

Profit before taxation
  
1,426,782
1,397,772

Taxation on profit
 9 
(336,893)
107,268

Profit for the financial year
  
1,089,889
1,505,040

The notes on pages 13 to 25 form part of these financial statements.

There are no items of other comprehensive income for either the year or the prior year other than the profit for the year. Accordingly, no statement of other comprehensive income has been presented.

Page 10


 
REGISTERED NUMBER:11434241
CHAINALYSIS UK LIMITED

BALANCE SHEET
AS AT 31 JANUARY 2024

2024
2023
Note
£
£

Fixed assets
  

Tangible assets
 10 
264,968
304,707

Current assets
  

Debtors: amounts falling due within one year
 11 
10,826,982
6,363,522

Cash at bank and in hand
  
1,372,776
1,765,913

  
12,199,758
8,129,435

Creditors: amounts falling due within one year
 12 
(3,762,848)
(3,251,100)

Net current assets
  
 
 
8,436,910
 
 
4,878,335

Total assets less current liabilities
  
8,701,878
5,183,042

  

Net assets
  
8,701,878
5,183,042


Capital and reserves
  

Called up share capital 
 14 
1
1

Profit and loss account
  
8,701,877
5,183,041

Total equity
  
8,701,878
5,183,042


The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 




J Levin
Director

Date: 9 October 2024

The notes on pages 13 to 25 form part of these financial statements.

Page 11

 

CHAINALYSIS UK LIMITED

STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JANUARY 2024


Called up share capital
Profit and loss account
Total equity

£
£
£


At 1 February 2022
1
1,446,571
1,446,572


Comprehensive income for the year

Profit for the year
-
1,505,040
1,505,040

Equity-settled share based payment expense
-
2,231,430
2,231,430



At 1 February 2023
1
5,183,041
5,183,042


Comprehensive income for the year

Profit for the year
-
1,089,889
1,089,889

Equity-settled share based payment expense
-
2,428,947
2,428,947


At 31 January 2024
1
8,701,877
8,701,878


The notes on pages 13 to 25 form part of these financial statements.

Page 12

 

CHAINALYSIS UK LIMITED

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024

1.


General information

Chainalysis UK Limited is a private company limited by shares incorporated in England and Wales. The address of its registered office is 2nd Floor Office, 77 Kingsway, London, England, WC2B 6SR.
The financial statements are presented in Sterling (£), which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The principal activity of the company is to support its parent, which provides comprehensive blockchain analysis products, services, training, data, and research to public and private sector customers, including government agencies, digital currency exchanges, financial  institutions, and other businesses internationally.

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 FRS 102 'The Financial Reporting Standard applicable in the UK and the Republic of Ireland' and the requirements of the Companies Act 2006.

The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by FRS 102:
 
Section 3 Financial Statement Presentation paragraph 3.17(d) (inclusion of statement of cash flows);
Section 7 Statement of Cash Flows (inclusion of statement of cash flows);
Section 11 Financial Instruments paragraphs 11.42, 11.44, 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv),11.48(b) and 11.48(c) (disclosures relating to financial instruments);
Section 26 Share based payments (disclosure of share based payments); and
Section 33 Related Party Disclosures paragraph 33.7 (disclosures of key management personnel compensation).

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

The following principal accounting policies have been applied:

 
2.2

Going concern

After making enquiries, the director has a reasonable expectation that the company has adequate resources to continue in operational existence and meet its liabilities as they fall due for the foreseeable future, being a period of at least twelve months from the date these financial statements were approved. Accordingly, they continue to adopt the going concern basis in preparing the financial statements.

Page 13

 

CHAINALYSIS UK LIMITED

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024

2.Accounting policies (continued)

 
2.3

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured. Revenue 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 revenue is recognised:

Rendering of services

Revenue 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 revenue 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.

 
2.4

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.

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.

Depreciation is provided on the following basis:

Long-term leasehold property
-
Length of lease
Fixtures and fittings
-
20%
Computer equipment
-
33%

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.
Assets that are subject to depreciation are assessed at each balance sheet date to determine whether ther is any indication that the assets are impaired. Where there is any indication that an asset is impaired, the carrying value of the asset is tested for impairment. An impairment loss is recognised for the amount by which the asset's carrying value exceeds the recoverable amount. The recoverable amount is the higher of the assets fair value less costs to sell and value in use. 

 
2.5

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.

Page 14

 

CHAINALYSIS UK LIMITED

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024

2.Accounting policies (continued)

 
2.6

Cash

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. 

  
2.7

Share capital

Ordinary shares are classified as equity.

 
2.8

Financial instruments

The company has elected to apply Sections 11 and 12 of FRS 102 in respect of financial instruments. 
Financial assets and financial liabilities are recognised when the company becomes party to the contractual provisions of the instrument.

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.
The company’s policies for its major classes of financial assets and financial liabilities are set out below.
Financial assets
Basic financial assets, including trade and other debtors, cash and bank balances, intercompany working capital balances, are initially recognised at transaction price, 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 for a similar debt instrument. Financing transactions are those in which payment is deferred beyond normal business terms or is financed at a rate of interest that is not a market rate.
Such assets are subsequently carried at amortised cost using the effective interest method, less any impairment.
Financial liabilities
Basic financial liabilities, including trade and other creditors and loans from fellow group companies, 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 for a similar debt instrument. Financing transactions are those in which payment is deferred beyond normal business terms or is financed at a rate of interest that is not a market rate.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method. 
Impairment of financial assets
Financial assets measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the profit and loss account.
For financial assets measured at cost less impairment, the impairment loss is measured as the difference between the asset's carrying amount and the best estimate of the amount the company would receive for the asset if it were to be sold at the reporting date.
 
Page 15

 

CHAINALYSIS UK LIMITED

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024

2.Accounting policies (continued)


2.8
Financial instruments (continued)

For financial assets measured at amortised cost, the impairment loss is measured as the difference between the asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If the financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.
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 and financial liabilities
Financial assets are derecognised when (a) the contractual rights to the cash flows from the asset expire or are settled, or (b) substantially all the risks and rewards of the ownership of the asset are transferred to another party or (c) despite having retained some significant risks and rewards of ownership, control of the asset has been transferred to another party who has the practical ability to unilaterally sell the asset to an unrelated third party without imposing additional restrictions.
Derecognition of financial assets and financial liabilities
Financial assets are derecognised when (a) the contractual rights to the cash flows from the asset expire or are settled, or (b) substantially all the risks and rewards of the ownership of the asset are transferred to another party or (c) despite having retained some significant risks and rewards of ownership, control of the asset has been transferred to another party who has the practical ability to unilaterally sell the asset to an unrelated third party without imposing additional restrictions.
Offsetting of financial assets and financial liabilities
Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is an 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.

 
2.9

Finance costs

Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount.

 
2.10

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

 

CHAINALYSIS UK LIMITED

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024

2.Accounting policies (continued)

 
2.11

Current and deferred taxation

The tax expense for the period comprises current and deferred tax. Tax is recognised in the profit and loss account, 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.
Current tax is the amount of income tax payable in respect of taxable profit for the period or prior years.
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 arises from timing differences that are differences between taxable profits and total comprehensive income as stated in the financial statements. These timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in the financial statements.
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. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

  
2.12

Share based payments

Where share options are awarded to employees, the fair value of the options at the date of grant is charged to profit or loss over the vesting period. Non-market vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each balance sheet date so that, ultimately, the cumulative amount recognised over the vesting period is based on the number of options that eventually vest. Market vesting conditions are factored into the fair value of the options granted. The cumulative expense is not adjusted for failure to achieve a market vesting condition.
The fair value of the award also takes into account non-vesting conditions. These are either factors beyond the control of either party (such as a target based on an index) or factors which are within the control of one or other of the parties (such as the company keeping the scheme open or the employee maintaining any contributions required by the scheme).

 
2.13

Interest income

Interest income is recognised in profit or loss using the effective interest method.

Page 17

 

CHAINALYSIS UK LIMITED

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024

2.Accounting policies (continued)

 
2.14

Foreign currency translation

Functional and presentation currency

The company's functional and presentational currency is Sterling (£).

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 except when deferred in other comprehensive income as qualifying cash flow hedges.

Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the profit and loss account within 'administrative expenses'.

 
2.15

Holiday pay accrual

A liability is recognised to the extent of any unused holiday pay entitlement which is accrued at the balance sheet date and carried forward to future periods. This is measured at the undiscounted salary cost of the future holiday entitlement so accrued at the balance sheet date.

 
2.16

Provisions for liabilities

Provisions are made where an event has taken place that gives the company a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to profit or loss in the year that the company becomes aware of the obligation, and are measured at the best estimate at the balance sheet date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.


3.


Judgements in applying accounting policies and key sources of estimation uncertainty

In the process of applying the company's accounting policies, which are described above, management have made the following judgements and estimations about the future that have the most significant effect on the amounts recognised in the financial statements. 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 if the reivision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods. 
Classification of leases:
The decision on whether leases entered into by the company as a lessee are operating or finance leases depend on an assessment of whether the risks and rewards of ownership have been transferred from the lessor to the lessee on a lease by lease basis.
 
Page 18

 

CHAINALYSIS UK LIMITED

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024

3.Judgements in applying accounting policies (continued)

Tangible fixed assets:
Tangible fixed assets are depreciated over their useful lives taking into account residual values, where 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, factors such as technological innovation, product life cycles and maintenance programmes are taken into account. Residual value assessments consider issues such as future economic market conditions, the remaining life of the asset and projected disposal values.
Share based payments:
The company participates in an equity settled share based payment arrangement in which share options in its parent company are issued to employees of the company. The fair value determined at the grant date is expensed on a straight line basis over the vesting period. The fair value is calculated using the appropriate fair value model in line with the estimated level of vesting to be reviewed annually by management.

4.


Turnover

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


2024
2023
£
£

Rendering of services
29,023,813
27,915,500

29,023,813
27,915,500


All turnover arose within the United Kingdom.


5.


Operating profit

The operating profit is stated after charging:

2024
2023
£
£

Exchange differences
56,440
(1,268)

Operating lease rentals
(297,347)
500,571

Share-based payment
2,428,947
2,231,430

Depreciation
153,060
91,746

Audit fees payable to the company's auditor
15,000
14,000

Loss on sale of assets
35,583
2,881

Page 19

 

CHAINALYSIS UK LIMITED

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024

6.


Auditor's remuneration

During the year, the company obtained the following services from the company's auditor:


2024
2023
£
£

Fees payable to the company's auditor for the audit of the company's financial statements
15,000
14,000

Fees payable to the company's auditor for assistance in preparation of financial statements

4,100
3,800

19,100
17,800


7.


Employees

Staff costs were as follows:


2024
2023
£
£

Wages and salaries
18,174,435
17,443,266

Social security costs
2,185,116
2,193,594

Cost of defined contribution scheme
847,116
795,877

21,206,667
20,432,737


The average monthly number of employees, including directors, during the year was 129 (2023 - 129).


8.


Director's remuneration



The director is employed by the company's parent and is remunerated by that company.

Page 20

 

CHAINALYSIS UK LIMITED

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024

9.


Taxation


2024
2023
£
£

Corporation tax


Current tax on profits for the year
948,396
602,065

Adjustments in respect of previous periods
-
(88,399)


Total current tax
948,396
513,666

Deferred tax


Origination and reversal of timing differences
(611,503)
(620,934)

Total deferred tax
(611,503)
(620,934)


Taxation on profit
336,893
(107,268)

Factors affecting tax charge for the year

The tax assessed for the year is lower than (2023 - lower than) the standard rate of corporation tax in the UK of 24% (2023 - 19%). The differences are explained below:

2024
2023
£
£


Profit on ordinary activities before tax
1,426,782
1,397,772


Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 24% (2023 - 19%)
342,428
265,577

Effects of:


Expenses not deductible for tax purposes
27,702
19,187

Capital allowances for year in excess of depreciation
(5,045)
42,527

Adjustments in respect of previous periods
-
(62,305)

Other timing differences leading to a (decrease) in taxation
(28,192)
-

Movement in deferred tax asset not recognised
-
(372,254)

Total tax charge for the year
336,893
(107,268)

Page 21

 

CHAINALYSIS UK LIMITED

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024

10.


Tangible fixed assets





Leasehold property
Fixtures and fittings
Computer equipment
Total

£
£
£
£



Cost


At 1 February 2023
-
31,423
423,221
454,644


Additions
82,813
29,545
62,482
174,840


Disposals
-
-
(150,527)
(150,527)



At 31 January 2024

82,813
60,968
335,176
478,957



Depreciation


At 1 February 2023
-
365
149,572
149,937


Charge for the year
20,237
14,726
118,097
153,060


Disposals
-
-
(89,008)
(89,008)



At 31 January 2024

20,237
15,091
178,661
213,989



Net book value



At 31 January 2024
62,576
45,877
156,515
264,968



At 31 January 2023
-
31,058
273,649
304,707

Page 22

 

CHAINALYSIS UK LIMITED

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024

11.


Debtors

2024
2023
£
£


Trade debtors
81,422
5,000

Amounts owed by group undertakings
8,686,324
5,209,861

Other debtors
414,292
222,036

Called up share capital not paid
1
1

Prepayments and accrued income
412,506
305,690

Deferred taxation
1,232,437
620,934

10,826,982
6,363,522


Amounts owed by group undertakings are unsecured, interest free, have no fixed date for repayment and are repayable on demand.


12.


Creditors: Amounts falling due within one year

2024
2023
£
£

Trade creditors
225,618
290,888

Amounts owed to group undertakings
-
24,029

Corporation tax
218,445
515,715

Other taxation and social security
768,172
765,360

Other creditors
761,052
786,324

Accruals and deferred income
1,789,561
868,784

3,762,848
3,251,100


Amounts owed to group undertakings are unsecured, interest free, have no fixed date for repayment and are repayable on demand.

Page 23

 

CHAINALYSIS UK LIMITED

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024

13.


Deferred taxation




2024


£






At beginning of year
620,934


Charged to profit or loss
611,503



At end of year
1,232,437

The deferred tax asset is made up as follows:

2024
2023
£
£


Charge to profit and loss
1,232,437
620,934

1,232,437
620,934


14.


Share capital

2024
2023
£
£
Allotted, called up and fully paid



1 (2023 - 1) Authorised Ordinary share of £1.00
1
1

The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company.



15.


Reserves

Called up share capital

Called up share capital represents the nominal value of shares issued.

Profit and loss account

Profit and loss account represents cumulative profits or losses, net of dividends paid and other adjustments.

Page 24

 

CHAINALYSIS UK LIMITED

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024

16.


Commitments under operating leases

At 31 January 2024 the company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:

2024
2023
£
£


Not later than 1 year
343,070
-

Later than 1 year and not later than 5 years
1,086,545
-


17.


Pension commitments

The comany operates a defined conributions pension scheme. The assets of the scheme are help separately from those of the company in an independent administered fund. The pension cost charge represents contributions payable by the company to the fund and amounted to £847,116 (2023 - £795,877). Contributions totalling £114,978 (2023 - £137,651) were payable to the fund at the balance sheet date and are included in creditors.


18.


Related party transactions

The company has taken advantage of the exemption contained in FRS 102 section 33 "Related Party Disclosures" from disclosing transactions with entities which are a wholly owned part of the group.


19.


Parent undertaking

The smallest group for which consolidated financial statements are drawn up is headed by Chainalysis
Inc. whose registered office is 114 5th Ave, 19th Floor, NY, NY 10011.

 
Page 25