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Registered number:
FOR THE YEAR ENDED 31 DECEMBER 2024
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PARITY TECHNOLOGIES LIMITED
COMPANY INFORMATION
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PARITY TECHNOLOGIES LIMITED
CONTENTS
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PARITY TECHNOLOGIES LIMITED
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
The Directors present the Strategic Report for the year ended 31 December 2024.
Parity Technologies is a core blockchain infrastructure company with a remote first team of 150+ professionals, with entities located in Germany, United Kingdom, Portugal, Switzerland and Singapore. Founded by blockchain pioneers, our team includes some of the world's leading blockchain innovators, core engineers, Rust developers and solutions architects.
The partnership between Parity Technologies and its key client, Web 3.0 Foundation (W3F), remains robust, with a three year Service Level Agreement (SLA) signed in January 2024. Parity continues to play a pivotal role as the primary engineering services firm for the Polkadot blockchain, renowned for its scalability, resilience and interoperability.
Polkadot 2.0 sets the foundation for what comes next, following the delivery of the white paper - both in terms of technical progress and overall direction. Polkadot Cloud and the Hub now serve as a clearer way to understand how all of our work - past, present, and future - fits into the bigger picture. They help position Polkadot to be more relevant and accessible to the market and the broader world.
The Coretime marketplace now allows developers to purchase blockspace on-demand and scale up easily when needed, thanks to elastic scaling. We’re also moving beyond enterprise-only use cases by lowering the barriers to entry through the Hub. It offers a unified liquidity layer that supports Solidity smart contracts, all while leveraging Polkadot’s unmatched security, scalability, and interoperability. Looking ahead, JAM is on the horizon. It marks the next stage of evolution for the Relay Chain, a decentralized, high-performance system that allows developers to build using familiar, non-native coding languages. This opens the door to a wider range of builders and new kinds of applications for the next generation of the internet.
The continued evolution of the Polkadot ecosystem driven by the rollout of Polkadot Cloud, the Hub, and the Coretime marketplace is aligned with the strategic direction set by the board. These initiatives are making the network more accessible, flexible, and relevant for builders, and have laid the groundwork for long-term growth. Our compensation structure remains competitive, helping us retain high-performing team members and attract top talent to support this next phase.
Key Objectives:
• Strengthen developer and user engagement by offering easier access to Polkadot’s infrastructure, including support for Solidity smart contracts and non-native development languages • Enhance scalability and flexibility through the Coretime marketplace and elastic scaling to meet real-time application needs • Lower the barrier to entry via the Polkadot Hub, encouraging broader participation across both technical and non-technical stakeholders • Ensure security and decentralization remain core priorities, carried forward into upcoming innovations like JAM We remain confident in our strategy and resource planning to carry this momentum through the next phase of network adoption and innovation.
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PARITY TECHNOLOGIES LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
Parity Technologies’ development of Polkadot upholds the lowest total annualized network carbon emissions for proof-of-stake protocols as reported in the CCRI PoS Benchmark Study 2023, demonstrating our dedication to sustainable practices and environmental responsibility.
In addition, Parity operates primarily with remote workers and maintains a small office space in a FORA facility in the UK, reflecting our commitment to minimising our environmental impact. Energy Consumption: Our total energy consumption at our UK office, located in a FORA facility, remains minimal due to the nature of our operations, which primarily consist of electricity usage. Considering the frequency of office use and the number of employees utilising the space weekly, it is highly likely that our energy consumption is below 40,000 kWh however, we do not have specific data to support this estimate. Carbon Emissions: Our remote working model significantly reduces commuting emissions and aligns with our sustainability goals. Future Plans: We are committed to leveraging remote work to further reduce our carbon footprint. Additionally, we will explore opportunities to enhance energy efficiency and sustainability measures in our limited office operations.
The Directors of Parity Technologies are committed to upholding their duties as outlined in Section 172 of the Companies Act 2006. In their decision-making processes, the Directors have considered the following:
• Long-Term Consequences: Strategic decisions, technological developments and partnerships are made with a focus on long-term sustainability and growth. • Employee Interests: Our employees are our most valuable asset. The Directors prioritise their well-being, offering competitive performance based compensation packages, fostering a supportive work environment, and investing in professional development. • Company Relationships: Maintaining strong relationships with customers, suppliers, and partners is essential. The 2024 SLA with W3F exemplifies our commitment to long-term partnerships and the success of Polkadot. • Community and Environment: Parity Technologies is dedicated to minimising its environmental impact and contributing positively to the community. Our initiatives in these areas are detailed in the SECR section. • High Standards of Conduct: We strive to maintain the highest standards of company conduct, ensuring transparency, ethical practices, and robust governance. • Fair Treatment of Shareholders: The Directors are dedicated to sustainable long-term value creation for all shareholders, ensuring balanced and equitable decision-making.
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PARITY TECHNOLOGIES LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
Key Financials
Turnover: £40.5m (vs 2023: £58.6m, -30.8%) Gross profit/(loss): £23.4m (vs 2023: £24.8m, -5.6%) Operating profit excl Exceptional items: (£11.5m) (vs 2023: (£28.4m), 59.5%) Overall, the company made an operating loss of £296.7m (2023: loss £26.8m), which included £284.6m of exceptional one-off items (2023: £0m) The total turnover of Parity has decreased in 2024 by 52.9% year-over-year, due to less demand for services from the W3F. The Directors have assessed the group's performance in meeting its objectives against its Key Performance Indicators. Turnover generated from assistance with the building of blockchain infrastructure being a key KPI, was down 52.9% from £56.8m in 2023 to £26.7m in 2024, in line with the group’s decision to reduce headcount in order to concentrate on core development, we remain committed to supporting strategic initiatives across other key verticals within the broader ecosystem. The Directors are happy with the overall performance of the Company given the backdrop of the difficult macro environment and negative sentiment impacting the Blockchain industry and valuations.
In light of Parity Technologies’ ongoing commitment to developing the Polkadot ecosystem, a strategic evaluation of the corporate structure of the company was undertaken. In November 2022, Parity Technologies Holdings (PTH) was incorporated in a jurisdiction with greater regulatory and economic clarity on digital assets, and in July 2024 PTH was incorporated into the group structure.
Market risk: The primary risk to the group is fluctuation in the market value of its intangible assets. The risk is mitigated through careful asset management, ensuring the group has sufficient cash liquidity.
Other risks: Technological risk: With any complex technological product, there is risk of failure. Such a failure in the technological underpinnings of our digital assets would present a financial risk. The group does not regard this as a principal risk, except to the extent that it is ultimately a market risk. Talent risk: The competitive job market within the technology space presents a risk of failing to obtain and retain staff with desired skill sets.
The company will continue its strategy of pursuing technological excellence and innovation, scaling the Polkadot infrastructure for wider adoption.
The Directors see a strong future for Parity Technologies as the appetite for blockchain remains robust, and growth opportunities open up in sectors such as real-world asset tokenization and decentralised physical infrastructure. To this end, Parity's engineers remain focused on continually upgrading the software that secures the Polkadot ecosystem, making it more scalable and more interoperable with the wider Web3 community.
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PARITY TECHNOLOGIES LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
The group has a normal level of exposure to price, credit, liquidity and cash flow risks arising from trading activities which are conducted mainly in euros, with the only foreign currency transactions being covered by suitable currency contracts to minimise exposure to exchange rate volatility. The company does not enter into any formally designated hedging transactions.
The company has put in place qualifying third-party indemnity provisions for the benefit of its Directors. These provisions, which were in force during the financial year and remain in force as of the date of this report, provide protection against certain liabilities incurred by Directors in the execution of their duties. The indemnity provisions are part of the company's commitment to support its Directors and officers, enabling them to perform their roles effectively without undue concern for personal liability.
This report was approved by the board on 11 August 2025 and signed on its behalf.
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PARITY TECHNOLOGIES LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
The directors present their report and the financial statements for the year ended 31 December 2024.
No ordinary dividends were paid. The directors do not recommend payment of a dividend.
The group and company has put in place qualifying third-party indemnity provisions for the benefit of its Directors. These provisions, which were in force during the financial year and remain in force as of the date of this report, provide protection against certain liabilities incurred by Directors in the execution of their duties. The indemnity provisions are part of the companies commitment to support its Directors and officers, enabling them to perform their roles effectively without undue concern for personal liability.
The directors who served during the year were:
There have been no significant events affecting the Group since the year end.
The auditors, Harris and Trotter LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board on
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PARITY TECHNOLOGIES LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2024
The directors are responsible for preparing the Group Strategic Report, the Directors' Report and the consolidated 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 the Group and of the profit or loss of the Group for that period.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Group'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 Group 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 the Group and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
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PARITY TECHNOLOGIES LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF PARITY TECHNOLOGIES LIMITED
We have audited the financial statements of Parity Technologies Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 December 2024, which comprise the Consolidated Profit and Loss Account, the Consolidated Statement of Comprehensive Income, the Consolidated Statement of Financial Position, the Company Statement of Financial Position, the Consolidated Statement of Cash Flows, the Consolidated Statement of Changes in Equity, the Company Statement of Changes in Equity and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
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 Group 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.
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Group's or the parent Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
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PARITY TECHNOLOGIES LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF PARITY TECHNOLOGIES LIMITED (CONTINUED)
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 Report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Group 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 Group Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Directors' Report.
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PARITY TECHNOLOGIES LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF PARITY TECHNOLOGIES LIMITED (CONTINUED)
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PARITY TECHNOLOGIES LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF PARITY TECHNOLOGIES LIMITED (CONTINUED)
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 Group 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:
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud. As part of an audit in accordance with ISAs (UK), we exercise professional judgment and maintain professional scepticism throughout the audit. We also: • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion of the effectiveness of the Company's internal control. • We obtained an understanding of the legal and regulatory framework applicable to the Group and the industry in which it operates. We determined that the following laws and regulations were most significant: FRS 102 and the Companies Act 2006. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. • Conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our Auditors' Report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our Auditors' Report. However, future events or conditions may cause the Company to cease to continue as a going concern. • Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. • Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion.
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PARITY TECHNOLOGIES LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF PARITY TECHNOLOGIES LIMITED (CONTINUED)
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
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.
This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an 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.
for and on behalf of
Harris and Trotter LLP
Statutory Auditors
101 New Cavendish Street
W1W 6XH
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PARITY TECHNOLOGIES LIMITED
CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2024
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PARITY TECHNOLOGIES LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2024
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PARITY TECHNOLOGIES LIMITED
REGISTERED NUMBER: 09760015
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2024
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PARITY TECHNOLOGIES LIMITED
REGISTERED NUMBER: 09760015
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 31 DECEMBER 2024
The financial statements were approved and authorised for issue by the board and were signed on its behalf on
The notes on pages 24 to 48 form part of these financial statements.
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PARITY TECHNOLOGIES LIMITED
REGISTERED NUMBER: 09760015
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2024
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PARITY TECHNOLOGIES LIMITED
REGISTERED NUMBER: 09760015
COMPANY STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 31 DECEMBER 2024
The financial statements were approved and authorised for issue by the board and were signed on its behalf by
The notes on pages 24 to 48 form part of these financial statements.
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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
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COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
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