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Registered number:
FOR THE YEAR ENDED 31 DECEMBER 2024
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DEMERZEL SOLUTIONS LIMITED
COMPANY INFORMATION
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DEMERZEL SOLUTIONS LIMITED
CONTENTS
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DEMERZEL SOLUTIONS LIMITED
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
Demerzel Solutions Ltd, a leading blockchain research and software engineering company, demonstrated another strong financial performance in the latest reporting period. This strategic review outlines our growth in revenue, profit, key financial metrics, strategic initiatives, and future outlook.
Turnover The company’s turnover increased by 53% from the last reporting period. This growth is due to both an expanded client base but also increased sales to existing customers.
Gross Profit Gross profit increased by 33% from the last reporting period. However, gross profit margin fell to 37% due to the faster expansion of the engineering and research teams. This saw the Cost of Sales increase by 68% year on year. Administrative Expenses Administrative expenses grew by 83% on a like-for-like basis. This increase is primarily due to building out the operational infrastructure and human capital required for the rapid growth of the business, as well as increased marketing and promotion and travel costs. Non Operating Income Non operating income saw significant increases driven by both profits from disposal of digital assets and large increases in the Company’s investment portfolio companies. Profit After Tax The Company’s Profit after Tax increased from $14.8m to $44.4m, driven primarily by Non Operating Income.
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DEMERZEL SOLUTIONS LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
Blockchain Core Engineering The core engineering team continues being the key driver in the growth of the company. The team implemented key upgrades to our flagship product, the Nethermind Execution Client, and again focused on enhancing solutions for the Ethereum mainnet and emerging Layer 2 solutions. Key projects included working on the Pectra upgrade for Ethereum network (which was successfully implemented in early 2025) and extensive building on the Starknet network focusing on our Voyager and Juno products. The team continues to build a reputation as a leading builder and this will drive significant growth in the future.
Nethermind Research The research team again worked on some significant technologies, including lattice based folding and based pre-confirmations. The team continued to work with partners, Starknet Foundation, World, the Ethereum Foundation and others which drove significant revenue increases for the year. The Company see the research team as a key driver for growth in the future. Nethermind Security The security team again achieved impressive revenue growth, with significant revenue growth from both existing and new clients. The formal verification team also won some significant contracts in the period. Infrastructure Management The infrastructure team also saw strong revenue growth, again working with the leading protocols in the Ethereum ecosystem, such as Lido. The infrastructure team continues to develop a strong presence in this space and the company sees significant growth in the coming years. dApps and Enterprise Engineering The enterprise engineering team more than any other part of the business is highly influenced by general macro trends, as such revenue growth was lower than anticipated as the market was extremely volatile and entered a bear phase which suppressed demand for services. Again, the team retained major clients and forged some key relationships working with some of the most promising emerging defi players. The institutional foray into the crypto Institutional engagement in this sector has yet to really begin, although the momentum is increasing and the company sees immense potential in this sector especially around payment rails, stablecoins and asset tokenisation. Ventures, Incubation, Investment and Partnerships 2024 saw significant valuation increases in our joint venture Twinstake and our incubated ventures such as Valantis and Pimlico. We continue to work with key partners such as flashbots and continue to invest in people and products that are suitable for incubation and spin out. Products The company invested significant capital in new initiatives and products. A hardware team was spun up and started to work a unique ryptographic and biometric identity hardware, AI was also a focus with teams working on and launching an AI AuditAgent and building a AI agentic workforce platform, the development of which is ongoing. The company also started development of a blockchain as a service product. The company expects blockchain as a product, agentic AI and cryptographic guardrails for AI to be key drivers for future growth.
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DEMERZEL SOLUTIONS LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
Technological Risks The company faces significant risk in terms of faster technological advancements and changing demand and usage of existing technology especially around the widespread adoption of artificial intelligence. It invests heavily in R&D, hires the best talent and provides the best tools to help mitigate these technological risks. We also monitor likely future advancements to ensure that our products and services continue to be relevant and in demand.
Market Risks The company is highly exposed to the crypto markets and the Ethereum ecosystem in particular. These markets continue to see high levels of volatility and they are especially affected by external macro economic factors. The company attempts to mitigate these risks by prudent treasury management, entering into long term partnerships and by diversifying its income streams through the development of new products. That said, many revenue streams are highly dependent on capital inflows and continued building in the crypto sector. Regulatory Risks The company operates in a highly uncertain regulatory environment. Regulation is the sector is continually evolving, though recently trending positive, however a lack of coordination or complementary regulation across the major regions, the USA, EU, UK and Asia could still cause significant problems in the future. The company does attempt to engage with regulatory bodies and policymakers to ensure compliance with current regulations and adaptability to future changes.
Growth Projections The company is investing heavily in new products, technologies and initiatives and is particularly excited about the opportunities around the intersection of cryptography, blockchain, AI and robotics. These opportunities are medium to long term so we expect slower revenue growth whilst these markets mature. The company anticipates headwinds in the crypto sector in the short term, however it anticipates continued positive developments in the regulatory environment as well as substantial increases in investment in the sector from institutional and traditional finance players. This should provide significant opportunities for strong revenue growth.
Conclusion The Company has had a particularly successful year, seen significant revenue growth, has invested heavily in talent and technology and made some important technological breakthroughs. It continues to be a leading player in the ecosystem and is uniquely placed to capitalise on the opportunities ahead.
This report was approved by the board and signed on its behalf.
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DEMERZEL SOLUTIONS 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.
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.
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.
A comprehensive review of the development and performance of the business during the year, together with a description of the principal risks and uncertainties facing the Group, is set out in the Strategic Report on pages 1-3. That review forms part of this report by cross-reference and is not repeated here in order to avoid duplication.
The profit for the year, after taxation, amounted to $44,424,855 (2023 - $14,814,178).
There were no dividends declared.
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DEMERZEL SOLUTIONS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
The director who served during the year was:
Tomasz Kajetan Stanczak (appointed on 10 August 2017) The directors appointed after the year-end were: Joseph Richard Tristan Kohler (appointed on 24 January 2025) Michal Koniec (appointed on 24 January 2025)
There have been no significant events affecting the Group since the year end.
The auditors, Harris & Trotter LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
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DEMERZEL SOLUTIONS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF DEMERZEL SOLUTIONS LIMITED
We have audited the financial statements of Demerzel Solutions Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 December 2024, which comprise 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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DEMERZEL SOLUTIONS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF DEMERZEL SOLUTIONS 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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DEMERZEL SOLUTIONS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF DEMERZEL SOLUTIONS 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:
• We obtained an understanding of the legal and regulatory frameworks that are applicable to the Company and determined that the most significant are those that relate to the reporting framework (FRS 102 and the Companies Act 2006) and relevant tax compliance regulations.
• We understood how Demerzel Solutions Limited is complying with those frameworks by making enquiries of senior management, including the Chief Financial Officer and Chief Operating Officer. We corroborated our understanding through our review of board meeting minutes. • We assessed the susceptibility of the Company’s financial statements to material misstatement, including how fraud might occur, by meeting with management to understand where they considered there was susceptibility to fraud. We considered the controls that the Company has established to address risks identified, or that otherwise prevent, deter and detect fraud; and how management monitors these controls. Where the risk was considered to be higher, we performed audit procedures to address each identified fraud risk. • Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations identified in the paragraphs above. Our procedures involved: journal entry testing, with a focus on manual journals and journals indicating large or unusual transactions based on our understanding of the business; enquiries of senior management; and focused testing on areas with a higher risk of fraud such as revenue and investments.
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.
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DEMERZEL SOLUTIONS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF DEMERZEL SOLUTIONS LIMITED (CONTINUED)
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
Chartered accountants & statutory auditors
101 New Cavendish Street, 1st Floor South London, United Kingdom W1W 6XH Date:
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DEMERZEL SOLUTIONS LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2024
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DEMERZEL SOLUTIONS LIMITED
REGISTERED NUMBER: 10908862
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
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 18 to 39 form part of these financial statements.
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DEMERZEL SOLUTIONS LIMITED
REGISTERED NUMBER: 10908862
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2024
The financial statements were approved and authorised for issue by the board and were signed on its behalf on
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DEMERZEL SOLUTIONS LIMITED
REGISTERED NUMBER: 10908862
COMPANY STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 31 DECEMBER 2024
The notes on pages 18 to 39 form part of these financial statements.
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