Digital River UK Limited - Limited company accounts 11.4

REGISTERED NUMBER: 05788465 (England and Wales)

REPORT OF THE DIRECTOR AND

FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013

FOR

DIGITAL RIVER UK LIMITED

Page

Company Information

1

Report of the Director

2

Report of the Independent Auditors

3

Profit and Loss Account

4

Balance Sheet

5

Notes to the Financial Statements

6

DIRECTOR:

S Sheppard

REGISTERED OFFICE:

85 King Street

Maidenhead

Berkshire

SL6 1DU

REGISTERED NUMBER:

05788465 (England and Wales)

AUDITORS:

Durrants, Chartered Accountants

Chartered Accountants & Statutory Auditor

24 Wellington Business Park

Dukes Ride

Crowthorne

Berkshire

RG45 6LS

The director presents his report with the financial statements of the company for the year ended 31 December 2013.

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of global e-commerce solutions for software consumer

technology.

DIRECTORS

The directors who have held office during the period from 1 January 2013 to the date of this report are as follows:

R Mitchell - resigned 28 February 2013

T M Donnelly - resigned 24 October 2013

S Sheppard - appointed 25 February 2013

STATEMENT OF DIRECTOR'S RESPONSIBILITIES

The director is responsible for preparing the Report of the Director 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 United Kingdom Generally Accepted Accounting Practice (United Kingdom

Accounting Standards and applicable law). 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 and then apply them consistently;

-	make judgements 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 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 enable him to ensure that

the financial statements comply with the Companies Act 2006. He 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.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the director is aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of

which the company's auditors are unaware, and he has taken all the steps that he ought to have taken as a director in order to

make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

AUDITORS

The auditors, Durrants, Chartered Accountants, will be proposed for re-appointment at the forthcoming Annual General Meeting.

This report has been prepared in accordance with the special provisions of Part 15 of the Companies Act 2006 relating to small

companies.

ON BEHALF OF THE BOARD:

S Sheppard - Director

17 July 2014

We have audited the financial statements of Digital River UK Limited for the year ended 31 December 2013 on pages four to nine.

The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting

Standards (United Kingdom Generally Accepted Accounting Practice).

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 a Report of the Auditors 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.

Respective responsibilities of director and auditors

As explained more fully in the Statement of Director's Responsibilities set out on page two, the director is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors.

Scope of the audit of the financial statements

An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable

assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an

assessment of: whether the accounting policies are appropriate to the company's circumstances and have been consistently

applied and adequately disclosed; the reasonableness of significant accounting estimates made by the director; and the overall

presentation of the financial statements. In addition, we read all the financial and non-financial information in the Report of the

Director to identify material inconsistencies with the audited financial statements and to identify any information that is apparently

materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit.

If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.

Opinion on financial statements

In our opinion the financial statements:

-	give a true and fair view of the state of the company's affairs as at 31 December 2013 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.

Opinion on other matter prescribed by the Companies Act 2006

In our opinion the information given in the Report of the Director for the financial year for which the financial statements are

prepared is consistent with the financial statements.

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters where 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; or

-	the director was not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemption from the requirement to prepare a Strategic Report or in preparing the Report of the Director.

Ian Bessant ACA (Senior Statutory Auditor)

for and on behalf of Durrants, Chartered Accountants

Chartered Accountants & Statutory Auditor

24 Wellington Business Park

Dukes Ride

Crowthorne

Berkshire

RG45 6LS

21 July 2014

TURNOVER

6,254,515

5,998,511

Administrative expenses

5,967,414

5,723,115

287,101

275,396

Other operating income

320

-

OPERATING PROFIT

2

287,421

275,396

Interest receivable and similar income

-

1,681

PROFIT ON ORDINARY ACTIVITIES BEFORE
TAXATION

287,421

277,077

Tax on profit on ordinary activities

3

79,121

76,514

PROFIT FOR THE FINANCIAL YEAR

208,300

200,563

CONTINUING OPERATIONS

None of the company's activities were acquired or discontinued during the current year or previous year.

TOTAL RECOGNISED GAINS AND LOSSES

The company has no recognised gains or losses other than the profits for the current year or previous year.

FIXED ASSETS

Tangible assets

4

54,873

83,529

CURRENT ASSETS

Debtors

5

1,605,417

1,001,405

Cash at bank

-

172,284

1,605,417

1,173,689

CREDITORS

Amounts falling due within one year

6

621,095

421,698

NET CURRENT ASSETS

984,322

751,991

TOTAL ASSETS LESS CURRENT LIABILITIES

1,039,195

835,520

PROVISIONS FOR LIABILITIES

8

2,344

6,969

NET ASSETS

1,036,851

828,551

CAPITAL AND RESERVES

Called up share capital

9

1,000

Profit and loss account

10

1,035,851

827,551

SHAREHOLDERS' FUNDS

12

1,036,851

828,551

The financial statements have been prepared in accordance with the special provisions of Part 15 of the Companies Act 2006 relating to small companies.

The financial statements were approved by the director on 17 July 2014 and were signed by:

S Sheppard - Director

1.	ACCOUNTING POLICIES

Accounting convention

The financial statements have been prepared under the historical cost convention.

Financial reporting standard number 1

Exemption has been taken from preparing a cash flow statement on the grounds that the company qualifies as a small

company.

Related party exemption

The company has taken advantage of exemption, under the terms of Financial Reporting Standard 8 Related Party

Disclosures, not to disclose related party transactions with wholly owned subsidiaries within the group.

Turnover

Turnover represents net invoiced sales of services, excluding value added tax.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

Land and buildings

-

over the life of the lease

Plant and machinery etc

-

33% on cost

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet

date.

Foreign currencies

Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet

date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction.

Exchange differences are taken into account in arriving at the operating result.

Hire purchase and leasing commitments

Rentals paid under operating leases are charged to the profit and loss account on a straight line basis over the period of the

lease.

Pension costs and other post-retirement benefits

The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme

are charged to the profit and loss account in the period to which they relate.

2.	OPERATING PROFIT

The operating profit is stated after charging/(crediting):

2013

2012

£

Other operating leases

204,205

185,469

Depreciation - owned assets

48,583

42,158

Loss on disposal of fixed assets

-

908

Auditors' remuneration

9,725

9,794

Foreign exchange differences

(320

)

137

Pension costs

112,023

110,028

Directors' remuneration and other benefits etc

210,283

192,988

Compensation to director for loss of office

169,320

-

The number of directors to whom retirement benefits were accruing was as follows:

Money purchase schemes

1

3.

TAXATION

Analysis of the tax charge

The tax charge on the profit on ordinary activities for the year was as follows:

2013

2012

£

Current tax:

UK corporation tax

81,027

79,814

Deferred tax

(1,906

)

(3,300

)

Tax on profit on ordinary activities

79,121

76,514

Factors affecting the tax charge

The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained

below:

2013

2012

£

Profit on ordinary activities before tax

287,421

277,077

Profit on ordinary activities

multiplied by the standard rate of corporation tax

in the UK of 23% (2012 - 24%)

66,107

66,498

Effects of:

Expenses not deductible for tax purposes

9,721

9,376

Depreciation in excess of capital allowances

4,625

2,562

Other tax adjustments

574

1,378

Current tax charge

81,027

79,814

4.	TANGIBLE FIXED ASSETS

Plant and

Land and

machinery

buildings

etc

Totals

£

COST

At 1 January 2013

25,002

243,867

268,869

Additions

-

19,927

At 31 December 2013

25,002

263,794

288,796

DEPRECIATION

At 1 January 2013

25,002

160,338

185,340

Charge for year

-

48,583

At 31 December 2013

25,002

208,921

233,923

NET BOOK VALUE

At 31 December 2013

-

54,873

At 31 December 2012

-

83,529

5.

DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2013

2012

£

Amounts owed by group undertakings

1,238,623

173,561

Other debtors

366,794

827,844

1,605,417

1,001,405

6.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2013

2012

£

Trade creditors

(10,094

)

10,474

Amounts owed to group undertakings

63,664

7,055

Taxation and social security

192,669

185,858

Other creditors

374,856

218,311

621,095

421,698

7.	OPERATING LEASE COMMITMENTS

The following operating lease payments are committed to be paid within one year:

Land and buildings

2013

2012

£

Expiring:

Between one and five years

111,000

8.	PROVISIONS FOR LIABILITIES

2013

2012

£

Deferred tax

2,344

6,969

Deferred

tax

£

Balance at 1 January 2013

6,969

Credit to profit and loss account during year

(4,625

)

Balance at 31 December 2013

2,344

9.	CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:

Number:

Class:

Nominal

2013

2012

value:

£

1,000

Ordinary

£1

1,000

10.

RESERVES

Profit

and loss

account

£

At 1 January 2013

827,551

Profit for the year

208,300

At 31 December 2013

1,035,851

11.	ULTIMATE PARENT COMPANY

Digital River Inc (incorporated in United States ) is regarded by the director as being the company's ultimate parent

company.

Digital River Inc prepares group financial statements and copies can be obtained from 10380 Bren Road West, Minnetonka,

MN 55343-9072 USA.

12.	RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS

2013

2012

£

Profit for the financial year

208,300

200,563

Net addition to shareholders' funds

208,300

200,563

Opening shareholders' funds

828,551

627,988

Closing shareholders' funds

1,036,851

828,551