HORIZON_RE_LIMITED - Accounts

The director of the company has elected not to include a copy of the profit and loss account within the financial statements.true

For the financial year ended 31 December 2019 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.

The director acknowledges his responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of financial statements.

The members have not required the company to obtain an audit of its financial statements for the year in question in accordance with section 476.

These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.

Horizon RE Limited is a private company limited by shares incorporated in England and Wales. The registered office is C/O Waterstone Company Secretaries Ltd Third Floor, 5 St. Bride Street, London, United Kingdom, EC4A 4AS.

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.

Items included in the financial statements are measured using the currency of the primary economic environment in which the entity operates (the ‘functional currency’). The financial statements are presented in Euros, which is the company’s presentational currency. This is also the functional currency of the company's undertakings and is considered by the board also to be appropriate for the purposes of preparing the financial statements.

Foreign currency transactions have been translated at the following rates:

Transactions which pass through the Profit and Loss Account have been translated at the average rate for the year.

Financial assets and liabilities have been translated at the closing rate at the date of the balance sheet.

The British Pound Sterling (£) rate of exchange at the balance sheet date is €1.171:£1 (2018: €1.109:£1). The average rate for the year was €1.134/£1 (2018: €1.133/£1).

The United States Dollar ($) rate of exchange at the balance sheet date is €0.89/$1 (2018: €0.87/$1). No transactions took place in the year that were denominated in $.

Group accounts

The company has taken advantage of the exemption under section 399 of the Companies Act 2006 not to prepare consolidated accounts, on the basis that the group of which this is the parent qualifies as a small group.

When assessing the size of the group the company's subsidiary Global Starnet Limited has been excluded on the basis that the company did not have control over the subsidiary during the period. This was as a result of the trading branch of Global Starnet Limited being managed and operated by a Judicial Administrator as outlined in note 5. The consequence of these actions are that, from a legal perspective, the shares of the company’s subsidiary Global Starnet Limited are subject to severe long term restrictions under the control and management of the Judicial Administrator, and the appointment is anticipated to continue for the foreseeable future and has already exceeded one year. Furthermore, whilst this arrangement continues there has been a loss of control, as Horizon RE Limited does not have the power over the Italian branch operations of Global Starnet Limited to affect the amount of the investor’s returns. Accordingly, Horizon RE Limited has not prepared group accounts since the year ended 31 December 2017 due to severe long term restrictions in place and the loss of control over their subsidiary entities.

The financial statements present information about the company as an individual entity and not about the group.

The financial statements have been prepared on a going concern basis.true

At the time of approving the financial statements, the director has a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

In making this assessment the Director has considered the following:

• The activities of the company are relatively limited and the Director considers that they will have sufficient financial resources and/or support from related parties to meet their debts and obligations as they fall due.

• The company has positive net assets and anticipates being able to meet any amounts due in respect of repayment of related party liabilities from amounts due and receivable from related party debtors.

• The company is not specifically reliant on any proceeds, funds or distributions from its subsidiary entity, Global Starnet Limited.

• Whilst at this stage the financial statements do not show the impact of the potential impairment in the carrying value of the investment held by Horizon RE Limited in Global Starnet Limited, there is a risk that this investment may be subsequently impaired. However, the Director does not consider that any such impairment of this investment would give rise to a change in the basis of preparation of the financial statements on a going concern basis.

In the event that one of more of these assumptions used by the director in making their assessment change, this may highlight a material uncertainty, which may cast significant doubt about the company’s ability to continue as a going concern.

The financial statements do not include any adjustments that may result from any significant changes in the assumptions noted above in preparing the financial statements on a going concern basis.

A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The company considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.

Financial instruments are initially recognised at fair value. Fair value is the amount at which such an instrument could be exchanged in an arm’s-length transaction between informed and willing parties.

Financial instruments that are measured subsequent to initial recognition at fair value are grouped into Levels 1 to 3 based on the degree to which the fair value is observable:

Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2 fair value measurements for those derived from inputs other than quoted prices included within Level 1 that are observable for the assets or liability, either directly or indirectly; and

Level 3 fair value measurements are those derived from inputs that are not based on observable market data.

At the balance sheet date all of the company's financial assets fell into Level 3.

In estimating the fair value for an unquoted investment, the company applies a methodology that is appropriate in light of the nature, facts and circumstances of the investment and its materiality in the context of the total investment portfolio using reasonable data, market inputs, assumptions and estimates. Any changes in the above data, market inputs, assumptions and estimates will affect the fair value of an investment which may lead to a recognition of an impairment loss in the statements of comprehensive income if an indication of impairment exists.

Investments in subsidiary undertakings are stated at cost less impairment.

Unquoted investments with no reliable measure of fair value are stated at cost less impairment. Income from these investments is recognised in the income statement when entitlement is established.

Derecognition of financial assets occurs when the rights to receive cash flows from the investments expire or substantially all of the risks and rewards of ownership have been transferred. An assessment for impairment is undertaken at least at each statement of financial position date whether or not there is objective evidence that a financial asset is impaired.

Trade and other receivables are recognised initially at fair value and subsequently restated for any impairment. If collection is expected in one year or less (or in the normal operating cycle of the business if longer) they are classified as current assets. If this is not the case, they are presented as non-current assets.

Cash and cash equivalents comprise cash at bank and in hand as well as short term bank deposits.

Financial liabilities are obligations to pay cash or other financial assets and are recognised when the company becomes party to the contractual provisions of the instrument. All financial liabilities are recorded initially at fair value, net of direct issue costs and subsequently measured at amortised cost using the effective interest method, less settlement payments. Interest related charges are recognised as an expense in finance costs in the income statement.

Finance charges, including premiums payable on settlement or redemption and direct issue costs are charged to the income statement on an accruals basis using the effective interest method. They are added to the carrying amount of the instrument to the extent that they are not settled in the period in which they arise.

Trade payables are obligations to pay for goods, services and fees that have been either acquired or incurred in the ordinary course of business. Amounts payable are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer). If this is not the case, they are presented as non-current liabilities.

A financial liability is derecognised only when the obligation is discharged, cancelled or expires.

Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.

Transactions in currencies other than Euros are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

In the application of the company’s accounting policies, the director is required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

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 where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

Further details of estimates and assumptions are set out in each of the relevant accounting policies and detailed notes to the financial statements.

The principal judgements made by management that could have a significant impact upon the company’s financial results relate to the following:

- the assertions in the preparation of the financial statements on a going concern basis (see note 1.2);

- the assessment of investments for impairment (see note 5); and

- the assessment of the carrying value of receivables and amounts due from related parties.

The average monthly number of persons (including directors) employed by the company during the year was:

The director did not receive any remuneration from the company during the year (2018: €nil).

Unquoted investments at 31 December 2019 have been measured on a Level 3 basis as no observable market data was available. The investments are accounted for at their cost less impairment. These investments are as follows:

Shares in Global Starnet Limited have a carrying value at cost of €10,758k. Shares in Brackel Limited have a carrying value at cost of €2,718k. These have been valued at the price paid by Horizon RE Limited as the Director believes that this is the best indication of the value at the year end.

Details of the company's subsidiaries at 31 December 2019 are as follows:

The company's total direct and indirect share holding of Global Starnet Limited is 99.41%, of which 0.59% is directly held by the company, 1.53% is held indirectly through the company's wholly owned subsidiary, Brackel Limited, and the remainder is beneficially owned through a declaration of trust with Atlantis World Group of Companies Limited. Atlantis World Group of Companies Limited was re-domiciled from Netherlands Antilles to Cyprus in 2011.

Following a criminal investigation in Italy that culminated in December 2016, the shares of the company’s investee company, Global Starnet Limited, were subsequently seized and these together with the day to day operational responsibility for the Italian branch and the company’s investee entities are managed by a team of Judicial Administrators. The consequence of these actions is that the investment in Global Starnet is subject to severe long term restrictions under the control and management of the Judicial Administrators, an appointment anticipated to continue for the foreseeable future and which has already exceeded one year. Furthermore, whilst this arrangement continues there has been a loss of control, the company does not have the control over the Global Starnet Limited and does not have the ability to use its control over the investee entity to affect the amount of the investor’s returns.

At this stage there is some uncertainty regarding the carrying value of the investment in Global Starnet Limited, and the investment in Brackel which holds an interest in Global Starnet Limited. Whilst this matter is ongoing and in the event that this is not resolved satisfactorily and/or in circumstances where the recoverable value of the investments held by Horizon RE Limited in Global Starnet and Brackel Limited cannot be realised, valued or recovered at or above the current carrying value of the investments held by Horizon RE Limited, there is a risk that these investments may be subsequently impaired. At this stage the financial statements do not include the impact of any potential impairment in the carrying value of the investments held by Horizon RE Limited in Global Starnet Limited and Brackel Limited.

During the year the company entered into the following transactions with related parties:

Subsidiaries

There were no transactions between the company and its subsidiaries during the year. At the year end the company had a balance owing to a subsidiary of €32,211k (2018: €32,246k) and it had a balance due from a subsidiary of €341k (€335k). The movement on these balances relate to foreign currency movement.

Other related parties

A company under common ownership with Horizon RE Limited settled liabilites of €61k (2018: €27k) on behalf of Horizon RE Limited during the year. At the year end the company had a balance owing to the company under common ownership of €1,891k (2018: €1,827k).

During a previous year Horizon RE Limited transferred €42,857k to a company owned by the beneficial owner of the group as a result of pending closure of bank accounts held by Horizon RE Limited in advance of setting up alternative banking facilities. This amount is held by the related party as nominee on behalf of Horizon RE Limited. At the year end the amount owed to Horizon RE Limited was €42,879k (2018: €42,853k) and the movement relates to foreign currency movement.

Ultimate controlling party

At the year end the ultimate controlling party owed the company €430k (2018: €430k).

The ultimate controlling party is Mr. F Corallo, who has a 100% shareholding of the company.