Understanding Entities, Groups, CGUs and Portfolios in Horizon Finance

Horizon Finance organises financial data so you can move seamlessly from the legal view (companies, accounts, filings) to the economic view (projects, sites, portfolios).

This structure helps you standardise reporting, run workflows at the right level, and get a consistent picture across all assets.

Entities (SPVs / Companies)

• A legally registered company (often a Special Purpose Vehicle).

• Holds accounting records: ledgers, invoices, bank accounts, tax filings.

• Important: One entity may own one project or many projects. For example, a rooftop solar SPV may hold 8 different sites.

• Example: Solar Holdings Ltd with 8 rooftop sites inside.

Groups (Project / Site Legal Structures)

• A group is a collection of legal entities that together represent a single project or site.

• Used when a project is split across multiple companies (e.g., a Genco and a SupplyCo).

• Groups combine these entities to reflect the full legal structure of one project.

• Example:

  • Wind Farm Project = Wind Farm Generation Co. (Genco) + Wind Farm Trading Co. (SupplyCo).

Cash Generating Units (CGUs)

• The economic unit that produces cash flows — usually the physical site/project.

• Entity vs CGU relationship:

  • One Entity can contain many CGUs (e.g., a rooftop SPV with 8 solar sites).

  • One Group typically maps to one CGU (the project).

• Difference from Groups:

  • Groups = legal view (combine entities).

  • CGUs = economic view (true performance of the site).

• Example:

  • Solar Site 1, Solar Site 2 … Solar Site 8 are all CGUs inside Solar Holdings Ltd.

Portfolios

• The fund or investor view: all assets managed under a mandate, across multiple groups, entities and CGUs.

• Used for top-level reporting across different projects and geographies.

• Example: Renewables Portfolio containing wind, solar and storage projects.

Legal vs Economic Ownership

Horizon Finance supports both legal ownership and economic ownership perspectives:

• Legal ownership: Captures the % shareholding of each entity in the legal chain.

• Economic overrides: At the CGU level, you can apply an economic ownership override to reflect contractual rights to cash flows (different from shareholding).

This means you can:

• Track the legal structure accurately for compliance and audit.

• Report the economic reality of cash flow distribution for investors.

Visual Hierarchy

Portfolio (Fund / Investor View)
   └── Group (Project / Site Legal Entities Combined)
         └── Entity (Individual SPV / Company)
                └── CGU(s) (One or Many Sites / Projects)
                     └── Economic Overrides (% cashflow rights)

Why Horizon Finance Uses This Structure

• Legal accuracy: Entities and Groups match company structures.

• Economic clarity: CGUs reflect actual sites, with overrides showing true cashflow rights.

• Investor transparency: Portfolios roll up cleanly across both legal and economic views.

• Operational efficiency: Workflows (accounting, cash, commentary) can be run at the level that makes sense.

👉 Example workflow: Reconcile accounts at the Entity level → consolidate entities into a Group if needed → report site performance at the CGU level (even if many are inside one Entity) → apply economic overrides → roll up to the Portfolio for fund reporting.