Solar Smart Energy
Business Plan · FY2027–FY2036
Confidential Information Memorandum

Solar Smart EnergyBusiness Plan and Capital Raise · FY2027–FY2036

An integrated solar import, engineering and installation group serving South Africa's commercial, industrial and residential markets — seeking in growth equity to scale a proven delivery platform into a national annuity-backed energy business.

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Aerial view of a large-scale solar photovoltaic plant
Capital sought
25%
Equity offered
511 MW
Installed by FY2036
26.3%
Indicative 5-yr IRR
Prepared for shareholders and prospective investors Cape Town, South Africa
Legal

Important notice and disclaimer

This document is confidential and is issued for information purposes only.

Purpose of this document

This business plan has been prepared by the directors of Solar Smart Energy (Pty) Ltd (“the Company”) for the sole purpose of assisting existing shareholders and prospective investors in evaluating a proposed subscription for ordinary shares. It does not constitute an offer to the public as contemplated in the Companies Act 71 of 2008, and is directed only at persons falling within the exemptions contained in section 96 of that Act.

Forward-looking statements

The financial projections contained in this document are forward-looking statements. They reflect the directors' current expectations of future events and are based on the assumptions set out in the Financial Assumptions section. Those assumptions concern matters that are partly or wholly outside the Company's control — including exchange rates, electricity tariff paths, import duties, interest rates and customer demand. Actual results will differ from those projected, and the differences may be material. Nothing in this document should be construed as a guarantee, forecast or warranty of future performance.

No advice

Neither this document nor any part of it constitutes financial, investment, legal, tax or accounting advice. Each recipient must make its own independent assessment and should consult its own professional advisers. The Company, its directors and its advisers accept no liability for any loss arising from reliance on this document.

Basis of preparation

The projections have been prepared on the going-concern basis using accounting policies consistent with IFRS for SMEs. They have not been audited, reviewed or otherwise reported on by the Company's independent auditors. All monetary amounts are stated in nominal South African Rand unless otherwise indicated. Where United States Dollar amounts are shown, they are a presentational convenience converted at a fixed rate of R18.50 to US$1.00 and do not represent a forecast of future exchange rates.

Confidentiality

This document and its contents are confidential. By accepting delivery, the recipient agrees not to reproduce, distribute or disclose it, in whole or in part, without the prior written consent of the Company, and to return or destroy it on request.

Market data note

Third-party market statistics are drawn from public sources including the National Transmission Company of South Africa, Statistics South Africa, NERSA and Eskom, and are current as at mid-2026. Recipients should satisfy themselves as to the currency of this data at the date of their investment decision.

Solar Smart Energy (Pty) Ltd · ConfidentialLegalPage 2
Contents

Table of contents

53 pages. Figures may be displayed in Rand or United States Dollars using the currency selector in the toolbar.

Ref SectionPage
LegalImportant notice and disclaimer2
Section 01Executive summary4
Section 01Summary financial performance5
Section 02The investment opportunity6
Section 03Market context7
Section 03Market segmentation and sizing8
Section 04Market research: methodology9
Section 05Market research: findings10
Section 06Market sizing and geographic priority11
Section 07Regulatory and fiscal framework12
Section 08Competitive landscape13
Section 09Company overview14
Section 10Vision, mission and strategic objectives15
Section 11Business model and revenue streams16
Section 12Import and supply chain strategy17
Section 13Engineering and delivery capability18
Section 14Products and technical specification19
Section 15Sales and marketing strategy20
Section 16Customer segments and value proposition21
Section 17Marketing roll-out plan: phasing22
Section 18Marketing channel plan and budget23
Section 19Campaign calendar24
Section 20Marketing funnel economics and key indicators25
Section 21Solar-as-a-Service programme26
Section 22Operations and branch rollout27
Section 23Staffing plan and payroll schedule28
Section 24Management team29
Section 25Governance, compliance and transformation30
Section 26Risk analysis and mitigation31
Section 27Environmental, social and governance impact32
Section 28Financial assumptions33
Section 29Start-up and capital expenditure schedule34
Section 30Projected income statement35
Section 31Revenue and gross margin analysis36
Section 32Operating expenditure analysis37
Section 33Projected cash flow statement38
Section 34Monthly cash flow forecast: FY202739
Section 34Monthly cash flow forecast: FY202840
Section 35Projected balance sheet41
Section 36Working capital and funding structure42
Section 37Ratio analysis43
Section 38Break-even and sensitivity analysis44
Section 39Funding requirement and debt service cover45
Section 40Valuation and investor returns46
Section 41Application of proceeds47
Section 42Exit strategy48
Section 43Implementation roadmap49
Section 44Scenario analysis50
Appendix AGlossary and definitions51
Appendix BSupporting annexures52
Appendix CContact and next steps53
How to read this document

Sections 1 to 27 describe the business, the market research behind it, and its operations, including the marketing roll-out at Sections 17 to 20 and the staffing schedule at Section 23. Sections 28 to 40 contain the financial projections, which are internally consistent and derive entirely from the assumptions stated in Section 28. Sections 41 to 44 address the transaction itself — the application of proceeds, exit and scenario outcomes. Appendices follow.

A reader with limited time should read the Executive Summary (pages 4–5), the Market Sizing at Section 6, the Monthly Cash Flow Forecast at Section 34, the Application of Proceeds at Section 41 and the Scenario Analysis at Section 44.

Solar Smart Energy (Pty) Ltd · ConfidentialPage 3
Section 01

Executive summary

A profitable, cash-generative solar business scaling from regional installer to national platform.

Solar Smart Energy (Pty) Ltd imports solar photovoltaic modules, inverters, batteries and mounting systems from Tier 1 international manufacturers and designs, installs, commissions and maintains those systems for South African commercial, industrial and residential customers. The Company controls the value chain from port of entry to roof, which is the single most important structural advantage in this market: it captures the import margin, the engineering margin and the installation margin on the same kilowatt.

The Company is seeking in new ordinary equity to fund a national scale-up. The capital is not required to prove the model — it is required to remove the two constraints that currently cap growth: import working capital and installation capacity outside the Western Cape.

FY2027 revenue
FY2031 revenue
FY2036 revenue
26.1%
Revenue CAGR

Why this market, and why now

South African rooftop solar has passed 9,100 MW of installed capacity — more than every utility-scale renewable project ever contracted by the state combined. This was not built by government. It was built by private businesses and households responding to a simple arithmetic problem: grid electricity now costs roughly R3.00 per kilowatt-hour and rises at double-digit rates each year, while rooftop solar delivers energy at roughly R0.95 per kilowatt-hour over its life.

That spread is the whole business. It does not depend on load-shedding returning, on subsidy, or on sentiment. It depends only on the tariff continuing to rise faster than the installed cost of solar — which has been true every year for a decade and is embedded in the utility's own multi-year price determinations.

The core proposition

Every commercial building in South Africa is now a customer with a five-year payback and a twenty-year asset. The constraint on this market is not demand. It is the number of firms capable of importing reliably, engineering competently and installing at scale. The Company is building precisely that capability.

Where the money goes

of the raise funds the import inventory float that lets the Company buy containers rather than pallets; opens Gauteng and KwaZulu-Natal branches in provinces that together hold roughly half the national installed base; the balance funds installation capability, the Solar-as-a-Service asset seed, systems and transaction costs.

Utility-scale solar array extending to the horizon beneath a mountain range
Figure 01Utility-scale ground-mount array of the type Solar Smart Energy's engineering division designs and commissions for independent power producers.
Solar Smart Energy (Pty) Ltd · ConfidentialExecutive summaryPage 4
Section 01

Summary financial performance

Ten-year trajectory: growth funded from operations after year two.

R'000 unless statedFY2027FY2028FY2029FY2030FY2031FY2032FY2033FY2034FY2035FY2036
Revenue
Gross profit
Gross margin19.4%20.2%21.3%22.6%23.9%25.1%26.3%27.4%28.5%29.6%
EBITDA
EBITDA margin3.9%6.1%7.8%9.8%11.4%13.0%14.4%15.8%17.1%18.3%
Profit after tax
Net margin3.5%3.7%4.7%5.8%6.8%7.8%8.9%9.9%10.9%11.9%
Earnings per share (R)0.410.641.151.892.833.995.457.118.9811.11
Free cash flow
Closing cash

Revenue by segment

0416,371,216832,742,4331,249,113,6491,665,484,8662,081,856,0822027202820292030203120322033203420352036
C&I installationResidentialEquipment distributionMaintenance contractsSolar-as-a-Service

EBITDA and margin

0%4%8%13%17%21%2027202820292030203120322033203420352036
EBITDA margin

What the shape of these numbers means

Three things are worth reading off the table above. First, the EBITDA margin starts thin — 3.9% in FY2027. That is normal and honest for an engineering and construction business carrying a national overhead before national volume arrives. Anyone presenting a first-year solar EPC margin of twenty percent is either not building the overhead or not telling you something.

Second, the margin expansion to 18.3% by FY2036 is not driven by charging customers more. It is driven by mix: maintenance contracts and Solar-as-a-Service grow from nothing to 14.4% of revenue, and those streams carry margins two to four times the installation business.

Third, cash never goes negative. The minimum closing cash balance across the ten years is , and peak net debt is . The plan does not require a second equity round.

Solar Smart Energy (Pty) Ltd · ConfidentialExecutive summaryPage 5
Section 02

The investment opportunity

Terms of the proposed subscription for ordinary shares.

Total subscription
Post-money valuation
25%
Ordinary equity offered
TermDetail
InstrumentOrdinary shares of no par value, ranking pari passu with existing shares
Amount in cash on closing
Subscription price per share
New shares issued5,000,000
Shares in issue after20,000,000
Pre-money valuation
Post-money valuation
Resulting investor holding25%
Board representationOne non-executive director appointed by the subscriber, plus one independent director jointly appointed
Reserved mattersFurther share issues, disposals above 10% of assets, related-party transactions, gearing above 45%, and material deviation from the approved annual budget
Information rightsAudited annuals within 120 days; management accounts within 21 days of month-end; quarterly board pack; annual budget for approval
Dividend policyNo distribution before FY2031; thereafter 30% of profit after tax, subject to solvency and liquidity and to maintaining net debt below 2.0× EBITDA
Anti-dilutionBroad-based weighted average on issues below the subscription price
Tag and dragFull tag-along; drag-along at 75% shareholder approval
Lock-upFounders restricted from disposing of shares for 36 months from closing
Conditions precedentConfirmatory legal, financial, technical and tax due diligence; execution of a shareholders' agreement and amended MOI; key-person insurance; Competition Act clearance if required
Valuation basis

The pre-money valuation of represents 16.5× FY2027 forecast EBITDA and 0.65× FY2027 forecast revenue. A discounted cash flow cross-check using a 16.5% weighted average cost of capital and a 4.5% terminal growth rate produces an equity value of , materially above the subscription valuation. The methodology and its sensitivities are set out in the Valuation section.

Engineers reviewing thermal drone imagery on a warehouse rooftop array
Figure 02Drone-based thermographic survey of an existing rooftop installation. Aerial inspection forms part of the Company's standard pre-contract audit.
Solar Smart Energy (Pty) Ltd · ConfidentialThe offerPage 6
Section 03

Market context

South Africa's electricity economics have permanently repriced distributed generation.

The tariff is the market

South Africa's electricity price has risen faster than inflation in every year since 2008. The April 2026 determination lifted average residential rates by roughly 13.7% to approximately R3.00 per kilowatt-hour. Commercial and industrial tariffs, once network charges, demand charges and time-of-use penalties are included, land materially higher for many users.

Against this, a well-engineered commercial rooftop system delivers electricity at approximately R0.95 per kilowatt-hour on a levelised basis over a twenty-five year module life. The resulting payback period has compressed to under five years for most commercial users — and under four years for high-consumption, high-daytime-load businesses such as cold storage, manufacturing, retail centres and agriculture.

What changed, and what did not

Load-shedding effectively ended in early 2024. Installations did not slow. This is the most important single fact about the market: demand had already shifted from keeping the lights on to reducing the cost of electricity. The first motive was episodic and emotional. The second is structural and arithmetic. A business plan built on the return of load-shedding would be speculative; this one is not.

Scale of the installed base

Rooftop photovoltaic capacity in South Africa reached approximately 9,107 MW by June 2026, having passed the 8 GW mark earlier that year. For context, the total operational solar capacity contracted under the state's REIPPPP and RMIPPPP procurement programmes combined is approximately 2.8 GW. Private rooftop deployment is now more than three times the size of the entire public renewable procurement programme.

Total installed solar capacity in the country is forecast to rise from approximately 9.8 GW in 2026 to close to 17 GW by 2031 — implying roughly 7 GW of new capacity to be designed, imported, installed and maintained over the plan's first five years.

0 GW4 GW8 GW12 GW16 GW20 GWJul 24Aug 25Jan 26Jun 262027f2028f2029f2031f

Installed rooftop PV capacity, gigawatts. Historical figures from National Transmission Company of South Africa estimates; 2027 onward interpolated from published industry forecasts of approximately 17 GW total installed solar by 2031.

Where the capacity sits

Gauteng accounts for approximately 30% of the national installed base. Gauteng, KwaZulu-Natal and the Western Cape together account for roughly 60%. The Company's current operations are concentrated in the Western Cape — meaning it is presently addressable to well under half of its own market. Correcting that is the primary purpose of this raise.

Diesel standby generators in an industrial plant room
Figure 03Diesel standby generation — the incumbent cost base that solar displaces. Fuel and maintenance costs remain the principal driver of commercial demand for embedded generation.
Solar Smart Energy (Pty) Ltd · ConfidentialMarketPage 7
Section 03

Market segmentation and sizing

Four addressable segments, ranked by margin quality rather than headline size.

SegmentTypical systemEconomicsCompany position
Commercial & industrial rooftop100 kWp – 3 MWp3–5 year payback; Section 12B 100% year-one tax deduction below 1 MWPrimary focus. Highest absolute margin per project, longest sales cycle
Residential retrofit5 – 12 kWp with storage4–7 year payback; no individual tax rebate since 2024Secondary. Volume business, fast cash conversion, brand-building
Equipment distributionContainer-scale wholesaleThin margin, high velocity, no installation riskMonetises import scale; absorbs inventory overhang
Agricultural and off-grid50 kWp – 500 kWpDiesel displacement; irrigation and pack-house load profilesOpportunistic; strong Western Cape footprint

Sizing the addressable opportunity

The Company's serviceable market is defined by the intersection of three constraints: geography (provinces with a physical branch), segment (commercial and residential rooftop) and project scale (systems between 5 kWp and 3 MWp). On the forecast national build of roughly 7 GW over FY2027–FY2031, the Company plans to capture the installed volumes below.

Installation volumesFY2027FY2028FY2029FY2030FY2031FY2032FY2033FY2034FY2035FY2036
Commercial & industrial (MW)11.517.023.530.037.044.051.057.563.569.0
Residential systems (units)3805808001,0301,2601,4701,6601,8301,9802,110
Residential capacity (MW)3.14.86.68.410.312.113.615.016.217.3
Cumulative installed base (MW)14.636.466.4104.9152.2208.3272.9345.4425.1511.4

Cumulative installed capacity

01182353534715882027202820292030203120322033203420352036

Megawatts. Reaching 152 MW by FY2031 represents roughly 2.17% of forecast national new-build over the period — a deliberately modest share assumption.

Share assumption sanity check

A common failure in solar business plans is to assume double-digit national market share. This plan does not. Even at FY2036 the Company would hold a low single-digit percentage of the national installed base.

The growth in this plan is therefore execution-constrained, not demand-constrained. The relevant question for an investor is not whether the market is large enough — it plainly is — but whether the Company can hire, train, import and install fast enough. That question is addressed in the Operations and Risk sections.

Aerial view of a commercial park with rooftop and carport solar arrays
Figure 04Commercial business park combining rooftop and carport arrays. This segment represents the Company's highest-margin addressable market.
Solar Smart Energy (Pty) Ltd · ConfidentialMarketPage 8
Section 04

Market research: methodology

How the demand assumptions in this plan were tested before they were relied on.

The volume and pricing assumptions underpinning Sections 28 to 37 were not derived from industry commentary. A structured research programme was commissioned between September and December 2025 and refreshed in May 2026, combining primary field research with secondary data. The methodology is set out below so that a reviewer can judge the weight the findings deserve.

Primary research

InstrumentSampleMethodPeriod
Commercial decision-maker survey214 completed responsesStructured telephone and online survey of financial directors, facilities managers and operations directors at businesses with monthly electricity spend above R80,000, across six sectors and four provincesSep – Nov 2025
In-depth commercial interviews48 interviewsSemi-structured interviews of 45–60 minutes, including 19 businesses that had already installed solar and 12 that had evaluated and declinedOct – Dec 2025
Residential household survey1,180 completed responsesOnline panel survey of homeowners in Gauteng, Western Cape and KwaZulu-Natal with household income above R45,000 per monthNov 2025, refreshed May 2026
Competitor quotation benchmark31 quotationsMystery-shopped written quotations obtained for three standardised briefs — an 8 kWp residential system, a 250 kWp commercial rooftop and a 1 MWp industrial arrayJan – Mar 2026
Channel and consultant interviews26 interviewsElectrical consultants, quantity surveyors, property managers and managing agents on specification and referral behaviourFeb – Apr 2026
Supplier and manufacturer discussions11 discussionsModule, inverter and battery manufacturers and their regional agents on pricing trajectory, allocation and lead timesOngoing

Secondary research

Limitations the directors wish to state explicitly

The commercial survey over-represents businesses in the four provinces where the Company operates or intends to operate, and under-represents the Free State, Limpopo, Mpumalanga, North West and Northern Cape. It is therefore a sound basis for the serviceable market assumptions in this plan and a poor basis for national extrapolation.

The residential panel is skewed toward higher-income households, which is appropriate for the Company's target segment but means the findings say nothing useful about the affordable-housing market. The competitor quotation benchmark is a snapshot of 31 quotations and is indicative of price positioning, not a statistically robust price index.

Roughly 40% of the residential responses were collected in November 2025 and refreshed only partially in May 2026. Sentiment in this market moves with tariff announcements, and the directors would expect the stated purchase intent to have moved — probably upward — following the April 2026 determination.

Solar Smart Energy (Pty) Ltd · ConfidentialMarket researchPage 9
Section 05

Market research: findings

What buyers actually said, including the findings that were unhelpful.

Commercial purchase drivers

Respondents ranked seven factors in importance when selecting a solar installer. The results below are the proportion of the 214 commercial respondents placing each factor in their top three.

FactorAll respondentsAlready installedEvaluated and declined
Payback period and financial return81%78%89%
Installer track record and reference sites64%72%41%
Warranty terms and who honours them58%69%37%
Total installed price55%44%83%
Disruption to operations during installation37%41%28%
B-BBEE status of the supplier29%31%24%
Ongoing maintenance and monitoring offering24%38%9%
The most commercially useful finding in the study

Compare the two right-hand columns. Businesses that declined ranked headline price far higher (83%) and installer track record far lower (41%) than businesses that proceeded (44% and 72%). Buyers who never buy are price-led; buyers who complete a purchase are credibility-led.

This is the empirical basis for the Company's decision to compete on engineering credibility rather than price, stated in Section 15. Chasing the price-led segment consumes sales capacity on opportunities with a materially lower probability of closing.

Barriers among businesses that evaluated and declined

Stated barrierShare citingCompany response
Capital not available or committed elsewhere47%Solar-as-a-Service removes the capital requirement entirely (Section 21)
Uncertainty about tenure of the premises38%Power purchase agreement with landlord consent and assignment on sale
Roof condition or structural doubt31%Independent structural certification funded by the Company at proposal stage
Could not evaluate competing quotations29%Standardised proposal format disclosing yield basis, degradation and assumptions
Concern the installer would not be trading in ten years26%Audited financials, insurance schedules and manufacturer-backed warranties provided at proposal
Waiting for further equipment price falls18%Deferral cost modelled explicitly in the proposal (Section 16)

Residential findings

Purchase intent

  • 11% of respondents had already installed a system.
  • 19% intended to install within twelve months.
  • 34% intended to install within three years.
  • 27% cited affordability of the upfront cost as the sole barrier.

Willingness to pay

62% of respondents said they would pay a premium above the cheapest quotation for a supplier with a verifiable track record and a maintenance offering. The median premium volunteered was 8–12%. This is the single most important finding for the residential gross margin assumption of 23.8%.

Quotation benchmark, 8 kWp with storage

QuartilePricePosition
Lowest quotationStorage undersized; no structural assessment
Lower quartileTypical small independent installer
MedianMarket midpoint
Company pricing3% above median
Upper quartileNational retail brands
Highest quotationPremium specification

The Company's residential pricing sits marginally above the median and well below the upper quartile — consistent with a credibility position rather than a premium position.

A finding that did not support the plan

Only 24% of commercial respondents placed maintenance and monitoring in their top three selection factors, and just 9% among those who declined. Buyers do not value the maintenance annuity at the point of sale, which means the 55% to 85% attach rate assumed in the financial model cannot be achieved by selling it upfront. It has to be earned after handover, which is why the sales process places the maintenance offer at commissioning rather than at contract. The 38% figure among businesses that had already installed — considerably higher than the 24% overall — indicates that valuation of maintenance rises materially once a customer has lived with a system.

Solar Smart Energy (Pty) Ltd · ConfidentialMarket researchPage 10
Section 06

Market sizing and geographic priority

Addressable market built from the bottom up, and the share this plan actually requires.

7,000 MW
Total addressable — national build FY2027–31
3,125 MW
Serviceable available — provinces and segments served
152 MW
Serviceable obtainable — this plan
LayerBasisCapacityIndicative value
Total addressable marketNational installed solar forecast to rise from approximately 9.8 GW in 2026 to close to 17 GW by 2031, implying roughly 7 GW of new build over the plan's first five years7,000 MW
Less: provinces not servedCompany operates in Western Cape, Gauteng, KwaZulu-Natal and Eastern Cape, which together account for approximately 72% of the national installed base(1,960) MW
Less: segments not servedExcludes utility-scale projects above 3 MWp, mini-grid and off-grid electrification, and the affordable-housing segment — approximately 38% of remaining capacity(1,915) MW
Serviceable available marketCommercial rooftop 100 kWp to 3 MWp and residential retrofit in four provinces3,125 MW
Serviceable obtainable marketCumulative installed capacity to FY2031 under this plan, constrained by installation crew capacity rather than by demand152 MW

The plan therefore requires the Company to capture 4.9% of its serviceable market and 2.2% of the national build over five years. Revenue share exceeds capacity share because residential systems generate roughly twice the revenue per megawatt of commercial arrays.

Geographic prioritisation

ProvinceShare of national installed baseBranchRationale and target position
Gauteng~30%Q2 FY2027Largest single market and the highest concentration of industrial and logistics roof area. Entered first because the addressable pool is roughly three times the Western Cape.
KwaZulu-Natal~17%Q1 FY2028Second-largest provincial base, with Durban providing an alternate port of entry that de-risks Cape Town congestion.
Western Cape~13%EstablishedHome market, existing reference base and central import warehouse. Defended rather than expanded.
Eastern Cape~7%Q3 FY2030Automotive manufacturing cluster with strong daytime load profiles. Served from Cape Town until volume justifies fixed cost.
Balance of provinces~33%Not servedAddressed opportunistically through the distribution channel and accredited independent installers rather than through owned branches.
Why the Company is not chasing the other 33%

The remaining provinces represent a third of the national market, and a plan that claimed them would show a larger opportunity. They are excluded because a branch requires roughly of fixed annual cost before it installs anything, and the research indicates insufficient density of qualifying commercial load in those provinces to reach contribution break-even inside eighteen months. Serving them through accredited independent installers captures the equipment margin without the fixed cost — which is the strategic reason the distribution stream exists at all.

Rows of solar modules stretching across arid terrain
Figure 05Ground-mount installation in a high-irradiation inland region. Geographic priority follows irradiation, grid access and tariff exposure.
Solar Smart Energy (Pty) Ltd · ConfidentialMarket sizingPage 11
Section 07

Regulatory and fiscal framework

The rules governing generation, connection, importation and taxation.

Generation licensing

The licensing threshold for embedded generation was raised to 100 MW in 2021 and subsequently removed for most self-generation, replaced by a registration regime administered by NERSA. Systems within the Company's project range require registration, not licensing — a materially lower administrative burden and a direct enabler of the commercial rooftop market.

Grid connection and compliance

Grid-tied systems must comply with NRS 097-2-1, incorporate certified anti-islanding protection, and be registered as Small-Scale Embedded Generation with the relevant distributor. Eskom has extended its SSEG registration fee waiver for systems up to 50 kW to 30 September 2026, and is introducing a prepaid metering option for residential generators. Every installation is issued with a Certificate of Compliance by a registered installation electrician.

Operational implication

Municipal SSEG approval timelines vary widely — Cape Town and Johannesburg operate streamlined processes measured in weeks, while smaller municipalities can take three to six months. The Company's project scheduling assumes an average ten-week approval lag and sequences procurement accordingly. Approval delay is a working-capital risk, not a revenue risk, and is modelled as such.

Section 12B capital allowance

Section 12B of the Income Tax Act 58 of 1962 permits a taxpayer carrying on a trade to deduct 100% of the cost of qualifying photovoltaic assets not exceeding 1 MW in the year the asset is first brought into use. Arrays above 1 MW are written off on a 50/30/20 basis over three years. The threshold was confirmed by National Treasury in the 2025 Budget and will not be revised.

The enhanced Section 12BA allowance, which provided a once-off 125% deduction, applied only to assets brought into use between 1 March 2023 and 28 February 2025 and was not renewed. This plan assumes no benefit from Section 12BA.

Section 12B matters to the Company in two ways. As a sales argument, it reduces the effective cost of a commercial system by 27% of qualifying capital cost at the corporate tax rate, shortening customer payback by roughly a year. As a tax position, the Company's own Solar-as-a-Service assets qualify, producing an accelerated first-year deduction and a deferred tax liability that unwinds over the asset life. This treatment is applied explicitly in the tax computation.

Importation

Photovoltaic modules enter South Africa free of customs duty. Inverters, batteries and certain balance-of-system components attract duty at rates between zero and 20% depending on tariff heading, plus VAT at 15% on the landed value. All imports are subject to SABS and NRCS letter-of-authority requirements where applicable. The Company's customs position is managed by an appointed clearing agent under a standing power of attorney, with tariff classifications reviewed annually by its tax advisers.

Aerial view at sunset of a large solar plant with containerised battery units
Figure 06Grid-tied generation plant with containerised storage. Licensing thresholds and registration requirements determine how each project of this scale is structured.
Solar Smart Energy (Pty) Ltd · ConfidentialRegulatoryPage 12
Section 08

Competitive landscape

A fragmented market with a widening quality gap.

South African solar installation is severely fragmented. Thousands of small installers compete on price at the residential end, while a small number of engineering firms and independent power producers contest large commercial and utility-scale work. The middle of the market — 100 kWp to 3 MWp commercial rooftop — is where the Company competes, and it is structurally under-served.

Competitor typeStrengthsWeaknessesHow the Company wins
Small independent installers (majority by number)Low overhead, local relationships, price aggressiveNo import scale, no engineering depth, thin balance sheet, cannot bond or warrant at commercial scaleEngineering credibility, bonding capacity, and a warranty a facilities manager will accept
National retail energy brandsBrand, finance products, marketing spendSub-contracted installation, inconsistent quality, weak in C&IDirectly employed crews and single-point accountability
Engineering and construction majorsBalance sheet, utility-scale track record, blue-chip client accessCost structure too heavy for sub-3 MW work; slowSpeed and cost on the mid-market projects they cannot serve economically
Equipment distributorsImport scale and stock depthNo installation capability; margin capped at distributionCapture both import and installation margin on the same kilowatt
Independent power producers / PPA providersCapital, long-dated contractingDeal sizes typically above the mid-market; slow originationOffer Solar-as-a-Service at scales the IPPs will not underwrite

The structural advantage: vertical integration

Most competitors sit on one side of a margin split. Distributors earn roughly 14–16% on equipment and stop. Installers buy that equipment at retail and earn perhaps 15–18% on what remains. The Company does both, which is why its blended commercial gross margin of approximately 18.3% in FY2027 is achievable without pricing above the market.

Honest assessment of competitive risk

This advantage is real but not permanent. It can be replicated by any well-funded competitor willing to carry import inventory. The Company's defensibility over the medium term rests on three things that are harder to copy: an installed base under maintenance contract, a trained installation workforce in a market with an acute skills shortage, and Solar-as-a-Service assets producing contracted annuity revenue. Each of these compounds. The import margin alone does not.

Installation crew fitting rooftop solar modules above a city skyline
Figure 07Rooftop installation in progress above the Cape Town CBD. In-house delivery capability is the Company's principal competitive differentiator.
Solar Smart Energy (Pty) Ltd · ConfidentialCompetitionPage 13
Section 09

Company overview

History, legal structure and current operating base.

ParticularDetail
Registered nameSolar Smart Energy (Pty) Ltd
Registration number2019/447281/07
IncorporatedMarch 2019, Republic of South Africa
Financial year end28 / 29 February
Registered officeUnit 14, Montague Park, Montague Gardens, Cape Town, 7441
Operating branchesCape Town (head office and central warehouse); Kempton Park, Gauteng (from FY2027); Pinetown, KwaZulu-Natal (from FY2028); Gqeberha, Eastern Cape (from FY2030)
AuditorsBrandt Meyer Incorporated, Registered Auditors
AttorneysFerreira Adams Attorneys, Cape Town
Tax advisersMeridian Tax Advisory (Pty) Ltd
Technical adviserAurora Energy Consulting (Pty) Ltd — independent owner's engineer
AccreditationsPV GreenCard installer; SAPVIA member; ECA(SA) registered; ISO 9001:2015 (certification in progress)
B-BBEE statusLevel 4 contributor; Level 2 targeted by FY2029 through the transaction described in Governance

How the business reached this point

2019 — FormationIncorporated as a residential installation business in Cape Town with two crews, funded by R3.2m of founder capital.
2021 — Direct importationFirst direct container import, removing the local distributor from the supply chain and lifting gross margin by roughly six percentage points.
2022 — Commercial pivotLoad-shedding intensified. The Company moved deliberately upmarket into commercial rooftop, appointing its first professional engineer and building an in-house design function.
2024 — ConsolidationLoad-shedding ended; several competitors failed as demand assumptions built on outage anxiety collapsed. The Company's commercial pipeline held, validating the tariff-arbitrage thesis over the outage thesis.
2025–2026 — Platform buildERP and monitoring platform implemented; central warehouse commissioned; maintenance contracting introduced; Gauteng bridgehead established with a small resident sales team ahead of a full branch.
FY2027 — This raiseCapital to convert a proven Western Cape operation into a national platform.
Why the Company is raising equity rather than debt

The binding constraint is import working capital, and import working capital is a poor candidate for debt funding at this stage: it is lumpy, exposed to exchange rate movement, and sits ahead of revenue rather than behind it. Debt-funding a growth-stage inventory cycle converts a growth business into a fragile one. Equity funds the float; the trade finance facility of then gears it efficiently once the cycle is established.

Warehouse interior stacked with palletised solar modules and inverters
Figure 08The Company's central distribution facility, holding palletised modules, inverters and balance-of-system stock ahead of dispatch to site.
Solar Smart Energy (Pty) Ltd · ConfidentialCompanyPage 14
Section 10

Vision, mission and strategic objectives

What the Company is building, and how progress will be measured.

Vision

To be the most trusted name in South African distributed energy — the company a facilities director calls when the installation has to work for twenty years, not twenty months.

Mission

To design, import, install and maintain solar energy systems that measurably reduce the cost of electricity for South African businesses and households, and to stand behind every system for its full operating life.

Operating values

Strategic objectives to FY2031

#ObjectiveMeasureFY2031 target
1Establish national installation coverageOperating branches4 provinces
2Scale commercial installation volumeMW installed per year37.0 MW
3Build annuity revenueMaintenance and Solar-as-a-Service as % of revenue4.9%
4Expand EBITDA margin through mixEBITDA margin11.4%
5Maintain conservative gearingNet debt to EBITDA0.24×
6Achieve Level 2 B-BBEEVerified scorecardLevel 2
7Build the maintained installed baseCumulative MW installed152 MW
8Fund growth from operationsFree cash flow
The strategic logic in one sentence

Use imported equipment margin to fund a national installation footprint, use the installation footprint to build an installed base, and use the installed base to build annuity revenue that is worth more per Rand than the installation revenue that created it.

Operators at a national monitoring centre with a wall of performance dashboards
Figure 09The national operations centre. Central visibility across the installed fleet is the platform on which the ten-year growth objectives depend.
Solar Smart Energy (Pty) Ltd · ConfidentialStrategyPage 15
Section 11

Business model and revenue streams

Five streams, deliberately sequenced from transactional to recurring.

Revenue streamFY2027FY2028FY2029FY2030FY2031FY2032FY2033FY2034FY2035FY2036
Commercial & industrial installation
Residential installation
Equipment distribution
Maintenance and monitoring contracts
Solar-as-a-Service energy sales
Total revenue
Annuity share of revenue0.0%0.4%1.5%3.2%4.9%6.8%8.6%10.5%12.5%14.4%

1. Commercial and industrial installation

Turnkey design, supply, installation and commissioning of rooftop and carport systems between 100 kWp and 3 MWp. Contracts are fixed-price with 30% on order, progress claims against milestones, and 5% retention released on practical completion. Average selling price of per megawatt in FY2027, escalating at 2% nominal as rand inflation is partly offset by continued module price deflation.

2. Residential installation

Systems averaging 8.2 kWp specified with battery storage, at an average price of per system. Payment is 60% on order and 40% on commissioning, making this stream cash-positive from day one and a useful funder of the commercial working capital cycle.

3. Equipment distribution

Wholesale supply to independent installers from the Company's own imported stock. Gross margin is thin at 13.8%, but the stream requires no installation labour, converts inventory quickly, and — critically — lets the Company order at container scale for its own installation pipeline without carrying the full inventory risk.

4. Maintenance and monitoring

Annual contracts covering panel cleaning, inverter servicing, performance monitoring, performance-ratio reporting and warranty administration, priced at per megawatt per year and escalating at 5.5%. Attach rate rises from 55% of the installed base in FY2027 to 85% by FY2036.

5. Solar-as-a-Service

The Company funds, owns and operates the system and sells the electricity it produces to the building occupier under a fifteen-year power purchase agreement. Described in full in Section 22.

Why the sequencing matters

Streams one to three are transactional: revenue stops when selling stops. Streams four and five are contracted and recurring. A business built only on the first three is worth a low multiple of earnings because its earnings are only as durable as its order book. The deliberate migration of mix — from 0.0% annuity revenue in FY2027 to 14.4% by FY2036 — is the principal driver of enterprise value in this plan, not the growth in installation volume.

Solar carport structures and inverter cabinets at a corporate campus
Figure 10Carport array and containerised inverter plant at a corporate campus — a typical turnkey EPC engagement under the Company's contracting model.
Solar Smart Energy (Pty) Ltd · ConfidentialBusiness modelPage 16
Section 12

Import and supply chain strategy

The capability the raise is principally intended to fund.

Sourcing

The Company procures modules from manufacturers appearing on the BloombergNEF Tier 1 list, which screens for bankability rather than price. Inverters and battery systems are sourced from a deliberately narrow panel of three approved manufacturers — narrow because after-sales support, firmware maturity and local spares availability matter more over a twenty-year asset life than the two or three percent that a fourth supplier might shave off landed cost.

Supplier selection is governed by a formal approved-vendor process assessing manufacturing capacity, warranty enforceability in South African law, third-party test certification, insurance-backed product warranties and financial standing. Approved vendors are re-assessed annually.

The import cycle

StageTypical durationCash impact
Order placement and depositDay 030% deposit paid to manufacturer
Manufacturing18 – 25 daysCash committed, no stock
Ocean freight (Far East to Cape Town)26 – 34 daysBalance payable against documents
Port clearance, duty and VAT3 – 7 daysDuty and VAT settled to release cargo
Inland transfer to branch warehouse2 – 5 daysLogistics cost
Stock available for installationDay 52 – 70Inventory recognised
Installation and invoicing+15 – 45 daysRevenue recognised
Customer settlement+45 days averageCash received
Total cash cycleApproximately 115 – 160 daysFunded by the equity float
This table is the investment case

Between paying a manufacturer and being paid by a customer, roughly four to five months elapse. Every rand of growth therefore requires roughly four to five months of that growth pre-funded. This is precisely why a profitable solar importer can run out of cash while growing — and precisely what of this raise is allocated to solve.

Currency management

Approximately 68% of cost of sales is denominated in United States Dollars. The Company's treasury policy requires that at least 75% of committed foreign currency exposure is hedged by forward exchange contract at the point of order confirmation, with the balance left open to avoid over-hedging orders that may be varied or cancelled. Unhedged exposure is reported to the board monthly. Customer quotations carry a 30-day validity and an explicit currency adjustment clause beyond that period.

Inventory discipline

Inventory is held at 72 days of cost of sales in FY2027, reducing to 58 days by FY2036 as demand forecasting improves and branch replenishment replaces single-point holding. Stock is insured at replacement value in transit and in store. Slow-moving lines above 120 days are cleared through the distribution channel rather than written down — one of the strategic reasons the distribution stream exists.

Truck-mounted crane offloading pallets of solar modules at a project site
Figure 11Delivery of imported modules to site. Controlled inbound logistics protect landed cost and reduce handling damage across the supply chain.
Truck-mounted crane and forklift offloading crated solar equipment at a site
Figure 12Crated consignment received on site.
Solar Smart Energy (Pty) Ltd · ConfidentialSupply chainPage 17
Section 13

Engineering and delivery capability

How a project moves from enquiry to a system under maintenance contract.

1. Qualification and load analysisTwelve months of half-hourly consumption data are obtained and analysed against tariff structure. Projects where the daytime load profile cannot support an acceptable return are declined — a discipline that protects both the customer and the Company's performance record.
2. Preliminary design and yield modellingArray layout, string configuration and shading analysis are modelled using site-specific irradiance data, producing a P50 and P90 yield estimate. Savings projections are presented at P90.
3. Structural assessmentAn independent structural engineer certifies roof loading capacity before any commitment is given. No exceptions.
4. Proposal and financial modellingThe customer receives a modelled cash flow showing payback, internal rate of return and the Section 12B tax effect, with assumptions stated explicitly.
5. Detailed design and approvalsSingle-line diagrams, protection coordination and SSEG application. Municipal approval is the longest external dependency.
6. Procurement releaseEquipment is released against the confirmed order and a signed deposit, never on verbal instruction.
7. InstallationDirectly employed crews under a site supervisor, working to a documented method statement and an approved safety file.
8. Commissioning and handoverString testing, insulation resistance, earth continuity, inverter configuration, anti-islanding verification, Certificate of Compliance issue, and an operating and maintenance manual.
9. Performance validationThirty days of monitored output compared against the modelled P90 yield. Variances above 8% are investigated and rectified at the Company's cost.
10. Maintenance contractThe customer is offered an annual contract at handover, when satisfaction and system understanding are highest. This is the single largest determinant of the attach rate assumption in the model.

Quality and safety

All installation electricians hold a valid wireman's licence; all installers carry PV GreenCard accreditation. The Company operates a documented Health and Safety Management System compliant with the Occupational Health and Safety Act 85 of 1993 and the Construction Regulations 2014, with working-at-height competency mandatory for every crew member. The FY2027–FY2031 target is a lost-time injury frequency rate below 0.45 per 200,000 hours worked.

Mobile crane lifting solar equipment onto a warehouse roof
Figure 13Mechanical handling of roof-mounted plant.
Technicians positioning modules on an industrial roof
Figure 14Module placement by an accredited installation team.
Solar Smart Energy (Pty) Ltd · ConfidentialEngineeringPage 18
Section 14

Products and technical specification

Standardised system architectures, deliberately limited in number.

ConfigurationCapacityApplicationIndicative price
Residential essential5 kWp / 5 kWhBackup and partial offset for suburban households
Residential standard8 kWp / 10 kWhPrimary residential offering; near-full daytime offset
Residential premium12 kWp / 15 kWhHigh-consumption households, pool and climate loads
Commercial compact100 kWp, grid-tiedRetail, professional offices, small warehousing
Commercial standard500 kWp, grid-tiedManufacturing, cold storage, shopping centres
Commercial large1 MWp, grid-tiedHeavy industrial and logistics campuses
Commercial hybrid1 MWp with 2 MWh storageLoad-shifting off peak tariff periods
Agricultural off-grid250 kWp with diesel hybridIrrigation, pack-houses, remote operations

Indicative FY2027 pricing excluding VAT. Commercial pricing equates to approximately per megawatt installed, consistent with the revenue model. Residential pricing includes battery storage, which is why it exceeds the R15,000–R18,000 per kilowatt commonly quoted for storage-free systems.

Standard component specification

ComponentSpecificationWarranty position
Photovoltaic modulesMonocrystalline half-cut, 550–620 Wp, Tier 1 manufacturer, IEC 61215 and IEC 61730 certified12-year product, 25-year linear performance to 87.4%
String invertersThree-phase, 98.4% peak efficiency, NRS 097-2-1 compliant, integrated DC isolation10 years, extendable to 20
Hybrid invertersBi-directional, black-start capable, battery-agnostic protocol support10 years
Battery storageLithium iron phosphate (LFP), 6,000 cycles to 80% depth of discharge10 years or 6,000 cycles
MountingMarine-grade aluminium with stainless fixings; wind-loading certified to SANS 10160-315 years structural
MonitoringCellular gateway with per-string monitoring and automated performance-ratio alertingIncluded in maintenance contract
Why so few configurations

Standardisation is a margin strategy, not a convenience. Eight configurations mean eight bills of material, eight sets of spares, eight installation method statements and predictable container loading. Every bespoke system built outside this catalogue costs approximately four percentage points of gross margin in design time, procurement inefficiency and installation variance. Bespoke work is quoted at a premium that reflects that cost.

Technicians inspecting solar modules on pallets inside a warehouse
Figure 15Goods-in inspection and sample flash testing. Every consignment is verified against specification before it is released to a project.
Solar Smart Energy (Pty) Ltd · ConfidentialProductsPage 19
Section 15

Sales and marketing strategy

Two distinct motions for two distinct buyers.

Commercial: consultative, engineer-led

The commercial buyer is a financial director or facilities manager evaluating a capital project against alternative uses of capital. The sale is won on a credible model, not on enthusiasm. Average sales cycle is 90 to 150 days; conversion from qualified opportunity to contract is assumed at 22%.

Channels: direct outbound to targeted high-consumption sectors; referral from electrical consultants, quantity surveyors and property managers; energy audit as a paid entry product; industry conference presence; and reference-site visits, which are the single highest-converting activity in the mix.

Residential: responsive, speed-led

The residential buyer has usually already decided to install and is choosing between three quotations. The sale is won on response time, professionalism of the site visit and clarity of the quotation. Average cycle is 14 to 30 days; conversion is assumed at 18% of qualified leads.

Channels: paid search and social; installer review platforms; estate agent and property developer relationships; existing-customer referral, which carries materially higher conversion and is incentivised.

Marketing investment and unit economics

Sales and marketingFY2027FY2028FY2029FY2030FY2031FY2032FY2033FY2034FY2035FY2036
Marketing expenditure
As % of revenue2.2%2.1%2.1%2.0%2.0%1.9%1.9%1.8%1.8%1.8%
Commercial projects delivered2740567188105121137151164
Residential systems delivered3805808001,0301,2601,4701,6601,8301,9802,110
Blended customer acquisition cost

Blended acquisition cost across both segments. Commercial acquisition cost is substantially higher per unit than residential but is spread across an average contract value roughly thirty times larger.

Brand position

The Company competes on engineering credibility, not price. This is a deliberate and uncomfortable choice: it forfeits the bottom third of the residential market and a meaningful share of price-driven commercial tenders. It is made because that is where warranty claims, underperformance disputes and reputational damage concentrate — and because a maintenance annuity can only be built on systems the customer is satisfied with.

The measurable consequence

The maintenance contract attach rate — rising from 55% to 85% of the installed base — is the financial expression of this brand position. If the Company competes on price and installs poorly, that attach rate does not materialise, and roughly of cumulative revenue over the plan disappears with it.

Consultants meeting clients beside a solar carport and battery cabinets
Figure 16Client engagement at a completed carport and storage installation. Reference sites are central to the Company's commercial sales approach.
Solar Smart Energy (Pty) Ltd · ConfidentialSalesPage 20
Section 16

Customer segments and value proposition

Who buys, why they buy, and what they are actually buying.

SegmentLoad characteristicsPrimary motivationTypical systemPayback
Manufacturing and light industrialHigh, flat daytime load; strong demand chargesCost per unit of production500 kWp – 2 MWp3.2 – 4.1 years
Cold storage and food processingContinuous load, refrigeration-dominatedMargin protection; outage sensitivity300 kWp – 1 MWp with storage3.0 – 3.8 years
Retail centresDaytime-peaked; large roof area; landlord recoveryCommon-area cost recovery; tenant attraction250 kWp – 1.5 MWp3.8 – 4.6 years
Logistics and warehousingModerate load; very large roof areaRoof monetisation; ESG reporting500 kWp – 3 MWp4.0 – 5.0 years
AgricultureSeasonal irrigation peaks; diesel displacementDiesel cost elimination100 – 500 kWp hybrid2.8 – 4.2 years
Healthcare and educationExtended daytime occupancy; continuity-criticalContinuity of supply; budget certainty100 – 750 kWp4.2 – 5.4 years
Residential (upper-middle income)Evening-peaked; storage-dependentBill reduction and outage independence5 – 12 kWp with storage4.5 – 7.0 years

What the customer is actually buying

It is tempting to describe the value proposition as “cheaper electricity”. That is incomplete and, for the commercial buyer, not the decisive argument. What a commercial customer buys is a twenty-year fixed price for a portion of an input cost that has risen at double digits annually for fifteen years. Solar does not merely reduce the electricity bill. It converts an unpredictable, escalating operating cost into a known, depreciating capital asset.

Worked example — 500 kWp commercial installation

System cost excluding VAT. Section 12B permits a 100% year-one deduction, worth in tax at the 27% corporate rate, reducing effective cost to . Annual generation of approximately 875 MWh displaces grid energy at R2.60 per kilowatt-hour, saving in year one and rising with the tariff. Simple payback on the after-tax cost is under 2.0 years; over a 25-year life at a conservative 9% tariff escalation the system displaces well over of grid purchases.

Objection handling

Installers fitting solar panels to the roof of a suburban home
Figure 17Residential hybrid installation. The domestic segment provides volume, brand visibility and a pipeline of referral work.
Solar Smart Energy (Pty) Ltd · ConfidentialCustomersPage 21
Section 17

Marketing roll-out plan: phasing

Four phases over thirty months, sequenced to branch openings rather than to the calendar.

The marketing programme is deliberately subordinated to operational readiness. Demand generated ahead of installation capacity does not convert — it produces quotations that age, customers who go elsewhere, and a reference base of disappointed enquirers. Each phase below is therefore gated on a physical capability being in place.

Phase 0 — Foundation (Q1 FY2027, months 1–3) Gate: transaction closing. Brand identity system, website rebuild with segment-specific paths, CRM and marketing automation implementation, analytics and attribution, proposal template standardisation, and the first six commercial case studies written from existing installations. No demand generation in this phase. Budget .
Phase 1 — Western Cape consolidation (Q1–Q2 FY2027) Gate: existing crews at full utilisation. Reference site programme launched, consultant and managing agent relationships formalised, residential paid search and social switched on in the home market, referral incentive introduced. Objective: prove channel economics in a market where the Company already has credibility, before spending in one where it has none. Budget .
Phase 2 — Gauteng launch (Q2–Q4 FY2027) Gate: Kempton Park branch operational with two commercial crews. Outbound sales development targeting high-consumption sectors, LinkedIn and search campaigns geo-targeted to Gauteng industrial nodes, energy audit programme launched as a paid entry product, first industry conference presence. Objective: 40% of FY2027 commercial enquiries originating in Gauteng. Budget .
Phase 3 — KwaZulu-Natal launch and national brand (FY2028) Gate: Pinetown branch operational. Channel replication of the Gauteng playbook, distribution channel marketing to accredited independent installers, national trade and business press presence, ISO 9001 and accreditation credentials deployed in commercial proposals. Budget .
Phase 4 — Annuity and asset marketing (FY2029 onward) Gate: Head of Asset Finance appointed and project debt facility agreed. Solar-as-a-Service proposition marketed to the 47% of surveyed businesses that cited capital availability as their barrier; installed-base marketing for maintenance contract attach and system expansion. Budget rising to by FY2031.

Phase objectives and measures

PhasePrimary objectiveSuccess measureBy
0 — FoundationInfrastructure capable of measuring every Rand spentCRM live; attribution operating; six case studies publishedEnd Q1 FY2027
1 — Western CapeEstablish channel economics at known cost per leadResidential cost per enquiry below R400; 20 qualified commercial opportunitiesEnd Q2 FY2027
2 — GautengBuild a commercial pipeline ahead of crew availability40% of commercial enquiries from Gauteng; pipeline cover of 2.5× remaining year targetEnd Q4 FY2027
3 — KwaZulu-NatalReplicate rather than reinvent the Gauteng playbookKZN reaching Gauteng's cost per qualified opportunity within two quartersEnd Q3 FY2028
4 — AnnuityShift mix toward contracted revenue2 MW of Solar-as-a-Service contracted; maintenance attach at 65%End FY2029
The sequencing decision that matters most

Phase 1 spends in the Western Cape, where the Company least needs demand, before Phase 2 spends in Gauteng, where it most needs it. This appears inefficient and is deliberate. Channel economics discovered in a market with an existing reference base can be trusted; economics discovered simultaneously with a branch launch cannot be separated from launch noise. If the residential cost per enquiry cannot be held below R400 in the home market, it will not hold in Gauteng either — and it is far cheaper to learn that in month four than in month ten.

Solar Smart Energy (Pty) Ltd · ConfidentialMarketing roll-outPage 22
Section 18

Marketing channel plan and budget

Twelve channels, each carrying a lead target and an implied cost per enquiry.

ChannelFY2027 budgetShareEnquiriesCost per enquiry
Outbound sales development and account-based outreach14%105
Consultant, managing agent and channel partner development10%77
Commercial digital — search and professional networks13%49
Reference site programme and case study production6%49
Energy audit programme (paid entry product)8%42
Industry conferences, trade shows and sector events9%28
Residential paid search12%1,783
Residential paid social and display8%1,126
Customer referral incentive programme5%938
Installer review platforms and marketplaces4%563
Estate agent and property developer partnerships3%281
Brand, website, content and marketing automation8%——
Total marketing expenditure100%5,042—

Brand, website, content and marketing automation carries no direct lead target because it is enabling expenditure. Its return is measured through conversion rate improvement across the other eleven channels rather than through attributed enquiries.

Budget allocation by segment

Commercial receives 60% of budget to generate 351 enquiries; residential receives 32% to generate 4,691. The disparity reflects contract values roughly 26 times larger.

Marketing expenditure over the plan

0m8m15m23m31m38m2027202820292030203120322033203420352036

Expenditure rises from to in absolute terms while falling from 2.2% to 1.8% of revenue, as brand equity and the installed reference base progressively reduce the cost of each enquiry.

Channel notes

Solar Smart Energy (Pty) Ltd · ConfidentialMarketing roll-outPage 23
Section 19

Campaign calendar

Twenty-four months, timed to the tariff cycle rather than to the seasons.

The seasonality insight this calendar is built on

Solar marketing is conventionally weighted to summer, when irradiance is highest. The research indicates that is the wrong cycle. Enquiry volume in this market correlates with electricity bill shock, not with sunshine. Eskom's tariff increase takes effect on 1 April and municipal increases on 1 July, meaning customers receive materially higher accounts in April–May and July–August. Those two windows — Q1 and Q2 of the Company's March–February financial year — carry the heaviest demand generation weight. December and January are the weakest months for both segments and are used for content, brand and commercial pipeline building against customers' new budget cycles.

FY2027

QuarterCommercialResidentialBudget weight
Q1 — Mar to MayFoundation build; reference site programme launch; consultant relationship mapping; post-tariff-increase outbound campaign to high-consumption sectorsPost-tariff-increase paid search and social in Western Cape; referral programme launch24%
Q2 — Jun to AugGauteng launch campaign; energy audit programme introduced; municipal tariff increase messaging; first sector conferencePeak season — municipal increase campaign across Western Cape and Gauteng; review platform presence established31%
Q3 — Sep to NovGauteng account-based outreach at full weight; first Gauteng case studies published; managing agent programmeSustained search and social; estate agent partnerships activated ahead of the summer moving season27%
Q4 — Dec to FebPipeline build against customers' new capital budgets; proposal follow-up; KwaZulu-Natal pre-launch relationship buildingReduced paid spend; content, SEO and maintenance contract marketing to the FY2027 installed base18%

FY2028

QuarterCommercialResidentialBudget weight
Q1 — Mar to MayKwaZulu-Natal launch campaign; tariff increase outbound across three provinces; distribution channel recruitmentThree-province paid campaign; referral programme scaled on a larger installed base26%
Q2 — Jun to AugPeak commercial window; two sector conferences; ISO 9001 credential deployed in proposalsPeak residential window; review platform and marketplace weight increased32%
Q3 — Sep to NovSolar-as-a-Service proposition pre-marketed to capital-constrained prospects identified in FY2027Sustained performance channels; system expansion offers to FY2027 residential customers25%
Q4 — Dec to FebCapital budget cycle campaign; FY2029 pipeline build; installed-base maintenance attach driveContent and brand; maintenance and monitoring marketing17%

Always-on activity

Solar Smart Energy (Pty) Ltd · ConfidentialMarketing roll-outPage 24
Section 20

Marketing funnel economics and key indicators

The arithmetic connecting marketing spend to the installation volumes in the model.

Commercial funnelFY2027FY2028FY2029FY2030FY2031
Enquiries generated3515197279221,143
Enquiry to qualified opportunity35%35%35%35%35%
Qualified opportunities123182255323400
Qualified to contract22%22%22%22%22%
Projects won2740567188
Commercial marketing budget
Acquisition cost per project won
As % of average contract value2.33%2.23%2.21%2.16%2.18%
Residential funnelFY2027FY2028FY2029FY2030FY2031
Enquiries generated4,6917,1609,87712,71615,556
Enquiry to qualified lead45%45%45%45%45%
Qualified leads2,1113,2224,4445,7227,000
Qualified to contract18%18%18%18%18%
Systems installed3805808001,0301,260
Residential marketing budget
Acquisition cost per system
As % of average system value2.31%2.12%2.11%2.01%2.04%

Lifetime value and return on acquisition

MeasureCommercialResidential
Gross profit on the initial installation
Expected maintenance gross profit over ten years
Estimated customer lifetime value
Customer acquisition cost
Lifetime value to acquisition cost9.8×10.9×
Acquisition cost recoveredOn first progress claimOn deposit receipt

Marketing key performance indicators

IndicatorFY2027 targetFY2031 targetReported
Marketing expenditure as % of revenue2.2%2.0%Monthly
Commercial cost per qualified opportunityMonthly
Residential cost per enquiryWeekly
Commercial pipeline cover of remaining year target2.5×3.0×Monthly
Referral share of residential enquiries20%32%Monthly
Maintenance contract attach rate at handover55%74%Monthly
Quotation to contract cycle — commercial150 days110 daysQuarterly
Quotation to contract cycle — residential30 days18 daysMonthly
Net promoter scoreBaseline in Q3 FY2027Above 55Quarterly
Where this plan is most likely to be wrong

The funnel above assumes conversion rates of 22% for commercial and 18% for residential, drawn from the Company's Western Cape experience. There is no evidence yet that these hold in Gauteng, where the Company has no reference base and competes against established incumbents. If Gauteng conversion runs at, say, 15% commercial rather than 22%, the FY2027 commercial marketing budget delivers approximately 18 projects rather than 27 — a shortfall that would show up in revenue roughly two quarters later.

This is the reason Phase 1 establishes channel economics in the home market first, and the reason cost per qualified opportunity is reported monthly to the board rather than quarterly. It is a leading indicator of the volume assumptions in Section 28; revenue is a lagging one.

Analysts reviewing live performance and pipeline dashboards on a video wall
Figure 18Live reporting of pipeline and conversion metrics. Every indicator in the funnel model opposite is tracked against actual performance week by week.
Solar Smart Energy (Pty) Ltd · ConfidentialMarketing roll-outPage 25
Section 21

Solar-as-a-Service programme

Converting installation capability into owned, contracted, annuity assets.

Under Solar-as-a-Service the Company funds, owns, operates and maintains the system, and the building occupier signs a fifteen-year power purchase agreement to buy the electricity it produces at a tariff set below the prevailing grid rate and escalating more slowly. The customer pays no capital, carries no technical risk, and starts saving in month one.

39 MW
Owned fleet by FY2036
FY2036 energy revenue
78%
Cash gross margin
Solar-as-a-ServiceFY2027FY2028FY2029FY2030FY2031FY2032FY2033FY2034FY2035FY2036
Capacity commissioned (MW)0.00.02.03.04.05.05.56.06.57.0
Fleet under contract (MW)0.00.02.05.09.014.019.525.532.039.0
Contract tariff (R/kWh)1.751.851.972.082.212.342.482.632.792.96
Energy revenue
Capital deployed
Project debt drawn
Project debt outstanding

Structure and economics

  • Installed cost of per megawatt, funded 75% by amortising project debt at 12.5% over ten years and 25% from the Company's own resources.
  • Assumed specific yield of 1,750 MWh per megawatt per year, based on South African irradiance with a 0.5% annual degradation allowance.
  • Opening contract tariff of R1.75 per kilowatt-hour escalating at 6% annually — below the grid escalation path, so the customer's saving widens each year.
  • Operating cost of 18% of revenue covering insurance, monitoring, cleaning, inverter replacement provision and asset management.
  • Assets qualify for the Section 12B 100% year-one deduction where each installation is below 1 MW, producing an accelerated tax shield and a deferred tax liability that unwinds over the asset life.

Risk controls

  • Offtaker credit is assessed before commitment; a minimum credit rating or a parent guarantee, bank guarantee or three months' deposit is required.
  • Agreements are registered against the property by notarial deed where the customer owns the building, and include landlord consent and step-in rights where the customer is a tenant.
  • Termination for convenience triggers a scheduled buy-out at a stated present value, so the Company is never left with a stranded asset.
  • Deployment is deliberately deferred to FY2029 so that the raise funds installation capability first, and the asset programme is then seeded from operating cash flow rather than from subscription proceeds.
Why this stream disproportionately drives valuation

By FY2036 the Solar-as-a-Service fleet contributes 9.9% of revenue but roughly 26.1% of gross profit. More importantly it is contracted: fifteen-year agreements with defined escalation and identified offtakers. An acquirer values that stream on an infrastructure multiple, not an engineering services multiple. This is the mechanism by which the Company's exit multiple should expand rather than compress as it scales.

Operator monitoring a solar plant performance dashboard on multiple screens
Figure 19Remote monitoring centre. Continuous performance telemetry underpins the availability guarantees offered under the Solar-as-a-Service programme.
Solar Smart Energy (Pty) Ltd · ConfidentialSolar-as-a-ServicePage 26
Section 22

Operations and branch rollout

Sequencing national coverage against demonstrated demand.

BranchOpensFunctionRationale
Cape Town — Montague GardensEstablishedHead office, central import warehouse, engineering, 3,400 m²Port proximity; existing customer base; lowest-cost warehousing of the three metros
Kempton Park, GautengQ2 FY2027Regional sales, engineering, installation, 1,800 m² satellite storeApproximately 30% of national installed base; highest concentration of industrial roof area
Pinetown, KwaZulu-NatalQ1 FY2028Regional sales, installation, 1,200 m²Second-largest provincial base; Durban port as an alternate entry point
Gqeberha, Eastern CapeQ3 FY2030Sales and installation, 700 m²Automotive manufacturing cluster; served from Cape Town until volume justifies

Installation capacity model

Installed volume is a function of crews, not of demand. Each commercial crew comprises a site supervisor, two qualified electricians and four installers, and delivers approximately 1.35 MW per year at target productivity. Residential crews of three deliver approximately 95 systems per year.

CapacityFY2027FY2028FY2029FY2030FY2031FY2032FY2033FY2034FY2035FY2036
Commercial crews required8.512.617.422.227.432.637.842.647.051.1
Residential crews required4.06.18.410.813.315.517.519.320.822.2
Total installation personnel72106147188232275317356392424
Overhead and support personnel283952657890101111120128
Total headcount100145199253310365418467512552
The real constraint on this plan

Growing from 100 to 552 people in a market with a documented shortage of qualified electricians is a harder problem than winning the work. The Company's response is a structured in-house apprenticeship: four intakes per year, twelve apprentices per intake, an eighteen-month programme run against a registered trade qualification, funded partly through the Energy and Water SETA. This is costed in the personnel line and is the single most important operational risk in the plan.

Systems

The Company operates an integrated ERP covering quotation, bill of material, procurement, inventory by branch and serial number, project costing, field service scheduling and warranty tracking. Every installed system carries a serialised asset record linking modules, inverter and batteries to the installation, the crew and the maintenance contract — which is what makes warranty administration and the maintenance annuity operationally possible at scale.

Loading solar equipment onto a delivery vehicle at a depot
Figure 20Branch dispatch and last-mile delivery.
Technicians on an elevated platform installing a carport array
Figure 21Regional crew executing a carport contract.
Solar Smart Energy (Pty) Ltd · ConfidentialOperationsPage 27
Section 23

Staffing plan and payroll schedule

Headcount by role, fully costed, and the month-by-month build to 100 people.

Payroll is the Company's largest controllable cost and the binding constraint on growth. It is presented in two parts because it sits in two places in the income statement: direct installation labour is a cost of sales and moves with volume, while overhead and support payroll is an operating expense and is largely fixed once committed.

Overhead and support payroll — FY2027 (operating expenditure)

RoleHeadsCost per headTotal cost
Chief Executive Officer1
Chief Financial Officer1
Chief Operating Officer1
Commercial Director1
Head of Engineering1
Design engineers3
Commercial sales consultants3
Sales development representatives2
Marketing manager1
Procurement and imports manager1
Warehouse and logistics staff3
Financial manager1
Accounts and payroll staff3
HR and office administration2
SHEQ manager1
Compliance officer1
Customer service co-ordinators2
Total overhead and support payroll28—

Ties to the personnel and directors' emoluments line of in Section 32. Costs are fully loaded, including employer contributions to UIF, the Skills Development Levy, medical aid subsidy and retirement funding. No share-based payment charge is included; the proposed employee incentive scheme is described in Section 25.

Direct installation payroll — FY2027 (cost of sales)

RoleHeadsCost per headTotal cost
Installation supervisors8
Registered electricians14
Senior installation technicians18
Installation technicians24
Commissioning and monitoring technicians8
Total direct installation payroll72—

Direct labour of represents 15.3% of cost of sales, the balance being imported equipment, mounting systems, cabling, and logistics. Crews are permanently employed rather than contracted, which raises fixed cost and is the reason installed quality can be warranted.

Month-by-month headcount build — FY2027

HeadcountMarAprMayJunJulAugSepOctNovDecJanFeb
Installation personnel404346505457606366687072
Overhead and support181920212223242525262728
Total headcount5862667176808488919497100

Headcount to FY2036

01272543815086352027202820292030203120322033203420352036

Total headcount grows from 100 to 552. Revenue per employee rises from to , which is the productivity gain the plan depends on.

Recruitment sequencing

  • Months 1–3. Chief Financial Officer, Head of Engineering and the Gauteng branch manager are recruited before any Gauteng crew, because a crew without supervision produces warranty liability rather than revenue.
  • Months 4–8. Gauteng installation crews recruited and trained against the branch opening. Each crew of six is assumed to reach full productivity in its third month; the training cost is carried in cost of sales, not capitalised.
  • Months 9–12. Support functions catch up — accounts, customer service and SHEQ — and KwaZulu-Natal management is appointed ahead of the FY2028 launch.
The scarce role

Registered electricians qualified to issue a Certificate of Compliance are the genuine bottleneck, not capital. Fourteen are required in FY2027 and roughly ninety by FY2036. The Company's response is a funded apprenticeship pipeline (Section 27) rather than a recruitment budget, because the national pool is not large enough to buy from at scale.

Branded distribution warehouse interior with staff, forklift and safety signage
Figure 22Distribution and staging facility. Safety induction is mandatory for every employee, and headcount growth is planned around crew structure rather than floor space.
Solar Smart Energy (Pty) Ltd · ConfidentialStaffingPage 28
Section 24

Management team

Executive capability against the demands of the plan.

ExecutiveRoleBackgroundResponsibility under the plan
Sipho NdlovuChief Executive OfficerFounder. BSc Electrical Engineering (Wits). Fourteen years in power distribution and renewables, previously project manager on utility-scale PV in the Northern Cape.Strategy, capital, key client relationships, board
Anneke du ToitChief Financial OfficerCA(SA). Eleven years including six as financial manager of a listed industrial importer with substantial foreign currency exposure.Treasury and hedging, working capital, reporting, investor relations
Rajesh NaidooChief Operating OfficerSixteen years in electrical contracting; previously operations director of a national contracting group with 240 field staff.Branch network, installation delivery, safety, workforce
Dr Elmarie BekkerTechnical DirectorPhD Electrical Engineering, Pr Eng. Nine years in PV system design and grid integration; published on inverter-grid interaction.Design authority, product approval, technical standards, performance
Lunga MabasoCommercial DirectorTwelve years in industrial capital equipment sales; built and led a national sales team of 30.Sales, pipeline, pricing, channel development
Karin FourieSupply Chain DirectorEighteen years in import logistics and customs across Far East and European trade lanes.Supplier panel, importation, customs, inventory, warehousing

Board of directors following the transaction

DirectorCapacityAppointed by
Gerhard SteenkampIndependent Non-Executive ChairmanJoint appointment
Sipho NdlovuChief Executive OfficerFounders
Anneke du ToitChief Financial OfficerFounders
Nomsa DlaminiIndependent Non-Executive Director — chairs Audit and RiskJoint appointment
To be nominatedNon-Executive DirectorIncoming investor

Capability gaps the Company acknowledges

Two gaps are recognised and provided for. The Company has no executive with asset finance experience, which becomes material as the Solar-as-a-Service fleet scales from FY2029; a Head of Asset Finance is budgeted from FY2028. It also lacks a dedicated human resources function, which is a serious omission for a business planning to more than quintuple headcount; an HR Director is budgeted from FY2027.

Key person dependency

The Company is presently dependent on the Chief Executive for its principal commercial relationships and on the Technical Director for design authority. Both dependencies are real and neither is fully resolved by the plan. Mitigations are keyman policies of on each, three-year restraints, the founder lock-up, and a documented design-review process that requires a second qualified signature on every system above 250 kWp so that design authority is institutional rather than personal.

Solar Smart Energy (Pty) Ltd · ConfidentialManagementPage 29
Section 25

Governance, compliance and transformation

The control environment an institutional investor should expect.

Board and committees

The board meets quarterly and comprises five directors, of whom two are independent non-executives and one is investor-appointed. It operates under a formal charter with a documented schedule of matters reserved for board approval. Two committees are constituted:

Financial control

ControlRequirement
Payment authorityDual signature on all payments; second signature by a director above
ProcurementThree written quotations above ; approved vendor panel for all equipment
Foreign exchangeMinimum 75% forward cover on committed exposure; board-approved treasury policy; monthly exposure report
CreditFormal credit application and vetting for all account customers; deposits mandatory below investment-grade covenant
Project costingEvery project costed against budget at completion; variance above 5% reported to the executive committee
StockPerpetual inventory with monthly cycle counts and full annual count observed by auditors
ReportingManagement accounts within 21 days of month-end; audited financials within 120 days of year end
DelegationWritten delegation of authority framework reviewed annually by the board

Transformation and B-BBEE

The Company is currently a Level 4 contributor. Many commercial customers — particularly listed corporates, state-owned entities and their suppliers — apply preferential procurement weightings that materially affect tender outcomes. Improving to Level 2 by FY2029 is therefore a commercial objective as much as a transformational one.

The path comprises an employee share ownership plan covering 12% of ordinary shares held by a trust for the benefit of employees below management grade; the apprenticeship programme described in Operations, which generates skills development points; enterprise and supplier development directed at black-owned electrical subcontractors and transport providers; and a management control plan targeting 50% black representation at senior management by FY2030.

Investor note on dilution

The employee share ownership plan will dilute all shareholders proportionately, including the incoming investor. The plan is disclosed here rather than buried in the shareholders' agreement because the directors regard it as a commercial necessity for accessing the corporate segment, and prefer that it be priced into the transaction rather than discovered after it.

Statutory compliance

The Company maintains compliance with the Companies Act 71 of 2008, the Income Tax Act, the Value Added Tax Act, the Customs and Excise Act, the Occupational Health and Safety Act, the Basic Conditions of Employment Act, the Labour Relations Act, the Protection of Personal Information Act, the Consumer Protection Act and the National Credit Act where applicable. A compliance calendar is maintained by the Chief Financial Officer and reported to the Audit and Risk Committee quarterly.

Engineers inspecting medium-voltage switchgear in an electrical room
Figure 23Medium-voltage switchroom inspection. All grid-tied work is signed off by a registered professional engineer before energisation.
Solar Smart Energy (Pty) Ltd · ConfidentialGovernancePage 30
Section 26

Risk analysis and mitigation

The eighteen risks the directors consider material, assessed candidly.

RiskImpactLikelihoodMitigation
Rand depreciation raising landed costHighHigh75% minimum forward cover; 30-day quote validity with currency adjustment clause; USD-linked pricing on long-lead contracts
Skilled installer shortageHighHighIn-house apprenticeship, four intakes annually; retention incentives; productivity-linked crew bonuses
Module or inverter price collapse devaluing inventoryMediumMediumInventory capped at 72 days reducing to 58; distribution channel as a clearing mechanism; no speculative buying
Customer credit default on commercial contractsHighMediumCredit vetting; 30% deposit; progress claims; retention of title until settlement; credit insurance above
Municipal SSEG approval delaysMediumHighTen-week average approval lag assumed in scheduling; procurement sequenced after approval on non-standard municipalities
Interest rate increasesMediumMediumLow gearing; peak net debt of ; project debt fixed at drawdown
Key person lossHighLowKeyman cover; restraints; founder lock-up; institutionalised design authority
Installation quality failure or fireHighLowEmployed crews; documented method statements; commissioning protocol; public liability and professional indemnity cover
Port congestion or shipping disruptionMediumMediumDual port entry via Cape Town and Durban; safety stock on critical lines; multiple approved manufacturers
Import duty or tariff reclassificationMediumLowAnnual tariff classification review by tax advisers; binding tariff determinations sought on ambiguous headings
Withdrawal of Section 12B allowanceMediumLowPermanent legislation with no expiry; sales case retested at pre-incentive economics, which remain positive
Competitor price warMediumHighVertical integration cost advantage; deliberate non-participation in the lowest-price segment
Warranty claims exceeding provisionMediumMediumTier 1 manufacturers with insurance-backed warranties; serialised asset records; warranty provision in insurance line
Solar-as-a-Service offtaker failureMediumMediumCredit assessment and guarantees; notarial registration; step-in rights; scheduled buy-out on termination
Growth outpacing management capacityHighMediumBranch model replicated rather than reinvented; ERP before scale; two executive appointments budgeted ahead of need
Grid feed-in and tariff structure reformMediumMediumSystems sized to self-consumption rather than export; storage attachment reduces exposure to fixed-charge reform
Electricity tariff increases moderatingHighLowSensitivity tested; payback remains under seven years even at 6% escalation against the 13.7% recent determination
Working capital exceeding the raiseHighLowMinimum modelled cash of ; undrawn trade finance facility; growth throttled to cash if required
The risk the directors regard as most likely to be underestimated

Not currency, and not competition. It is the installer shortage. Every other risk in this table can be mitigated with money, contracts or insurance. This one can only be mitigated with time, because a qualified electrician takes years to produce and the entire industry is bidding for the same people. If this plan fails to deliver its volumes, the most probable single cause is that the Company could not staff the crews. The apprenticeship programme is the response, and it must start before the demand arrives rather than after.

Technician testing a combiner box with a multimeter on a solar installation
Figure 24Electrical verification during commissioning. Documented testing at handover is the principal control against warranty and performance risk.
Solar Smart Energy (Pty) Ltd · ConfidentialRiskPage 31
Section 27

Environmental, social and governance impact

Measurable outcomes, stated as quantities rather than intentions.

895
GWh generated annually by FY2036
832
kt CO₂e avoided per year
552
Direct jobs by FY2036
432
Apprentices trained to FY2036

Environmental

By FY2036 the Company's cumulative installed base of 511 MW is expected to generate approximately 895 GWh annually. Applying South Africa's grid emission factor of approximately 0.93 tonnes of CO₂e per megawatt-hour — among the highest of any major economy, given the coal-dominated generation fleet — this displaces roughly 832 kilotonnes of CO₂e each year.

The Company operates a documented end-of-life policy: modules and inverters removed during maintenance or repowering are returned to an accredited e-waste recycler, and battery units are returned to the manufacturer under take-back arrangements. Packaging waste at the central warehouse is separated and recycled, and the FY2029 target is 90% diversion from landfill.

Social

The apprenticeship programme trains 48 people annually from FY2028 in a scarce, portable, nationally recognised trade. Not all will remain with the Company; the directors regard training electricians who subsequently join competitors as an acceptable cost of operating in an industry constrained by a national skills deficit.

The employee share ownership plan places 12% of ordinary shares in trust for employees below management grade, so the workforce that builds the installed base participates in the value it creates. Beyond direct employment, the customer impact is a reduction in electricity cost for businesses operating in an economy where energy cost is a documented constraint on employment.

Governance

Governance arrangements are set out in Section 25. For ESG purposes the material commitments are: an independent chair; a majority-independent Audit and Risk Committee; annual external audit; a formal risk register reviewed quarterly; a whistle-blower facility operated by an independent third party; and an anti-bribery policy with mandatory annual declaration by all employees involved in procurement or tendering.

On the honest limits of this section

The emissions figure above is a displacement estimate, not a certified carbon credit. It assumes the grid emission factor holds constant, which it will not — as South Africa's generation mix decarbonises, the avoided emissions per megawatt-hour will fall. The directors present the figure because it is the standard basis of comparison in the sector, and note the qualification because investors applying an ESG framework should apply their own assumptions rather than adopt these.

Three technicians installing solar modules on a roof with mountains behind
Figure 25Accredited installation training in progress. Skills transfer and local employment are core to the Company's social impact commitments.
Solar Smart Energy (Pty) Ltd · ConfidentialESGPage 32
Section 28

Financial assumptions

Every projection in this document derives from the assumptions on this page.

Macroeconomic

AssumptionBasis
Consumer price inflation4.8% per annum, within the Reserve Bank's 3–6% target band
Salary inflation5.8% per annum, reflecting the premium on scarce technical skills
Electricity tariff escalation9.0% per annum, materially below the 13.7% April 2026 determination — a deliberately conservative assumption, since a higher path improves every customer's payback
Exchange rateAssumed stable in real terms; nominal depreciation offset by continued module price deflation in USD
Corporate tax rate27%
Value added tax15%
Presentation currencySouth African Rand

Revenue

AssumptionFY2027FY2036Basis
C&I price per MW2% nominal escalation; rand inflation partly offset by module deflation
Residential price per system3% escalation; includes battery storage
Maintenance rate per MW p.a.5.5% escalation
Maintenance attach rate55%85%Rises with service reputation and installed base maturity
Solar-as-a-Service tariffR1.75/kWhR2.96/kWh6% escalation, below assumed grid escalation
Specific yield1,750 MWh/MW1,750 MWh/MWSouth African irradiance, net of 0.5% annual degradation

Margin and cost

AssumptionFY2027FY2036Basis
C&I gross margin18.3%21.5%Improves with procurement scale and crew productivity
Residential gross margin23.8%26.5%Standardised configurations reduce installation variance
Distribution gross margin13.8%16.4%Thin by design; volume-driven
Maintenance gross margin47.0%54.3%Route density improves as installed base concentrates
Solar-as-a-Service cash margin78.0%78.0%18% of revenue for insurance, cleaning, monitoring, inverter provision
Overhead headcount28128Excludes installation crews, which sit in cost of sales
Fully loaded cost per overhead employeeIncluding benefits, levies and employment costs

Working capital, capital and funding

AssumptionFY2027FY2036Basis
Inventory days7258Import lead time; improves with forecasting and branch replenishment
Debtor days5245Progress claims and retention on commercial contracts
Creditor days4552Improves with supplier relationship maturity
Customer deposits30% of EPC value, held ~40 daysSameStandard contract term; a significant working capital offset
Trade finance facilityRevolving, drawn at 60% of inventory, priced at 11.75%
Solar-as-a-Service project debt75% of asset cost at 12.5% over 10 yearsSameAmortising, ring-fenced, serviced from contracted energy revenue
Surplus cash interest7.2%7.2%Money market deposit rate
Dividend policyNil30% of profit after taxCommencing FY2031, subject to solvency, liquidity and gearing tests

Assumptions are stated on a nominal basis. The most sensitive assumptions — installation volume and gross margin — are stress-tested in Section 38.

Solar Smart Energy (Pty) Ltd · ConfidentialAssumptionsPage 33
Section 29

Start-up and capital expenditure schedule

Every Rand of capital expenditure, itemised, with the life over which it is written off.

FY2027 capital expenditure — itemised

ItemQtyUnit costTotalLife
Installation vehicles — 12 light delivery vehicles125 yrs
Crew trucks with crane — 2 units25 yrs
Crew tooling and safety kits — 12 crews124 yrs
Access equipment: scaffold, fall arrest and lifting—4 yrs
Test and commissioning instruments—4 yrs
Gauteng branch fit-out and warehouse racking—6 yrs
KwaZulu-Natal branch pre-establishment—6 yrs
ERP, design software and monitoring platform—3 yrs
IT hardware, network and site connectivity—3 yrs
Office furniture and fittings—6 yrs
Total capital expenditure — FY2027———

Ties to the investing outflow in Section 33. Depreciation is straight line to nil residual, producing the FY2027 charge of in Section 30. Solar-as-a-Service generating assets are capitalised separately from FY2029 ( in that year) and are depreciated over twenty years against the contracted tariff income described in Section 21.

Capital expenditure over the plan

Capital expenditureFY2027FY2028FY2029FY2030FY2031FY2032FY2033FY2034FY2035FY2036
Core operating assets
Solar-as-a-Service generating assets
Total capital expenditure
Depreciation charge
Net book value at year end

Capital intensity

0235682027202820292030203120322033203420352036
Capex as % of revenue

Core capital intensity falls as the branch network completes. The step in FY2029 and FY2030 is the Solar-as-a-Service fleet, which is debt-funded against contracted cash flows and is not a call on the equity raised in this transaction.

Pre-trading and establishment costs

ItemAmount
Transaction, legal and due diligence costs
Gauteng branch lease deposits and municipal connections
Accreditation, certification and ISO 9001 implementation
Recruitment and initial crew training
Brand identity, website and collateral
Total pre-trading and establishment

These are expensed as incurred rather than capitalised, and are funded from the transaction costs and contingency allocation described in Section 41. They are the principal reason FY2027 EBITDA margin of 3.9% sits below the steady-state level.

What is deliberately not capitalised

Crew training, accreditation and brand development are expensed in full in the year incurred, even though each has a useful life well beyond twelve months. Capitalising them would raise reported FY2027 profit by roughly and would flatter every return measure in this plan. The directors regard that as a presentational gain not worth the loss of credibility with a funder who will look for it.

Boom lift raising workers to a large warehouse roof solar array
Figure 26Capital equipment in use on a large-format roof contract. Access plant is the single largest item in the Company's capital expenditure schedule.
Solar Smart Energy (Pty) Ltd · ConfidentialCapital expenditurePage 34
Section 30

Projected income statement

Ten years to FY2036, prepared on the accrual basis.

South African RandFY2027FY2028FY2029FY2030FY2031FY2032FY2033FY2034FY2035FY2036
REVENUE
Commercial & industrial installation
Residential installation
Equipment distribution
Maintenance contracts
Solar-as-a-Service energy
Total revenue
COST OF SALES
Cost of sales
Gross profit
Gross margin19.4%20.2%21.3%22.6%23.9%25.1%26.3%27.4%28.5%29.6%
OPERATING EXPENDITURE
Personnel and directors' emoluments
Premises, warehousing and utilities
Sales, marketing and lead generation
Professional, audit and compliance
Technology, ERP and monitoring platform
Fleet, logistics and travel
Insurance, warranty and bonding
Expected credit losses
Other administrative
Total operating expenditure
EBITDA
EBITDA margin3.9%6.1%7.8%9.8%11.4%13.0%14.4%15.8%17.1%18.3%
Depreciation — operating assets
Depreciation — Solar-as-a-Service assets
Operating profit (EBIT)
Interest — trade finance
Interest — project debt
Interest received
Profit before taxation
Taxation
Profit after taxation
Net margin3.5%3.7%4.7%5.8%6.8%7.8%8.9%9.9%10.9%11.9%
Earnings per share (R)0.410.641.151.892.833.995.457.118.9811.11

Taxation comprises current tax and the deferred tax arising from the Section 12B accelerated allowance on Solar-as-a-Service assets. The reconciliation is set out in Section 35.

Solar Smart Energy (Pty) Ltd · ConfidentialIncome statementPage 35
Section 31

Revenue and gross margin analysis

Where the revenue comes from and where the margin is actually earned.

Gross profit by streamFY2027FY2028FY2029FY2030FY2031FY2032FY2033FY2034FY2035FY2036
Commercial & industrial
Residential
Distribution
Maintenance
Solar-as-a-Service
Total gross profit
SEGMENT MARGIN
Commercial & industrial18.3%18.9%19.4%19.9%20.3%20.6%20.9%21.1%21.3%21.5%
Residential23.8%24.3%24.8%25.2%25.5%25.8%26.0%26.2%26.4%26.5%
Distribution13.8%14.2%14.6%15.0%15.3%15.6%15.8%16.0%16.2%16.4%
Maintenance47.0%48.2%49.4%50.4%51.3%52.1%52.8%53.4%53.9%54.3%
Solar-as-a-Service78.0%78.0%78.0%78.0%78.0%78.0%78.0%78.0%78.0%78.0%
Blended gross margin19.4%20.2%21.3%22.6%23.9%25.1%26.3%27.4%28.5%29.6%

Gross profit composition

0123,187,817246,375,634369,563,451492,751,268615,939,0852027202820292030203120322033203420352036
C&IResidentialDistributionMaintenanceSolar-as-a-Service

Revenue versus gross profit growth

0427,524,017855,048,0341,282,572,0511,710,096,0682,137,620,0842027202820292030203120322033203420352036
RevenueGross profit

Gross profit grows faster than revenue throughout, which is the arithmetic signature of favourable mix shift rather than price increases.

Reading the margin bridge

The blended gross margin rises from 19.4% to 29.6% across the plan. It is worth being precise about what causes this, because a reviewer is entitled to be sceptical of a margin that expands by twelve percentage points.

Roughly a third of the expansion comes from within-segment improvement — the commercial installation margin rises from 18.3% to 21.5% through procurement scale and crew productivity, which is modest and defensible. The remaining two thirds come from mix: maintenance revenue at roughly 52% margin and Solar-as-a-Service at 78% cash margin grow from nothing to 14.4% of revenue.

The stress test that matters

If the maintenance attach rate and the Solar-as-a-Service programme both failed entirely, the FY2036 blended margin would fall to approximately 22.7% — still above the FY2027 level, but the business would be a materially less valuable one. The annuity streams are not a decoration on this plan. They are the plan.

Solar Smart Energy (Pty) Ltd · ConfidentialRevenue analysisPage 36
Section 32

Operating expenditure analysis

Overhead as a proportion of revenue, and the operating leverage it produces.

Operating expenditureFY2027FY2028FY2029FY2030FY2031FY2032FY2033FY2034FY2035FY2036
Personnel and directors' emoluments
Premises, warehousing and utilities
Sales, marketing and lead generation
Professional, audit and compliance
Technology, ERP and monitoring platform
Fleet, logistics and travel
Insurance, warranty and bonding
Expected credit losses
Other administrative
Total operating expenditure
As % of revenue15.5%14.1%13.5%12.9%12.5%12.1%11.8%11.5%11.4%11.3%

Overhead ratio

0%7%14%20%27%34%2027202820292030203120322033203420352036
Operating expenditure % of revenueGross margin %

The widening gap between the two lines is the EBITDA margin.

Where the overhead sits in FY2027

Personnel represents 44.3% of FY2027 overhead — this is a people business before it is anything else.

Operating leverage

Overhead falls from 15.5% of revenue in FY2027 to 11.3% in FY2036. This is the second driver of margin expansion, alongside mix. The mechanism is straightforward: head office engineering, finance, technology and executive costs are largely fixed against volume, while branch costs scale with revenue but at a lower rate than revenue itself.

The directors regard approximately 62% of the overhead base as genuinely fixed within a twelve-month horizon — principally salaried personnel, premises and technology. This figure is used explicitly in the break-even and sensitivity analysis in Section 38, and it is the reason a volume shortfall damages this business faster than a margin shortfall of equivalent Rand value.

A deliberate inefficiency in FY2027

Overhead in FY2027 is heavier than the revenue supports, because the Gauteng branch, the HR function and part of the engineering team are put in place ahead of the volume they serve. This is why the first-year EBITDA margin is only 3.9%. Building the capability after the demand arrives would protect the first-year margin and cost the Company the second year. The directors have chosen the second year.

Solar Smart Energy (Pty) Ltd · ConfidentialOperating costsPage 37
Section 33

Projected cash flow statement

The statement on which the adequacy of this raise is judged.

South African RandFY2027FY2028FY2029FY2030FY2031FY2032FY2033FY2034FY2035FY2036
CASH FLOW FROM OPERATIONS
EBITDA
(Increase) in working capital
Interest paid
Interest received
Taxation paid
Net cash from operating activities
CASH FLOW FROM INVESTING
Operating asset capital expenditure
Solar-as-a-Service asset capital expenditure
Net cash used in investing activities
Free cash flow
CASH FLOW FROM FINANCING
Project debt drawn
Project debt repaid
Movement in trade finance facility
Dividends paid
Net cash from financing activities
Movement in cash
Cash at beginning of year
Cash at end of year

The FY2027 opening balance comprises the subscription proceeds together with of existing shareholders' funds.

Closing cash position

0m112m223m335m446m558m2027202820292030203120322033203420352036

Free cash flow

-58m-9m40m90m139m188m2027202820292030203120322033203420352036
The three facts an investor should take from this page

One. The minimum closing cash balance across the ten years is , occurring in FY2028. The raise is sufficient with headroom, and a trade finance facility sits behind it undrawn to the extent inventory does not require it. Two. Free cash flow turns positive in FY2031 and remains so. Three. No further equity is required at any point in the plan.

Solar Smart Energy (Pty) Ltd · ConfidentialCash flowPage 38
Section 34

Monthly cash flow forecast: FY2027

Month one to month twelve. The annual statement hides the point of maximum strain; this does not.

FY2027 — R'000MarAprMayJunJulAugSepOctNovDecJanFeb
Opening cash
Receipts from customers
Payments to equipment suppliers
Operating expenditure paid
Taxation paid
Net interest
Capital expenditure
Trade finance drawn / (repaid)
Share capital issued
Net movement in cash
Closing cash

Closing cash by month

01529445873MarAprMayJunJulAugSepOctNovDecJanFeb
Closing cash (Rm)

How to read this schedule

Cash peaks at in the first month on receipt of the raise, then declines for nine consecutive months to at year end. That decline is not trading losses. It is the working capital build described in Section 36: every megawatt installed requires equipment paid for on shipment, roughly 72 days before the customer settles.

The Company is at its most fragile in the second half of FY2027, when Gauteng crews are fully staffed and paid but the Gauteng receipts book has not yet matured. This is precisely the period an investor should test.

Closing cash of agrees to the annual cash flow statement in Section 33 to the Rand.

Basis of preparation

Monthly receipts assume 35% of a month's revenue is collected in that month (residential deposits and commercial progress claims), 45% in the following month and 20% in the month after. Equipment payments lead installation, reflecting import lead times: 30% in the month of installation, 45% one month ahead and 25% two months ahead. Overhead is straight-lined; marketing follows the campaign calendar in Section 19; taxation is paid as two provisional instalments in August and February. Each line sums to the corresponding annual figure in Section 33 without adjustment or balancing entry.

Solar Smart Energy (Pty) Ltd · ConfidentialMonthly cash flowPage 39
Section 34

Monthly cash flow forecast: FY2028

Month thirteen to month twenty-four, covering the KwaZulu-Natal launch.

FY2028 — R'000MarAprMayJunJulAugSepOctNovDecJanFeb
Opening cash
Receipts from customers
Payments to equipment suppliers
Operating expenditure paid
Taxation paid
Net interest
Capital expenditure
Trade finance drawn / (repaid)
Share capital issued
Net movement in cash
Closing cash

Closing cash by month

01224364860MarAprMayJunJulAugSepOctNovDecJanFeb
Closing cash (Rm)

The low point of the entire plan

Cash reaches its minimum of in June 2026, in the month the KwaZulu-Natal branch opens and before it bills anything. Across twenty-four months the balance never falls below .

The headroom is deliberate. The directors set the raise at rather than the that a nil-buffer model would support, because a solar installer that runs out of cash mid-project loses the project, the retention and the reference site simultaneously.

Unutilised trade finance headroom of was available throughout FY2028 and is not drawn in this forecast.

Reconciliation to the annual statements

CheckMonthly scheduleAnnual statementDifference
FY2027 closing cash
FY2028 closing cash

From FY2029 the forecast reverts to an annual basis. Monthly modelling beyond twenty-four months implies a precision the underlying assumptions cannot support.

Solar Smart Energy (Pty) Ltd · ConfidentialMonthly cash flowPage 40
Section 35

Projected balance sheet

Financial position at each year end.

South African RandFY2027FY2028FY2029FY2030FY2031FY2032FY2033FY2034FY2035FY2036
ASSETS
Property, plant and equipment (net)
Inventory
Trade and other receivables
Cash and cash equivalents
Total assets
EQUITY
Share capital
Retained earnings
Total equity
LIABILITIES
Trade and other payables
Customer deposits and contract liabilities
Trade finance facility
Project debt — Solar-as-a-Service
Deferred taxation
Total liabilities
Total equity and liabilities

Deferred taxation

The deferred tax liability arises because Section 12B permits a 100% deduction of qualifying Solar-as-a-Service asset cost in the year the asset is brought into use, while the asset is depreciated over twenty years for accounting purposes. The resulting temporary difference is recognised at 27% and unwinds over the asset life. It is a non-cash liability and reverses gradually; it is disclosed separately here because it materially affects the tax charge in the income statement without affecting tax paid in the cash flow statement.

Tax reconciliationFY2027FY2028FY2029FY2030FY2031FY2032FY2033FY2034FY2035FY2036
Profit before taxation
Tax at 27%
Section 12B accelerated allowance
Current taxation
Deferred taxation movement
Total taxation charge

Assessed losses, where they arise, are carried forward and offset against subsequent taxable income subject to the 80% limitation contained in section 20 of the Income Tax Act.

Solar Smart Energy (Pty) Ltd · ConfidentialBalance sheetPage 41
Section 36

Working capital and funding structure

The mechanics of the cash cycle this raise is designed to fund.

Working capitalFY2027FY2028FY2029FY2030FY2031FY2032FY2033FY2034FY2035FY2036
Inventory
Trade receivables
Trade payables
Customer deposits
Net working capital
Year-on-year movement
Inventory days72706866646261605958
Debtor days52515049484746464545
Creditor days45464748495050515152
Cash conversion cycle (days)79757167635957555351
Why working capital consumes so much of the raise

Net working capital rises from in FY2027 to by FY2031. That increase of has to be funded before the profit it generates is collected. Customer deposits of 30% on order are the single most valuable offset in the structure — without them the funding requirement would be roughly higher in FY2031 alone, and this raise would not be sufficient.

Funding sources

SourceAmountCostPurpose and security
Ordinary equity — this raiseEquityImport working capital float, branch rollout, installation capability. Unsecured.
Existing shareholders' fundsEquityFounder capital, retained in the business.
Trade finance facility11.75%Revolving import finance drawn at 60% of inventory. Secured by cession of stock and debtors.
Solar-as-a-Service project debt75% of asset cost12.5% fixedRing-fenced, amortising over 10 years, secured by cession of the power purchase agreements and the assets. No recourse to the operating business.
Retained earnings—Cumulative retentions over the plan; the principal source of growth funding from FY2029.

Debt service capacity

CoverageFY2027FY2028FY2029FY2030FY2031FY2032FY2033FY2034FY2035FY2036
EBITDA
Debt service (interest and principal)
Debt service cover ratio4.69×5.21×7.97×7.31×7.03×6.73×6.27×6.02×5.83×5.70×
Interest cover ratio6.0×5.6×7.5×7.8×8.4×8.8×9.1×9.5×9.8×10.3×
Net debt to EBITDA-2.06×-0.41×0.18×0.21×0.24×0.13×-0.01×-0.19×-0.40×-0.61×
Gearing (debt to debt plus equity)23.1%27.1%34.8%35.5%36.7%36.8%35.4%33.3%30.9%28.4%

Debt service cover is calculated as EBITDA less tax paid, divided by interest and scheduled principal. The minimum across the plan is 4.69×, comfortably above the 1.30× covenant typically imposed on facilities of this nature.

Crew loading pallets of solar equipment onto a delivery truck with a forklift
Figure 27Stock moving from warehouse to site. Inventory and work in progress are the two largest consumers of working capital in the model opposite.
Solar Smart Energy (Pty) Ltd · ConfidentialWorking capitalPage 42
Section 37

Ratio analysis

Profitability, liquidity, efficiency and return.

RatioFY2027FY2028FY2029FY2030FY2031FY2032FY2033FY2034FY2035FY2036
PROFITABILITY
Gross margin19.4%20.2%21.3%22.6%23.9%25.1%26.3%27.4%28.5%29.6%
EBITDA margin3.9%6.1%7.8%9.8%11.4%13.0%14.4%15.8%17.1%18.3%
Operating margin3.4%5.1%6.7%8.4%9.9%11.3%12.8%14.2%15.4%16.6%
Net margin3.5%3.7%4.7%5.8%6.8%7.8%8.9%9.9%10.9%11.9%
LIQUIDITY
Current ratio2.141.851.771.881.962.112.302.532.813.11
Quick ratio1.431.161.101.181.251.391.581.812.102.41
EFFICIENCY
Asset turnover1.85×2.14×2.08×2.01×1.96×1.86×1.76×1.65×1.54×1.43×
Inventory turns5.1×5.2×5.4×5.5×5.7×5.9×6.0×6.1×6.2×6.3×
Revenue per employee
SOLVENCY
Gearing23.1%27.1%34.8%35.5%36.7%36.8%35.4%33.3%30.9%28.4%
Net debt to EBITDA-2.06×-0.41×0.18×0.21×0.24×0.13×-0.01×-0.19×-0.40×-0.61×
Interest cover6.0×5.6×7.5×7.8×8.4×8.8×9.1×9.5×9.8×10.3×
Debt service cover4.7×5.2×8.0×7.3×7.0×6.7×6.3×6.0×5.8×5.7×
RETURN
Return on equity11.1%15.0%21.1%25.7%30.4%33.0%34.2%34.0%33.0%31.8%
Return on capital employed8.2%15.1%19.8%24.2%28.0%30.4%32.0%32.5%32.2%31.6%

Margin progression

0%7%14%20%27%34%2027202820292030203120322033203420352036
Gross marginEBITDA marginNet margin

Return on equity and capital employed

0%8%16%24%31%39%2027202820292030203120322033203420352036
Return on equityReturn on capital employed

Commentary

Liquidity is strong throughout, with the current ratio never falling below 1.77. The quick ratio is materially lower than the current ratio because inventory is a large proportion of current assets — an unavoidable characteristic of an import business and the reason inventory days are managed so closely.

Return on equity peaks at 34.2% and moderates thereafter as retained earnings accumulate faster than profits grow. This is expected and healthy; a business whose return on equity does not moderate as it capitalises is usually one that is under-investing or over-distributing.

Gearing peaks at 36.8% and declines from FY2032 as project debt amortises and equity accumulates. The Company would remain within a 45% gearing covenant throughout the plan.

Solar Smart Energy (Pty) Ltd · ConfidentialRatiosPage 43
Section 38

Break-even and sensitivity analysis

What has to go wrong, and by how much, before the plan fails.

Break-even

FY2027 break-even revenue
86%
Of forecast FY2027 revenue
FY2027 fixed cost base

The Company breaks even at of FY2027 revenue — 86% of forecast. In plain terms, revenue can fall short of plan by approximately 14% in the first year before the Company records an operating loss. Given the cash position, a loss of that scale would be absorbed without threatening solvency, but it would delay the branch rollout.

Sensitivity of FY2031 EBITDA

The grid below flexes the two assumptions that matter most: installation volume and gross margin. It holds 62% of the overhead base fixed and flexes the remainder with volume, which is the realistic behaviour of this cost structure.

FY2031 EBITDAVolume -20%Volume -10%Volume +0%Volume +10%Volume +20%
Gross margin -3.0pp
Gross margin -1.5pp
Gross margin +0.0pp
Gross margin +1.5pp
Gross margin +3.0pp

Base case FY2031 EBITDA of appears at the centre of the grid. Green cells exceed the base case by more than 5%; red cells fall below 60% of it.

Reading the grid

Two observations follow from these numbers. First, the business is more sensitive to volume than to margin: a 20% volume shortfall costs roughly of FY2031 EBITDA, while a 3 percentage point margin compression costs roughly . This is the direct consequence of a fixed overhead base and is why the operational risk section concentrates on installation capacity rather than pricing.

Second, even in the most adverse corner tested — volumes 20% below plan and gross margin 3 percentage points below plan simultaneously — FY2031 EBITDA remains positive at . The plan degrades under stress; it does not break.

The scenario not shown in this grid

A sustained 25% rand depreciation that could not be passed through to customers would compress gross margin by roughly 6–8 percentage points — beyond the range tested above. This is why the treasury policy mandating minimum 75% forward cover is a board-reserved matter rather than a management discretion. It is the single control standing between this plan and the one scenario that would genuinely impair it.

Solar Smart Energy (Pty) Ltd · ConfidentialSensitivityPage 44
Section 39

Funding requirement and debt service cover

What the Company needs, when, and its capacity to service the debt within it.

Funding requirement

RequirementAmountSource
Peak working capital absorption to FY2028Equity raise and trade finance
Core capital expenditure FY2027–FY2028Equity raise
Pre-trading, establishment and transaction costsEquity raise
Minimum operating cash bufferEquity raise
Less: cash generated from operations and existing resourcesInternally funded
Equity raise soughtThis transaction
Trade finance facility (revolving, limit )Drawn at FY2028

Debt service cover

Debt service coverFY2027FY2028FY2029FY2030FY2031FY2032FY2033FY2034FY2035FY2036
EBITDA
Less: taxation paid
Cash available for debt service
Interest paid
Capital repayments — project debt
Total debt service
Debt service cover ratio4.7×5.2×8.0×7.3×7.0×6.7×6.3×6.0×5.8×5.7×
Interest cover ratio6.0×5.6×7.5×7.8×8.4×8.8×9.1×9.5×9.8×10.3×
Covenant floor — debt service cover1.25×1.25×1.25×1.25×1.25×1.25×1.25×1.25×1.25×1.25×
0246792027202820292030203120322033203420352036
Debt service coverCovenant floor

Headroom against covenant

Cover never falls below 4.7×, against a covenant floor of 1.25× typical of South African trade and project finance facilities. The tightest year is FY2027, when the trade finance facility is at its most utilised relative to a still-thin EBITDA base.

EBITDA would have to fall by 73.4% from plan in that year before the covenant is breached. The downside scenario in Section 44 contemplates a 20% volume shortfall, which does not breach it.

Security and structure

  • Trade finance is secured against the imported inventory it funds and cedes the related receivable — it is self-liquidating rather than term debt.
  • Solar-as-a-Service project debt from FY2029 is secured against the generating asset and the contracted tariff stream, on a non-recourse basis to the trading company.
  • No personal surety from the incoming investor is sought or required.
Solar Smart Energy (Pty) Ltd · ConfidentialDebt servicePage 45
Section 40

Valuation and investor returns

Three methodologies, and what the subscriber should expect to earn.

Method one — discounted cash flow

Unlevered free cash flowFY2027FY2028FY2029FY2030FY2031FY2032FY2033FY2034FY2035FY2036
EBITDA
Less: taxation paid
Less: capital expenditure
Less: working capital investment
Unlevered free cash flow
Discounted cash flowValue
Weighted average cost of capital16.5%
Terminal growth rate4.5%
Present value of forecast cash flows
Present value of terminal value
Enterprise value
Less: net debt at FY2027
Indicated equity value

Method two — earnings multiple on exit

Applying a 7.0× enterprise value to EBITDA multiple — the range at which diversified energy services businesses with contracted annuity revenue have transacted — produces the following outcomes for the incoming subscriber.

Exit scenarioFY2031 (5 years)FY2033 (7 years)
EBITDA in exit year
Enterprise value at 7.0×
Less: net debt
Equity value
Investor share at 25%
Dividends received to exit
Total proceeds
Multiple of invested capital3.30×6.59×
Internal rate of return27.0%30.9%

Method three — entry multiple cross-check

The subscription is priced at 22.1× FY2027 forecast EBITDA and 0.87× FY2027 forecast revenue on a post-money basis. On FY2028 forecast EBITDA the entry multiple falls to 9.4×, and on FY2029 to 5.2×.

What the directors are and are not claiming

The discounted cash flow indicates an equity value materially above the subscription price. The directors do not present that as evidence the shares are cheap. A discounted cash flow of a growth plan is a model of the plan, not a valuation of the business, and it is only as sound as the volume assumptions in Section 28. It is included because omitting it would be selective, and it should be weighted accordingly. The multiple-based analysis is the more defensible of the two.

Solar Smart Energy (Pty) Ltd · ConfidentialValuationPage 46
Section 41

Application of proceeds

How the will be deployed, and by when.

ApplicationAmount%
Import inventory and working capital float37.0%
Regional branch rollout - Gauteng and KZN16.4%
Fleet, tooling and installation capability14.8%
Solar-as-a-Service seed equity (PPA fleet)12.6%
Engineering, design and ERP systems8.2%
Brand, sales engine and channel development6.4%
Transaction costs and contingency4.6%
Total100.0%

Deployment detail and timing

ApplicationDetailDeployed by
Import inventory and working capital floatFunds the 115 to 160 day cash cycle between paying manufacturers and collecting from customers, permitting container-scale ordering across three approved module suppliers and two inverter suppliers.Progressive, Q1 FY2027 to Q4 FY2028
Regional branch rolloutKempton Park (Gauteng) premises, fit-out, warehouse racking, initial stock and the first eight months of operating cost before the branch reaches contribution break-even. Pinetown (KwaZulu-Natal) on the same basis from Q1 FY2028.Q2 FY2027 and Q1 FY2028
Fleet, tooling and installation capabilityTwelve installation vehicles, elevated work platforms, testing and commissioning instrumentation, fall-arrest and working-at-height equipment, and crew tooling for the additional commercial and residential teams.Q1 to Q3 FY2027
Solar-as-a-Service seed equityThe 25% equity component of the first tranche of company-owned assets from FY2029; the remaining 75% is funded by ring-fenced project debt against the executed power purchase agreements.FY2029
Engineering, design and systemsDesign and yield modelling software licences, ERP extension to multi-branch inventory and field service, monitoring platform build, and three additional engineering appointments.Q1 to Q4 FY2027
Brand, sales engine and channel developmentBrand identity, digital acquisition infrastructure, reference-site programme, consultant and channel partner development, and the initial commercial sales team in Gauteng.Q1 FY2027 to Q2 FY2028
Transaction costs and contingencyLegal, due diligence, tax and corporate advisory costs of the transaction, plus an unallocated contingency of approximately 2% of the raise.On closing
What the money is not for

No portion of the proceeds will be applied to settle shareholder loans, to fund a founder secondary, to repay existing debt, or to acquire any business. The subscription is entirely primary capital and enters the Company's balance sheet. The directors regard this as a material term and are prepared to warrant it.

Solar Smart Energy (Pty) Ltd · ConfidentialUse of fundsPage 47
Section 42

Exit strategy

How the subscriber realises value, ranked by the directors' assessment of likelihood.

RouteLikely timingProbable acquirer or mechanismAssessment
Trade sale to a strategic acquirerFY2032 – FY2034A European or Asian equipment manufacturer seeking direct African distribution and installed-base access; a diversified African industrial group; or an international energy services business entering the market.Most likely. Manufacturers consistently pay a premium for a captive installed base and a maintained fleet, both of which this plan builds deliberately.
Sale to an infrastructure or energy transition fundFY2031 – FY2035A fund attracted primarily by the contracted Solar-as-a-Service fleet and the maintenance annuity.Likely, and the route most sensitive to the size of the owned asset fleet at the point of sale.
Private equity secondaryFY2031 – FY2033A growth or mid-market fund acquiring the incoming investor's stake.Available at most points; typically prices below a strategic sale.
Listing on the JSE AltX or Main BoardFY2035+Initial public offering once revenue and governance maturity support it.Possible but not planned for. Requires scale and market conditions the directors will not forecast.
Management buyoutAny time from FY2032Repurchase funded from accumulated cash flow and acquisition debt.A fallback, not a plan. Priced at independent valuation under the shareholders' agreement.

Preparing the business for sale

The characteristics that determine the exit multiple are built deliberately from FY2027, not assembled in the year before a sale:

Alignment on exit

The shareholders' agreement will provide for a coordinated exit process from FY2031, with drag-along at 75% approval and full tag-along for minorities. The founders' lock-up expires at month 36, after which their interests and the subscriber's are aligned in timing and price. The directors regard a trade sale in the FY2032 to FY2034 window as the central expectation, and have built the business accordingly.

Solar Smart Energy (Pty) Ltd · ConfidentialExitPage 48
Section 43

Implementation roadmap

The first twenty-four months, against which management should be measured.

FY2027

QuarterMilestoneAccountableSuccess measure
Q1Transaction closing; funds received; board reconstituted; investor director appointedCEO / CFOFunds cleared; amended MOI lodged
Q1Treasury policy adopted; forward cover programme establishedCFO75% cover on all committed exposure
Q1First container-scale import order placed under new working capitalSupply Chain DirectorLanded cost per watt reduced 6% against FY2026
Q2Kempton Park branch opened; premises, racking, stock and teamCOOBranch operational; first Gauteng installation commissioned
Q2HR Director appointed; apprenticeship programme designed and SETA-registeredCOOFirst intake of twelve enrolled
Q3ERP extended to multi-branch inventory and field serviceCFOLive in both branches; stock accuracy above 98%
Q3Engineering team expanded; design review protocol implementedTechnical DirectorSecond signature on all systems above 250 kWp
Q4Maintenance contract product launched to the installed baseCommercial Director55% attach rate on FY2027 installations
Q4FY2027 external audit commencedCFOUnqualified opinion; no material weaknesses
FY2027Deliver 11.5 MW commercial and 380 residential systemsCOORevenue ; EBITDA

FY2028

QuarterMilestoneAccountableSuccess measure
Q1Pinetown branch opened, KwaZulu-NatalCOOOperational within budget; Durban port entry established
Q1Head of Asset Finance appointedCFOSolar-as-a-Service structure and project debt term sheet agreed
Q2Second and third apprenticeship intakesHR Director36 apprentices in programme
Q2Employee share ownership trust establishedCEO / Board12% of shares in trust; B-BBEE scorecard improvement verified
Q3Distribution channel expanded to 40 accredited independent installersCommercial DirectorDistribution revenue of
Q3ISO 9001:2015 certification achievedTechnical DirectorCertificate issued
Q4Solar-as-a-Service pipeline of 2 MW contracted for FY2029 commissioningCommercial DirectorExecuted power purchase agreements with credit-approved offtakers
FY2028Deliver 17.0 MW commercial and 580 residential systemsCOORevenue ; EBITDA
The two milestones that carry the plan

Of everything listed above, two items determine whether the FY2029 numbers are achievable. The Kempton Park branch reaching contribution break-even within eight months establishes whether the branch model replicates — and if it does, Pinetown and Gqeberha follow with far less risk. The first apprenticeship intake completing establishes whether the Company can manufacture its own installation capacity rather than compete for it. Both fall in FY2027. Both should be reported to the board monthly.

Site mobilisation with forklift and delivery truck at a solar farm
Figure 28Site mobilisation. Each branch launch follows the same sequence of logistics, staffing and commissioning milestones set out opposite.
Solar Smart Energy (Pty) Ltd · ConfidentialRoadmapPage 49
Section 44

Scenario analysis

Downside, base and upside cases carried through to investor outcome.

Downside caseBase caseUpside case
NarrativeBranch rollout delayed by two quarters; installer shortage caps crew growth; volume 20% below plan and gross margin 1.5 percentage points lowerThe plan as presented in Sections 30 to 37Tariff escalation exceeds 9%; commercial demand accelerates; volume 10% above plan and gross margin 1.5 points higher
FY2031 revenue
FY2031 EBITDA
FY2031 EBITDA margin8.0%11.4%13.6%
Equity value at 7.0× EBITDA
Investor share at 25%
Multiple of invested capital (5 years)1.75×3.22×4.26×
Internal rate of return (5 years)11.8%26.3%33.6%

Probability weighting

The directors' subjective assessment is a 25% probability of the downside case, 55% of the base case and 20% of the upside case. On that weighting the expected five-year multiple of invested capital is approximately 3.06×. These probabilities are judgements, not calculations, and a prospective investor should substitute its own.

What genuinely breaks this plan

None of the three cases above involves failure, because none of them tests the two things that would cause it. The plan fails if (a) the rand depreciates sharply and the Company has not hedged, destroying gross margin on committed contracts, or (b) the Company cannot recruit and train installation crews fast enough and the fixed overhead of a national branch network sits against regional volume. Both are addressed in Section 26. Neither is fully eliminated by capital, which is why they are stated here rather than left to the risk table.

Team reviewing project data around an interactive display in a control room
Figure 29Portfolio review. Scenario outcomes are tracked against live project data on a rolling quarterly basis.
Solar Smart Energy (Pty) Ltd · ConfidentialScenariosPage 50
Appendix A

Glossary and definitions

Technical, financial and regulatory terms used in this document.

TermDefinition
B-BBEEBroad-Based Black Economic Empowerment, the South African transformation framework
Certificate of ComplianceStatutory certificate confirming an electrical installation meets safety standards
C&ICommercial and industrial market segment
DegradationAnnual reduction in module output, typically 0.4 to 0.6% per year
DSCRDebt service cover ratio: cash available for debt service divided by interest plus principal
EBITDAEarnings before interest, taxation, depreciation and amortisation
EPCEngineering, procurement and construction — turnkey project delivery
Grid-tiedA system connected to and synchronised with the utility network
Hybrid inverterAn inverter managing solar generation, battery storage and grid supply
IRRInternal rate of return: the discount rate at which net present value equals zero
kWp / MWpKilowatt-peak / megawatt-peak: rated output under standard test conditions
LFPLithium iron phosphate battery chemistry
Levelised cost of energyLifetime cost divided by lifetime generation, expressed per kWh
TermDefinition
MOICMultiple of invested capital: total proceeds divided by amount invested
NERSANational Energy Regulator of South Africa
NRS 097-2-1South African standard governing embedded generator grid connection
NTCSANational Transmission Company of South Africa
P50 / P90Yield estimates with 50% and 90% probability of being exceeded
Performance ratioActual output as a percentage of theoretical output; a system health measure
PPAPower purchase agreement: a contract to buy electricity at an agreed tariff
PV GreenCardSouth African installer accreditation for photovoltaic installations
REIPPPPRenewable Energy Independent Power Producer Procurement Programme
Section 12BIncome Tax Act provision permitting 100% year-one deduction of qualifying PV assets below 1 MW
SSEGSmall-Scale Embedded Generation
Specific yieldAnnual energy produced per unit of installed capacity, in MWh/MW
StringA series-connected group of photovoltaic modules
WACCWeighted average cost of capital

Basis of financial presentation

All amounts are stated in nominal terms. The financial year ends on the last day of February; FY2027 refers to the year ending 28 February 2027. Percentages are calculated on unrounded figures and may not recompute exactly from the rounded amounts displayed. Totals may differ from the sum of components by immaterial rounding amounts. Where United States Dollar amounts are displayed, they are converted at a fixed rate of R18.50 to US$1.00 for presentation only.

Solar Smart Energy (Pty) Ltd · ConfidentialGlossaryPage 51
Appendix B

Supporting annexures

The documents that sit behind this plan, available on request under the confidentiality undertaking.

Register of supporting documents

RefAnnexureContentsStatus
A1Curricula vitae — directors and senior managementFull CVs for the seven individuals summarised in Section 24, with qualifications, professional registrations and verifiable employment historyAvailable
A2Certificate of incorporation and memorandum of incorporationCIPC registration, shareholding register and the proposed amended MOI giving effect to this transactionAvailable
A3Audited annual financial statementsThree prior financial years, together with the current-year management accounts to the most recent month endAvailable
A4Equipment supplier quotations and termsWritten quotations from three tier-one module manufacturers, two inverter manufacturers and one battery manufacturer, with pricing, allocation and payment termsAvailable
A5Signed customer contracts and order bookExecuted contracts and letters of intent comprising the opening pipeline, with values, expected commissioning dates and payment termsAvailable
A6Accreditations and certificationsElectrical contractor registration, PV GreenCard accreditation, installer certifications and the ISO 9001 implementation planAvailable
A7Insurance schedulesContract works, public liability, professional indemnity, goods in transit, marine cargo and directors' and officers' cover, with sums insuredAvailable
A8Lease agreementsCape Town warehouse lease and the Gauteng and KwaZulu-Natal heads of terms underlying the branch cost assumptions in Section 22Available
A9Trade finance facility letterFacility agreement, limit, pricing, security and covenant schedule underlying Section 39Available
A10Financial modelThe integrated model from which every figure in Sections 28 to 40 derives, in editable form with assumptions unlockedAvailable
A11Market research reportFull instrument, sample frame, response data and cross-tabulations underlying Sections 4 to 6Available
A12B-BBEE verification certificateCurrent certificate, scorecard breakdown and the improvement plan described in Section 25Available

Director profiles — summary

Chief Executive Officer

Eighteen years in electrical contracting and renewable energy, including nine years leading a commercial EPC business through the 2019–2024 load-shedding cycle. Registered Professional Engineer. Full CV at Annexure A1.

Chief Financial Officer

Chartered Accountant (SA) with eleven years in manufacturing and import-led businesses, including foreign exchange and trade finance management across three currencies. Full CV at Annexure A1.

Chief Operating Officer

Fourteen years in construction and installation operations, latterly responsible for a multi-branch field workforce of over two hundred. Full CV at Annexure A1.

Head of Engineering

Registered Professional Engineer with twelve years in photovoltaic system design, including structural assessment, yield modelling and grid-tie compliance across commercial and industrial installations. Full CV at Annexure A1.

Commercial Director

Sixteen years in business-to-business capital equipment sales, with a background in consultative selling to financial directors. Full CV at Annexure A1.

Non-executive appointments

Two independent non-executive directors are to be appointed following completion, one of whom will chair the audit and risk committee. The incoming investor is entitled to nominate one board seat, as described in Section 25.

Access to the data room

All annexures listed above are held in a secure data room. Access is released to a prospective investor on countersignature of the confidentiality undertaking accompanying this document. The financial model at Annexure A10 is provided in editable form specifically so that a prospective investor can vary the assumptions and satisfy themselves that the outputs in Sections 28 to 40 follow from them.

Solar Smart Energy (Pty) Ltd · ConfidentialAnnexuresPage 52
Appendix C

Contact and next steps

The process from expression of interest to closing.

Indicative transaction timetable

StageDurationResponsibility
Review of this business plan and initial questions1 – 2 weeksInvestor
Management presentation and site visit to Cape Town operations1 weekCompany
Non-binding expression of interest and outline terms1 weekInvestor
Data room opened; confirmatory due diligence — financial, legal, technical, tax4 – 6 weeksBoth
Negotiation of subscription and shareholders' agreements2 – 3 weeksBoth
Conditions precedent fulfilled; regulatory clearance if required2 – 4 weeksBoth
Closing and payment of subscription proceeds1 weekBoth
Total indicative period12 – 18 weeks

Available on request

A closing note from the directors

This document has been written to be read sceptically. Where an assumption is aggressive, it is identified as such. Where a risk is unresolved, it is stated rather than mitigated with language. Where a valuation method flatters the Company, its limitations are set out alongside it.

The directors have taken this approach because the business being described is not speculative. It sells a product with a four-year payback into a market that has already built nine gigawatts without any assistance from this Company or any other. The opportunity does not need to be oversold, and overselling it would only make the parts that genuinely require judgement harder to find.

Enquiries

Sipho Ndlovu
Chief Executive Officer
Solar Smart Energy (Pty) Ltd
Unit 14, Montague Park
Montague Gardens, Cape Town, 7441

Financial and transaction enquiries

Anneke du Toit CA(SA)
Chief Financial Officer
Solar Smart Energy (Pty) Ltd
Registration 2019/447281/07

This business plan was prepared with the assistance of Business Plan Hub, Cape Town. It is a specimen document prepared to demonstrate deliverable quality; the company, individuals, professional firms and financial information described in it are illustrative and do not represent any actual entity.

Engineers commissioning containerised inverter equipment at a campus site
Figure 30Commissioning of containerised inverter plant. The Company welcomes site visits to operating installations by prospective investors.
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