Summary Rating Report Enterprise Holdings by liaoqinmei


									Ratings Agency acknowledged by German Federal
                 Financial Supervisory Authority

Creditreform Rating Summary
Information tableau

                                                                                        Emission rating:
Issuer:               Enterprise Holdings Limited
Emission:                    7,00% holder-shared obligation                                      A-
                             NSIN: A1G9AQ
                                                                                   Created:           30.08.2012
                             ISIN: DE000A1G9AQ4
Creditreform ID:             2000000234                                           Valid up to:        29.08.2013

Issuer:                      Enterprise Holdings Limited
                             Suite 3, Second Floor, ICOM House, 1/5 Irish Town
                             Gibraltar, United Kingdom

Branch:                      Holding company

This Creditreform rating summary is based on the report on the rating of the emission/holder shared
obligation with NSIN: A1G9AQ / ISIN: DE000A1G9AQ4 of issuer Enterprise Holdings Limited. It con-
tains comprehensive information about the emission rating. The emission rating report is prevailing if
there are discrepancies. The rating is subject to no restrictions.


The prospectus approval by German Federal Financial Supervisory Authority according to § 13 paragraph 1
of WpPG for the holder-shared obligation analyzed here was on 12.09.2012. The subscription of the bonds
is intended on 17.09.2012.

The loan analyzed here is matter of the holder-shared obligation of the issuer Enterprise Holdings Limited
(formerly ADYE Holdings Limited). The issue has in perspective a total volume of up to EUR 35.000.000,00
and a fixed coupon of 7.0% p.a. Taking account of emission expenses in the amount of 6% of the issue
volume, or approximately EUR 2.1 million by full placement of loan, the issuer prospects by complete
placement of the emission a net inflow in the amount of EUR 32.900.000,00 from the holder-shared obliga-
tion analyzed here. The proceeds of the loan will be used primarily to finance the growth. Revenue growth
of approximately GBP 250 million is the aim within the next 12 months.

No separate security is provided for the holder-shared obligation of Enterprise Holdings Limited. However
the issuer offers investors a premature termination right up to September 26, 2015. In addition it is commit-
ted itself to covenants, which breaking provides an extraordinary termination right for investors. It includes
the obligation to dispose of no shares to the existing companies, to grant no land charges, retentions of
title, pledges or any other physical securities with regard to the current and future assets, as well as to pay
50% of the estimated net profit of the issuer on a special bank account each month, until the total nominal
amount of the loan and the interest to be paid are achieved, and to limit the distribution so, that the pay-
ments for these obligations may not be reduced.

The issuer plans to include the loan in the Entry Standard in the Open Market at the Frankfurt Stock Ex-
change at the end of the subscription period. Due to the use of resources (see use of emission proceeds),
we see no risk in the not full placement of the loan as this would reduce only the target growth.

The company of the issuer is Enterprise Holdings Limited (formerly AYDE limited) and is registered in the
Register of Gibraltar under number 98427 since March 30, 2007.

Gibraltar is a full member of the EU since accession of Britain to the EU and thus subject to the regulatory
provisions for insurance companies of the EU. Gibraltar has become in recent years a Europe-wide signifi-
cant place for insurance companies, which competent controlling authority is the Gibraltar Financial Ser-
vices Commission (FSC).

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The issuer is the holding company of a group of companies consisting of an insurance company with bou-
tique character, which mainly offers white label insurance products for retailers and other insurance provid-
ers, as well as from companies providing the services with regard to the technical assessment, control and

The operative company, which has regulatory approval to offer insurance services in different segments in
different EU countries, is Enterprise Insurance Company Plc. It specializes in lucrative niche products in
European markets (e.g. car insurance for taxi drivers or driving instructors), where demand and little compe-
tition exist. The company sells insurance products but not by itself and does not take over the claims settle-
ment. It focuses on the calculation, pricing, as well as compliance with the regulatory provisions, such as the
deposit of reserves for the calculated damages according to the regulatory investment restrictions, for their
respective partners. The insurance risk is covered by now up to 45% over reinsurers with first-class credit.

Thereby, the company benefits on the one hand from the long experience in medium-sized strong man-
agement, the designated market knowledge of the distributors as well as the extensive network of manage-
ment from previous activities in other insurance companies.

On the other hand the experience gained from the rapid growth during the last years, when premiums al-
most doubled each year, leads to an increasingly secure calculation in terms of expected loss ratios, as can
be seen from the development of the quota of provisions for damage in comparison to the damage actually
occurred. Thus it is possible for the company to create a safe calculation from the point of view of risk of
loss rates also by insufficient statistical material. This is obviously unique selling point and competitive ad-
vantage towards major market participants, as well as a market entry barrier for similar, smaller companies
on the basis of the regulatory requirements.

In 2011 the company performed in the course of implemented and continued growth a comprehensive eval-
uation of the risk situation and processes of the company at the hands of consultants respected in this field
in Gibraltar and the United Kingdom, to ensure the continued growth and at the same time to meet the regu-
lations of the Solvency II Act which will be valid next year. The results presented or initiated changes imply
risk policy adequate to the business model and adequate risk management.

Also it becomes apparent in the context of growth that due to the short duration of insurance contracts
(maximum 1 year) and the decreasing importance of individual contracts in the course of rapid growth the
distribution of the risk of a total growing portfolio leads to a significantly reduced effect of not calculated loss
of individual contracts. In addition, the company through a tight-knit and timely control of the loss process of
the individual contracts aims to a continuous improvement of loss management. Thus shortened response
times arise, resulting in reduction of unplanned loss processes.

The balance sheet is created therefore on the basis of the business model through financial investments,
the collected bonuses, the current boundaries and the loss reserves as well as equity and the respective
shares of the reinsurer. The business model requires the regulatory conditional deposit of 16% of the pre-
mium as equity in the context of prudential investment restrictions and on the other hand does not require
investments in equipment or working capital in the course of further growth, which does not lead to further
foreign debt.

In order to use the existing market-based opportunities for further growth through the profit retention in-
creasingly, the issuer aims to ensure the depositing of the equity capital in the insurance company the issu-
ance of the described holder-shared obligation through the holding company. Due to possible additional
6,25-fold of larger premium volume, we look at a relatively safe operation of interest, as well as the return of
the loan as it was given even with falling returns.

These sales shall be generated through conclusion of insurance contracts (underwriting) for general and
special motor vehicle insurance and motor vehicle insurance for taxis in the UK, for warranty insurance in
Europe, for the insurance of domestic animals in Austria, of rent loss insurance in Norway, for special motor
vehicle insurance in Europe, other insurance offerings for professional liability insurance in the UK, for spe-
cial motor vehicle insurance in Greece and in addition in the U.A.E. as a platform for the processing of in-
surance companies in the Middle East.

The use of the funds is not subject to external control or a competent trustee. According to the bond terms
50% of the estimated monthly profit should be deposited as dividend payout each month on a separate ac-
count for the loan subscriber until the total amount on this account is equal to the principal amount of the
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loan and the due interest. In addition, the state of the account will be published regularly on the home page
of the issuer. We estimate this form of security as limited, as neither an independent monitoring body, nor a
scenario in the case of «nonprofit phase» exists. The planned release represents only a special form of
transparency towards the subscriber.

The funds from the proceeds of the loan should be designed according to the investment restrictions of the
regulatory framework conditions for insurance companies, so that the insurer may at any time perform its
obligations. Although there is an increased risk regarding the investment of free resources, neither concrete
investment, nor a possible monitoring body in the prospectus is called and thus there is no direct regulation
of the use of funds, it is to assume in the context of the use of funds by an application of the regulatory re-
quirements for insurance companies.

Due to the above-average actuarial quota on loss reserves, already achieved in the past financial year, to
actually occurred loss and the presented process improvements for ensuring the provisions within the
framework of the Solvency II Act, we consider the risk of severe investment losses as low.

In addition, the above-average quota of other expenses, reached already in the past financial year, should
continue to improve, compared to the premium volume of targeted growth, which increases the security of
applied reserves. The reason for this is in the business model of the company, which allows the growth of
insurance without own retail with the existing structures without a significant expansion of the number of
employees or any step-fixed costs.

A partial placing of the loan shall not have negative effects, in our opinion, because the possible growth
would be limited, but not the business itself.

On the basis of the fact that in the annual financial statements of the issuer on 31.03.2012 there is a short-
ened fiscal year of 9 months, it can be established that premium volume almost doubled every year in the
past three years and has grown to £ 75,20 mln by 31.03.2012. The provisional figures on 30.06.2012 desig-
nated a premium volume of £ 28,01 mln for the first quarter, so that a continuation of growth based on cur-
rent numbers can be assumed.

This goes hand in hand with an expansion of the balance sheet total to £ 93,66 mln by 31.03.2012 corre-
sponding to the business model. The issuer generated consistently high cash flows of £ 7.90 mln due to
operations in the last three years.

The rising reinsurance rate nearly 45%, the constantly declining rate of other expenses compared to the
premium volume of 21.3% on 31.03.2012 as well as the above-average rate of provisions for loss in com-
parison to the loss actually occurred over 140% offset, in our view, the below-average equity rate of the
Group of 12,56% on 31.03.2012 due to the growth.

On the basis of the submitted plans, as well as the present requests to new insurance contracts in different
sectors and different regions, which are listed in the prospectus, we assume that for successful placement
of the designated shared obligation and the associated depositing of regulatory required equity the envis-
aged growth in the near future is likely and leads to the necessary cash flow, which is necessary to the op-
eration of the interest of the loan and its return. It can be assumed that the majority of the loan proceeds,
according to the investment restrictions, will be applied.

The operative risks of the issuer are correctly described in the prospectus, in our opinion. Due to the regula-
tory requirements, we consider them to be manageable. Especially the risks from individual insurance con-
tracts due to the runtime and the decreasing size in relation to the total premium volume are reduced fur-

We consider the risk of a person after the talks with the medium-sized strong management as manageable.
The currency risk is limited both for the issuer and the investor, because on the one hand premium income
and claim settlements are made in the same currency and thus the currency risk on the system of reserves,
as well as the other costs remains limited. For the investor, on the other hand, it is important that the issuer
assumes an investment of the loan funds exclusively in euro.

Furthermore, the risk of regulatory changes remains during the duration of the loan, which the issuer al-
ready tried to meet through a close contact to the regulators in advance of upcoming changes.

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The Approval of the German Federal Financial Supervisory Authority of the present Proprietor’s Loan No-
tes took place on 12.09.2012. The subscription of the loan notes is intended for release on 17.09.2012.

The earnings from the loan emissions will be used to increase the proprietary capital of Enterprise Insur-
ance Company Plc in accordance with the regulatory requirements for insurance companies for prospective
growth projects. What particular projects are going to be implemented remains in the decision competence
of the Issuer.

Based on the Covenants it can be assumed that a depositing in the framework of the legal supervisory
capital restrictions is going to take place. As, in addition to that, the Covenants will not presume any sales
of the shares to the group members as well as any material security, it can be assumed that the loan mo-
ney will be maintained as assets, even if there is no security concept. Moreover there will be beside the
intermediary monthly depositing of 50% of the assumed net profit to a separate account and the connected
distribution limitations obligations of the Issuer to provide extraordinary termination rights for the subscri-
bers. The possibility for the subscribers to prematurely terminate the contract beginning from 26.09.2015
was also considered in the present Ratings.

The assets, financial and earnings planning is positive and show the ability to repay the planned loan from
the operative cashflow.

The results of the analysis of the emission show that the creditor claims under recognition of the risk volu-
me can be satisfied in accordance with the present knowledge. In general we assess the emission NSIN:
A1G9AQ / ISIN: DE000A1G9AQ4 with the rating A-. The emission has thereby a good quality.

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 Creditreform Rating AG                                 Enterprise Holdings Ltd
 Hellersbergstraße 11                                   Gibraltar, United Kingdom
 D - 41460 Neuss                                        Suite 3, Second Floor, ICOM House, 1/5 Irish Town

 Telefon    +49 (0) 2131 / 109-626                      Telefon    +350 200 50 - 150
 Telefax    +49 (0) 2131 / 109-627                      Telefax    +350 200 50 - 191
 E-Mail                 E-Mail:
 Internet                  Internet

 Board of Directors:                                    Executive Director:
 Dr. Michael Munsch                                     Andrew John Flowers
 President of the Supervision Council:
 Prof. Dr. Helmut Rödl                                  Gibraltar Company Register
 HRB 10522, District Court Neuss                        No. 98427

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