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COVID-19 is causing disruption for many companies in different sectors. For Orchard Finance, the health of our employees and our clients has key priority. We are continuously working with different clients on how to optimally continue to provide support in this situation, protecting business continuity for our clients and for Orchard Finance. Orchard systems are fully functioning in cloud environments that we have in place to facilitate remote working for our employees.

For most companies the situation is highly impacting treasury and financing related matters. Treasury departments are thinly staffed and therefore vulnerable but remain crucial in these challenging times. Securing access to financing, to liquidity and maintaining active treasury operations in place are key concerns. Thanks to technology, working from home to coordinate with financial counterparties and local business units is well facilitated.

To prepare however for growing uncertainties, we have listed below critical areas for a corporate treasury and their main points of attention.

Treasury Organisation

- Ensure remote access to required systems and secure available back-up for critical processes, including treasury and operational payments

- Ensure resilience against cyber and fraud attacks

Financing agreements

- Headroom: overview and control of all credit and guarantee facilities in the group. Determine if sufficient committed headroom is available to cope with disrupted sales

- Scenarios: (quarterly) forecast model to run scenarios on financial covenants and headroom

Cash & Liquidity Management

- Secure liquidity: identify cash positions and assess if/how trapped cash can be freed up in the short term

- Visibility of actual cash positions is crucial to be able to monitor cash and liquidity balances

- Working capital needs may increase due to supply chain disruptions

- Insight into expected cash balances (cash flow forecasting). Improved cash flow forecasts will help to timely identify critical circumstances

Risk Management

- Credit management: monitor AR positions

- Contingency planning: prepare plans and back up procedures

- Financial Crime: ensure the use of controls in (new) processes to mitigate fraud risk

- The impact of increased FX volatility on the bottom line profit

We are committed to support our clients in navigating the emerging challenges and to think along with you. Please feel free to contact us should you have any questions or need support.

In the meantime, on a personal level, we wish you and your families health and wellbeing.

Best regards,

Orchard Finance team