Tracking Compliance to Facility Covenant

See previous W5 version guide

PURPOSE

This document contains the detailed procedures on how to set up facility covenant and perform periodic checks for compliance.

WHY IS THIS IMPORTANT?

These steps provide a systematic way to reduce the effort and errors when tracking compliance to facility covenant.

PROCEDURE

Maintaining Covenants

1. To set up facility covenant, click on Set Up > Global > User Definable.

2. Look for Facility Covenant Type in the list of user definable. Click on the Edit button.

3. Click on Action and select New to add new facility covenant.

4. Key in the facility covenant you wish to create in the New Item field. In this example, we will create Consolidated Net Tangible Assets.

5. Click Save.

6. After the facility covenant is created, navigate to Set Up > Risk > Facility > Amend Facility. Click on Covenants button to maintain the covenant rules/ limit.

7. The following screen will be displayed.

8. Key in the facility covenant rules in the screen provided. In this example, we will create consolidated net tangible assets must be more than or equal to S$100 million. First, key in the With Effect From field to indicate the effective date. Select Min/Max as Min, SGD as the currency and 100 million under Value field for the respective covenant rule.

9. Click Save. This brings you back to the Amend Facility screen.

10. Click Cancel to return to Facility listing screen.  Tick the checkbox of the saved facility and click Action and Approve.

Tracking Actual Covenants

11. Next, to enter the actual financial covenants by company, click on Set Up > Static > Accounting Centre. Click on the Edit button of the accounting centre that you wish to maintain the actual financial covenants, then click on the Financial Covenants button.

12. The below screen will be displayed.

13. Click on Maintain button.

14. Key in the As At Date, Currency and the Actual Amount then click Save.

15. To check if the financial covenants complied with the facility covenant rule set up, user may print the following reports under Reporting. Note that report will indicate “N” if the rule is not complied.

Report 1640 – This report is grouped by facility covenant.

Report 1641. This report is grouped by Accounting Centre.

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