| SCHEDULE OF COMPONENTS OF NOTES PAYABLE AND CAPITAL LEASES |
Notes
payable and finance leases consisted of the following:
SCHEDULE OF COMPONENTS OF NOTES PAYABLE AND CAPITAL LEASES
| |
|
|
|
As of September 30, 2021 |
|
| |
|
|
|
|
|
|
Current |
|
|
Long-Term |
|
| Name |
|
|
|
Total |
|
|
Maturities |
|
|
Maturities |
|
| |
|
|
|
|
|
|
|
|
|
|
|
| D&O Insurance |
|
(1) |
|
$ |
26,452 |
|
|
$ |
26,452 |
|
|
$ |
- |
|
| Bank Overdraft Facility |
|
(2) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
| Term Finance Facility |
|
(3) |
|
|
1,270,755 |
|
|
|
990,623 |
|
|
|
280,132 |
|
| Loan Payable Bank - Export Refinance |
|
(4) |
|
|
2,924,661 |
|
|
|
2,924,661 |
|
|
|
- |
|
| Loan Payable Bank - Running Finance |
|
(5) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
| Loan Payable Bank - Export Refinance II |
|
(6) |
|
|
2,222,742 |
|
|
|
2,222,742 |
|
|
|
- |
|
| Loan Payable Bank - Running Finance II |
|
(7) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
| Loan Payable Bank - Export Refinance III |
|
(8) |
|
|
4,094,525 |
|
|
|
4,094,525 |
|
|
|
- |
|
| Sale and Leaseback Financing |
|
(9) |
|
|
73,117 |
|
|
|
26,063 |
|
|
|
47,054 |
|
| Term Finance Facility |
|
(10) |
|
|
49,021 |
|
|
|
19,408 |
|
|
|
29,613 |
|
| Insurance Financing |
|
(11) |
|
|
45,198 |
|
|
|
45,198 |
|
|
|
- |
|
| |
|
|
|
|
10,706,471 |
|
|
|
10,349,672 |
|
|
|
356,799 |
|
| Subsidiary Finance Leases |
|
(12) |
|
|
113,515 |
|
|
|
73,543 |
|
|
|
39,972 |
|
| |
|
|
|
$ |
10,819,986 |
|
|
$ |
10,423,215 |
|
|
$ |
396,771 |
|
| |
|
|
|
As of June 30, 2021 |
|
| |
|
|
|
|
|
|
Current |
|
|
Long-Term |
|
| Name |
|
|
|
Total |
|
|
Maturities |
|
|
Maturities |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| D&O Insurance |
|
(1) |
|
$ |
73,143 |
|
|
$ |
73,143 |
|
|
$ |
- |
|
| Bank Overdraft Facility |
|
(2) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
| Term Finance Facility |
|
(3) |
|
|
1,648,818 |
|
|
|
1,090,259 |
|
|
|
558,559 |
|
| Loan Payable Bank - Export Refinance |
|
(4) |
|
|
3,162,555 |
|
|
|
3,162,555 |
|
|
|
- |
|
| Loan Payable Bank - Running Finance |
|
(5) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
| Loan Payable Bank - Export Refinance II |
|
(6) |
|
|
2,403,542 |
|
|
|
2,403,542 |
|
|
|
- |
|
| Loan Payable Bank - Running Finance II |
|
(7) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
| Loan Payable Bank - Export Refinance III |
|
(8) |
|
|
4,427,578 |
|
|
|
4,427,578 |
|
|
|
- |
|
| Sale and Leaseback Financing |
|
(9) |
|
|
85,313 |
|
|
|
28,183 |
|
|
|
57,130 |
|
| Term Finance Facility |
|
(10) |
|
|
55,182 |
|
|
|
19,644 |
|
|
|
35,538 |
|
| Insurance Financing |
|
(11) |
|
|
41,774 |
|
|
|
41,774 |
|
|
|
- |
|
| |
|
|
|
|
11,897,905 |
|
|
|
11,246,678 |
|
|
|
651,227 |
|
| Subsidiary Finance Leases |
|
(12) |
|
|
168,107 |
|
|
|
119,493 |
|
|
|
48,614 |
|
| |
|
|
|
$ |
12,066,012 |
|
|
$ |
11,366,171 |
|
|
$ |
699,841 |
|
| (1) |
The Company finances Directors’ and Officers’ (“D&O”)
liability insurance and Errors and Omissions (“E&O”) liability insurance, for which the D&O and E&O balances
are renewed on an annual basis and, as such, are recorded in current maturities. The interest rate on these financings were ranging from
5.0% to 7.0% as of September 30, 2021 and June 30, 2021. |
| (2) |
The
Company’s subsidiary, NTE, has an overdraft facility with HSBC Bank plc whereby the bank would cover any overdrafts up to £300,000,
or approximately $405,405.
The annual interest rate was 5.12%
as of September 30, 2021.
The total outstanding balance as of September 30, 2021 was £Nil.
|
NETSOL
TECHNOLOGIES, INC.
Notes
to Condensed Consolidated Financial Statements
September
30, 2021
(Unaudited)
|
This overdraft
facility requires that the aggregate amount of invoiced trade debtors (net of provisions for bad and doubtful debts and excluding
intra-group debtors) of NTE, not exceeding 90 days old, will not be less than an amount equal to 200% of the facility. As of
September 30, 2021, NTE was in compliance with this covenant.
|
| |
|
| (2) |
The Company’s subsidiary, NTE, has an overdraft facility with HSBC Bank plc whereby the bank
would cover any overdrafts up to £300,000, or approximately $405,405. The annual interest rate was 5.12% as of September 30, 2021. The total outstanding balance as of September 30, 2021 was £Nil. This overdraft facility requires that the aggregate amount of invoiced trade debtors (net of provisions for bad and doubtful debts and excluding intra-group debtors) of NTE, not exceeding 90 days old, will not be less than an amount equal to 200% of the facility. As of September 30, 2021, NTE was in compliance with this covenant. |
| |
|
| (3) |
The Company’s subsidiary, NetSol PK, has a term finance
facility from Askari Bank Limited, approved by the Government of Pakistan to protect the employment situation during the COVID-19 pandemic.
This is a term loan payable in three years. The availed facility amount was Rs. 217,248,351 or $1,270,755, at September 30, 2021, of
which $990,623 is shown as current and the remaining $280,132 is shown as long term. The availed facility amount was Rs. 260,678,818
or $1,648,818, at June 30, 2021, of which $1,090,259 is shown as current and the remaining $558,559 is shown as long term. The interest
rate for the loan was 3% at September 30, 2021 and June 30, 2021. |
| |
|
| (4) |
The Company’s subsidiary, NetSol PK, has an export refinance
facility with Askari Bank Limited, secured by NetSol PK’s assets. This is a revolving loan that matures every nine months. The
total facility amount is Rs. 500,000,000 or $2,924,661 at September 30, 2021 and Rs. 500,000,000 or $3,162,555 at June 30, 2021. The
interest rate for the loan was 3% at September 30, 2021 and June 30, 2021. |
| |
|
| (5) |
The Company’s subsidiary, NetSol PK, has a running finance
facility with Askari Bank Limited, secured by NetSol PK’s assets. The total facility amount is Rs. 75,000,000 or $438,699, at September
30, 2021. The balance outstanding at September 30, 2021 and June 30, 2021 was Rs. Nil. The interest rate for the loan was 9.8% and 9.5%
at September 30, 2021 and June 30, 2021, respectively. |
| |
|
|
This facility
requires NetSol PK to maintain a long-term debt equity ratio of 60:40 and the current ratio of 1:1. As of September 30, 2021, NetSol
PK was in compliance with this covenant. |
| |
|
| (5) |
The
Company’s subsidiary, NetSol PK, has a running finance facility with Askari Bank Limited, secured by NetSol PK’s assets.
The total facility amount is Rs. 75,000,000 or $438,699, at September 30, 2021. The balance outstanding at September 30, 2021 and June 30, 2021 was Rs. Nil. The interest rate for the loan was 9.8% and 9.5% at September 30, 2021 and June 30, 2021, respectively. This facility requires NetSol PK to maintain a long-term debt equity ratio of 60:40 and the current ratio of 1:1. As of September 30, 2021, NetSol PK was in compliance with this covenant.
|
| |
|
| (6) |
The Company’s subsidiary, NetSol PK, has an export refinance
facility with Samba Bank Limited, secured by NetSol PK’s assets. This is a revolving loan that matures every nine months. The total
facility amount is Rs. 380,000,000 or $2,222,742 and Rs. 380,000,000 or $2,403,542 at September 30, 2021 and June 30, 2021, respectively.
The interest rate for the loan was 3% at September 30, 2021 and June 30, 2021. |
| |
|
| (7) |
The Company’s
subsidiary, NetSol PK, has a running finance facility with Samba Bank Limited, secured by NetSol PK’s assets. The total
facility amount is Rs. 120,000,000
or $701,919
and Rs. 120,000,000
or $759,013,
at September 30, 2021 and June 30, 2021, respectively. The interest rate for the loan was 9.3%
and 9.0%
at September 30, 2021 and June 30, 2021, respectively. The balance outstanding at September 30, 2021 and June 30, 2021 was Rs. Nil. |
| |
|
|
During the
tenure of the loan, the facilities from Samba Bank Limited require NetSol PK to maintain at a minimum a current ratio of 1:1, an
interest coverage ratio of 4 times, a leverage ratio of 2 times, and a debt service coverage ratio of 4 times. As of September 30,
2021, NetSol PK was in compliance with these covenants. |
| (7) |
The Company’s
subsidiary, NetSol PK, has a running finance facility with Samba Bank Limited, secured by NetSol PK’s assets. The total
facility amount is Rs. 120,000,000
or $701,919
and Rs. 120,000,000
or $759,013,
at September 30, 2021 and June 30, 2021, respectively. The interest rate for the loan was 9.3%
and 9.0%
at September 30, 2021 and June 30, 2021, respectively. The balance outstanding at September 30, 2021 and June 30, 2021 was Rs. Nil. During the
tenure of the loan, the facilities from Samba Bank Limited require NetSol PK to maintain at a minimum a current ratio of 1:1, an
interest coverage ratio of 4 times, a leverage ratio of 2 times, and a debt service coverage ratio of 4 times. As of September 30,
2021, NetSol PK was in compliance with these covenants. |
| |
|
| (8) |
The Company’s subsidiary, NetSol PK, has an export refinance
facility with Habib Metro Bank Limited, secured by NetSol PK’s assets. This is a revolving loan that matures every nine months.
Total facility amount is Rs. 900,000,000 or $5,264,389 and Rs. 900,000,000 or $5,692,600, at September 30, 2021 and June 30, 2021, respectively.
NetSol PK used Rs. 700,000,000 or $4,094,525 and Rs. 700,000,000 or $4,427,578, at September 30, 2021 and June 30, 2021, respectively.
The interest rate for the loan was 3% at September 30, 2021 and June 30, 2021. |
| |
|
| (9) |
The Company’s subsidiary, NetSol PK, availed sale and
leaseback financing from First Habib Modaraba secured by the transfer of the vehicles’ title. As of June 30, 2021, NetSol PK used
Rs. 12,499,891 or $73,117 of which $47,054 was shown as long term and $26,063 as current. As of June 30, 2021, NetSol PK used Rs. 13,487,949
or $85,313 of which $57,130 was shown as long term and $28,183 as current. The interest rate for the loan was 9.0% at September 30, 2021,
and June 30, 2021. |
| |
|
| (10) |
In March 2020, the Company’s subsidiary, VLS, entered
into a loan agreement. The loan amount was £69,549, or $93,985, for a period of 5 years with monthly payments of £1,349,
or $1,823. As of September 30, 2021, the subsidiary has used this facility up to $49,021, of which $29,613 was shown as long-term and
$19,408 as current. As of June 30, 2021, the subsidiary has used this facility up to $55,182, of which $35,538 was shown as long-term
and $19,644 as current. The interest rate was 6.14% at September 30, 2021 and June 30, 2021. |
NETSOL
TECHNOLOGIES, INC.
Notes
to Condensed Consolidated Financial Statements
September
30, 2021
(Unaudited)
| (11) |
The Company’s subsidiary, VLS, finances Directors’
and Officers’ (“D&O”) liability insurance, and the $45,198 and $41,774 was recorded in current maturities, at September
30, 2021 and June 30, 2021, respectively. The interest rate on this financing ranged from 9.7% to 12.7% as of September 30, 2021 and
was 9.7% as of June 30, 2021. |
| |
|
| (12) |
The Company leases various fixed assets under finance lease
arrangements expiring in various years through 2024. The assets and liabilities under finance leases are recorded at the lower of the
present value of the minimum lease payments or the fair value of the asset. The assets are secured by the assets themselves. Depreciation
of assets under finance leases is included in depreciation expense for the three months ended September 30, 2021 and 2020. |
|