| 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 December 31, 2021 |
|
| |
|
|
|
|
Current |
|
|
Long-Term |
|
| Name |
|
Total |
|
|
Maturities |
|
|
Maturities |
|
| |
|
|
|
|
|
|
|
|
|
| D&O
Insurance |
(1) |
$ |
146,959 |
|
|
$ |
146,959 |
|
|
$ |
- |
|
| Bank
Overdraft Facility |
(2) |
|
- |
|
|
|
- |
|
|
|
- |
|
| Term
Finance Facility |
(3) |
|
979,250 |
|
|
|
979,250 |
|
|
|
- |
|
| Loan
Payable Bank - Export Refinance |
(4) |
|
2,817,219 |
|
|
|
2,817,219 |
|
|
|
- |
|
| Loan
Payable Bank - Running Finance |
(5) |
|
- |
|
|
|
- |
|
|
|
- |
|
| Loan
Payable Bank - Export Refinance II |
(6) |
|
2,141,086 |
|
|
|
2,141,086 |
|
|
|
- |
|
| Loan
Payable Bank - Running Finance II |
(7) |
|
- |
|
|
|
- |
|
|
|
- |
|
| Loan
Payable Bank - Export Refinance III |
(8) |
|
3,944,107 |
|
|
|
3,944,107 |
|
|
|
- |
|
| Sale
and Leaseback Financing |
(9) |
|
64,193 |
|
|
|
26,442 |
|
|
|
37,751 |
|
| Term
Finance Facility |
(10) |
|
44,280 |
|
|
|
19,708 |
|
|
|
24,572 |
|
| Insurance
Financing |
(11) |
|
20,264 |
|
|
|
20,264 |
|
|
|
- |
|
| |
|
|
10,157,358 |
|
|
|
10,095,035 |
|
|
|
62,323 |
|
| Subsidiary
Finance Leases |
(12) |
|
110,912 |
|
|
|
52,958 |
|
|
|
57,954 |
|
| |
|
$ |
10,268,270 |
|
|
$ |
10,147,993 |
|
|
$ |
120,277 |
|
| |
|
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 December 31, 2021 and June 30, 2021. |
NETSOL
TECHNOLOGIES, INC.
Notes
to Condensed Consolidated Financial Statements
December
31, 2021
(Unaudited)
| (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 December 31, 2021. The total outstanding balance as of December 31, 2021 and June
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 December 31, 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 December 31, 2021. The total outstanding balance as of December 31, 2021 and June
30, 2021 was £Nil. Thisoverdraft 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 December 31, 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. 173,797,255 or
$979,250, at December 31, 2021, which is shown as current. 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 December 31, 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 $2,817,219 at December 31, 2021 and Rs. 500,000,000
or $3,162,555 at June 30, 2021. The interest rate for the loan was 3% at December 31, 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 $422,583, at December 31, 2021. The balance outstanding at December 31, 2021 and June 30, 2021 was Rs. Nil.
The interest rate for the loan was 12.5% and 9.5% at December 31, 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 December 31, 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 $422,583, at December 31, 2021. The balance outstanding at December 31, 2021 and June
30, 2021 was Rs. Nil. The interest rate for the loan was 12.5% and 9.5% at December 31, 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 December 31,
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 $2,141,086 and Rs. 380,000,000 or $2,403,542 at
December 31, 2021 and June 30, 2021, respectively. The interest rate for the loan was 3% at December 31, 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 $676,133 and Rs. 120,000,000 or $759,013, at December 31, 2021 and June 30, 2021, respectively. The interest
rate for the loan was 12.0% and 9.0% at December 31, 2021 and June 30, 2021, respectively. The balance outstanding at December 31, 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 December 31, 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. The total facility amount is Rs. 900,000,000
or $5,070,994
and Rs. 900,000,000
or $5,692,600,
at December 31, 2021 and June 30, 2021, respectively. NetSol PK used Rs. 700,000,000
or $3,944,107
and Rs. 700,000,000
or $4,427,578,
at December 31, 2021 and June 30, 2021, respectively. The interest rate for the loan was 3%
at December 31, 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 December 31 2021, NetSol PK used Rs. 11,392,924 or $64,193 of which $37,751 was shown as long term and $26,442 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 December 31, 2021, and June 30, 2021. |
NETSOL
TECHNOLOGIES, INC.
Notes
to Condensed Consolidated Financial Statements
December
31, 2021
(Unaudited)
| (10) |
In March 2019,
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 December 31, 2021, the subsidiary has used this facility up to $44,280,
of which $24,572 was shown as long-term and $19,708 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 December 31, 2021 and June 30, 2021. |
| (11) |
The Company’s
subsidiary, VLS, finances Directors’ and Officers’ (“D&O”) liability insurance, and the $20,264 and $41,774
was recorded in current maturities, at December 31, 2021 and June 30, 2021, respectively. The interest rate on this financing ranged
from 9.7% to 12.7% as of December 31, 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
December 31, 2021 and 2020. |
|