| 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, 2022 |
|
| |
|
|
|
|
|
|
Current |
|
|
Long-Term |
|
| Name |
|
|
|
Total |
|
|
Maturities |
|
|
Maturities |
|
| |
|
|
|
|
|
|
|
|
|
|
|
| D&O Insurance |
|
(1) |
|
$ |
34,344 |
|
|
$ |
34,344 |
|
|
$ |
- |
|
| Bank Overdraft Facility |
|
(2) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
| Term Finance Facility |
|
(3) |
|
|
190,425 |
|
|
|
190,425 |
|
|
|
- |
|
| Loan Payable Bank - Export Refinance |
|
(4) |
|
|
2,192,694 |
|
|
|
2,192,694 |
|
|
|
- |
|
| Loan Payable Bank - Running Finance |
|
(5) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
| Loan Payable Bank - Export Refinance II |
|
(6) |
|
|
1,666,447 |
|
|
|
1,666,447 |
|
|
|
- |
|
| Loan Payable Bank - Export Refinance III |
|
(7) |
|
|
3,069,772 |
|
|
|
3,069,772 |
|
|
|
- |
|
| Sale and Leaseback Financing |
|
(8) |
|
|
407,166 |
|
|
|
144,372 |
|
|
|
262,794 |
|
| Term Finance Facility |
|
(9) |
|
|
24,348 |
|
|
|
16,966 |
|
|
|
7,382 |
|
| Insurance Financing |
|
(10) |
|
|
79,234 |
|
|
|
79,234 |
|
|
|
- |
|
| |
|
|
|
|
7,664,430 |
|
|
|
7,394,254 |
|
|
|
270,176 |
|
| Subsidiary Finance Leases |
|
(11) |
|
|
54,998 |
|
|
|
32,718 |
|
|
|
22,280 |
|
| |
|
|
|
$ |
7,719,428 |
|
|
$ |
7,426,972 |
|
|
$ |
292,456 |
|
| |
|
|
|
As of June 30, 2022 |
|
| |
|
|
|
|
|
|
Current |
|
|
Long-Term |
|
| Name |
|
|
|
Total |
|
|
Maturities |
|
|
Maturities |
|
| |
|
|
|
|
|
|
|
|
|
|
|
| D&O Insurance |
|
(1) |
|
$ |
89,552 |
|
|
$ |
89,552 |
|
|
$ |
- |
|
| Bank Overdraft Facility |
|
(2) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
| Term Finance Facility |
|
(3) |
|
|
423,101 |
|
|
|
423,101 |
|
|
|
- |
|
| Loan Payable Bank - Export Refinance |
|
(4) |
|
|
2,434,749 |
|
|
|
2,434,749 |
|
|
|
- |
|
| Loan Payable Bank - Running Finance |
|
(5) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
| Loan Payable Bank - Export Refinance II |
|
(6) |
|
|
1,850,409 |
|
|
|
1,850,409 |
|
|
|
- |
|
| Loan Payable Bank - Export Refinance III |
|
(7) |
|
|
3,408,648 |
|
|
|
3,408,648 |
|
|
|
- |
|
| Sale and Leaseback Financing |
|
(8) |
|
|
619,108 |
|
|
|
189,226 |
|
|
|
429,882 |
|
| Term Finance Facility |
|
(9) |
|
|
31,204 |
|
|
|
18,339 |
|
|
|
12,865 |
|
| Insurance Financing |
|
(10) |
|
|
118,026 |
|
|
|
118,026 |
|
|
|
- |
|
| |
|
|
|
|
8,974,797 |
|
|
|
8,532,050 |
|
|
|
442,747 |
|
| Subsidiary Finance Leases |
|
(11) |
|
|
68,571 |
|
|
|
35,095 |
|
|
|
33,476 |
|
| |
|
|
|
$ |
9,043,368 |
|
|
$ |
8,567,145 |
|
|
$ |
476,223 |
|
| (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, 2022 and June 30, 2022. |
| (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
$333,333. The annual interest rate was 5.5% as of September 30, 2022. The total outstanding balance as of September 30, 2022 and June
30, 2022 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, 2022,
NTE was in compliance with this covenant. |
NETSOL
TECHNOLOGIES, INC.
Notes
to Condensed Consolidated Financial Statements
September
30, 2022
(Unaudited)
| (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. 43,422,699 or
$190,425, at September 30, 2022, which is shown as current. The availed facility amount is Rs. 86,887,974 or $423,101, at June 30, 2022,
which is shown as current. The interest rate for the loan was 3% at September 30, 2022 and June 30, 2022. |
| (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 $2,192,694 at September 30, 2022 and Rs. 500,000,000
or $2,434,749 at June 30, 2022. The interest rate for the loan was 10% and 3% at September 30, 2022 and June 30, 2022, respectively. |
| (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. 53,000,000 or $235,057, at September 30, 2022. The balance outstanding at September 30, 2022 and June 30, 2022 was Rs.
Nil. The interest rate for the loan was 17.8% and 14.0% at September 30, 2022 and June 30, 2022, 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, 2022, 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 $1,666,447 and Rs. 380,000,000 or $1,850,409 at
September 30, 2022 and June 30, 2022, respectively. The interest rate for the loan was 10% and 3% at September 30, 2022 and June 30,
2022, respectively. |
|
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, 2022, NetSol PK was
in compliance with these covenants. |
| (7) |
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 $3,946,849 and Rs. 900,000,000 or $4,382,548,
at September 30, 2022 and June 30, 2022, respectively. NetSol PK used Rs. 700,000,000 or $3,069,772 and Rs. 700,000,000 or $3,408,648,
at September 30, 2022 and June 30, 2022, respectively. The interest rate for the loan was 10% and 3% at September 30, 2022 and June 30,
2022, respectively. |
| (8) |
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 September 30, 2022, NetSol PK used Rs. 92,846,015 or $407,166 of which $262,794 was shown as long term and $144,372 as current.
As of June 30, 2022, NetSol PK used Rs. 127,140,038 or $619,108 of which $429,882 was shown as long term and $189,226 as current. The
interest rate for the loan was 9.0% to 16.0% at September 30, 2022, and June 30, 2022. |
| (9) |
In March 2019,
the Company’s subsidiary, VLS, entered into a loan agreement. The loan amount was £69,549, or $77,277, for a period of 5
years with monthly payments of £1,349, or $1,499. As of September 30, 2022, the subsidiary has used this facility up to $24,348,
of which $7,382 was shown as long-term and $16,966 as current. As of June 30, 2022, the subsidiary has used this facility up to $31,204,
of which $12,865 was shown as long-term and $18,339 as current. The interest rate was 6.14% at September 30, 2022 and June 30, 2022. |
| (10) |
The Company’s
subsidiary, VLS, finances Directors’ and Officers’ (“D&O”) liability insurance, and the $79,234 and $96,781
was recorded in current maturities, at September 30, 2022 and June 30, 2022, respectively. The interest rate on this financing ranged
from 9.7% to 12.7% as of September 30, 2022 and June 30, 2022. |
| (11) |
The Company leases
various fixed assets under finance lease arrangements expiring in various years through 2025. 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, 2022 and 2021. |
|