| 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, 2023 |
|
| Name |
|
|
|
Total |
|
|
Current
Maturities |
|
|
Long-Term
Maturities |
|
| |
|
|
|
|
|
|
|
|
|
|
|
| D&O Insurance |
|
(1) |
|
$ |
14,495 |
|
|
$ |
14,495 |
|
|
$ |
- |
|
| Bank Overdraft Facility |
|
(2) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
| Loan Payable Bank - Export Refinance |
|
(3) |
|
|
1,737,619 |
|
|
|
1,737,619 |
|
|
|
- |
|
| Loan Payable Bank - Running Finance |
|
(4) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
| Loan Payable Bank - Export Refinance II |
|
(5) |
|
|
1,320,591 |
|
|
|
1,320,591 |
|
|
|
- |
|
| Loan Payable Bank - Export Refinance III |
|
(6) |
|
|
2,432,667 |
|
|
|
2,432,667 |
|
|
|
- |
|
| Sale and Leaseback Financing |
|
(7) |
|
|
286,142 |
|
|
|
149,167 |
|
|
|
136,975 |
|
| Term Finance Facility |
|
(8) |
|
|
8,105 |
|
|
|
8,105 |
|
|
|
- |
|
| Insurance Financing |
|
(9) |
|
|
74,903 |
|
|
|
74,903 |
|
|
|
- |
|
| |
|
|
|
|
5,874,522 |
|
|
|
5,737,547 |
|
|
|
136,975 |
|
| Subsidiary Finance Leases |
|
(10) |
|
|
19,878 |
|
|
|
19,006 |
|
|
|
872 |
|
| |
|
|
|
$ |
5,894,400 |
|
|
$ |
5,756,553 |
|
|
$ |
137,847 |
|
| |
|
|
|
As of June 30, 2023 |
|
| Name |
|
|
|
|
Total |
|
|
|
Current
Maturities
|
|
|
|
Long-Term
Maturities
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| D&O Insurance |
|
(1) |
|
$ |
89,823 |
|
|
$ |
89,823 |
|
|
$ |
- |
|
| Bank Overdraft Facility |
|
(2) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
| Loan Payable Bank - Export Refinance |
|
(3) |
|
|
1,741,493 |
|
|
|
1,741,493 |
|
|
|
- |
|
| Loan Payable Bank - Running Finance |
|
(4) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
| Loan Payable Bank - Export Refinance II |
|
(5) |
|
|
1,323,535 |
|
|
|
1,323,535 |
|
|
|
- |
|
| Loan Payable Bank - Export Refinance III |
|
(6) |
|
|
2,438,089 |
|
|
|
2,438,089 |
|
|
|
- |
|
| Sale and Leaseback Financing |
|
(7) |
|
|
321,113 |
|
|
|
148,264 |
|
|
|
172,849 |
|
| Term Finance Facility |
|
(8) |
|
|
13,356 |
|
|
|
13,356 |
|
|
|
- |
|
| Insurance Financing |
|
(9) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
| |
|
|
|
|
5,927,409 |
|
|
|
5,754,560 |
|
|
|
172,849 |
|
| Subsidiary Finance Leases |
|
(10) |
|
|
28,330 |
|
|
|
24,950 |
|
|
|
3,380 |
|
| |
|
|
|
$ |
5,955,739 |
|
|
$ |
5,779,510 |
|
|
$ |
176,229 |
|
| (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 7.9% as of September 30, 2023 and June 30, 2023, respectively. |
| (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 $365,854. The annual interest rate was 9.5% as of September 30, 2023. The total outstanding balance as of September
30, 2023 and June 30, 2023 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, 2023, NTE was in compliance with this covenant. |
NETSOL
TECHNOLOGIES, INC.
Notes
to Condensed Consolidated Financial Statements
September
30, 2023
(Unaudited)
| (3) |
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 $1,737,619 at September 30,
2023 and Rs. 500,000,000 or $1,741,493 at June 30, 2023. The interest rate for the loan was 19.0% and 17.0% at September 30, 2023 and
June 30, 2023, respectively. |
| (4) |
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 $186,273, at September 30, 2023. The balance outstanding at September 30, 2023 and June
30, 2023 was Rs. Nil. The interest rate for the loan was 24.9% at September 30, 2023 and June 30, 2023. |
|
This
facility requires NetSol PK to maintain a long-term debt equity ratio of 60:40 and a current ratio of 1:1. As of September 30, 2023,
NetSol PK was in compliance with this covenant. |
| (5) |
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 $1,320,591 and Rs. 380,000,000
or $1,323,535 at September 30, 2023 and June 30, 2023, respectively. The interest rate for the loan was 19.0% and 18.0% at September
30, 2023 and June 30, 2023, 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,
2023, NetSol PK was in compliance with these covenants. |
| (6) |
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 $3,127,715 and Rs. 900,000,000
or $3,134,687, at September 30, 2023 and June 30, 2023, respectively. NetSol PK used Rs. 700,000,000 or $2,432,667 and Rs. 700,000,000
or $2,438,089, at September 30, 2023 and June 30, 2023, respectively. The interest rate for the loan was 19.0% and 18.0% at September
30, 2023 and June 30, 2023, respectively. |
| (7) |
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, 2023, NetSol PK used Rs. 82,337,274 or $286,142 of which $136,975 was shown as long term and
$149,167 as current. As of June 30, 2023, NetSol PK used Rs. 92,194,774 or $321,113 of which $172,849 was shown as long term and $148,264
as current. The interest rate for the loan was 9.0% to 16.0% at September 30, 2023, and June 30, 2023. |
| (8) |
In
March 2019, the Company’s subsidiary, VLS, entered into a loan agreement. The loan amount was £69,549, or $84,816, for a
period of 5 years with monthly payments of £1,349, or $1,645. As of September 30, 2023, the subsidiary has used this facility up
to $8,105, which was shown as current. As of June 30, 2023, the subsidiary has used this facility up to $13,356, which was shown as current.
The interest rate was 6.14% at September 30, 2023 and June 30, 2023. |
| (9) |
The
Company’s subsidiary, VLS, finances Directors’ and Officers’ (“D&O”) liability insurance, and the $74,903
and $nil was recorded in current maturities, at September 30, 2023 and June 30, 2023, respectively. The interest rate on this financing
ranged from 9.7% to 12.7% as of September 30, 2023 and June 30, 2023. |
| (10) |
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, 2023 and 2022. |
|