| SCHEDULE OF COMPONENTS OF NOTES PAYABLE AND CAPITAL LEASES |
Notes
payable and capital leases consisted of the following:
SCHEDULE OF COMPONENTS OF NOTES PAYABLE AND CAPITAL LEASES
| |
|
|
|
As of June 30, 2024 |
|
| |
|
|
|
|
|
|
Current |
|
|
Long-Term |
|
| Name |
|
|
|
Total |
|
|
Maturities |
|
|
Maturities |
|
| |
|
|
|
|
|
|
|
|
|
|
|
| D&O Insurance |
|
(1) |
|
$ |
124,314 |
|
|
$ |
124,314 |
|
|
$ |
- |
|
| Line of Credit |
|
(2) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
| Bank Overdraft Facility |
|
(3) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
| Loan Payable Bank - Export Refinance |
|
(4) |
|
|
1,796,558 |
|
|
|
1,796,558 |
|
|
|
- |
|
| Loan Payable Bank - Running Finance |
|
(5) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
| Loan Payable Bank - Export Refinance II |
|
(6) |
|
|
1,365,384 |
|
|
|
1,365,384 |
|
|
|
- |
|
| Loan Payable Bank - Export Refinance III |
|
(7) |
|
|
2,515,181 |
|
|
|
2,515,181 |
|
|
|
- |
|
| Sale and Leaseback Financing |
|
(8) |
|
|
56,842 |
|
|
|
47,158 |
|
|
|
9,684 |
|
| Term Finance Facility |
|
(9) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
| Short Term Financing |
|
(10) |
|
|
412,655 |
|
|
|
412,655 |
|
|
|
- |
|
| |
|
|
|
|
6,270,934 |
|
|
|
6,261,250 |
|
|
|
9,684 |
|
| Subsidiary Finance Leases |
|
(11) |
|
|
100,962 |
|
|
|
14,875 |
|
|
|
86,087 |
|
| |
|
|
|
$ |
6,371,896 |
|
|
$ |
6,276,125 |
|
|
$ |
95,771 |
|
| |
|
|
|
As of June 30, 2023 |
|
| |
|
|
|
|
|
|
Current |
|
|
Long-Term |
|
| Name |
|
|
|
Total |
|
|
Maturities |
|
|
Maturities |
|
| |
|
|
|
|
|
|
|
|
|
|
|
| D&O Insurance |
|
(1) |
|
$ |
89,823 |
|
|
$ |
89,823 |
|
|
$ |
- |
|
| Line of Credit |
|
(2) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
| Bank Overdraft Facility |
|
(3) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
| Loan Payable Bank - Export Refinance |
|
(4) |
|
|
1,741,493 |
|
|
|
1,741,493 |
|
|
|
- |
|
| Loan Payable Bank - Running Finance |
|
(5) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
| Loan Payable Bank - Export Refinance II |
|
(6) |
|
|
1,323,535 |
|
|
|
1,323,535 |
|
|
|
- |
|
| Loan Payable Bank - Export Refinance III |
|
(7) |
|
|
2,438,089 |
|
|
|
2,438,089 |
|
|
|
- |
|
| Sale and Leaseback Financing |
|
(8) |
|
|
321,113 |
|
|
|
148,264 |
|
|
|
172,849 |
|
| Term Finance Facility |
|
(9) |
|
|
13,356 |
|
|
|
13,356 |
|
|
|
- |
|
| Short Term Financing |
|
(10) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
| |
|
|
|
|
5,927,409 |
|
|
|
5,754,560 |
|
|
|
172,849 |
|
| Subsidiary Finance Leases |
|
(11) |
|
|
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 range from 8.6%
to 10.9%
and 5.0%
to 7.9%
as of June 30, 2024 and 2023, respectively.
|
NETSOL
TECHNOLOGIES, INC.
Notes
to Consolidated Financial Statements
June
30, 2024 and 2023
| (2) |
|
The Company has
an uncommitted discretionary demand line of credit up to an aggregate amount of $1,000,000
with HSBC, secured by lien on the Company’s
assets. The annual interest rate was 8.75%
as of June 30, 2024. The total outstanding balance as of June 30, 2024 was $nil.
|
| (3) |
|
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 $379,747.
The annual interest rate was 9.5%%
as of June 30, 2024 and 2023. The total outstanding balance as of June 30, 2024 and 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 June 30, 2024, NTE was in compliance with this covenant.
|
| (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 six months. The total facility amount is Rs. 500,000,000
or $1,796,558
and Rs. 500,000,000
or $1,741,493
at June 30, 2024 and 2023, respectively. The
interest rate for the loan was 17.5%
and 17.0%
at June 30, 2024 and 2023, 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. 53,600,000
or $192,591
and Rs. 53,600,000
or $186,688,
at June 30, 2024 and 2023, respectively. The balance outstanding at June 30, 2024 and 2023 was Rs. Nil.
The interest rate for the loan was 22.2%
and 24.9%
at June 30, 2024 and 2023, respectively.
|
|
|
These
facilities require NetSol PK to maintain a long-term debt equity ratio of 60:40 and the current ratio of 1:1. As of June 30, 2024,
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 six months. The total facility amount is Rs. 380,000,000
or $1,365,384
and Rs. 380,000,000
or $1,323,535,
at June 30, 2024 and 2023, respectively. The interest rate for the loan was 17.5%
and 18.0%
at June 30, 2024 and 2023, respectively.
|
|
|
During
the loan tenure, 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 June 30, 2024,
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 $3,233,804
and Rs. 900,000,000
or $3,134,687,
at June 30, 2024 and 2023, respectively. NetSol PK used Rs. 700,000,000
or $2,515,181
and Rs. 700,000,000
or $2,438,089,
at June 30, 2024 and 2023, respectively. The interest rate for the loan was 17.5%
and 18.0%
at June 30, 2024 and 2023, 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 June 30, 2024, NetSol PK used Rs. 15,819,683
or $56,842
of which $9,684
was shown as long term and $47,158
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
ranging from 22.7%
to 24.2%
at June 30, 2024. The interest rate for the loan was ranging from 9.0%
to 16.0%
at June 30, 2023.
|
| (9) |
|
In March 2020,
the Company’s subsidiary, VLS, entered into a loan agreement with Investec Bank PLC. The loan amount was £69,549,
or $88,037,
for a period of 5
years with monthly payments of £1,349,
or $1,708.
The subsidiary has paid this facility in full. 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 June 30, 2023.
|
| (10) |
|
The Company’s
subsidiary, NetSol Beijing , has a short term loan facility with Bank of China, secured by personal guarantee of General Manager of NetSol
Beijing for a period of one year. The facility amount is CNY 3,000,000
or $412,655.
NetSol Beijing used CNY 3,000,000
or $412,655,
at June 30, 2024. The interest rate of the loan was 3.8%
at June 30, 2024.
|
NETSOL
TECHNOLOGIES, INC.
Notes
to Consolidated Financial Statements
June
30, 2024 and 2023
| (11) |
|
The Company leases
various fixed assets under capital lease arrangements expiring in various years through 2027. The assets and liabilities under capital
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 capital leases is included in depreciation expense for the years ended June 30,
2024 and 2023. |
|