Quarterly report pursuant to Section 13 or 15(d)

Debts - Components of Notes Payable and Capital Leases (Details)

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Debts - Components of Notes Payable and Capital Leases (Details) - USD ($)
Dec. 31, 2016
Jun. 30, 2016
Total [1] $ 3,909,077 $ 3,951,725
Current Maturities [1] 3,909,077 3,951,725
Long-Term Maturities [1]
Subsidiary Capital Leases, Current Maturities (459,853)  
Subsidiary Capital Leases, Long-Term Maturities 501,554  
Total 4,870,484 4,917,776
Current Maturities 4,368,930 4,440,084
Long-Term Maturities 501,554 477,692
D & O Insurance [Member]    
Total [2] 89,732 65,114
Current Maturities [2] 89,732 65,114
Long-Term Maturities [2]
HSBC Loan [Member]    
Total [3] 93,704
Current Maturities [3] 93,704
Long-Term Maturities [3]
Loan Payable Bank [Member]    
Total [4] 3,819,345 3,792,907
Current Maturities [4] 3,819,345 3,792,907
Long-Term Maturities [4]
Subsidiary Capital Leases [Member]    
Subsidiary Capital Leases, Total 961,407 966,051
Subsidiary Capital Leases, Current Maturities 459,853 488,359
Subsidiary Capital Leases, Long-Term Maturities $ 501,554 $ 477,692
[1] The Company leases various fixed assets under capital lease arrangements expiring in various years through 2021. 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 three and six months ended December 31, 2016 and 2015.
[2] The Company finances Directors’ and Officers’ (“D&O”) liability insurance as well as Errors and Omissions (“E&O”) liability insurance, for which the total balances are renewed on an annual basis and as such are recorded in current maturities. The interest rate on the insurance financing was 5.9% as of December 31, 2016 and June 30, 2016, respectively.
[3] In October 2011, the Company’s subsidiary, NTE, entered into a loan agreement with HSBC Bank to finance the acquisition of a 51% controlling interest in Virtual Leasing Services Limited. HSBC Bank guaranteed the loan up to a limit of £1,000,000, or approximately $1,234,568 for a period of 5 years with monthly payments of £18,420, or approximately $22,741. The interest rate was 4% which is 3.5% above the bank sterling base rate. The loan is securitized against a debenture comprising of fixed and floating charges over all the assets and undertakings of NTE including all present and future freehold and leasehold property, book and other debts, chattels, goodwill and uncalled capital, both present and future. Interest expense for the three and six months ended December 31, 2016 was $38 and $1,596, respectively. Interest expense for the three and six months ended December 31, 2015 was $1,161 and $9,011, respectively. NTE paid this loan in full during six months ended December 31, 2016.
[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. Total facility amount is Rs. 400,000,000 or approximately $3,819,345. The interest rate for the loans was 3% and 4.5% at December 31, 2016 and June 30, 2016, respectively. Interest expense for the three and six months ended December 31, 2016 was $28,527 and $57,592, respectively. Interest expense for the three and six months ended December 31, 2015 was $36,980 and $77,986, 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, 2016, NetSol PK was in compliance with this covenant.