Annual report pursuant to Section 13 and 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 ($)
Jun. 30, 2018
Jun. 30, 2017
Total $ 8,284,480 $ 9,861,787
Current Maturities 8,284,480 9,861,787
Long-Term Maturities
Subsidiary Capital Leases, Total [1] 642,035 727,770
Subsidiary Capital Leases, Current Maturities [1] 311,439 361,008
Subsidiary Capital Leases, Long-Term Maturities [1] 330,596 366,762
Total 8,926,515 10,589,557
Current Maturities 8,595,919 10,222,795
Long-Term Maturities 330,596 366,762
D&O Insurance [Member]    
Total [2] 69,578 87,485
Current Maturities [2] 69,578 87,485
Long-Term Maturities [2]
Bank Overdraft Facility [Member]    
Total [3] 221,379
Current Maturities [3] 221,379
Long-Term Maturities [3]
Loan Payable Bank - Export Refinance [Member]    
Total [4] 4,107,451 4,776,461
Current Maturities [4] 4,107,451 4,776,461
Long-Term Maturities [4]
Loan Payable Bank - Running Finance [Member]    
Total [5]  
Current Maturities [5]  
Long-Term Maturities [5]  
Loan Payable Bank - Export Refinance II [Member]    
Total [6] 2,875,216 1,910,585
Current Maturities [6] 2,875,216 1,910,585
Long-Term Maturities [6]
Loan Payable Bank - Running Finance II [Member]    
Total [7] 1,232,235 2,865,877
Current Maturities [7] 1,232,235 2,865,877
Long-Term Maturities [7]
[1] The Company leases various fixed assets under capital lease arrangements expiring in various years through 2022. 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 depreciated over the lesser of their related lease terms or their estimated useful lives and are secured by the assets themselves. Depreciation of assets under capital leases is included in depreciation expense for the years ended June 30, 2018 and 2017.
[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 these financings range from 5.25% to 6.48% and from 4.8% to 7.69% as of June 30, 2018 and 2017, respectively.
[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 $394,737. The annual interest rate was 4.75% as of June 30, 2018. Total outstanding balance as of June 30, 2018 was nil. Interest expense for years ended June 30, 2018 and 2017 was $8,788 and $9,077, respectively. 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, 2018, 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. Total facility amount is Rs. 500,000,000 or $4,107,451 at June 30, 2018 and 2017. The interest rate for the loan was 3% at June 30, 2018 and 2017, respectively. Interest expense for the years ended June 30, 2018 and 2017 was $126,800 and $121,306, respectively.
[5] The Company's subsidiary, NetSol PK, has a running finance facility with Askari Bank Limited, secured by NetSol PK's assets. Total facility amount is Rs. 75,000,000 or $616,118, at June 30, 2018. NetSol PK used Rs. Nil or $Nil, at June 30, 2018 and 2017, respectively. The interest rate for the loan was 8.16% at June 30, 2018. 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 June 30, 2018, NetSol PK was in compliance with these covenants.
[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. Total facility amount is Rs. 350,000,000 or $2,875,216 and Rs. 200,000,000 or $1,910,585, at June 30, 2018 and 2017, respectively. The interest rate for the loan was 3% at June 30, 2018 and 2017. Interest expense for the years ended June 30, 2018 and 2017 was $92,262 and $2,511, respectively.
[7] The Company's subsidiary, NetSol PK, has a running finance facility with Samba Bank Limited, secured by NetSol PK's assets. Total facility amount is Rs. 150,000,000 or $1,232,235 and Rs. 300,000,000 or $2,865,877, at June 30, 2018 and 2017, respectively. The interest rate for the loan was 8.47% and 8.13% at June 30, 2018 and 2017, respectively. Interest expense for the years ended June 30, 2018 and 2017 was $125,830 and $78,251, respectively. During the tenure of 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 June 30, 2018, NetSol PK was in compliance with these covenants.