| 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, 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 |
|
| |
|
|
|
|
As of June 30, 2021 |
|
| |
|
|
|
|
|
|
|
Current |
|
|
Long-Term |
|
| Name |
|
|
|
|
Total |
|
|
Maturities |
|
|
Maturities |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| D&O Insurance |
|
(1) |
|
|
$ |
73,143 |
|
|
$ |
73,143 |
|
|
$ |
- |
|
| Bank Overdraft Facility |
|
(2) |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
| Term Finance Facility |
|
(3) |
|
|
|
1,648,818 |
|
|
|
1,090,259 |
|
|
|
558,559 |
|
| Loan Payable Bank - Export Refinance |
|
(4) |
|
|
|
3,162,555 |
|
|
|
3,162,555 |
|
|
|
- |
|
| Loan Payable Bank - Running Finance |
|
(5) |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
| Loan Payable Bank - Export Refinance II |
|
(6) |
|
|
|
2,403,542 |
|
|
|
2,403,542 |
|
|
|
- |
|
| Loan Payable Bank - Export Refinance III |
|
(7) |
|
|
|
4,427,578 |
|
|
|
4,427,578 |
|
|
|
- |
|
| Sale and Leaseback Financing |
|
(8) |
|
|
|
85,313 |
|
|
|
28,183 |
|
|
|
57,130 |
|
| Term Finance Facility |
|
(9) |
|
|
|
55,182 |
|
|
|
19,644 |
|
|
|
35,538 |
|
| Insurance Financing |
|
(10) |
|
|
|
41,774 |
|
|
|
41,774 |
|
|
|
- |
|
| |
|
|
|
|
|
11,897,905 |
|
|
|
11,246,678 |
|
|
|
651,227 |
|
| Subsidiary Finance Leases |
|
(11) |
|
|
|
168,107 |
|
|
|
119,493 |
|
|
|
48,614 |
|
| |
|
|
|
|
$ |
12,066,012 |
|
|
$ |
11,366,171 |
|
|
$ |
699,841 |
|
| (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 5.0% to 7.0% as of June 30, 2022 and 2021, respectively. |
NETSOL
TECHNOLOGIES, INC.
Notes
to Consolidated Financial Statements
June
30, 2022 and 2021
| (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 5.5%
and 5.1%
as of June 30, 2022 and 2021, respectively. The total outstanding balance as of June 30, 2022 and 2021 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, 2022, NTE was in compliance with this covenant. |
| (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 is Rs. 86,887,974 or $423,101, at June 30, 2022, which is shown
as current. The availed facility amount was Rs. 260,678,180 or $1,648,818, at June 30, 2021, of which $1,090,259 is shown as current
and the remaining $558,559 is shown as long term. The interest rate for the loan was 3% at June 30, 2022 and 2021. |
| (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 $2,434,749
and Rs. 500,000,000
or $3,162,555
at June 30, 2022 and 2021, respectively. The interest rate for the loan was 3%
at June 30, 2022 and 2021. |
| (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 $261,005
and Rs. 75,000,000
or $474,383,
at June 30, 2022 and 2021, respectively. The balance outstanding at June 30, 2022 and 2021 was Rs. Nil.
The interest rate for the loan was 14.0%
and 9.5%
at June 30, 2022 and 2021, 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, 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 six months. The total facility amount is Rs. 380,000,000
or $1,850,409
and Rs. 380,000,000
or $2,403,542,
at June 30, 2022 and 2021, respectively. The interest rate for the loan was 3%
at June 30, 2022 and 2021. |
|
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, 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 $4,382,548
and Rs. 900,000,000
or $5,692,600,
at June 30, 2022 and 2021, respectively. NetSol PK used Rs. 700,000,000
or $3,408,648
and Rs. 700,000,000
or $4,427,578,
at June 30, 2022 and 2021, respectively. The interest rate for the loan was 3%
at June 30, 2022 and 2021. |
| (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, 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. As of June 30, 2021, NetSol PK used Rs.
13,487,949 or $85,313 of which $57,130 was shown as long term and $28,183 as current. The interest rate for the loan was ranging from
9.0% to 16.0% at June 30, 2022 and 2021. |
| (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 $84,816, for a period of 5 years with monthly payments
of £1,349, or $1,645. 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 June 30, 2022. |
NETSOL
TECHNOLOGIES, INC.
Notes
to Consolidated Financial Statements
June
30, 2022 and 2021
| (10) |
The Company’s subsidiary, VLS, finances Directors’
and Officers’ (“D&O”) liability insurance, and the $96,781 and $41,774 was recorded in current maturities, at March
31, 2022 and June 30, 2021, respectively. The interest rate on this financing ranged from 9.7% to 12.7% as of June 30, 2022 and was 9.7%
as of June 30, 2021. |
| (11) |
The Company leases various fixed assets under capital lease
arrangements expiring in various years through 2024. 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, 2022 and 2021. |
|