Company: NTWK
Filing Date: 2025-09-29
Form Type: 10-K
Source: 0001493152-25-015950
Chunk: 1366

Company: NETSOL TECHNOLOGIES INC
Filing Date: 2025-09-29
Form: 10-K
Item: Item 7A
Chunk 1366
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We
are exposed to financial market risks, including changes in currency exchange rates and interest rates.

Foreign
Currency Exchange Risk 

Economic
Exposure 

We
transact business in various foreign currencies and have significant international revenues, as well as costs denominated in foreign
currencies. This exposes us to the risk of fluctuations in foreign currency exchange rates. Since the majority of the Company’s
operations are based in the Asia Pacific region where the Pakistan Rupee is continuously losing its value against the US Dollar and we
don’t have any imports; therefore, we believe it is counter-productive to hedge this exposure. The devaluation of the Pakistan
Rupee results in a foreign exchange gain to the Company.

Transaction
Exposure

Our
exposure to foreign currency transaction gains and losses is the result of certain net receivables due from our foreign subsidiaries
and customers being denominated in currencies other than the functional currency of the subsidiary, primarily the Euro, Yuan, Baht and
the Pakistan Rupee. Our foreign subsidiaries conduct their businesses in local currency. Since the majority of the Company’s operations
are based in the Asia Pacific region where the Pakistan Rupee is continuously losing its value against the US Dollar and we don’t
have any imports; therefore, we believe it is counter-productive to hedge this exposure.

ITEM
8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 

The
Consolidated Financial Statements that constitute Item 8 are included at the end of this report on page F-1.

ITEM
9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

NETSOL’s
financial statements for the fiscal years ended June 30, 2025, and June 30, 2024, did not contain an adverse opinion or disclaimer of
opinion, and were not qualified or modified as to uncertainty, audit scope, or accounting principles.

In
connection with the audit of NETSOL’s financial statements for the fiscal year ended June 30, 2025, and 2024, there were no disagreements,
disputes, or differences of opinion with Fortune CPA. (“Fortune”) on any matters of accounting principles or practices, financial
statement disclosure, or auditing scope and procedures, which, if not resolved to the satisfaction of Fortune would have caused Fortune
to make reference to the matter in their report.

ITEM
9A. CONTROLS AND PROCEDURES

Evaluation
of Disclosure Controls and