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Operating Segments | 12 Months Ended
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Jun. 30, 2020
Operating Segments [Abstract] |
Operating Segments | 22. Operating segments The Company discloses segment information as reflected in the management information systems reports that its chief operating decision maker uses in making decisions and to report certain entity-wide disclosures about products and services, major customers, and the countries in which the entity holds material assets or reports material revenues. The Company currently has three reportable segments: South African transaction processing, International tr ansaction processing and Financial inclusion and applied technologies. The South African transaction processing and Financial inclusion and applied technologies segments operate mainly within South Africa while the International transaction processing segm ent operates mainly within South Korea, Hong Kong and the European Union. The Company’s reportable segments offer different products and services and require different resources and marketing strategies and share the Company’s assets. The South African t ransaction processing segment currently consists mainly of an ATM infrastructure deployed in South Africa, transaction processing for retailers, utilities, and banks, and a welfare benefit distribution service provided to the South African government throu gh September 30, 2018. The welfare benefit distribution services ceased following the SASSA contract expiration on September 30, 2018. Fee income is earned from customers utilizing our ATM infrastructure. Utility providers and banks are charged a fee for t ransaction processing services performed on their behalf at retailers. Fee income was also earned based on the number of recipient cardholders paid through September 30, 2018. There were no individually significant customers providing more than 10% of tota l revenue during the year s ended June 30, 2020 and 2019, respectively. This segment had an individually significant customer that accounted for more than 10% of the total revenue of the Company during the year ended June 30, 2018 (19%). During the years en ded June 30, 2020, 2019 and 2018, the operating segment incurred goodwill impairment losses of $5.6 million, $1.2 million and $1.1 million, respectively (refer to Note 10). The International transaction processing segment consists mainly of activities in South Korea from which the Company generate d revenue from the provision of payment processing services to merchants and card issuers. The Company’s South Korean business has been reported as a discontinued operation following its disposal in March 2020 (refer to Note 3). Accordingly, t he Company’s South Korean business did not contribute to segment performance during the last four months of the year ended June 30, 20 20. This segment included fee revenue from the provision of payment processing services and to a lesser extent from the sale of goods, primarily point of sale terminals, to customers in South Korea up until the sale of our Korean operations. Fees generated from payment services processing and other processing activities by the IPG are included in this segment. During the year ended June 30, 2019 and 2018, the operating segment incurred goodwill impairment loss es of $7.0 million and $19.9 million, respectively (refer to Note 10). The Financial inclusion and applied technolo gies segment derives revenue from the provision of short-term loans as a principal and the provision of bank accounts, as a fixed monthly fee per account is charged for the maintenance of these accounts. This segment also includes fee income and associated expenses from merchants and card holders using the Company’s merchant acquiring system, the sale of prepaid products (electricity and airtime) as well as the sale of hardware and software. Finally, the Company earns premium income from the sale of life in surance products through its insurance business. DNI was acquired on June 30, 2018, and w as allocated to the Financial inclusion and applied technologies segment. DNI contributed to segment performance for the first nine months of the year ended June 30, 2 019. DNI has been reported as a discontinued operation following its disposal of the Company’s controlling interest in March 2019 (refer to Note 3). Accordingly, DNI did not contribute to segment performance during the year ended June 30, 2020, the last three months of the year ended June 30, 2019 and during the year ended June 30, 2018. 22. Operating segments (continued) Operating segments (continued) DNI primarily derive d revenue from fees generated through the distribution of starter packs and, to a less extent, from interest income earned through the provision of financing to Cell C in order for it to expand components of Cell C’s telecommunications infrastructure in South Africa. During the year ended June 30, 2019, the operating segment incurred a goodwill impairment loss of $6.2 million (refer to Note 10). Corporate/eliminations includes the Company’s head office cost center and the amortization of acquisition-related intangible assets. The $17.5 million termination fee paid to terminate the Ban k Frick option (refer to Note 10) during the year ended June 30, 20 20, has been allocated to corporate/ elimination. The $5.3 million impairment loss related to the impairment of DNI intangible assets (refer to Note 3) during the year end ed June 30, 2019, has been allocated to corporate/ elimination. The reconciliation of the reportable segment’s revenue to revenue from external customers for the years ended June 30, 2020, 2019 and 2018, respectively, is as follows:
|  |  |  |  |  | Revenue |
|  |  |  |  |  | Reportable Segment |  | Corporate/ Eliminations (Note 14) |  | Inter-segment |  | From external customers |
| South African transaction processing | $ | 73 796 |  | $ | 0 |  | $ | 7 956 |  | $ | 65 840 |
| International transaction processing |  | 90 416 |  |  | - |  |  | - |  |  | 90 416 |
|  | Continuing |  | 5 041 |  |  | - |  |  | - |  |  | 5 041 |
|  | Discontinued |  | 85 375 |  |  | - |  |  | - |  |  | 85 375 |
| Financial inclusion and applied technologies |  | 82 342 |  |  | - |  |  | 2 226 |  |  | 80 116 |
|  | Total for the years ended June 30, 2020 |  | 246 554 |  |  | - |  |  | 10 182 |  |  | 236 372 |
|  |  | Continuing |  | 161 179 |  |  | - |  |  | 10 182 |  |  | 150 997 |
|  |  | Discontinued | $ | 85 375 |  | $ | - |  | $ | - |  | $ | 85 375 |
| South African transaction processing | $ | 96 038 |  | $ | - |  | $ | 6 990 |  | $ | 89 048 |
| International transaction processing |  | 148 268 |  |  | - |  |  | - |  |  | 148 268 |
|  | Continuing |  | 9 842 |  |  | - |  |  | - |  |  | 9 842 |
|  | Discontinued |  | 138 426 |  |  | - |  |  | - |  |  | 138 426 |
| Financial inclusion and applied technologies |  | 146 184 |  |  | - |  |  | 2 801 |  |  | 143 383 |
|  | Continuing |  | 89 847 |  |  | - |  |  | 2 801 |  |  | 87 046 |
|  | Discontinued |  | 56 337 |  |  | - |  |  | - |  |  | 56 337 |
| Reportable segments |  | 390 490 |  |  | - |  |  | 9 791 |  |  | 380 699 |
| Corporate/Eliminations – revenue refund (Note 14) |  | - |  |  | (19 709) |  |  | - |  |  | (19 709) |
|  |  | Total for the years ended June 30, 2019 |  | 390 490 |  |  | (19 709) |  |  | 9 791 |  |  | 360 990 |
|  |  |  | Continuing |  | 195 727 |  |  | (19 709) |  |  | 9 791 |  |  | 166 227 |
|  |  |  | Discontinued | $ | 194 763 |  | $ | - |  | $ | - |  | $ | 194 763 |
| South African transaction processing | $ | 268 047 |  | $ | - |  | $ | 29 949 |  | $ | 238 098 |
| International transaction processing |  | 180 027 |  |  | - |  |  | - |  |  | 180 027 |
|  | Continuing |  | 26 713 |  |  | - |  |  | - |  |  | 26 713 |
|  | Discontinued |  | 153 314 |  |  | - |  |  | - |  |  | 153 314 |
| Financial inclusion and applied technologies |  | 221 906 |  |  | - |  |  | 27 142 |  |  | 194 764 |
|  | Continuing |  | 221 906 |  |  | - |  |  | 27 142 |  |  | 194 764 | -
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | -
|  |  | Total for the years ended June 30, 2018 |  | 669 980 |  |  | - |  |  | 57 091 |  |  | 612 889 |
|  |  |  | Continuing |  | 516 666 |  |  | - |  |  | 57 091 |  |  | 459 575 |
|  |  |  | Discontinued | $ | 153 314 |  | $ | - |  | $ | - |  | $ | 153 314 |
The Company does not allocate interest income, interest expense or income tax expense to its reportable segments. The Company evaluates segment performance based on segment operating income before acquisition-related intangible asset amortization which represents operating income before acquisition-related intangible asset amortization and allocation of expenses allocated to Corporate/Eliminations, all under GAAP. The reconciliation of the reportable segments measures of profit or los s to income before income taxes for the years ended June 30, 2020, 2019 and 2018, respectively, is as follows:
|  |  |  | 2020 |  | 2019(1) |  | 2018 |
| Reportable segments measure of profit or loss | $ | (20 247) |  | $ | (42 692) |  | $ | 85 690 |
|  | Less: Discontinued operations: reportable segments' measure of profit or loss |  | (14 568) |  |  | (43 739) |  |  | (17 977) |
|  | Continuing operations: reportable segments' measure of profit or loss |  | (34 815) |  |  | (86 431) |  |  | 67 713 |
|  | Continuing operations : Operating income - Corporate/Eliminations |  | (9 433) |  |  | (48 501) |  |  | (13 904) |
|  | Change in fair value of equity securities |  | - |  |  | (167 459) |  |  | 32 473 |
|  | Gain on disposal of FIHRST (Note 3) |  | 9 743 |  |  | - |  |  | - |
|  | (Loss) Gain on disposal of DNI interest as an equity method investment (Note 3) |  | (1 010) |  |  | 177 |  |  | - |
|  | Loss on deconsolidation of CPS (Note 3) |  | (7 148) |  |  | - |  |  | - |
|  | Termination fee to cancel Bank Frick option |  | (17 517) |  |  | - |  |  | - |
|  | Interest income |  | 2 805 |  |  | 5 424 |  |  | 16 845 |
|  | Interest expense |  | (7 641) |  |  | (9 860) |  |  | (8 569) |
|  | Impairment of Cedar Cellular Note |  | - |  |  | (12 793) |  |  | - |
|  |  | Loss before income taxes | $ | (65 016) |  | $ | (319 443) |  | $ | 94 558 |
(1) - Operating loss: Corporate/Eliminations includes $34.0 million related to the accrual referred to in Note 13. The following tables summarize segment information for the years ended June 30, 2020, 2019 and 2018:
|  |  |  |  |  |  |  |  | 2020 |  | 2019 |  | 2018 |
| Revenues |  |  |  |  |  |  |  |  |
|  | South African transaction processing | $ | 73 796 |  | $ | 96 038 |  | $ | 268 047 |
|  | International transaction processing |  | 90 416 |  |  | 148 268 |  |  | 180 027 |
|  |  |  | Continuing |  | 5 041 |  |  | 9 842 |  |  | 26 713 |
|  |  |  | Discontinued |  | 85 375 |  |  | 138 426 |  |  | 153 314 |
|  | Financial inclusion and applied technologies |  | 82 342 |  |  | 146 184 |  |  | 221 906 |
|  |  |  | Continuing |  | 82 342 |  |  | 89 847 |  |  | 221 906 |
|  |  |  | Discontinued |  | - |  |  | 56 337 |  |  | - |
|  |  |  |  |  | Total |  | 246 554 |  |  | 390 490 |  |  | 669 980 |
|  |  |  |  |  |  |  | Continuing |  | 161 179 |  |  | 195 727 |  |  | 516 666 |
|  |  |  |  |  |  |  | Discontinued |  | 85 375 |  |  | 194 763 |  |  | 153 314 |
| Operating (loss) income |  |  |  |  |  |  |  |  |
|  | South African transaction processing (1) |  | (19 575) |  |  | (30 771) |  |  | 42 796 |
|  | International transaction processing |  | 2 051 |  |  | 2 837 |  |  | (12 478) |
|  |  |  | Continuing |  | (12 517) |  |  | (16 502) |  |  | (30 455) |
|  |  |  | Discontinued |  | 14 568 |  |  | 19 339 |  |  | 17 977 |
|  | Financial inclusion and applied technologies(1) |  | (2 723) |  |  | (14 758) |  |  | 55 372 |
|  |  |  | Continuing (1) |  | (2 723) |  |  | (39 158) |  |  | 55 372 |
|  |  |  | Discontinued |  | - |  |  | 24 400 |  |  | - |
|  |  |  |  | Subtotal: Operating segments |  | (20 247) |  |  | (42 692) |  |  | 85 690 |
|  |  |  |  | Corporate/Eliminations |  | (15 217) |  |  | (70 816) |  |  | (26 741) |
|  |  |  |  |  | Continuing |  | (9 433) |  |  | (48 501) |  |  | (13 904) |
|  |  |  |  |  | Discontinued |  | (5 784) |  |  | (22 315) |  |  | (12 837) |
|  |  |  |  |  |  | Total (1) |  | (35 464) |  |  | (113 508) |  |  | 58 949 |
|  |  |  |  |  |  |  | Continuing (1) |  | (44 248) |  |  | (134 932) |  |  | 53 809 |
|  |  |  |  |  |  |  | Discontinued |  | 8 784 |  |  | 21 424 |  |  | 5 140 |
| Depreciation and amortization |  |  |  |  |  |  |  |  |
|  | South African transaction processing |  | 2 512 |  |  | 3 612 |  |  | 4 625 |
|  | International transaction processing |  | 4 405 |  |  | 9 962 |  |  | 17 627 |
|  |  |  | Continuing |  | 502 |  |  | 254 |  |  | 750 |
|  |  |  | Discontinued |  | 3 903 |  |  | 9 708 |  |  | 16 877 |
|  | Financial inclusion and applied technologies |  | 1 368 |  |  | 1 968 |  |  | 1 441 |
|  |  |  | Continuing |  | 1 368 |  |  | 1 355 |  |  | 1 441 |
|  |  |  | Discontinued |  | - |  |  | 613 |  |  | - |
|  |  |  |  | Subtotal: Operating segments |  | 8 285 |  |  | 15 542 |  |  | 23 693 |
|  |  |  |  | Corporate/Eliminations |  | 5 014 |  |  | 21 807 |  |  | 11 791 |
|  |  |  |  |  | Continuing |  | 265 |  |  | 6 882 |  |  | 3 657 |
|  |  |  |  |  | Discontinued |  | 4 749 |  |  | 14 925 |  |  | 8 134 |
|  |  |  |  |  |  | Total |  | 13 299 |  |  | 37 349 |  |  | 35 484 |
|  |  |  |  |  |  |  | Continuing |  | 4 647 |  |  | 12 103 |  |  | 10 473 |
|  |  |  |  |  |  |  | Discontinued |  | 8 652 |  |  | 25 246 |  |  | 25 011 |
| Expenditures for long-lived assets |  |  |  |  |  |  |  |  |
|  | South African transaction processing |  | 3 443 |  |  | 3 590 |  |  | 3 988 |
|  | International transaction processing |  | 2 206 |  |  | 3 607 |  |  | 4 397 |
|  |  |  | Continuing |  | 703 |  |  | 664 |  |  | 139 |
|  |  |  | Discontinued |  | 1 503 |  |  | 2 943 |  |  | 4 258 |
|  | Financial inclusion and applied technologies |  | 289 |  |  | 2 219 |  |  | 1 264 |
|  |  |  | Continuing |  | 289 |  |  | 1 488 |  |  | 1 264 |
|  |  |  | Discontinued |  | - |  |  | 731 |  |  | - |
|  |  |  |  | Subtotal: Operating segments |  | 5 938 |  |  | 9 416 |  |  | 9 649 |
|  |  |  |  | Corporate/Eliminations |  | - |  |  | - |  |  | - |
|  |  |  |  |  |  | Total |  | 5 938 |  |  | 9 416 |  |  | 9 649 |
|  |  |  |  |  |  |  | Continuing |  | 4 435 |  |  | 5 742 |  |  | 5 391 |
|  |  |  |  |  |  |  | Discontinued | $ | 1 503 |  | $ | 3 674 |  | $ | 4 258 |
(1) South African transaction processing and Financial inclusion and applied technologies include retrenchment costs for the year ended June 30, 2019, of: $4,665 and $1,604, respectively, for total retrenchment costs for the year ended June 30, 2019, of $6,269. The retrenchment costs are included in selling, general and administration expense on the consolidated statement of operations for the year ended June 30, 2019. The segment informatio n as reviewed by the chief operating decision maker does not include a measure of segment assets per segment as all of the significant assets are used in the operations of all, rather than any one, of the segments. The Company does not have dedicated asset s assigned to a particular operating segment. Accordingly, it is not meaningful to attempt an arbitrary allocation and segment asset allocation is therefore not presented. Geographic Information Long-lived assets based on the geographic location for the years ended June 30, 2020, 2019 and 2018, are presented in the table below:
|  |  |  |  |  |  |  |  | Long-lived assets |
|  |  |  |  |  |  |  |  | 2020 |  | 2019 |  | 2018 |
|  |  |  |  |  |  |  |  |  |  |  | (as restated)(A) |  | (as restated)(B) |
|  | South Africa | $ | 68 521 |  | $ | 141 235 |  | $ | 493 902 |
|  | Liechtenstein - investment in Bank Frick (Note 10) |  | 29 739 |  |  | 47 240 |  |  | 48 129 |
|  | India - investment in MobiKwik (Note 10) |  | 26 993 |  |  | 26 993 |  |  | 26 917 |
|  | South Korea (Note 3) |  | - |  |  | 149 390 |  |  | 177 388 |
|  | Rest of world |  | 9 119 |  |  | 9 739 |  |  | 41 597 |
|  |  | Total | $ | 134 372 |  | $ | 374 597 |  | $ | 787 933 |
22. Operating segment s (continued) (A) The South Africa and total amounts have been restated by $ 2 689 to correct the misstatement discussed in Note 1. (B) The South Africa and total amounts have been restated by $ 2 540 to correct the misstatement dis cussed in Note 1.

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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