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Operating Segments | 12 Months Ended
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Jun. 30, 2021
Operating Segments [Abstract] |
Operating Segments | 20. OPERATING SEGMENTS Change to internal reporting structure and restatement of previously reported information During September 2020, the Company’s chief operating decision maker changed the Company’s operating and internal reporting structures following the Company’s decisions to focus primarily on the South African market and to exit its operating activities performed through IPG. The chief operating decision maker has decided to analyze the Company’s operating performance primarily based on reported information for statutory entities, statutory groups, clustered statutory entities or clustered statutory groups, with certain reallocations, based on the activity of the reporting unit. Previous ly reported information has been restated. Reallocation of certain activities among operating segments During the first quarter of fiscal 2021, the Company reorganized its operating segments by combining what were previously the South African transaction processing segment and the International transaction processing segment into what is now the Processing segment and bifurcating what was previously the Financial inclusion and applied technologies segment into what are now the Financial services segment and the Technology segment. Segment results for the year ended June 30, 2021, reflect these changes to the operating segments. 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, and the countries in which the entity holds material assets or reports material revenues. The Company currently has three reportable segments: Processing, Financial services and Technology. All three segments operate mainly within South Africa and certain of our activities outside of South Africa have been allocated to Processing. The Company’s reportable segments offer different products and services and require different resources and marketing strategies but share the Company’s assets. The Processing segment includes fees earned by the Company from processing activities performed for its customers and revenue generated from the distribution of prepaid airtime. The Company provides its customers with transaction processing services that involve the collection, transmittal and retrieval of all transaction data. Customers that have a bank account managed by the Company are issued cards that can be utilized to withdraw funds at an ATM or to transact at a merchant point of sale device (“POS”). The Company earns processing fees from transactions processed for these customers. The Company also earns fees on transactions performed by other banks’ customers utilizing its ATM, POS or bill payment infrastructure. The Processing segment includes IPG’s processing activities. During the years ended June 30, 2020 and 2019, the operating segment incurred goodwill impairment losses of $ 5.6 million and $ 8.2 million, respectively (refer to Note 9). The Financial services segment includes activities related to the provision of financial services to customers, including a bank account, loans and insurance products. The Company charges monthly administration fees for all bank accounts. The Company provides short-term loans to customers in South Africa for which it earns initiation and monthly service fees. The Company writes life insurance contracts, primarily funeral-benefit policies, and policy holders pay the Company a monthly insurance premium. The Technology segment includes sales of hardware and licenses to customers. Hardware includes the sale of POS devices, SIM cards and other consumables which can occur on an ad hoc basis. Licenses include the right to use certain technology developed by the Company. During the year ended June 30, 2019, the operating segment incurred goodwill impairment losses of $6.2 million (refer to Note 9). 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 Bank Frick option (refer to Note 8) during the year ended June 30, 2020, has been allocated t o corporate/ elimination. 20. OPERATING SEGMENTS (continued) Operating segments (continued) The reconciliation of the reportable segment’s revenue to revenue from external customers for the years ended June 30, 2021, 2020 and 2019, respectively, is as follows: Revenue (as restated) (1) Reportable Segment Corporate/ Elimination s Inter- segment From external customers Processing $ 82,435 $ - $ 4,773 $ 77,662 Financial services 38,996 - 3,391 35,605 Technology 17,751 - 232 17,519 Total for the years ended June 30, 2021 $ 139,182 $ - $ 8,396 $ 130,786 Processing (1) $ 91,786 $ - $ 8,158 $ 83,628 Financial services 46,870 - 3,546 43,324 Technology 18,071 - 724 17,347 Total for the years ended June 30, 2020 $ 156,727 $ - $ 12,428 $ 144,299 Processing (1) $ 118,088 $ - $ 10,666 $ 107,422 Financial services 57,034 - 5,861 51,173 Technology 20,115 - (1,634) 21,749 Reportable segments 195,237 - 14,893 180,344 Corporate/Eliminations – revenue refund (Note 15) - (19,709) - (19,709) Total for the years ended June 30, 2019 $ 195,237 $ (19,709) $ 14,893 $ 160,635 (1) Processing for the years ended June 30, 2020 and 2019, has been restated for the error described in Note 1. 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 expenses allocated to Corporate/Eliminations, all under GAAP. The reconciliation of the reportable segments measures of profit or loss to income before income taxes for the years ended June 30, 2021, 2020 and 2019, respectively, is as follows: 2021 2020 (1) 2019 Reportable segments measure of profit or loss $ (40,085) $ (34,642) $ (86,937) Operating loss: Corporate/Eliminations (13,787) (9,606) (47,995) Change in fair value of equity securities (Note 23) 49,304 - (167,459) Loss on disposal of equity-accounted investment - Bank Frick (Note 8) (472) - - Loss on disposal of equity-accounted investment (Note 8) (13) - - Gain on disposal of FIHRST (Note 23) - 9,743 - (Loss) Gain on disposal of DNI interest as an equity method investment (Note 23) - (1,010) 177 Loss on deconsolidation of CPS (Note 23) - (7,148) - Termination fee to cancel Bank Frick option - (17,517) - Interest income 2,416 2,805 5,424 Interest expense (2,982) (7,641) (9,860) Impairment of Cedar Cellular Note - - (12,793) Loss before income taxes $ (5,619) $ (65,016) $ (319,443) (1) - Operating loss: Corporate/Eliminations includes $ 34.0 million related to an accrual CPS recorded at June 30, 2019, comprising a revenue refund of $ 19.7 million (ZAR 277.6 million), accrued interest of $ 11.4 million (ZAR 161.0 million), unclaimed indirect taxes of $ 2.8 million (ZAR 39.4 million) and estimated costs of $ 0.1 million (ZAR 1.4 million) . 20. OPERATIN G SEGMENTS (continued) Operating segments (continued) The following tables summarize segment information for the years ended June 30, 2021, 2020 and 2019: 2021 2020 2019 (as restated) (1) (as restated) (1) Revenues Processing $ 82,435 $ 91,786 $ 118,088 All others 80,742 88,476 109,931 IPG 1,693 3,310 8,157 Financial services 38,996 46,870 57,034 Technology 17,751 18,071 20,115 Total 139,182 156,727 195,237 Operating (loss) income Processing (2) (34,283) (33,836) (51,575) All others (2) (23,556) (21,488) (35,474) IPG (10,727) (12,348) (16,101) Financial services (2) (8,429) (3,621) (30,068) Technology 2,627 2,815 (5,294) Subtotal: Operating segments (2) (40,085) (34,642) (86,937) Corporate/Eliminations (13,787) (9,606) (47,995) Total (2) (53,872) (44,248) (134,932) Depreciation and amortization Processing 2,900 3,298 3,915 Financial services 473 790 1,002 Technology 615 168 90 Subtotal: Operating segments 3,988 4,256 5,007 Corporate/Eliminations 359 391 7,096 Total 4,347 4,647 12,103 Expenditures for long-lived assets Processing 1,173 4,297 4,419 Financial services 174 138 1,142 Technology 2,938 - 181 Subtotal: Operating segments 4,285 4,435 5,742 Corporate/Eliminations - - - Total $ 4,285 $ 4,435 $ 5,742 (1) Revenues-Processing -All others for the years ended June 30, 2020 and 2019, have been restated for the error described in Note 1. (2) Processing and Financial services 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 information 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 assets assigned to a particular operating segment. Accordingly, it is not meaningful to attempt an arbitrary allocation and segment asset allocation is therefore not presented. 20. OPERATING SEGMENTS (continued) Geographic Information Long-lived assets based on the geographic location for the years ended June 30, 2021, 2020 and 2019, are presented in the table below: Long-lived assets 2021 2020 2019 South Africa $ 50,754 $ 68,521 $ 141,235 Liechtenstein - investment in Bank Frick (Note 8) - 29,739 47,240 India - investment in MobiKwik (Note 8) 76,297 26,993 26,993 South Korea (Note 23) - - 149,390 Rest of world 6,962 9,119 9,739 Total $ 134,013 $ 134,372 $ 374,597

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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://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8924-108599 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8981-108599 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8721-108599 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9031-108599 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (f) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (e) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8844-108599 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9038-108599 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (d) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 22 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8736-108599 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9054-108599 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8657-108599 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8721-108599 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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