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Fair Value Of Financial Instruments
 12 Months Ended
Jun. 30, 2025
Fair Value Of Financial Instruments [Abstract]  
Fair Value Of Financial Instruments
6.
 
FAIR VALUE
 
OF FINANCIAL INSTRUMENTS
Fair value of financial instruments
Initial recognition and measurement
Financial instruments
 
are recognized
 
when the
 
Company becomes
 
a party
 
to the
 
transaction. Initial
 
measurements are
 
at cost,
which includes transaction costs.
 
Risk management
The Company manages its exposure
 
to currency exchange, translation, interest rate,
 
credit, microlending credit and equity price
and liquidity risks as discussed below.
 
Currency exchange risk
The Company is subject to currency exchange risk because it purchases components
 
for its vaults, that the Company assembles,
and inventories
 
that it is
 
required to
 
settle in other
 
currencies, primarily
 
the euro, renminbi,
 
and U.S. dollar.
 
The Company
 
has used
forward contracts in order to limit its
 
exposure in these transactions to fluctuations
 
in exchange rates between the South African
 
rand
(“ZAR”), on the one hand, and the U.S. dollar and the euro, on the other hand.
Translation risk
Translation risk relates to
 
the risk that
 
the Company’s results of operations
 
will vary significantly
 
as the U.S.
 
dollar is its
 
reporting
currency,
 
but it earns a
 
significant amount of its
 
revenues and incurs a
 
significant amount of its
 
expenses in ZAR. The
 
U.S. dollar to
the ZAR
 
exchange rate
 
has fluctuated
 
significantly over
 
the past
 
three years.
 
As exchange
 
rates are
 
outside the
 
Company’s
 
control,
there can be no
 
assurance that future fluctuations will
 
not adversely affect the Company’s results of operations and
 
financial condition.
Interest rate risk
As a result of its
 
normal borrowing activities, the Company’s operating results are exposed to fluctuations in
 
interest rates, which
it
 
manages
 
primarily
 
through
 
regular
 
financing
 
activities.
 
Interest
 
rates
 
in
 
South
 
Africa
 
have
 
been
 
trending
 
downwards
 
in
 
recent
quarters and
 
as of the
 
date of this
 
Annual Report,
 
are expected to
 
decline by a
 
further 25 basis
 
points in the
 
first quarter
 
of calendar
2026
 
and stabilize at
 
that level for
 
the remainder of
 
that year. Therefore, ignoring the impact
 
of changes to
 
the margin on its
 
borrowings
(refer
 
to
 
Note
 
12)
 
and
 
value
 
of
 
borrowings
 
outstanding,
 
the
 
Company
 
expects
 
its
 
cost
 
of
 
borrowing
 
to
 
decline
 
moderately
 
in
 
the
foreseeable future, however, the Company would expect a higher cost of borrowing if interest rates were to increase in the future. The
Company
 
periodically
 
evaluates
 
the
 
cost
 
and
 
effectiveness
 
of
 
interest
 
rate
 
hedging
 
strategies
 
to
 
manage
 
this
 
risk.
 
The
 
Company
generally
 
maintains surplus
 
cash in
 
cash equivalents
 
and held
 
to maturity
 
investments and
 
has occasionally
 
invested in
 
marketable
securities.
Credit risk
Credit
 
risk
 
relates
 
to
 
the
 
risk
 
of
 
loss
 
that
 
the
 
Company
 
would
 
incur
 
as
 
a
 
result
 
of
 
non-performance
 
by
 
counterparties.
 
The
Company
 
maintains
 
credit
 
risk
 
policies
 
in
 
respect
 
of
 
its
 
counterparties
 
to
 
minimize
 
overall
 
credit
 
risk.
 
These
 
policies
 
include
 
an
evaluation
 
of
 
a
 
potential
 
counterparty’s
 
financial
 
condition,
 
credit
 
rating,
 
and
 
other
 
credit
 
criteria
 
and
 
risk
 
mitigation
 
tools
 
as
 
the
Company’s
 
management deems
 
appropriate.
 
With
 
respect to
 
credit risk
 
on certain
 
financial instruments,
 
the Company
 
maintains a
policy of entering
 
into such transactions only
 
with South African
 
and European financial
 
institutions that have
 
a credit rating
 
of “B”
(or its equivalent) or better, as determined by
 
credit rating agencies such as Standard & Poor’s, Moody’s
 
and Fitch Ratings.
Consumer microlending credit
 
risk
The Company
 
is exposed
 
to credit
 
risk in
 
its Consumer
 
microlending activities,
 
which provides
 
unsecured short-term
 
loans to
qualifying customers.
 
Credit bureau
 
checks as
 
well as
 
an affordability
 
test are
 
conducted as
 
part of
 
the origination
 
process, both
 
of
which are in line with local regulations. The Company considers this
 
policy to be appropriate because the affordability test it
 
performs
takes into account
 
a variety of
 
factors such
 
as other debts
 
and total expenditures
 
on normal household
 
and lifestyle expenses.
 
Additional
allowances
 
may
 
be required
 
should the
 
ability of
 
its customers
 
to make
 
payments when
 
due
 
deteriorate
 
in the
 
future. Judgment
 
is
required to assess
 
the ultimate recoverability
 
of these finance
 
loan receivables, including
 
ongoing evaluation
 
of the creditworthiness
of each customer.
 
6.
 
FAIR VALUE
 
OF FINANCIAL INSTRUMENTS (continued)
Risk management (continued)
Merchant lending
The Company maintains an allowance for
 
doubtful finance loans receivable related to
 
its Merchant services segment with
 
respect
to short-term loans to qualifying merchant customers. The
 
Company’s risk management procedures include adhering to its proprietary
lending criteria which uses
 
an online-system loan application
 
process, obtaining necessary customer transaction-history
 
data and credit
bureau checks.
 
The Company considers
 
these procedures
 
to be appropriate
 
because it takes
 
into account
 
a variety of
 
factors such
 
as
the customer’s credit capacity and customer-specific
 
risk factors when originating a loan.
Equity price and liquidity risk
Equity price risk relates to the risk of loss that the Company would incur as a result of the volatility in the exchange-traded price
of equity
 
securities that
 
it holds.
 
The market
 
price of
 
these securities
 
may fluctuate
 
for a
 
variety of
 
reasons and,
 
consequently,
 
the
amount that the Company may obtain in a subsequent sale of these securities may significantly differ
 
from the reported market value.
 
Equity liquidity risk
 
relates to the risk
 
of loss that the
 
Company would incur as
 
a result of the lack
 
of liquidity on the
 
exchange
on
 
which
 
those
 
securities
 
are
 
listed.
 
The
 
Company
 
may
 
not be
 
able
 
to
 
sell some
 
or
 
all
 
of
 
these
 
securities
 
at
 
one
 
time,
 
or
 
over
 
an
extended period of time without influencing the exchange-traded price,
 
or at all.
Financial instruments
Fair value
 
is defined
 
as the price
 
that would
 
be received
 
upon sale
 
of an
 
asset or
 
paid upon
 
transfer of
 
a liability
 
in an orderly
transaction between
 
market participants
 
at the
 
measurement date
 
and in
 
the principal
 
or most
 
advantageous market
 
for that
 
asset or
liability. The
 
fair value should be calculated based
 
on assumptions that market participants
 
would use in pricing the asset
 
or liability,
not on assumptions specific to the entity. In addition, the fair value of liabilities should include consideration of non-performance risk
including the Company’s own credit
 
risk.
 
Fair value measurements and inputs are categorized into a
 
fair value hierarchy which prioritizes the inputs into
 
three levels based
on the
 
extent to which
 
inputs used
 
in measuring
 
fair value
 
are observable
 
in the
 
market. Each fair
 
value measurement
 
is reported in
one of the three levels which is determined by the lowest level input that is significant
 
to the fair value measurement in its entirety.
These levels are:
 
●
Level 1 – inputs are based upon unadjusted quoted prices for identical instruments
 
traded in active markets.
●
Level 2 – inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar
instruments in
 
markets that
 
are not
 
active, and
 
model-based valuation
 
techniques for
 
which all
 
significant assumptions
 
are
observable
 
in the
 
market or
 
can be
 
corroborated
 
by observable
 
market
 
data for
 
substantially the
 
full term
 
of the
 
assets or
liabilities.
●
Level
 
3
 
–
 
inputs
 
are
 
generally
 
unobservable
 
and
 
typically
 
reflect
 
management’s
 
estimates
 
of
 
assumptions
 
that
 
market
participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques
that include option pricing models, discounted cash flow models, and
 
similar techniques.
The following
 
section describes
 
the valuation
 
methodologies the
 
Company uses
 
to measure
 
its significant
 
financial assets
 
and
liabilities at fair value.
 
6.
 
FAIR VALUE
 
OF FINANCIAL INSTRUMENTS (continued)
Financial instruments (continued)
Asset measured at fair value using significant observable inputs – investment in MobiKwik
The Company’s
 
disposed of its entire holding,
 
comprising
6,215,620
 
equity shares, in MobiKwik in
 
late June 2025. MobiKwik
listed on the National Stock
 
Exchange of India (“NSE”) on December
 
18, 2024. Up until its listing
 
MobiKwik did not have a
 
readily
determinable fair
 
value and
 
the Company
 
elected to
 
measure its
 
investment in
 
MobiKwik at
 
cost minus
 
impairment, if
 
any,
 
plus or
minus changes
 
resulting from
 
observable price
 
changes in
 
orderly transactions
 
for the
 
identical or
 
a similar
 
investment of
 
the same
issuer (“cost plus or minus changes
 
in observable prices equity securities”).
 
From the date of MobiKwik’s
 
listing, the Company used
MobiKwik’s closing price reported on
 
the NSE on the last trading day related to last day of each of the Company’s external reporting
periods
 
through
 
March
 
31,
 
2025
 
to
 
determine
 
the
 
fair
 
value
 
of
 
the
 
equity
 
securities
 
owned
 
by
 
the
 
Company.
 
Refer
 
to
 
Note
 
9
 
for
additional information.
Asset measured at fair value using significant unobservable inputs – investment
 
in Cell C
The Company’s
 
Level 3 asset represents
 
an investment of
75,000,000
 
class “A” shares in Cell
 
C, a significant
 
mobile telecoms
provider in South Africa.
 
The Company used a discounted cash flow model developed by the Company to determine
 
the fair value of
its investment
 
in Cell
 
C as of
 
June 30,
 
2025 and
 
June 30, 2024,
 
respectively,
 
and valued Cell
 
C at $
0.0
 
(zero) and
 
$
0.0
 
(zero) as
 
of
June 30, 2025, and June 30, 2024, respectively.
 
The Company incorporates the payments under Cell C’s
 
lease liabilities into the cash
flow forecasts and assumes
 
that Cell C’s
 
deferred tax assets would
 
be utilized over the
 
forecast period. The Company
 
has assumed a
marketability discount
 
of
15
% (2024:
20
%) and a
 
minority discount
 
of
17
% (2024:
24
%). The Company
 
utilized the
 
latest business
plan
 
provided
 
by Cell
 
C management
 
for
 
the period
 
ended
 
May
 
31,
 
2030,
 
for
 
the
 
June 30,
 
2025,
 
valuation
 
and
 
the business
 
plan
approved by
 
Cell C management
 
for the period
 
ended December 31,
 
2027, for
 
the June 30,
 
2024, valuation. Adjustments
 
have been
made to the WACC
 
rate to reflect the Company’s
 
assessment of risk to Cell C achieving its business plan.
The following key valuation inputs were used as of June 30, 2025 and 2024:
 
 
 
 
 
 
 
 
 
 
 
 
Weighted Average
 
Cost of Capital ("WACC"):
24
% as of June 30, 2025 and between
21
% and
23
% as of June 30, 2024
Long-term growth rate:
4.5
% (
4.5
% as of June 30, 2024)
Marketability discount:
15
% (
20
% as of June 30, 2024)
Minority discount:
17
% (
24
% as of June 30, 2024)
Net adjusted external debt - June 30, 2025:
(1)
ZAR
8.3
 
billion ($
0.5
 
billion), no lease liabilities included
Net adjusted external debt - June 30, 2024:
(2)
ZAR
8
 
billion ($
0.4
 
billion), no lease liabilities included
(1) translated from ZAR to U.S. dollars at exchange rates applicable as of
 
June 30, 2025.
(2) translated from ZAR to U.S. dollars at exchange rates applicable as of
 
June 30, 2024.
The fair value
 
of Cell C
 
as of June
 
30, 2025, utilizing
 
the discounted
 
cash flow valuation
 
model developed
 
by the Company
 
is
sensitive to the following inputs: (i)
 
the ability of Cell C to achieve
 
the forecasts in their business case; (ii)
 
the WACC
 
rate used; and
(iii) the
 
minority and marketability
 
discount used. Utilization
 
of different inputs,
 
or changes to
 
these inputs, may
 
result in
 
a significantly
higher or lower fair value measurement.
 
The following table presents the impact on the carrying value of the Company’s
 
Cell C investment of a
1.0
% decrease and
1.0
%
increase in the WACC rate and the EBITDA margins used
 
in the Cell
 
C valuation on June
 
30, 2025, all amounts translated at
 
exchange
rates applicable as of June 30, 2025:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sensitivity for fair value of Cell C investment
1.0% increase
1.0% decrease
WACC
 
rate
$
(669)
$
1,095
EBITDA margin
$
1,780
$
(1,444)
The aggregate fair value of Cell C’s shares as of
 
June 30, 2025, represented
0.0
% of the Company’s total assets, including these
shares. The Company expects that there will
 
be short-term equity price volatility with respect
 
to these shares given that Cell
 
C remains
in a turnaround process
 
6.
 
FAIR VALUE
 
OF FINANCIAL INSTRUMENTS (continued)
Financial instruments (continued)
Derivative transactions - Foreign exchange contracts
As part
 
of the
 
Company’s
 
risk management
 
strategy,
 
the Company
 
enters into
 
derivative transactions
 
to mitigate
 
exposures to
foreign
 
currencies
 
using
 
foreign
 
exchange
 
contracts. These
 
foreign
 
exchange
 
contracts
 
are
 
over-the-counter
 
derivative
transactions. Substantially all of the Company’s derivative exposures are with counterparties that have long-term credit ratings of “B”
(or equivalent)
 
or better.
 
The Company
 
uses quoted
 
prices in
 
active markets
 
for similar
 
assets and liabilities
 
to determine
 
fair value
(Level 2). The
 
Company has
 
no derivatives
 
that require
 
fair value
 
measurement under
 
Level 1,
 
Level 2
 
or Level
 
3 of
 
the fair
 
value
hierarchy.
 
The Company had
no
 
outstanding foreign exchange contracts as of June 30, 2025 and June 30,
 
2024, respectively.
The following table presents the
 
Company’s assets measured
 
at fair value on a recurring basis as of
 
June 30, 2025, according to
the fair value hierarchy:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quoted Price in
Active Markets for
Identical Assets
(Level 1)
Significant Other
Observable Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Total
Assets
Investment in Cell C
$
-
$
-
$
-
$
-
Related to insurance business:
 
Cash, cash equivalents and
restricted cash (included in other
long-term assets)
 
125
-
-
125
Fixed maturity investments
(included in cash and cash
equivalents)
4,739
-
-
4,739
Total assets at fair value
 
$
4,864
$
-
$
-
$
4,864
The following table presents the Company’s
 
assets measured at fair value on a recurring basis as of
 
June 30, 2024, according to
the fair value hierarchy:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quoted Price in
Active Markets for
Identical Assets
(Level 1)
Significant Other
Observable Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Total
Assets
Investment in Cell C
$
-
$
-
$
-
$
-
Related to insurance business
Cash and cash equivalents
(included in other long-term
assets)
216
-
-
216
Fixed maturity investments
(included in cash and cash
equivalents)
4,635
-
-
4,635
Total assets at fair value
 
$
4,851
$
-
$
-
$
4,851
6.
 
FAIR VALUE
 
OF FINANCIAL INSTRUMENTS (continued)
Financial instruments (continued)
There have been
no
 
transfers in or out of Level 3 during the years ended June 30, 2025 and 2024, respectively.
There was
no
 
movement in the carrying value of assets measured at fair value on a recurring basis, and categorized within Level
3, during the years ended June 30, 2025
 
and 2024. Summarized below is the movement in
 
the carrying value of assets measured at fair
value on a recurring basis, and categorized within Level 3, during the year
 
ended June 30, 2025:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Carrying value
Assets
Balance as of June 30, 2024
$
-
Foreign currency adjustment
(1)
-
Balance as of June 30, 2025
$
-
(1) The
 
foreign currency
 
adjustment represents
 
the effects
 
of the fluctuations
 
of the South
 
African rand
 
against the
 
U.S. dollar
on the carrying value.
Summarized below is the movement in the carrying value of
 
assets and liabilities measured at fair value on a recurring
 
basis, and
categorized within Level 3, during the year ended June 30, 2024:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Carrying value
Assets
Balance as at June 30, 2023
$
-
Foreign currency adjustment
(1)
-
Balance as of June 30, 2024
$
-
(1) The
 
foreign currency
 
adjustment represents
 
the effects
 
of the fluctuations
 
of the South
 
African rand
 
against the
 
U.S. dollar
on the carrying value.
Trade, finance loans and other receivables
Trade, finance loans and other receivables originated by the Company are
 
stated at cost less allowance for credit losses. The fair
value of trade, finance loans and other receivables approximates their carrying
 
value due to their short-term nature.
Trade and other payables
The fair values of trade and other payables approximates their carrying amounts, due
 
to their short-term nature.
Assets and liabilities measured at fair value on a nonrecurring basis
 
The Company
 
measures equity
 
investments without
 
readily determinable
 
fair values
 
at fair
 
value on
 
a nonrecurring
 
basis. The
fair values of
 
these investments are
 
determined based on
 
valuation techniques using
 
the best information
 
available, and may
 
include
quoted market prices, market comparables, and discounted cash flow
 
projections. An impairment charge is recorded when the cost
 
of
the
 
asset
 
exceeds
 
its
 
fair
 
value
 
and
 
the
 
excess
 
is
 
determined
 
to
 
be
 
other-than-temporary.
 
Refer
 
to
 
Note
 
9
 
for
 
impairment
 
charges
recorded during the
 
reporting periods presented
 
herein. The Company
 
has
no
 
liabilities that
 
are measured at
 
fair value
 
on a
 
nonrecurring
basis.