Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (check one):

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
YES [  ]     NO [X ]

As of May 5,November 3, 2015 (the latest practicable date), 46,607,15347,322,702 shares of the registrant’s common stock, par value $0.001 per share, net of treasury shares, were outstanding.

Form 10-Q

NET 1 UEPS TECHNOLOGIES, INC.

Table of Contents

1

Part I. Financial Information

Item 1. Financial Statements

(A) – Derived from audited financial statements

See Notes to Unaudited Condensed Consolidated Financial Statements

2

NET 1 UEPS TECHNOLOGIES, INC.

NET 1 UEPS TECHNOLOGIES, INC.

Unaudited Condensed Consolidated Statements of Operations

		Three months ended						Nine months ended
		March 31,						March 31,
		2015			2014			2015			2014
		(In thousands, except per share data)						(In thousands, except per share data)
REVENUE	$	151,121		$	138,126		$	461,693		$	398,903
EXPENSE
Cost of goods sold, IT processing, servicing and support		71,094			63,149			217,274			187,591
Selling, general and administration		38,001			40,586			118,122			121,916
Depreciation and amortization		10,060			10,442			30,391			30,245
OPERATING INCOME		31,966			23,949			95,906			59,151
INTEREST INCOME		4,211			3,438			11,888			9,993
INTEREST EXPENSE		941			1,734			3,360			5,712
INCOME BEFORE INCOME TAX EXPENSE		35,236			25,653			104,434			63,432
INCOME TAX EXPENSE (Note 16)		10,305			8,535			32,156			22,119
NET INCOME BEFORE EARNINGS FROM EQUITY-ACCOUNTED INVESTMENTS		24,931			17,118			72,278			41,313
EARNINGS FROM EQUITY-ACCOUNTED INVESTMENTS		65			52			233			202
NET INCOME		24,996			17,170			72,511			41,515
LESS (ADD) NET INCOME (LOSS) ATTRIBUTABLE TO NON-CONTROLLING INTEREST		638			(12	)		1,690			(12	)
NET INCOME ATTRIBUTABLE TO NET1	$	24,358		$	17,182		$	70,821		$	41,527
Net income per share, in United States dollars (Note 13)
Basic earnings attributable to Net1 shareholders	$	0.52		$	0.38		$	1.51		$	0.91
Diluted earnings attributable to Net1 shareholders	$	0.52		$	0.37		$	1.51		$	0.90

Unaudited Condensed Consolidated Statements of Operations

See Notes to Unaudited Condensed Consolidated Financial Statements

3

NET 1 UEPS TECHNOLOGIES, INC.

NET 1 UEPS TECHNOLOGIES, INC.

Unaudited Condensed Consolidated Statements of Comprehensive Income

		Three months ended						Nine months ended
		March 31,						March 31,
		2015			2014			2015			2014
		(In thousands)						(In thousands)
Net income	$	24,996		$	17,170		$	72,511		$	41,515
Other comprehensive income (loss)
Net unrealized gain on asset available for sale, net of tax		648			327			422			288
Movement in foreign currency translation reserve		(11,596	)		(2,134	)		(49,182	)		2,838
Total other comprehensive (loss) income, net of taxes		(10,948	)		(1,807	)		(48,760	)		3,126
Comprehensive income		14,048			15,363			23,751			44,641
(Less) Add comprehensive (income)                   loss attributable to non-controlling interest		(601	)		12			(1,604	)		12
Comprehensive income attributable to Net1	$	13,447		$	15,375		$	22,147		$	44,653

Unaudited Condensed Consolidated Statements of Comprehensive Income

See Notes to Unaudited Condensed Consolidated Financial Statements

4

NET 1 UEPSTECHNOLOGIES, INC.

NET 1 UEPS TECHNOLOGIES, INC.

Unaudited Condensed Consolidated Statement of Changes in Equity for the nine months ended March 31, 2015 (dollar amounts in thousands)

		Net 1 UEPS Technologies, Inc. Shareholders
																							Accumulated
								Number of						Number of			Additional						other						Non-
		Number of						Treasury			Treasury			shares, net of			Paid-In			Retained			comprehensive			Total Net1			controlling
		Shares			Amount			Shares			Shares			treasury			Capital			Earnings			loss			Equity			Interest			Total
Balance – July 1, 2014		63,702,511		$	63			(15,883,212	)	$	(200,681	)		47,819,299		$	202,401		$	522,729		$	(82,741	)	$	441,771		$	(23	)	$	441,748
Repurchase of common stock (Note 10)								(1,837,432	)		(9,151	)		(1,837,432	)											(9,151	)					(9,151	)
Restricted stock granted (Note 12)		213,237												213,237												-						-
Exercise of stock option (Note 12)		748,633			1			(336,584	)		(4,688	)		412,049			6,467									1,780						1,780
Stock-based compensation charge (Note 12)																	2,682									2,682						2,682
Income tax benefit from vested stock awards																	483									483						483
Transactions with non-controlling interest (Note 10)																	1,231			404						1,635			(228	)		1,407
Dividends paid to non-controlling interest																										-			(1,024	)		(1,024	)
Net income																				70,821						70,821			1,690			72,511
Other comprehensive loss (Note 11)																							(48,674	)		(48,674	)		(86	)		(48,760	)
Balance – March 31, 2015		64,664,381		$	64			(18,057,228	)	$	(214,520	)		46,607,153		$	213,264		$	593,954		$	(131,415	)	$	461,347		$	329		$	461,676

UnauditedCondensedConsolidatedStatement ofChanges in Equity for the threemonths endedSeptember 30, 2015 (dollaramounts inthousands)

See Notes to Unaudited Condensed Consolidated Financial Statements

5

NET 1 UEPS TECHNOLOGIES, INC.

NET 1 UEPS TECHNOLOGIES, INC.

Unaudited Condensed Consolidated Statements of Cash Flows

		Three months ended						Nine months ended
		March 31,						March 31,
		2015			2014			2015			2014
		(In thousands)						(In thousands)
Cash flows from operating activities
Net income	$	24,996		$	17,170		$	72,511		$	41,515
Depreciation and amortization		10,060			10,442			30,391			30,245
Earnings from equity-accounted investments		(65	)		(52	)		(233	)		(202	)
Fair value adjustments		(449	)		110			(270	)		49
Interest payable		(23	)		30			1,276			1,696
Profit on disposal of property, plant and equipment		(64	)		(26	)		(295	)		(42	)
Stock-based compensation charge		731			922			2,682			2,820
Facility fee amortized		36			79			170			657
Decrease (Increase) in accounts receivable, pre- funded social welfare grants receivable and finance loans receivable		3,379			(6,443	)		5,534			(67,521	)
(Increase) Decrease in inventory		(26	)		2,821			(2,771	)		979
Increase (Decrease) in accounts payable and other payables		4,735			2,656			(7,654	)		(10,895	)
Increase in taxes payable		7,465			8,069			4,113			9,431
Decrease in deferred taxes		(1,467	)		(1,141	)		(2,025	)		(3,019	)
Net cash provided by operating activities		49,308			34,637			103,429			5,713
Cash flows from investing activities
Capital expenditures		(6,307	)		(4,848	)		(24,822	)		(17,309	)
Proceeds from disposal of property, plant and equipment		163			123			777			2,124
Proceeds from sale of business (Note 14)		-			-			1,895			-
(Investment in equity in) Repayment of loan by equity-accounted investment		-			(25	)		-			(25	)
Other investing activities		-			571			(29	)		570
Net change in settlement assets		(188,315	)		(277,912	)		10,283			(21,409	)
Net cash used in investing activities		(194,459	)		(282,091	)		(11,896	)		(36,049	)
Cash flows from financing activities
Repayment of long-term borrowings (Note 9)		-			-			(14,128	)		(87,008	)
Long-term borrowings utilized		798			1,028			2,976			72,633
Acquisition of treasury stock (Note 10)		-			-			(9,151	)		-
Sale of equity to non-controlling interest (Note 10)		-			-			1,407			-
Dividends paid to non-controlling interest		(1,024	)		-			(1,024	)		-
Proceeds from issue of common stock		791			88			1,780			88
Payment of facility fee		-			-			-			(872	)
Proceeds from bank overdraft		-			-			-			24,580
Repayment of bank overdraft		-			(23,335	)		-			(23,335	)
Acquisition of interests in KSNET (Note 10)		-			-			-			(1,968	)
Net change in settlement obligations		188,315			277,912			(10,283	)		21,409
Net cash provided (used in) by financingactivities		188,880			255,693			(28,423	)		5,527
Effect of exchange rate changes on cash		(3,708	)		274			(10,780	)		2,019
Net increase (decrease) in cash and cashequivalents		40,021			8,513			52,330			(22,790	)
Cash and cash equivalents – beginning of period		70,981			22,362			58,672			53,665
Cash and cash equivalents – end of period	$	111,002		$	30,875		$	111,002		$	30,875

Unaudited Condensed Consolidated Statements of Cash Flows

See Notes to Unaudited Condensed Consolidated Financial Statements

6

NET 1 UEPS TECHNOLOGIES, INC.

NET 1 UEPS TECHNOLOGIES, INC.

Notes to the Unaudited Condensed Consolidated Financial Statements

for the three and nine months ended March 31, 2015 and 2014

Notes to the Unaudited Condensed Consolidated Financial Statements for the three months ended September 30, 2015 and 2014 (All amounts in tables stated in thousands or thousands of United States Dollars, unless otherwise stated) 1. Basis of Presentation and Summary of Significant Accounting Policies 1. Basis of Presentation and Summary of Significant Accounting Policies Unaudited Interim Financial Information The accompanying unaudited condensed consolidated financial statements include all majority-owned subsidiaries over which the Company exercises control and have been prepared in accordance with USU.S. generally accepted accounting principles (“GAAP”) and the rules and regulations of the United States Securities and Exchange Commission for quarterly reports on Form 10-Q and include all of the information and disclosures required for interim financial reporting. The results of operations for the three and nine months ended March 31,September 30, 2015 and 2014, are not necessarily indicative of the results for the full year. The Company believes that the disclosures are adequate to make the information presented not misleading. These financial statements should be read in conjunction with the financial statements, accounting policies and financial notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2014.2015. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments (consisting only of normal recurring adjustments), which are necessary for a fair representation of financial results for the interim periods presented. References to the “Company” refer to Net1 and its consolidated subsidiaries, unless the context otherwise requires. References to Net1 are references solely to Net 1 UEPS Technologies, Inc. Recent accounting pronouncements adopted      In March 2013,There were no accounting pronouncements adopted during the FASB issued guidance regardingParent’s Accounting for the Cumulative Translation Adjustment Upon Derecognition of Certain Subsidiaries or Groups of Assets Within a Foreign Entity or of an Investment in a Foreign Entity. This guidance requires that the parent release any related cumulative translation adjustment into net income only if the sale or transfer results in the complete or substantially complete liquidation of the foreign entity in which the subsidiary or group of assets had resided. The guidance is effective for the Company beginning July 1, 2014, and is applied prospectively. The adoption of this guidance did not have a material impact on the Company’s financial statements.three months ended September 30, 2015. Recent accounting pronouncements not yet adopted as of March 31,September 30, 2015 In May 2014, the FASB issued guidance regardingRevenue from Contracts with Customers. This guidance requires an entity to recognize revenue when a customer obtains control of promised goods or services in an amount that reflects the consideration to which the entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The guidance iswas effective for the Company beginning July 1, 2017.2017, however this date has been extended as per subsequent guidance issued by the FASB. Early adoption is not permitted. The Company expects that this guidance will have a material impact on its financial statements and is currently evaluating the impact of this guidance on its financial statements on adoption. In August 2015, the FASB issued guidance regardingRevenue from Contracts with Customers, Deferral of the Effective Date. This guidance defers the required implementation date specified inRevenue from Contracts with Customers to December 2017. Public companies may elect to adopt the standard along the original timeline. The Company expects that this guidance will have a material impact on its financial statements and is currently evaluating the impact of this guidance on its financial statements on adoption. In August 2014, the FASB issued guidance regardingDisclosure of Uncertainties Aboutabout an Entity’s Ability to Continue as a Going Concern. This guidance requires an entity to perform interim and annual assessments of its ability to continue as a going concern within one year of the date that its financial statements are issued. An entity must provide certain disclosures if conditions or events raise substantial doubt about the entity’s ability to continue as a going concern. The guidance is effective for the Company beginning July 1, 2017. Early adoption is permitted. The Company is currently assessing the impact of this guidance on its financial statements disclosure. In February 2015, the FASB issued guidance regardingAmendments to the Consolidation Analysis. This guidance amends both the variable interest entity and voting interest entity consolidation models. The requirement to assess an entity under a different consolidation model may change previous consolidation conclusions. The guidance is effective for the Company beginning July 1, 2016. Early adoption is permitted. The Company is currently assessing the impact of this guidance on its financial statements disclosure. 2. Pre-funded social welfare grants receivable7 1. Basis of Presentation and Summary of Significant Accounting Policies (continued) Recent accounting pronouncements not yet adopted as of September 30, 2015 (continued) In July 2015, the FASB issued guidance regardingSimplifying the Measurement of Inventory. This guidance requires entities to measure most inventory “at the lower of cost and net realizable value,” thereby simplifying the current guidance under which an entity must measure inventory at the lower of cost or market (market in this context is defined as one of three different measures). The guidance will not apply to inventories that are measured by using either the last-in, first-out (“LIFO”) method or the retail inventory method (“RIM”). The guidance is effective for the Company beginning July 1, 2017. Early adoption is permitted. The Company is currently assessing the impact of this guidance on its financial statements disclosure. 2. Pre-funded social welfare grants receivable Pre-funded social welfare grants receivable represents amounts pre-funded by the Company to certain merchants participating in the merchant acquiring system. The AprilOctober 2015 payment service commenced on AprilOctober 1, 2015, but the Company pre-funded certain merchants participating in the merchant acquiring system on the last two days of MarchSeptember 2015. 3. Inventory 7 3. Inventory The Company’s inventory comprised the following categories as of March 31,September 30, 2015 and June 30, 2014.2015.     March 31,     June 30,       2015     2014   Finished goods $ 12,095   $ 10,785     $ 12,095   $ 10,785         September 30,     June 30,         2015     2015     Finished goods $ 12,335   $ 12,979       $ 12,335   $ 12,979   4. Settlement assets and settlement obligations 4. Settlement assets and settlement obligations Settlement assets comprise (1) cash received from the South African government that the Company holds pending disbursement to recipient cardholdersbeneficiaries of social welfare grants and (2) cash received from customers on whose behalf the Company processes payroll payments that the Company will disburse to customer employees, payroll-related payees and other payees designated by the customer. Settlement obligations comprise (1) amounts that the Company is obligated to disburse to recipient cardholdersbeneficiaries of social welfare grants, and (2) amounts that the Company is obligated to pay to customer employees, payroll-related payees and other payees designated by the customer. The balances at each reporting date may vary widely depending on the timing of the receipts and payments of these assets and obligations. 5. Fair value of financial instruments 5. 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 managementmanagement The Company seeks to reduce its exposure to currencies other than the South African Rand (“ZAR”) through a policy of matching, to the extent possible, assets and liabilities denominated in those currencies. In addition, the Company uses financial instruments in order to economically hedge its exposure to exchange rate and interest rate fluctuations arising from its operations. The Company is also exposed to equity price and liquidity risks as well as credit risks. 8 5. Fair value of financial instruments (continued) Risk management (continued) Currency exchange risk The Company is subject to currency exchange risk because it purchases inventories that it is required to settle in other currencies, primarily the euro and USU.S. dollar. The Company has used forward contracts in order to limit its exposure in these transactions to fluctuations in exchange rates between the ZAR, on the one hand, and the USU.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 USU.S. dollar is its reporting currency, but it earns most of its revenues and incurs most of its expenses in ZAR. The USU.S. dollar to 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 and leasing activities, the Company’s operating results are exposed to fluctuations in interest rates, which it manages primarily through regular financing activities. The Company generally maintains limited investment in cash equivalents and has occasionally invested in marketable securities. 8 5. Fair value of financial instruments (continued) Risk management (continued) 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 with regard to 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 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 BBB or better, as determined by credit rating agencies such as Standard & Poor’s, Moody’s and Fitch Ratings. UEPS-based microlending credit risk The Company is exposed to credit risk in its UEPS-based microlending activities, which provides unsecured short-term loans to qualifying customers. The Company manages this risk by performing an affordability test for each prospective customer and assigns a “creditworthiness score”, which takes into account a variety of factors such as other debts and total expenditures on normal household and lifestyle expenses. 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 and the risk that it may not be able to liquidate these securities. The market price of these securities may fluctuate for a variety of reasons, consequently, the amount the Company may obtain in a subsequent sale of these securities may significantly differ from the reported market value. 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 these 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. 9 5. Fair value of financial instruments (continued) Financial instruments The following section describes the valuation methodologies the Company uses to measure its significant financial assets and liabilities at fair value. In general, and where applicable, the Company uses quoted prices in active markets for identical assets or liabilities to determine fair value. This pricing methodology applies to Level 1 investments. If quoted prices in active markets for identical assets or liabilities are not available to determine fair value, then the Company uses quoted prices for similar assets and liabilities or inputs other than the quoted prices that are observable either directly or indirectly. These investments are included in Level 2 investments. In circumstances in which inputs are generally unobservable, values 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. Investments valued using such techniques are included in Level 3 investments. Asset measured at fair value using significant unobservable inputs – investment in Finbond Group Limited (“Finbond”) The Company's Level 3 asset represents an investment of 156,788,712 shares of common stock of Finbond, which are exchange-traded equity securities. Finbond’s shares are traded on the Johannesburg Stock Exchange (“JSE”) and the Company has designated such shares as available for sale investments. The Company has concluded that the market for Finbond shares is not active and consequently has employed alternative valuation techniques in order to determine the fair value of such stock. Finbond issues financial products and services under a mutual banking licence and also has a microlending offering. In determining the fair value of Finbond, the Company has considered amongst other things Finbond’s historical financial information (including its most recent public accounts), press releases issued by Finbond and its published net asset value. The Company believes that the best indicator of fair value of Finbond is its published net asset value and has used this value to determine the fair value. 9 5. Fair value of financial instruments (continued)      Financial instruments (continued) Asset measured at fair value using significant unobservable inputs – investment in Finbond Group Limited (“Finbond”) (continued) The fair value of these securities as of March 31,September 30, 2015, represented approximately 1% of the Company’s total assets, including these securities. The Company expects to hold these securities for an extended period of time and it is not concerned with short-term equity price volatility with respect to these securities provided that the underlying business, economic and management characteristics of the company remain sound. 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 BBB 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 or 3 of the fair value hierarchy. The Company’s outstanding foreign exchange contracts are as follows: As of March 31,September 30, 2015     Fair market   Notional amount Strike price value price Maturity EUR 706,205.00 ZAR 14.8645 ZAR 13.0822 April 20, 2015 EUR 512,865.00 ZAR 14.9455 ZAR 13.1517 May 20, 2015 EUR 526,263.00 ZAR 15.0345 ZAR 13.2305 June 22, 2015 EUR 526,263.00 ZAR 15.1145 ZAR 13.3002 July 20, 2015 EUR 526,263.00 ZAR 15.2025 ZAR 13.3786 August 20, 2015 EUR 526,263.00 ZAR 15.2944 ZAR 13.4595 September 21, 2015 EUR 526,263.00 ZAR 15.3809 ZAR 13.5353 ZAR15.5532 October 20, 2015 EUR 509,516.00 ZAR 15.4728 ZAR 13.6178 ZAR15.6435 November 20, 2015 EUR 529,865.00 ZAR 15.5654 ZAR 13.7004 ZAR15.7402 December 21, 2015 EUR 526,663.00 ZAR 15.6625 ZAR 13.7827 ZAR15.8358 January 20, 2016 10 5. Fair value of financial instruments (continued) Financial instruments (continued) As of June 30, 20142015     Fair market   Notional amount Strike price value price Maturity EUR 182,272.50526,263.00 ZAR 15.207715.1145 ZAR 14.580313.6275 July 21, 201420, 2015 EUR 182,272.50526,263.00 ZAR 15.348815.2025 ZAR 14.580313.7062 July 21, 2014 EUR 180,022.50 ZAR 15.4228 ZAR 14.6542 August 20, 20142015 EUR 180,022.50526,263.00 ZAR 15.281915.2944 ZAR 14.654213.7898 August 20, 2014 September 21, 2015 EUR 180,022.50526,263.00 ZAR 15.362315.3809 ZAR 14.736713.8683 September 22, 2014 EUR 180,022.50 ZAR 15.5041 ZAR 14.7367 September 22, 2014 EUR 181,570.50 ZAR 15.5739 ZAR 14.8119 October 20, 20142015 EUR 181,570.50509,516.00 ZAR 15.431615.4728 ZAR 14.811913.9540 October 20, 2014 EUR 180,022.50 ZAR 15.6552 ZAR 14.8982 November 20, 20142015 EUR 180,022.50529,865.00 ZAR 15.513615.5654 ZAR 14.898214.0397 November 20, 2014 December 21, 2015 EUR 180,022.50526,663.00 ZAR 15.597015.6625 ZAR 14.987414.1239 December 22, 2014 EUR 180,022.50 ZAR 15.7391 ZAR 14.9874 December 22, 2014 EUR 174,424.50 ZAR 15.8119 ZAR 15.0671 January 20, 2015 EUR 174,424.502016 ZAR 15.6729 ZAR 15.0671 January 20, 2015 10 5. Fair value of financial instruments (continued) The following table presents the Company’s assets and liabilities measured at fair value on a recurring basis as of March 31,September 30, 2015, according to the fair value hierarchy:     Quoted                         Price in                         Active     Significant                   Markets for     Other     Significant             Identical     Observable     Unobservable             Assets     Inputs     Inputs             (Level 1)   (Level 2)   (Level 3)   Total   Assets                            Related to insurance business (included in other long-term assets):                        Cash and cash equivalents $ 1,643   $ -   $ -   $ 1,643      Investment in Finbond (available for sale assets included in other long-term assets)   -     -     7,608     7,608      Other   -     1,300     -     1,300          Total assets at fair value $ 1,643   $ 1,300   $ 7,608   $ 10,551   Liabilities                            Foreign exchange contracts $ -   $ 819   $ -   $ 819          Total liabilities at fair value $ -   $ 819   $ -   $ 819         Quoted                           Price in                           Active     Significant                     Markets for     Other     Significant               Identical     Observable     Unobservable               Assets     Inputs     Inputs               (Level 1)   (Level 2)   (Level 3)   Total     Assets                             Related to insurance business (included in other long-term assets):        Cash and cash equivalents $ 1,884   $ -   $ -   $ 1,884       Investment in Finbond (available for sale assets included in other long-term assets) - - 6,618 6,618     Other   -     1,069     -     1,069          Total assets at fair value $ 1,884   $ 1,069   $ 6,618   $ 9,571   The following table presents the Company’s assets and liabilities measured at fair value on a recurring basis as of June 30, 2014,2015, according to the fair value hierarchy:     Quoted                         Price in                         Active     Significant                   Markets for     Other     Significant             Identical     Observable     Unobservable             Assets     Inputs     Inputs             (Level 1)   (Level 2)   (Level 3)     Total   Assets                            Related to insurance business (included in other long-term assets):                        Cash and cash equivalents $ 1,800   $ -   $ -   $ 1,800      Investment in Finbond (available for sale assets included in other long-term assets)   -     -     8,068     8,068      Other   -     47     -     47          Total assets at fair value $ 1,800   $ 47   $ 8,068   $ 9,915   Liabilities                            Foreign exchange contracts $ -   $ 164   $ -   $ 164          Total liabilities at fair value $ -   $ 164   $ -   $ 164         Quoted                           Price in                           Active     Significant                     Markets for     Other     Significant               Identical     Observable     Unobservable               Assets     Inputs     Inputs               (Level 1)   (Level 2)   (Level 3)   Total     Assets                              Related to insurance business (included in other long-term assets):          Cash and cash equivalents $ 1,640   $ -   $ -   $ 1,640        Investment in Finbond (available for sale assets included in other long-term assets) - - 7,488 7,488      Other   -     1,259     -     1,259            Total assets at fair value $ 1,640   $ 1,259   $ 7,488   $ 10,387     Liabilities                              Foreign exchange contracts $ -   $ 452   $ -   $ 452            Total liabilities at fair value $ -   $ 452   $ -   $ 452   11 5. Fair value of financial instruments (continued) Financial instruments (continued) Changes in the Company’s investment in Finbond (Level 3 that are measured at fair value on a recurring basis) were insignificant during the three and nine months ended March 31,September 30, 2015 and 2014, respectively. There have been no transfers in or out of Level 3 during the three and nine months ended March 31,September 30, 2015 and 2014, respectively. Assets and liabilities measured at fair value on a nonrecurring basis The Company measures its assets at fair value on a nonrecurring basis when they are deemed to be other-than-temporarily impaired. The Company has no liabilities that are measured at fair value on a nonrecurring basis. The Company reviews the carrying values of its assets when events and circumstances warrant and considers all available evidence in evaluating when declines in fair value are other-than-temporary. The fair values of the Company’s assets are determined 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 assets exceeds its fair value and the excess is determined to be other-than-temporary. The Company has not recorded any impairment charges during the reporting periods presented herein. 6. 11 6. Goodwill and intangible assets, net Goodwill Goodwill Summarized below is the movement in the carrying value of goodwill for the ninethree months ended March 31,September 30, 2015:           Accumulated     Carrying       Gross value     impairment     value   Balance as of June 30, 2014 $ 186,576   $ -   $ 186,576        Foreign currency adjustment(1)   (17,143 )   -     (17,143 )              Balance as of March 31, 2015 $ 169,433   $ -   $ 169,433               Accumulated     Carrying         Gross value     impairment     value     Balance as of June 30, 2015 $ 166,437   $ -   $ 166,437          Foreign currency adjustment(1)   (12,143 )   -     (12,143 )                Balance as of September 30, 2015 $ 154,294   $ -   $ 154,294   (1) – The foreign currency adjustment represents the effects of the fluctuations between the South African rand and the Korean won, and the USU.S. dollar on the carrying value. Goodwill has been allocated to the Company’s reportable segments as follows:     As of     As of       March 31,     June 30,       2015     2014                 South African transaction processing $ 24,974   $ 28,517   International transaction processing   117,788     128,427   Financial inclusion and applied technologies   26,671     29,632      Total $ 169,433   $ 186,576         South           Financial               African     International     inclusion and               transaction     transaction     applied     Carrying         processing     processing     technologies     value     Balance as of June 30, 2015 $ 24,579   $ 115,519   $ 26,339   $ 166,437        Foreign currency adjustment(1)   (3,053 )   (6,537 )   (2,553 )   (12,143 )   Balance as of September 30, 2015 $ 21,526   $ 108,982   $ 23,786   $ 154,294   (1) – The foreign currency adjustment represents the effects of the fluctuations between the South African rand and the Korean won, and the U.S. dollar on the carrying value. 12 6. Goodwill and intangible assets, net (continued) Intangible assets, net Carrying value and amortization of intangible assets Summarized below is the carrying value and accumulated amortization of the intangible assets as of March 31,September 30, 2015 and June 30, 2014:2015:     As of March 31, 2015     As of June 30, 2014       Gross           Net     Gross           Net       carrying     Accumulated      carrying      carrying     Accumulated     carrying       value     amortization     value     value     amortization     value   Finite-lived intangible assets:                                          Customer relationships $ 89,797   $ (43,972 ) $ 45,825   $ 98,676   $ (41,273 ) $ 57,403        Software and unpatented technology   30,534     (27,585 )   2,949     33,604     (26,207 )   7,397        FTS patent   3,169     (3,169 )   -     3,619     (3,619 )   -        Exclusive licenses   4,506     (4,506 )   -     4,506     (4,506 )   -        Trademarks   6,205     (3,314 )   2,891     6,890     (3,176 )   3,714        Total finite-lived intangible assets $ 134,211   $ (82,546 ) $ 51,665   $ 147,295   $ (78,781 ) $ 68,514         As of September 30, 2015     As of June 30, 2015         Gross           Net     Gross           Net         carrying     Accumulated     carrying     carrying     Accumulated     carrying         value     amortization     value     value     amortization     value     Finite-lived intangible assets:                                            Customer relationships $ 82,160   $ (44,008 ) $ 38,152   $ 88,109   $ (45,312 ) $ 42,797     Software and unpatented technology 27,872 (27,491 ) 381 29,964 (28,323 ) 1,641        FTS patent   2,731     (2,731 )   -     3,119     (3,119 )   -          Exclusive licenses   4,506     (4,506 )   -     4,506     (4,506 )   -          Trademarks   5,589     (3,260 )   2,329     6,094     (3,408 )   2,686     Total finite-lived intangible assets $ 122,858   $ (81,996 ) $ 40,862   $ 131,792   $ (84,668 ) $ 47,124 Aggregate amortization expense on the finite-lived intangible assets for the three and nine months ended March 31,September 30, 2015 was approximately $3.6 million and $11.3 million, respectively (three and nine months ended March 31, 2014, was approximately $4.6$3.3 million and $12.5$3.9 million, respectively).respectively. Future estimated annual amortization expense for the next five fiscal years and thereafter, assuming an exchange ratesrate prevailing on March 31,September 30, 2015, is presented in the table below. Actual amortization expense in future periods could differ from this estimate as a result of acquisitions, changes in useful lives, exchange rate fluctuations and other relevant factors. 2015 $ 14,446   2016   10,800   2017   8,611   2018   8,612   2019   8,293   Thereafter $ 11,507     2016 $ 10,105     2017   7,929     2018   7,928     2019   7,634     2020   7,463     Thereafter $ 3,088   7. Reinsurance assets and policy holder liabilities under insurance and investment contracts 12 7. Reinsurance assets and policy holder liabilities under insurance and investment contracts Reinsurance assets and policy holder liabilities under insurance contracts Summarized below is the movement in reinsurance assets and policy holder liabilities under insurance contracts during the ninethree months ended March 31,September 30, 2015:     Reinsurance     Insurance       assets (1)   contracts (2) Balance as of June 30, 2014 $ 21,062   $ (21,478 )    Foreign currency adjustment(3)   (2,617 )   2,668         Balance as of March 31, 2015 $ 18,445   $ (18,810 )       Reinsurance     Insurance         assets (1)   contracts (2)   Balance as of June 30, 2015 $ 183   $ (567 )        Foreign currency adjustment(3)   (23 )   71              Balance as of September 30, 2015 $ 160   $ (496 ) (1) Included in other long-term assets. (2) Included in other long-term liabilities. (3) The foreign currency adjustment represents the effects of the fluctuations between the ZAR against the USU.S. dollar. The Company has agreements with reinsurance companies in order to limit its losses from large insurance contracts, however, if the reinsurer is unable to meet its obligations, the Company retains the liability.      ThePolicyholders' liabilities under insurance contracts are derived from actual claims submitted which had not been settled as of September 30, 2015 and June 30, 2015, respectively, and represents management’s estimate of the net present value of future claims and benefits under existing insurance contract liabilities is based on best estimates assumptionscontracts, offset by probable future premiums to be received (net of future experience plus prescribed margins, as required in the markets in which these products are offered, namely South Africa. The process of deriving the best estimates assumptions plus prescribed margins includes assumptions related to future mortality and morbidity (an appropriate base table of standard mortality is chosen depending on the type of contract and class of business), withdrawals (based on recent withdrawal investigations and expected future trends), investment returns (based on government treasury rates adjusted by an applicable margin), expense inflation (based on a 10-year real return on CPI-linked government bonds from the risk-free rate and adding an allowance for salary inflation and book shrinkage of 1% per annum) and claim reporting delays (based on average industry experience)service cost). 13 7. Reinsurance assets and policy holder liabilities under insurance and investment contracts (continued) Assets and policy holder liabilities under investment contracts Summarized below is the movement in assets and policy holder liabilities under investment contracts during the ninethree months ended March 31,September 30, 2015:           Investment       Assets (1)   contracts (2) Balance as of June 30, 2014 $ 688   $ (688 )    Foreign currency adjustment(3)   (85 )   85         Balance as of March 31, 2015 $ 603   $ (603 )             Investment         Assets (1)   contracts (2)   Balance as of June 30, 2015 $ 593   $ (593 )        Foreign currency adjustment(3)   (73 )   73              Balance as of September 30, 2015 $ 520   $ (520 ) (1) Included in other long-term assets. (2) Included in other long-term liabilities. (3) The foreign currency adjustment represents the effects of the fluctuations between the ZAR against the USU.S. dollar. The Company does not offer any investment products with guarantees related to capital or returns. 8. Short-term credit facility 8. Short-term credit facility The Company’s short-term credit facilities are described in Note 12 to the Company’s audited consolidated financial statements included in its Annual Report on Form 10-K for the year ended June 30, 2014.2015. South Africa The Company’s short-term South African credit facility with Nedbank Limited comprises an overdraft facility of up to ZAR 50 million and indirect and derivative facilities of up to ZAR 150 million, which include letters of guarantee, letters of credit and forward exchange contracts. As of March 31, 2015, and JuneSeptember 30, 2014, the Company had not utilized any of its ZAR 250.0 million ($20.7 million, translated at exchange rates applicable as of March 31, 2015) overdraft facility. As of March 31, 2015, the interest rate on the overdraft facility was 8.10%8.35% . At March 31,As of each of September 30, 2015 and June 30, 2015, respectively, the Company had not utilized any of its overdraft facility. As of September 30, 2015, the Company had utilized approximately ZAR 137.2128.2 million ($11.39.1 million, translated at exchange rates applicable as of March 31,September 30, 2015) of its ZAR 150 million indirect and derivative facilities to obtain foreign exchange contracts from the bank and to enable the bank to issue guarantees, including stand-by letters of credit, in order for the Company to honor its obligations to third parties requiring such guarantees (refer to Note 17). As of June 30, 2014,2015, the Company had utilized approximately ZAR 139.0139.6 million ($13.111.4 million, translated at exchange rates applicable as of June 30, 2014)2015) of its indirect and derivative facilities. 13 8. Short-term credit facility (continued)Korea Korea The Company had not utilized any of its KRW 10 billion ($9.08.4 million, translated at exchange rates applicable as of March 31,September 30, 2015) overdraft facility as of March 31,September 30, 2015 and June 30, 2014.2015. As of March 31,September 30, 2015, the interest rate on the overdraft facility was 3.80%3.20% . The facility expires in January 2016. 9. Long-term borrowings 9. Long-term borrowings The Company’s Korean senior secured loan facility is described in Note 13 to the Company’s audited consolidated financial statements included in its Annual Report on Form 10-K for the year ended June 30, 2014.2015. The current carrying value as of March 31,September 30, 2015, is $60.0 million. As of March 31,September 30, 2015, the carrying amount of the long-term borrowings approximated fair value. The interest rate in effect on March 31,September 30, 2015, was 5.22%4.74% . Interest expense incurred during the three and nine months ended March 31,September 30, 2015 and 2014, was $0.8$0.7 million and $2.2 million; and $1.1 million and $3.7 million, respectively. Prepaid facility fees amortized during the three and nine months ended March 31,September 30, 2015 and 2014, was $0.04$0.03 million and $0.2 million; and $0.1 million, and $0.7 million, respectively. Prepaid facility fees amortized during the nine months ended March 31, 2014, include the remaining prepaid facility fees related to the refinanced facility of approximately $0.4 million that were expensed. The next scheduled principal payment of $9.0$8.4 million (translated at exchange rates applicable as of March 31,September 30, 2015) will be made on April 29, 2016. 10. Capital structure14 10. Capital structure The following table presents reconciliation between the number of shares, net of treasury, presented in the unaudited condensed consolidated statement of changes in equity during the ninethree months ended March 31,September 30, 2015 and 2014, respectively, and the number of shares, net of treasury, excluding non-vested equity shares that have not vested during the ninethree months ended March 31,September 30, 2015 and 2014, respectively:     2015     2014                 Number of shares, net of treasury:                  Statement of changes in equity   46,607,153     45,783,342        Less: Non-vested equity shares that have not vested (Note 12)   (341,529 )   (385,778 )              Number of shares, net of treasury excluding non-vested equity shares that have not vested   46,265,624     45,397,564         Sept 30,     Sept 30,         2015     2014                     Number of shares, net of treasury:                    Statement of changes in equity   47,322,702     46,475,623          Less: Non-vested equity shares that have not vested (Note 12)   (589,447 )   (453,333 )                Number of shares, net of treasury excluding non-vested equity shares that have not vested 46,733,255 46,022,290 Common stock repurchases and transaction with non-controlling interests The Company did not repurchase any of its shares during the three and nine months ended March 31,September 30, 2015 and 2014, under its share repurchase authorization. However, on August 27, 2014, the Company entered into a Subscription and Sale of Shares Agreement with Business Venture Investments No 1567 Proprietary Limited (RF) (“BVI”), one of the Company’s BEE partners, in preparation for any new potential SASSA tender. Pursuant to the agreement: (i) the Company repurchased BVI’s remaining 1,837,432 shares of the Company’s common stock for approximately ZAR 97.4 million in cash ($9.2 million translated at exchange rates prevailing as of August 27, 2014) and (ii) BVI has subscribed for new ordinary shares of Cash Paymaster Services (Pty) Ltd (“CPS”) representing approximately 12.5% of CPS’ ordinary shares outstanding after the subscription for ZAR 15.0 million in cash (approximately $1.4 million translated at exchange rates prevailing as of August 27, 2014). In connection with transactions described above, the CPS shareholder agreement that was negotiated as part of the original December 2013 Relationship Agreement became effective. 11. Accumulated other comprehensive loss Acquisition of KSNET non-controlling interests      During the nine months ended March 31, 2014, the Company acquired all of the issued share capital of KSNET, Inc. that it did not previously own for approximately $2.0 million in cash. The transaction was accounted for as an equity transaction with a non-controlling interest and accordingly, no gain or loss was recognized in the Company’s consolidated statement of operations. The carrying amount of the non-controlling interest was adjusted to reflect the change in ownership interest in KSNET. The difference between the fair value of the consideration paid and the amount by which the non-controlling interest was adjusted, of $1.5 million, was recognized in equity attributable to Net1. 14 11. Accumulated other comprehensive loss The table below presents the change in accumulated other comprehensive (loss) income per component during the ninethree months ended March 31,September 30, 2015:     Nine months ended       March 31, 2015             Accumulated                   Net                   unrealized             Accumulated     income (loss)             Foreign     on asset             currency     available for             translation     sale, net of             reserve     tax     Total                       Balance as of June 30, 2014 $ (83,359 ) $ 618   $ (82,741 )      Movement in foreign currency translation reserve   (49,096 )   -     (49,096 )     Unrealized gain on asset available for sale, net of tax of $97   -     422     422                Balance as of March 31, 2015 $ (132,455 ) $ 1,040   $ (131,415 )       Three months ended         September 30, 2015               Accumulated                     Net                     unrealized               Accumulated     income on               Foreign     asset               currency     available for               translation     sale, net of               reserve     tax     Total                           Balance as of June 30, 2015 $ (140,221 ) $ 1,040   $ (139,181 )        Movement in foreign currency translation reserve   (43,414 )   -     (43,414 )        Unrealized gain on asset available for sale, net of tax of $11 - 50 50                  Balance as of September 30, 2015 $ (183,635 ) $ 1,090   $ (182,545 ) There were no reclassifications from accumulated other comprehensive loss to comprehensive (loss) income during the three and nine months ended March 31,September 30, 2015 or 2014, respectively. 12. Stock-based compensation15 12. Stock-based compensation Stock option and restricted stock activity Options The following table summarizes stock option activity for the ninethree months ended March 31,September 30, 2015 and 2014:                 Weighted           Weighted             Weighted     Average           Average             average     Remaining     Aggregate     Grant             exercise     Contractual     Intrinsic     Date Fair       Number of     price     Term     Value     Value       shares     ($)     (in years)     ($’000)   ($)                                   Outstanding – June 30, 2014   2,710,392     14.16     5.38     3,909          Granted under Plan: August 2014   464,410     11.23     10.00     2,113     4.55    Exercised   (748,633 )   8.64           3,750              Outstanding – March 31, 2015   2,426,169     15.30     4.99     4,570                                       Outstanding – June 30, 2013   2,648,583     15.15     5.98     313          Granted under Plan: August 2013   224,896     7.35     10.00     568     2.53    Exercised   (10,000 )   8.75           12          Forfeited   (136,420 )   23.51                          Outstanding – March 31, 2014   2,727,059     14.12     5.63     2,290                         Weighted           Weighted               Weighted     Average           Average               average     Remaining     Aggregate     Grant               exercise     Contractual     Intrinsic     Date Fair         Number of     price     Term     Value     Value         shares     ($)     (in years)     ($’000)   ($)                                       Outstanding – June 30, 2015   2,401,169     15.34     4.74     11,516              Exercised   (323,645 )   11.62           2,669                Outstanding – September 30, 2015   2,077,524   15.92   4.33   7,509                                     Outstanding – June 30, 2014   2,710,392     14.16     5.38     3,909              Granted under Plan: August 2014 464,410 11.23 10.00 2,113 4.55    Exercised   (688,633 )   8.24           3,697                Outstanding – September 30, 2014   2,486,169   15.24   5.45   1,820 No stock options were awarded during the three months ended September 30, 2015. The fair value of each option is estimated on the date of grant using the Cox Ross Rubinstein binomial model that uses the assumptions noted in the following table. The estimated expected volatility is calculated based on the Company’s 250 day volatility. The estimated expected life of the option was determined based on historical behavior of employees who were granted options with similar terms. The Company has estimated no forfeitures for options awarded in August 2013 and 2014, respectively.2014. 15 12. Stock-based compensation (continued) Stock option and restricted stock activity (continued) Options (continued) The table below presents the range of assumptions used to value options granted during the ninethree months ended March 31,September 30, 2015 and 2014:     Nine months ended       March 31,       2015     2014   Expected volatility   60%     50%   Expected dividends   0%     0%   Expected life (in years)   3     3   Risk-free rate   1.0%     0.9%         Three months ended         September 30,         2015     2014     Expected volatility   n/a     60%     Expected dividends   n/a     0%     Expected life (in years)   n/a     3     Risk-free rate   n/a     1.0%   There were no forfeitures during each of the three and nine months ended March 31, 2015. During the threeSeptember 30, 2015 and nine months ended March 31, 2014, terminated employees forfeited 136,420 stock options.2014. The following table presents stock options vested and expecting to vest as of March 31,September 30, 2015:                 Weighted                   Weighted     Average                   average     Remaining     Aggregate             exercise     Contractual     Intrinsic       Number of     price     Term     Value       shares     ($)     (in years)     ($’000) Vested and expecting to vest – March 31, 2015   2,426,169     15.30     4.99     4,570                     Weighted                     Weighted     Average                     average     Remaining     Aggregate               exercise     Contractual     Intrinsic         Number of     price     Term     Value         shares     ($)     (in years)     ($’000)   Vested and expecting to vest – September 30, 2015 2,077,524 15.92 4.33 7,509 These options have an exercise price range of $7.35 to $24.46. 16 12. Stock-based compensation (continued) Stock option and restricted stock activity (continued) The following table presents stock options that are exercisable as of March 31,September 30, 2015:                 Weighted                   Weighted     Average                   average     Remaining     Aggregate             exercise     Contractual     Intrinsic       Number of     price     Term     Value       shares     ($)     (in years)     ($’000) Exercisable – March 31, 2015   1,668,163     17.71     3.24     1,775                     Weighted                     Weighted     Average                     average     Remaining     Aggregate               exercise     Contractual     Intrinsic         Number of     price     Term     Value         shares     ($)     (in years)     ($’000)   Exercisable – September 30, 2015   1,764,931     16.93     3.55     5,496        No stock options became exercisable duringDuring the three months ended March 31, 2015 and 2014, respectively. During the nine months ended March 31,September 30, 2015 and 2014, respectively, 330,967 and 358,333273,633 stock options became exercisable. During the three months ended March 31,September 30, 2015, the Company received approximately $0.8$3.8 million from 60,000the exercise of 323,645 stock options exercised.options. During the ninethree months ended March 31, 2015,September 30, 2014, the Company received approximately $1.8$1.0 million from 176,395the exercise of 116,395 stock options exercised.options. The remaining 572,238 stock options were exercised through recipients delivering 336,584 shares of the Company’s common stock to the Company on September 9, 2014, to settle the exercise price due. During the three and nine months ended March 31, 2014, the Company received approximately $0.1 million from 10,000 stock options exercised. The Company issues new shares to satisfy stock option exercises. 16 12. Stock-based compensation (continued) Stock option and restricted stock activity (continued) Restricted stock The following table summarizes restricted stock activity for the ninethree months ended March 31,September 30, 2015 and 2014:           Weighted       Number of     Average       Shares of     Grant Date       Restricted     Fair Value       Stock     ($’000) Non-vested – June 30, 2014   385,778     3,534    Granted – August 2014   141,707     581    Granted – November 2014   71,530     229    Vested – August 2014   (74,152 )   828    Vested – February 2015   (183,334 )   2,400        Non-vested – March 31, 2015   341,529     1,759                 Non-vested – June 30, 2013   405,226     4,393    Granted – August 2013   187,963     1,382    Vested – August 2013   (16,907 )   161    Vested – February 2014   (183,333 )   1,742    Forfeitures – October 2013   (7,171 )   84        Non-vested – March 31, 2014   385,778     3,534               Weighted         Number of     Average         Shares of     Grant Date         Restricted     Fair Value         Stock     ($’000)   Non-vested – June 30, 2015   341,529     1,759      Granted – August 2015   319,492     581      Vested – August 2015   (71,574 )   6,406          Non-vested – September 30, 2015   589,447     7,622                     Non-vested – June 30, 2014   385,778     3,534      Granted – August 2014   141,707     581      Vested – August 2014   (74,152 )   828          Non-vested – September 30, 2014   453,333     3,568   The August 2015 grants comprise 301,537 and 17,955 shares of restricted stock awarded to employees and non-employee directors, respectively. The shares of restricted stock awarded to employees in August 2015 are subject to time-based and performance-based vesting conditions. In order for any of the shares to vest, the recipient must remain employed by the Company on a full-time basis on the date that it files its Annual Report on Form 10-K for the fiscal year ended June 30, 2018. If that condition is satisfied, then the shares will vest based on the level of Fundamental EPS the Company achieves for the fiscal year ended June 30, 2018 (“2018 Fundamental EPS”), as follows: • One-third of the shares will vest if the Company achieves 2018 Fundamental EPS of $2.88; • Two-thirds of the shares will vest if the Company achieves 2018 Fundamental EPS of $3.30; and • All of the shares will vest if the Company achieves 2018 Fundamental EPS of $3.76. 17 12. Stock-based compensation (continued) Stock-based compensation charge and unrecognized compensation cost Restricted stock (continued) At levels of 2018 Fundamental EPS greater $2.88 and less than $3.76, the number of shares that will vest will be determined by linear interpolation relative to 2018 Fundamental EPS of $3.30. Any shares that do not vest in accordance with the above-described conditions will be forfeited. All shares of restricted stock have been valued utilizing the closing price of the Company’s stock quoted on The Nasdaq Global Select Market on the date of grant. The August 2014 grants comprise 127,626 and 14,081 shares of restricted stock awarded to employees and non-employee directors, respectively. All of the November 2014 grants were awarded to employees. The 127,626 and 71,530 shares of restricted stock awarded to employees in August 2014 will vest in full only on the date, if any, the following conditions are satisfied: (1) the closing price of the Company’s common stock equals or exceeds $19.41 (subject to appropriate adjustment for any stock split or stock dividend) for a period of 30 consecutive trading days during a measurement period commencing on the date that the Company files its Annual Report on Form 10-K for the fiscal year ended 2017 and ending on December 31, 2017 and (2) the recipient is employed by the Company on a full-time basis when the condition in (1) is met. If either of these conditions is not satisfied, then none of the shares of restricted stock will vest and they will be forfeited. The $19.41 price target represents a 20% increase, compounded annually,shares of restricted stock, other than the shares awarded to employees in August 2014, have been valued utilizing the closing price of the Company’s common stock quoted on The Nasdaq overGlobal Select Market on the $11.23 closing price on August 27, 2014. date of grant. The 127,626 and 71,530 shares of restricted stock awarded to employees in August 2014 are effectively forward starting knock-in barrier options with a strike price of zero. The fair value of these shares of restricted stock was calculated utilizing an adjusted Monte Carlo simulation discounted cash flow model which was developed for the purpose of the valuation of these shares. For each simulated share price path, the market share price condition was evaluated to determine whether or not the shares would vest under that simulation. The “adjustment” to the Monte Carlo simulation model incorporates a “jump diffusion” process to the standard Geometric Brownian Motion simulation, in order to capture the discontinuous share price jumps observed in the Company’s share price movements on stock exchanges on which it is listed. Therefore, the simulated share price paths capture the idiosyncrasies of the observed Company share price movements. In scenarios where the shares do not vest, the final vested value at maturity is zero. In scenarios where vesting occurs, the final vested value on maturity is the share price on vesting date. The value of the grant is the average of the discounted vested values. The Company used an expected volatility of 76.01%, an expected life of approximately three years, a risk-free rate of 1.27% and no future dividends in its calculation of the fair value of the 127,626 shares of restricted stock. The Company used an expected volatility of 63.73%, an expected life of approximately three years, a risk-free rate of 1.21% and no future dividendsstock awarded to employees in its calculation of the fair value of the 71,530 shares of restricted stock.August 2014. Estimated expected volatility was calculated based on the Company’s 30 day VWAP share price using the exponentially weighted moving average of returns. The fair value of restricted stock vesting during the three months ended March 31,September 30, 2015 and 2014, respectively, was $2.4$1.4 million and $1.7$0.8 million. The fair value of restricted stock vesting during the nine months ended March 31, 2015 and 2014, respectively, was $3.2 million and $1.9 million. The fair value of restricted stock is based on the closing price of the Company’s stock quoted on The Nasdaq Global Select Market on the date of grant. 17 12. Stock-based compensation (continued) Stock-based compensation charge and unrecognized compensation cost The Company has recorded a stock-based compensation charge of $0.7 million and $0.9 million, respectively, during the three months ended March 31,September 30, 2015 and 2014, which comprised:           Allocated to cost                   of goods sold, IT     Allocated to             processing,     selling, general       Total     servicing and     and       charge     support     administration   Three months ended March 31, 2015                        Stock-based compensation charge $ 731   $ -   $ 731              Total – three months ended March 31, 2015 $ 731   $ -   $ 731                       Three months ended March 31, 2014                        Stock-based compensation charge $ 922   $ -   $ 922              Total – three months ended March 31, 2014 $ 922   $ -   $ 922               Allocated to cost                     of goods sold, IT     Allocated to               processing,     selling, general         Total     servicing and     and         charge     support     administration     Three months ended September 30, 2015 Stock-based compensation charge $ 726 $ - $ 726              Total – three months ended September 30, 2015 $ 726   $ -   $ 726                           Three months ended September 30, 2014 Stock-based compensation charge $ 916 $ - $ 916              Total – three months ended September 30, 2014 $ 916   $ -   $ 916        The Company has recorded a stock-based compensation charge of $2.7 million and $2.8 million, respectively, during the nine months ended March 31, 2015 and 2014, which comprised:           Allocated to cost                   of goods sold, IT     Allocated to             processing,     selling, general       Total     servicing and     and       charge     support     administration   Nine months ended March 31, 2015                    Stock-based compensation charge $ 2,682   $ -   $ 2,682              Total – nine months ended March 31, 2015 $ 2,682   $ -   $ 2,682                       Nine months ended March 31, 2014                    Stock-based compensation charge $ 2,826   $ -   $ 2,826    Reversal of stock compensation charge related to restricted stock forfeited   (6 )   -     (6 )            Total – nine months ended March 31, 2014 $ 2,820   $ -   $ 2,820   The stock-based compensation charges have been allocated to selling, general and administration based on the allocation of the cash compensation paid to the employees. 18 12. Stock-based compensation (continued) Stock-based compensation charge and unrecognized compensation cost (continued) Restricted stock (continued) As of March 31,September 30, 2015, the total unrecognized compensation cost related to stock options was approximately $2.1$1.5 million, which the Company expects to recognize over approximately three years. As of March 31,September 30, 2015, the total unrecognized compensation cost related to restricted stock awards was approximately $1.3$1.2 million, which the Company expects to recognize over approximately two years. As of March 31,September 30, 2015 and June 30, 2014,2015, respectively, the Company has recorded a deferred tax asset of approximately $1.3$1.5 million and $1.6 million related to the stock-based compensation charge recognized related to employees and directors of Net1 as it is able to deduct the grant date fair value for taxation purposes in the United States. 13. Earnings per share 13. Earnings per share Basic earnings per share include shares of restricted stock that meet the definition of a participating security because these shares are eligible to receive non-forfeitable dividend equivalents at the same rate as common stock. Basic earnings per share have been calculated using the two-class method and basic earnings per share for the three and nine months ended March 31,September 30, 2015 and 2014, reflects only undistributed earnings. The computation below of basic earnings per share excludes the net income attributable to shares of unvested restricted stock (participating non-vested restricted stock) from the numerator and excludes the dilutive impact of these unvested shares of restricted stock from the denominator. 18 13. Earnings per share (continued) Diluted earnings per share hashave been calculated to give effect to the number of shares of additional common stock that would have been outstanding if the potential dilutive instruments had been issued in each period. Stock options are included in the calculation of diluted earnings per share utilizing the treasury stock method and are not considered to be participating securities as the stock options do not contain non-forfeitable dividend rights. The calculation of diluted earnings per share includes the dilutive effect of a portion of the restricted stock granted to employees in February 2012, August 2013, August 2014, and November 2014 and August 2015 as these shares of restricted stock are considered contingently returnable shares for the purposes of the diluted earnings per share calculation and the vesting conditions in respect of a portion of the restricted stock had been satisfied. The vesting conditions are discussed in Note 18 to the Company’s audited consolidated financial statements included in its Annual Report on Form 10-K for the year ended June 30, 2014.2015. 19 13. Earnings per share (continued) The following table presents net income attributable to Net1 (income from continuing operations) and the share data used in the basic and diluted earnings per share computations using the two-class method:     Three months ended     Nine months ended       March 31,     March 31,       2015     2014     2015     2014       (in thousands except percent     (in thousands except percent       and     and       per share data)     per share data)   Numerator:                              Net income attributable to Net1 $ 24,358   $ 17,182   $ 70,821   $ 41,527        Undistributed earnings   24,358     17,182     70,821     41,527        Percent allocated to common shareholders (Calculation 1)   99%     99%     99%     99%        Numerator for earnings per share: basic and diluted $ 24,102   $ 16,944   $ 70,011   $ 40,917                             Denominator:                              Denominator for basic earnings per share:      weighted-average common shares outstanding   46,071     45,142     46,235     45,070        Effect of dilutive securities:                                     Stock options   178     91     137     106                    Denominator for diluted earnings per share:                   adjusted weighted average common shares                  outstanding and assumed conversion   46,249     45,233     46,372     45,176                             Earnings per share:                              Basic $ 0.52   $ 0.38   $ 1.51   $ 0.91        Diluted $ 0.52   $ 0.37   $ 1.51   $ 0.90                             (Calculation 1)                              Basic weighted-average common shares      outstanding (A)   46,071     45,142     46,235     45,070        Basic weighted-average common shares      outstanding and unvested restricted shares      expected to vest (B)   46,561     45,776     46,770     45,742        Percent allocated to common shareholders (A) / (B)   99%     99%     99%     99%         Three months ended         September 30,         2015     2014         (in thousands except percent         and         per share data)     Numerator:                    Net income attributable to Net1 $ 23,020   $ 24,089          Undistributed earnings   23,020     24,089          Percent allocated to common shareholders (Calculation 1)   99%     99%          Numerator for earnings per share: basic and diluted $ 22,817   $ 23,847                     Denominator:                    Denominator for basic earnings per share: weighted-average common shares      outstanding 46,209 46,751        Effect of dilutive securities:                         Stock options   460     109                          Denominator for diluted earnings per share: adjusted weighted average                       common shares outstanding and assumed conversion   46,669   46,860                     Earnings per share:                    Basic $ 0.49   $ 0.51          Diluted $ 0.49   $ 0.51                     (Calculation 1)                    Basic weighted-average common shares outstanding (A)   46,209     46,751          Basic weighted-average common shares outstanding and unvested restricted shares      expected to vest (B) 46,620 47,226        Percent allocated to common shareholders (A) / (B)   99%     99%   Options to purchase 1,798,853874,443 shares of the Company’s common stock at prices ranging from $11.23$22.51 to $24.46 per share were outstanding during the three and nine months ended March 31,September 30, 2015, but were not included in the computation of diluted earnings per share because the options’ exercise price were greater than the average market price of the Company’s common stock. The options, which expire at various dates through August 27, 2024,2018, were still outstanding as of March 31,September 30, 2015. 14. Supplemental cash flow information 19 14. Supplemental cash flow information The following table presents supplemental cash flow disclosures for the three and nine months ended March 31,September 30, 2015 and 2014:     Three months ended     Nine months ended       March 31,     March 31,       2015     2014     2015     2014   Cash received from interest $ 4,200   $ 3,422   $ 11,940   $ 9,886   Cash paid for interest $ 915   $ 1,651   $ 3,328   $ 5,317   Cash paid for income taxes $ 3,086   $ 1,570   $ 28,639   $ 16,097         Three months ended         September 30,         2015     2014     Cash received from interest $ 4,265   $ 4,163     Cash paid for interest $ 939   $ 1,218     Cash paid for income taxes $ 4,066   $ 5,160   The sale of the Company’s NUETS business is described in Note 19 to its audited consolidated financial statements included in its Annual Report on Form 10-K for the year ended June 30, 2014.2015. The Company received cash sale proceeds of $1.9 million related to this transaction in July 2014. As discussed in Note 12, during the ninethree months ended March 31, 2015,September 30, 2014, employees exercised stock options through the delivery 336,584 shares of the Company’s common stock at the closing price on September 9, 2014 or $13.93 under the terms of their option agreements. These shares are included in the Company’s total share count and amount reflected as treasury shares on the unaudited condensed consolidated balance sheet as of March 31, 2015 and unaudited condensed consolidated statement of changes in equity for the nine months ended March 31, 2015. 15. Operating segments20 15. 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. A description of the Company’s operating segments is contained in Note 23 to the Company’s audited consolidated financial statements included in its Annual Report on Form 10-K for the year ended June 30, 2014.2015. The reconciliation of the reportable segments revenue to revenue from external customers for the three months ended March 31,September 30, 2015 and 2014, respectively, is as follows:     Revenue                   From       Reportable     Inter-     external       Segment     segment     customers   South African transaction processing $ 57,999   $ 5,359   $ 52,640   International transaction processing   38,311     -     38,311   Financial inclusion and applied technologies   66,830     6,660     60,170    Total for the three months ended March 31, 2015   163,140     12,019     151,121                       South African transaction processing   57,397     3,886     53,511   International transaction processing   35,245     -     35,245   Financial inclusion and applied technologies   56,226     6,856     49,370    Total for the three months ended March 31, 2014 $ 148,868   $ 10,742   $ 138,126         Revenue                     From         Reportable     Inter-     external         Segment     segment     customers     South African transaction processing $ 55,639   $ 3,627   $ 52,012     International transaction processing   41,229     -     41,229     Financial inclusion and applied technologies   67,360     6,128     61,232        Total for the three months ended September 30, 2015   164,228     9,755     154,473                           South African transaction processing   60,252     5,121     55,131     International transaction processing   43,204     -     43,204     Financial inclusion and applied technologies   65,197     7,091     58,106        Total for the three months ended September 30, 2014 $ 168,653   $ 12,212   $ 156,441        The reconciliation of the reportable segments revenue to revenue from external customers for the nine months ended March 31, 2015 and 2014, respectively, is as follows:     Revenue                   From       Reportable     Inter-     external       Segment     segment     customers   South African transaction processing $ 176,678   $ 15,917   $ 160,761   International transaction processing   121,981     -     121,981   Financial inclusion and applied technologies   199,558     20,607     178,951    Total for the nine months ended March 31, 2015 $ 498,217   $ 36,524   $ 461,693   20 15. Operating segments (continued)     Revenue                   From       Reportable     Inter-     external       Segment     segment     customers   South African transaction processing $ 173,312   $ 6,866   $ 166,446   International transaction processing   110,524     -     110,524   Financial inclusion and applied technologies   143,502     21,569     121,933    Total for the nine months ended March 31, 2014 $ 427,338   $ 28,435   $ 398,903   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 measure of profit or loss to income before income taxes for the three and nine months ended March 31,September 30, 2015 and 2014, respectively, is as follows:     Three months ended     Nine months ended       March 31,     March 31,       2015     2014     2015     2014   Reportable segments measure of profit or loss $ 37,703   $ 30,238   $ 112,751   $ 80,590    Operating income: Corporate/Eliminations   (5,737 )   (6,289 )   (16,845 )   (21,439 )  Interest income   4,211     3,438     11,888     9,993    Interest expense   (941 )   (1,734 )   (3,360 )   (5,712 )      Income before income taxes $ 35,236   $ 25,653   $ 104,434   $ 63,432         Three months ended         September 30,         2015     2014     Reportable segments measure of profit or loss $ 36,608   $ 38,595        Operating income: Corporate/Eliminations   (5,393 )   (5,470 )      Interest income   4,275     4,090        Interest expense   (974 )   (1,312 )        Income before income taxes $ 34,516   $ 35,903   The following tables summarize segment information which is prepared in accordance with GAAP for the three and nine months ended March 31,September 30, 2015 and 2014:     Three months ended     Nine months ended       March 31,     March 31,       2015     2014     2015     2014   Revenues                              South African transaction processing $ 57,999   $ 57,397   $ 176,678   $ 173,312        International transaction processing   38,311     35,245     121,981     110,524        Financial inclusion and applied technologies   66,830     56,226     199,558     143,502            Total   163,140     148,868     498,217     427,338   Operating income (loss)                              South African transaction processing   13,218     9,137     39,740     22,726        International transaction processing   6,579     4,642     19,671     15,305        Financial inclusion and applied technologies   17,906     16,459     53,340     42,559           Subtotal: Operating segments   37,703     30,238     112,751     80,590               Corporate/Eliminations   (5,737 )   (6,289 )   (16,845 )   (21,439 )                 Total   31,966     23,949     95,906     59,151    Depreciation and amortization                              South African transaction processing   1,726     1,653     5,271     5,475        International transaction processing   4,560     3,959     13,224     11,822        Financial inclusion and applied technologies   207     172     589     495            Subtotal: Operating segments   6,493     5,784     19,084     17,792                 Corporate/Eliminations   3,567     4,658     11,307     12,453                     Total $ 10,060   $ 10,442   $ 30,391   $ 30,245         Three months ended         September 30,         2015     2014     Revenues                    South African transaction processing $ 55,639   $ 60,252          International transaction processing   41,229     43,204          Financial inclusion and applied technologies   67,360     65,197              Total   164,228     168,653     Operating income (loss)                    South African transaction processing   13,511     13,639          International transaction processing   6,543     7,349          Financial inclusion and applied technologies   16,554     17,607              Subtotal: Operating segments   36,608     38,595                 Corporate/Eliminations   (5,393 )   (5,470 )                  Total $ 31,215   $ 33,125   21 15. Operating segments (continued)       Three months ended         September 30,         2015     2014     Depreciation and amortization                  South African transaction processing $ 1,795   $ 1,722        International transaction processing   4,696     4,372        Financial inclusion and applied technologies   240     179           Subtotal: Operating segments   6,731     6,273              Corporate/Eliminations   3,384     3,901                        Total   10,115     10,174     Expenditures for long-lived assets                  South African transaction processing   1,447     682        International transaction processing   8,038     8,327        Financial inclusion and applied technologies   1,213     369           Subtotal: Operating segments   10,698     9,378              Corporate/Eliminations   -     -                        Total $ 10,698   $ 9,378   15. Operating segments (continued)     Three months ended     Nine months ended       March 31,     March 31,       2015     2014     2015     2014   Expenditures for long-lived assets                            South African transaction processing $ 1,514   $ 303   $ 3,678   $ 2,903      International transaction processing   4,561     4,231     20,167     13,747      Financial inclusion and applied technologies   232     314     977     659         Subtotal: Operating segments   6,307     4,848     24,822     17,309              Corporate/Eliminations   -     -     -     -                      Total $ 6,307   $ 4,848   $ 24,822   $ 17,309   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. It is impractical to disclose revenues from external customers for each product and service or each group of similar products and services. 16. Income tax 16. Income tax Income tax in interim periods For the purposes of interim financial reporting, the Company determines the appropriate income tax provision by first applying the effective tax rate expected to be applicable for the full fiscal year to ordinary income. This amount is then adjusted for the tax effect of significant unusual or extraordinary items, for instance, changes in tax law, valuation allowances and non-deductible transaction-related expenses that are reported separately, and have an impact on the tax charge. The cumulative effect of any change in the enacted tax rate, if and when applicable, on the opening balance of deferred tax assets and liabilities is also included in the tax charge as a discrete event in the interim period in which the enactment date occurs. For the three and nine months ended March 31,September 30, 2015, the tax charge was calculated using the expected effective tax rate for the year. The Company’s effective tax rate for the three and nine months ended March 31,September 30, 2015, was 29.2% and 30.8%, respectively,31.6% and was higher than the South African statutory rate primarily as a result of a valuation allowance for foreign tax credits and non-deductible expenses (including consulting and legal fees and interest expense related to the Company’s long-term Korean borrowings)fees). The Company’s effective tax rate for the three and nine months ended March 31,September 30, 2014, was 33.3% and 34.9%32.4%, respectively, and was higher than the South African statutory rate primarily as a result of non-deductible expenses (including interest expense related to the Company’s long-term Korean borrowings and stock-based compensation charges). Uncertain tax positions The Company increased its unrecognized tax benefits by $1.2approximately $0.1 million during the three and nine months ended March 31,September 30, 2015. As of March 31,September 30, 2015, the Company had accrued interest related to uncertain tax positions of approximately $0.2$2.3 million on its balance sheet. The Company does not expect changes related to its unrecognized tax benefits will have a significant impact on its results of operations or financial position in the next 12 months. 22 16. Income tax (continued) Uncertain tax positions (continued) As of March 31,September 30, 2015 and June 30, 2014,2015, the Company has unrecognized tax benefits of $2.3$2.4 million and $1.2$2.3 million, respectively, all of which would impact the Company’s effective tax rate. The Company files income tax returns mainly in South Africa, South Korea, Austria,India, the United Kingdom, Botswana and in the USU.S. federal jurisdiction. As of March 31,September 30, 2015, the Company’s South African subsidiaries are no longer subject to income tax examination by the South African Revenue Service for periods before June 30, 2010.2011. The Company is subject to income tax in other jurisdictions outside South Africa, none of which are individually material to its financial position, results of operations or cash flows. 17. 22 17. Commitments and contingencies Guarantees Guarantees The South African Revenue Service and certain of the Company’s customers, suppliers and other business partners have asked the Company to provide them with guarantees, including standby letters of credit, issued by a South African bank. The Company is required to procure these guarantees for these third parties to operate its business. Nedbank has issued guarantees to these third parties amounting to ZAR 135.0124.9 million ($11.28.9 million, translated at exchange rates applicable as of March 31,September 30, 2015) and thereby utilizing part of the Company’s short-term facility. The Company in turn has provided nonrecourse, unsecured counter-guarantees to Nedbank for ZAR 125.0124.9 million ($10.38.9 million, translated at exchange rates applicable as of March 31,September 30, 2015). The Company pays commission of between 0.2% per annum to 2.0% per annum of the face value of these guarantees and does not recover any of the commission from third parties. The Company has not recognized any obligation related to these counter-guarantees in its consolidated balance sheet as of March 31,September 30, 2015 and June 30, 2014.2015. The maximum potential amount that the Company could pay under these guarantees is ZAR 135.0124.9 million ($11.28.9 million, translated at exchange rates applicable as of March 31,September 30, 2015). The guarantees have reduced the amount available for borrowings under the Company’s short-term credit facility described in Note 8. Contingencies Dismissal of U.S. Securities Litigation On March 6,September 16, 2015, the plaintiffUnited States District Court for the Southern District of New York dismissed the purported securities class action litigation originally filed an opposition to the Company’s motion to dismiss its complaint andon December 24, 2013, against the Company, filedits Chief Executive Officer and its Chief Financial Officer. In its opinion, the District Court provided plaintiff with 30 days to file a reply brief on March 27,second amended complaint. This deadline passed without plaintiff taking any action. Accordingly, the case has been closed. Plaintiff may file a notice of appeal until November 23, 2015. The Company intends to vigorously defend any appeal of the District Court’s ruling. The Company is subject to a variety of insignificant claims and suits that arise from time to time in the ordinary course of business. Management currently believes that the resolution of these matters, individually or in the aggregate, will not have a material adverse impact on the Company’s financial position, results of operations or cash flows. 23 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion should be read in conjunction with our Annual Report on Form 10-K for the year ended June 30, 2014,2015, and the unaudited condensed consolidated financial statements and the accompanying notes included in this Form 10-Q. Forward-looking statements Some of the statements in this Form 10-Q constitute forward-looking statements. These statements relate to future events or our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed, implied or inferred by these forward-looking statements. Such factors include, among other things, those listed under Item 1A.—“Risk Factors” and elsewhere in our Annual Report on Form 10-K for the year ended June 30, 2014, and Item 1A.—“Risk Factors” and elsewhere in this Form 10-Q.2015. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “could,” “would,” “expects,” “plans,” “intends,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of such terms and other comparable terminology. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we do not know whether we can achieve positive future results, levels of activity, performance, or goals. Actual events or results may differ materially. We undertake no obligation to update any of the forward-looking statements after the date of this Form 10-Q to conform those statements to reflect the occurrence of unanticipated events, except as required by applicable law. You should read this Form 10-Q and the documents that we reference herein and the documents we have filed as exhibits hereto and thereto and which we have filed with the Securities and Exchange Commission completely and with the understanding that our actual future results, levels of activity, performance and achievements may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements. Recent Developments Update onCancellation of SASSA tender processTender      AsIn late 2014, the South African Social Security Agency SASSA, or SASSA, issued a request for proposal, or RFP, as ordered by the South African Constitutional Court in its April 2014 ruling, SASSA initiated a newCourt. In May 2015, after careful consideration of all the relevant factors, we decided to withdraw from the tender process forand did not submit a five-year contract relating to the payment of social grants by issuingbid. On October 15, 2015, SASSA filed an initial Request for Proposal, or RFP, in October 2014. Following a detailed analysis ofupdate on the tender specifications, we concludedprocess with the Constitutional Court, which reported that the Chief Executive Officer, or CEO, of SASSA decided not to award the SASSA tender, in accordance with the recommendation received from the Bid Adjudication Committee, or BAC. The BAC recommended that the tender specifications were not sufficiently clear regardingbe awarded as a numberresult of critical points and failed to complythe non-responsiveness of all the bids received with the RFPmandatory requirements specifiedcontained in the RFP. Accordingly, the BAC recommended that the CEO should allow our current SASSA contract to continue until completion of the five-year period for which the contract was initially awarded (March 31, 2017), in accordance with the Constitutional Court’s ruling and, in November 2014, we appliedjudgment of April 2014. The BAC also recommended that the CEO should file a report with the Constitutional Court within 14 days of the decision not to the Court for an order setting aside the RFP and directing SASSA to issue a corrected RFP. Although the Court did not set aside the RFP, it did order SASSA to issue a draft amended RFP. SASSA issued amended RFPs on two separate occasions (in December 2014 and February 2015). We continued to object to deficiencies in the amended RFPs and made further applications to the Court setting forth our objections. In February 2015, SASSA applied to the Court for an extension of time to address our objections.      In orders dated March 19 and 24, 2015, the Court ordered SASSA to effect further amendments to the RFP to address our objections. The Court ordered that, absent further objections (1) SASSA must circulate a further amended draft RFP by April 17, 2015; (2) all bids must be submitted by May 17, 2015 and (3) SASSA shall award the new tender, by October 15, 2015. The Court’s April 2014 ruling does not requiresetting out all the relevant information on whether and when SASSA will be ready to award a new tender, thoughassume the duty to pay grants itself. Accordingly, we expect that any decisionwe will continue to provide our social grants payment service to SASSA through March 31, 2017. We cannot predict at this time whether or not we will continue to make an award would be subjectprovide our service after that date. We are committed to judicial reviewcontinue with the provision of a high level service to SASSA and scrutiny. On April 17,the social grant beneficiaries in accordance with the service level agreement and the Constitutional Court’s order. Introduction of EasyPay Everywhere “EPE” and EPE ATMs in South Africa In June 2015, SASSA issuedwe began the rollout of EPE our business-to-consumer, or B2C, offering in South Africa and circulated an amended RFPhad opened approximately 350,000 bank accounts as at the end of October 2015. EPE is a fully transactional account created to serve the needs of South Africa’s unbanked and under-banked population, and is available to all prospective bidders.consumers regardless of their financial or social status. The amended RFP specifies that bidders must submit their proposals to SASSA on or before May 18, 2015EPE account offers customers a comprehensive suite of financial and also states that no part of the contents of the RFP may be used, copied, disclosed or conveyedvarious financial inclusion services, such as prepaid products, in whole or in part to any party in any manner whatsoever other than for the purpose of the proposal.            We are currently analyzing the RFP to determine whether it is in the best interest of the Company to participate in the tender process or to focus on ouran economical, convenient and secure solution. EPE provides account holders with a UEPS-EMV debit MasterCard, mobile and internet banking services, ATM and POS services, as well as loans, insurance and other financial services businesses without being a contractor to SASSA. We have not yet made a final determination but expect to do so by the tender deadline. In any event, we cannot predict what the timing or ultimate outcome of the tender process will be, or if a new tender award will be made at all after the process is complete.      See Part II, Item 1A.—“Risk Factors,” for additional details.products and value-added services. 24 ATMs in South Africa      WeTo support the rollout of EPE, we have deployed ATMs, which are both EMV-and UEPS-compliant, and provideprovided biometric verification as well as proof of life functionality, in South Africa. We placed these ATMs with our merchant partners and within our own branches, creating a new delivery channel for our products and services that did not previously exist. ATM rollout has continued to make a positive contribution to our reported results and we have been able to expand our customer base because our ATMs accept all EMV-compliant cards. We currently have approximately 400750 operational ATMs, and we are actively deploying more ATMs in high demand areas. We have placed these ATMs with our merchant partners and within our own branches, creating a new delivery channel that did not exist before. Although capital intensive,will continue to expand our ATM rollout has already begunfootprint in fiscal 2016. Smart Life resumes writing new insurance policies We have complied with all the conditions imposed by the South African Financial Services Board, or FSB, to make a positive contributionuplift the suspension of Smart Life’s license to our reported results. ZAZOO      We established ZAZOO to oversee the global expansion of our mobile payments and value-added services businesses, including the activities currently conducted through our N1MS business unit. ZAZOO’s management is focused on worldwide growth opportunities, especiallyprovide long-term insurance products, which resulted in the UK, Europe,FSB withdrawing the USA, Indiaprohibition to conduct new business issued by it approximately two years ago. In September 2015, we resumed marketing and other developed and emerging markets. ZAZOO coordinates all research andbusiness development operations and marketing activities associated with N1MS’ mobile businesses.      ZAZOO entered into strategic collaborations with Uber, Microsoft and Cell C (one of South Africa’s largest mobile operators) during the third quarter of fiscal 2015 for our VCPay mobile application. VCPay is a mobile phone-based application that generates transaction specific virtual MasterCards that can be used for online purchases, or in brick-and-mortar retailers, that accept manual Card-Not-Present payments. Users can also send a virtual card to friends or family anywhere via email, SMS, MMS or WhatsApp, making it simpler than ever before to send money to third parties. VCPay is fully interoperable and does not require merchants to change the way in which payments are accepted online or via mobile applications, like Uber. We believe that VCPay bridges the electronic payment requirement gap for online or in-application payments by providing an immediate, safe and secure payment solution to anybody, regardless of their banking status.      Under the collaboration with Uber in South Africa, people who do not own credit cards are now able to use VCPay to pay for the Uber service.      Under the collaboration with Microsoft and Cell C, ZAZOO agreed to sponsor a R250 VCPay voucher to consumers who purchase the new Microsoft Lumia 535 on a Cell C contract. The new device became available on Cell C’s talk and data contracts beginning February 1, 2015, and the initial batch was packaged with the VCPay voucher for new owners to use in completing a purchase of their choice when using our VCPay service. World Food Program      The Southern Africa Regional Office of the United Nations World Food Program, or the WFP, has awarded us a tender for 12 countries that are members of the Southern African Development Community. The contract isselected areas for the distribution of cashour simple, low-cost life insurance products and food grants to hundredshave sold approximately 5,700 new policies as at the end of thousands of WFP beneficiaries in these territories.      Our technology makes use of any infrastructure present in each territory, and allows for the biometric verification of all beneficiaries regardless of the infrastructure being utilized even when such infrastructure is not biometrically enabled. In these scenarios, we utilize our patented variable PIN technology in conjunction with fingerprint or voice verification methods using any mobile phone. We do not expect that this socially responsible initiative will necessarily translate into a meaningful financial contributor for us in the short term, but we strongly believe that the exposure and credibility associated with winning and operating a project of this nature and scale will create further opportunities for us to implement the same or similar solutions in other contexts.October 2015. We are currently finalizingrecruiting staff members to expand our deployment contract with the WFP office based inmarketing activities across South Africa.Africa during fiscal 2016. Critical Accounting Policies Our unaudited condensed consolidated financial statements have been prepared in accordance with USU.S. GAAP, which requires management to make estimates and assumptions about future events that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities. As future events and their effects cannot be determined with absolute certainty, the determination of estimates requires management’s judgment based on a variety of assumptions and other determinants such as historical experience, current and expected market conditions and certain scientific evaluation techniques. 25 Critical accounting policies are those that reflect significant judgments or uncertainties, and potentially may result in materially different results under different assumptions and conditions. Management has identified the following critical accounting policies that are described in more detail in our Annual Report on Form 10-K for the year ended June 30, 2014:2015: Business combinations and the recoverability of goodwill; Intangible assets acquired through acquisitions; Deferred taxation; Stock-based compensation and equity instrument issued pursuant to BEE transaction; Accounts receivable and allowance for doubtful accounts receivable; and Research and development. • Business combinations and the recoverability of goodwill; • Intangible assets acquired through acquisitions; • Deferred taxation; • Stock-based compensation and equity instrument issued pursuant to BEE transaction; • Accounts receivable and allowance for doubtful accounts receivable; and • Research and development. 25 Recent accounting pronouncements adopted Refer to Note 1 to our unaudited condensed consolidated financial statements for a full description of recent accounting pronouncements adopted, including the dates of adoption and the effects on our condensed consolidated financial statements. Recent accounting pronouncements not yet adopted as of March 31,September 30, 2015 Refer to Note 1 to our unaudited condensed consolidated financial statements for a full description of recent accounting pronouncements not yet adopted as of March 31,September 30, 2015, including the expected dates of adoption and effects on our financial condition, results of operations and cash flows. Currency Exchange Rate Information Actual exchange rates The actual exchange rates for and at the end of the periods presented were as follows: Table 1   Three months ended     Nine months ended     Year ended     Three months ended     Year ended     March 31,     March 31,     June 30,     September 30,     June 30,     2015     2014     2015     2014     2014     2015     2014     2015   ZAR : $ average exchange rate   11.7422     10.8622     11.2377     10.3375     10.3798     12.9702     10.7581     11.4494   Highest ZAR : $ rate during period   12.4792     11.2667     12.4792     11.2667     11.2579     14.0282     11.2641     12.5779   Lowest ZAR : $ rate during period   11.3622     10.4848     10.5128     9.6324     9.6259     12.1965     10.5128     10.5128   Rate at end of period   12.0907     10.5833     12.0907     10.5833     10.5887     14.0282     11.2641     12.2854                                                   KRW : $ average exchange rate   1,101     1,071     1,072     1,083     1,068     1,169     1,027     1,078   Highest KRW : $ rate during period   1,139     1,089     1,139     1,168     1,147     1,203     1,051     1,139   Lowest KRW : $ rate during period   1,077     1,053     1,009     1,052     1,014     1,118     1,009     1,009   Rate at end of period   1,106     1,071     1,106     1,071     1,014     1,196     1,051     1,128   26 ZAR: US $ Exchange Rates KRW: US $ Exchange Rates 27 Translation exchange rates for financial reporting purposes We are required to translate our results of operations from ZAR and KRW to USU.S. dollars on a monthly basis. Thus, the average rates used to translate this data for the three and nine months ended March 31,September 30, 2015 and 2014, vary slightly from the averages shown in the table above. The translation rates we use in presenting our results of operations are the rates shown in the following table: Table 2   Three months ended     Nine months ended     Year ended     Three months ended     Year ended     March 31,     March 31,     June 30,     September 30,     June 30,     2015     2014     2015     2014     2014     2015     2014     2015   Income and expense items: $1 = ZAR   11.7218     10.8743     11.2251     10.3801     10.3966     12.9583     10.7431     11.4275   Income and expense items: $1 = KRW   1,101     1,070     1,064     1,076     1,049     1,167     1,029     1,073                                                   Balance sheet items: $1 = ZAR   12.0907     10.5833     12.0907     10.5833     10.5887     14.0282     11.2641     12.2854   Balance sheet items: $1 = KRW   1,106     1,071     1,106     1,071     1,014     1,196     1,051     1,128   Results of operations The discussion of our consolidated overall results of operations is based on amounts as reflected in our unaudited condensed consolidated financial statements which are prepared in accordance with USU.S. GAAP. We analyze our results of operations both in USU.S. dollars, as presented in the consolidated financial statements, and supplementally in ZAR, because ZAR is the functional currency of the entities which contribute the majority of our profits and is the currency in which the majority of our transactions are initially incurred and measured. Due to the significant impact of currency fluctuations between the USU.S. dollar and ZAR on our reported results and because we use the USU.S. dollar as our reporting currency, we believe that the supplemental presentation of our results of operations in ZAR is useful to investors to understand the changes in the underlying trends of our business.      Fiscal 2015 does not include MediKredit and the NUETS business and fiscal 2014 includes MediKredit and the NUETS business for the entire period. Our operating segment revenue presented in “—Results of operations by operating segment” represents total revenue per operating segment before inter-segment eliminations. A reconciliationReconciliation between total operating segment revenue and revenue presented in our consolidated financial statements is included in Note 15 to those statements. 27 We analyze our business and operations in terms of three inter-related but independent operating segments: (1) South African transaction processing, (2) International transaction processing and (3) Financial inclusion and applied technologies. In addition, corporate and corporate office activities that are impracticable to ascribe directly to any of the other operating segments, as well as any inter-segment eliminations, are included in corporate/eliminations. ThirdFirst quarter of fiscal 20152016 compared to thirdfirst quarter of fiscal 20142015 The following factors had a significant influence on our results of operations during the thirdfirst quarter of fiscal 20152016 as compared with the same period in the prior year: Unfavorable impact from the strengthening of the US dollar against the ZAR:The US dollar appreciated by 8% against the ZAR during the third quarter of fiscal 2015, which negatively impacted our reported results; Increased contribution by KSNET:Our results were positively impacted by growth in our Korean operations and a refund of $1.7 million that had been paid several years ago in connection with industry-wide litigation that has now been finalized; Increase in the number of SASSA grants paid:Our revenue and operating income have increased as a result of the higher number of SASSA UEPS/EMV cardholders paid during fiscal 2015 compared with 2014; and Continued growth in financial inclusion services:We continued to grow our financial inclusion services offerings during the third quarter of fiscal 2015, which has resulted in higher revenues and operating income from more sales of low-margin prepaid airtime and UEPS-based lending. • Unfavorable impact from the strengthening of the U.S. dollar against primary functional currencies:The U.S. dollar appreciated by 21% against the ZAR and 13% against the KRW during the first quarter of fiscal 2016, which negatively impacted our reported results; • Increased contribution by KSNET:Our results were positively impacted by growth in our Korean operations; • Continued growth in financial inclusion services:We continued to grow our financial inclusion services offerings during the first quarter of fiscal 2016 which has resulted in higher revenues and operating income, primarily from more sales of low-margin prepaid airtime and an increase in transaction fees; • Increase in the number of SASSA grants paid:Our revenue and operating income have increased as a result of the higher number of SASSA UEPS/EMV beneficiaries paid during fiscal 2016 compared with 2015; and • Launch of EPE and Smart Life:During the first quarter of fiscal 2016 we launched our EPE and Smart Life offerings, which contributed to a marginal increase in revenue in ZAR, as well as an associated increase in establishment costs. 28 Consolidated overall results of operations This discussion is based on the amounts which were prepared in accordance with USU.S. GAAP. The following tables show the changes in the items comprising our statements of operations, both in USU.S. dollars and in ZAR:   In United States Dollars     In United States Dollars   Table 3   (US GAAP)     (U.S. GAAP)     Three months ended March 31,     Three months ended September 30,     2015     2014   $ %     2015   2014     $ %   $ ’000   $ ’000     change     $ ’000     $ ’000     change   Revenue   151,121     138,126     9%     154,473   156,441     (1% ) Cost of goods sold, IT processing, servicing and support   71,094     63,149     13%     77,382   74,406     4%   Selling, general and administration   38,001     40,586     (6% )   35,761   38,736     (8% ) Depreciation and amortization   10,060     10,442     (4% )   10,115     10,174     (1% ) Operating income   31,966     23,949     33%     31,215   33,125     (6% ) Interest income   4,211     3,438     22%     4,275   4,090     5%   Interest expense   941     1,734     (46% )   974     1,312     (26% ) Income before income tax expense   35,236     25,653     37%     34,516   35,903     (4% ) Income tax expense   10,305     8,535     21%     10,897     11,648     (6% ) Net income before earnings from equity-accounted investments   24,931     17,118     46%     23,619   24,255     (3% ) Earnings from equity-accounted investments   65     52     25%     188     92     104%   Net income   24,996     17,170     46%     23,807   24,347     (2% ) Less (Add) net income (loss) attributable to non-controlling interest   638     (12 )   nm   Less net income attributable to non-controlling interest   787     258     205%   Net income attributable to us   24,358     17,182     42%     23,020     24,089     (4% ) 28   In South African Rand     In South African Rand   Table 4   (US GAAP)     (U.S. GAAP)     Three months ended March 31,     Three months ended September 30,     2015     2014           2015     2014           ZAR     ZAR     ZAR %     ZAR     ZAR     ZAR %     ’000     ’000     change     ’000     ’000     change   Revenue   1,771,411     1,502,024     18%     2,001,707     1,680,661     19%   Cost of goods sold, IT processing, servicing and support   833,350     686,701     21%     1,002,739     799,351     25%   Selling, general and administration   445,440     441,345     1%     463,402     416,145     11%   Depreciation and amortization   117,921     113,549     4%     131,073     109,300     20%   Operating income   374,700     260,429     44%     404,493     355,865     14%   Interest income   49,360     37,386     32%     55,397     43,939     26%   Interest expense   11,030     18,856     (42% )   12,621     14,095     (10% ) Income before income tax expense   413,030     278,959     48%     447,269     385,709     16%   Income tax expense   120,793     92,812     30%     141,207     125,136     13%   Net income before earnings from equity-accounted investments   292,237     186,147     57%     306,062     260,573     17%   Earnings from equity-accounted investments   762     565     35%     2,436     988     147%   Net income   292,999     186,712     57%     308,498     261,561     18%   Less (Add) net income (loss) attributable to non-controlling interest   7,479     (130 )   nm   Less net income attributable to non-controlling interest   10,198     2,772     268%   Net income attributable to us   285,520     186,842     53%     298,300     258,789     15%   The increase in revenue in ZAR was primarily due to higher prepaid airtime sales, more low-margin transaction fees generated from beneficiariescardholders using the South African National Payment System, an increase in the number of UEPS-based loans,more fees generated from our new EPE and ATM offerings, an increase in the number of SASSA UEPS/ EMV cardholdersbeneficiaries paid, a higher contribution from KSNET and more ad hoc terminal and card sales.sales, offset by lower UEPS-loans fees. The increase in cost of goods sold, IT processing, servicing and support was primarily due to higher expenses incurred from increased usage of the South African National Payment System by beneficiaries, expenses incurred to roll-out our new EPE and ATM offerings, and more prepaid airtime sold. In ZAR, our selling, general and administration expense increased due to a higher staff complement resulting from our EPE roll-out as well as increases in goods and services purchased from third parties. Our operating income margin for thirdfirst quarter of fiscal 2016 and 2015 was 20% and 2014 was 21% and 17%, respectively. We discuss the components of operating income margin under “—Results of operations by operating segment.” The increasedecrease is primarily attributable to the higher transaction volumescost of goods sold, IT processing, servicing and support referred to above and an increase in South Africa, including prepaid airtime sales, lending and SASSA grants paid.depreciation expenses. 29      DepreciationIn ZAR, depreciation and amortization were higher primarily as a result of an increase in depreciation related to more terminals used to provide transaction processing in Korea which was partially offset by no Eason intangible asset amortization as these intangible assets were fully amortized atand the endroll-out of June 2014.EPE ATMs. Interest on surplus cash increased to $4.2$4.3 million (ZAR 49.455.4 million) from $3.4$4.1 million (ZAR 37.443.9 million), due primarily to higher average daily ZAR cash balances. Interest expense decreased to $0.9$1.0 million (ZAR 11.012.6 million) from $1.7$1.3 million (ZAR 18.914.1 million), due to a lower average long-term debt balance on our South Korean debt and a lower interest rate. Fiscal 20152016 tax expense was $10.3$10.9 million (ZAR 120.8141.2 million) compared to $8.5$11.6 million (ZAR 92.8125.1 million) in fiscal 2014.2015. Our effective tax rate for fiscal 2015,2016, was 29.2%31.6% and was higher than the South African statutory rate as a result of a valuation allowance for foreign tax credits and non-deductible expenses (including consulting and legal fees and the interest expense related to our long-term South Korean borrowings)fees). Our effective tax rate for fiscal 2014,2015, was 33.3%32.4% and was higher than the South African statutory rate as a result of non-deductible expenses (including interest expense related to our long-term Korean borrowings and stock-based compensation charges). 29 Results of operations by operating segment The composition of revenue and the contributions of our business activities to operating income are illustrated below Table 5   In United States Dollars (US GAAP)           In United States Dollars (U.S. GAAP)           Three months ended March 31,           Three months ended September 30,           2015     % of     2014     % of     %     2015     % of     2014     % of     %   Operating Segment $ ’000     total   $ ’000     total     change   $  ’000     total   $  ’000     total     change   Revenue:                                                             South African transaction processing   57,999     38%     57,397     42%     1%     55,639     36%     60,252     39%     (8% ) International transaction processing   38,311     25%     35,245     26%     9%     41,229     27%     43,204     28%     (5% ) Financial inclusion and applied technologies   66,830     44%     56,226     41%     19%     67,360     44%     65,197     42%     3%   Subtotal: Operating segments   163,140     107%     148,868     109%     10%     164,228     107%     168,653     109%     (3% ) Intersegment eliminations   (12,019 )   (7% )   (10,742 )   (9% )   12%     (9,755 )   (7% )   (12,212 )   (9% )   (20% ) Consolidated revenue   151,121     100%     138,126     100%     9%     154,473     100%     156,441     100%     (1% ) Operating income (loss):                                                             South African transaction processing   13,218     41%     9,137     38%     45%     13,511     43%     13,639     41%     (1% ) International transaction processing   6,579     21%     4,642     19%     42%     6,543     21%     7,349     22%     (11% ) Financial inclusion and applied technologies   17,906     56%     16,459     69%     9%     16,554     53%     17,607     53%     (6% ) Subtotal: Operating segments   37,703     118%     30,238     126%     25%     36,608     117%     38,595     116%     (5% ) Corporate/Eliminations   (5,737 )   (18% )   (6,289 )   (26% )   (9% )   (5,393 )   (17% )   (5,470 )   (16% )   (1% ) Consolidated operating income   31,966     100%     23,949     100%     33%     31,215     100%     33,125     100%     (6% ) Table 6   In South African Rand (US GAAP)           In South African Rand (U.S. GAAP)           Three months ended March 31,           Three months ended September 30,           2015           2014                 2015           2014                 ZAR     % of     ZAR     % of     %     ZAR     % of     ZAR     % of     %   Operating Segment   ’000     total     ’000     total     change     ’000     total     ’000     total     change   Revenue:                                                             South African transaction processing   679,853     38%     624,153     42%     9%     720,987     36%     647,293     39%     11%   International transaction processing   449,074     25%     383,265     26%     17%     534,258     27%     464,145     28%     15%   Financial inclusion and applied technologies   783,368     44%     611,418     41%     28%     872,871     44%     700,418     42%     25%   Subtotal: Operating segments   1,912,295     107%     1,618,836     109%     18%     2,128,116     107%     1,811,856     109%     17%   Intersegment eliminations   (140,884 )   (7% )   (116,812 )   (9% )   21%     (126,409 )   (7% )   (131,195 )   (9% )   (4% ) Consolidated revenue   1,771,411     100%     1,502,024     100%     18%     2,001,707     100%     1,680,661     100%     19%   Operating income (loss):                                                             South African transaction processing   154,939     41%     99,359     38%     56%     175,080     43%     146,525     41%     19%   International transaction processing   77,118     21%     50,478     19%     53%     84,786     21%     78,951     22%     7%   Financial inclusion and applied technologies   209,891     56%     178,980     69%     17%     214,512     53%     189,154     53%     13%   Subtotal: Operating segments   441,948     118%     328,817     126%     34%     474,378     117%     414,630     116%     14%   Corporate/Eliminations   (67,248 )   (18% )   (68,388 )   (26% )   (2% )   (69,884 )   (17% )   (58,765 )   (16% )   19%   Consolidated operating income   374,700     100%     260,429     100%     44%     404,494     100%     355,865     100%     14%   30 South African transaction processing In ZAR, the increase in segment revenuesrevenue was primarily due to more low-margin transaction fees generated from beneficiariescard holders using the South African National Payment System and morean increase in the number of social welfare grants distributed, offset by fewer inter-segment transaction processing activities. In addition, revenue from the distribution of social welfare grants grew modestly during the year and was in-line with the increase in unique welfare cardholder recipients, net of removal of invalid and fraudulent beneficiaries, partially offset by the loss of MediKredit revenue as a result of the sale of that business. Our operating income margin for the thirdfirst quarter of fiscal 2016 and 2015 was 24% and 2014 was 23% and 16%, respectively, and has increased primarily due to more higher-margin inter-segment transaction processing activities, the elimination of MediKredit losses and an increase in the number of beneficiaries paid in fiscal 2015.2016 and a modest increase in the margin of transaction fees generated from cardholders using the South African National Payment System. International transaction-based activities Revenue increased in constant currency primarily due to higher transaction volume at KSNET during the thirdfirst quarter of fiscal 2015.2016. Operating income during the year to datefirst fiscal 2015quarter of 2016 was higher due to increase in revenue contribution from KSNET and a positive contribution by XeoHealth, but was partially offset by Zazooongoing ZAZOO start-up costs in the UK and India. Operating income and margin for the thirdfirst quarter of fiscal 2016 and 2015 was also positively impacted by a refund of approximately $1.7 million that had been paid several years ago in connection with industry-wide litigation that has now been finalized. Operating income margin for the third quarter of fiscal 201516% and 2014 was 17% and 13%, respectively, and was higher in fiscal 2015 primarily due to the refund referred to above.respectively. 30 Financial inclusion and applied technologies In ZAR, Financial inclusion and applied technologies revenue and operating income increased primarily due to higher prepaid airtime and other value-added services sales, driven by the rollout of our prepaid airtime product, an increase in the number of UEPS-based loans as we rolled out our product nationally, more ad hoc terminal and card sales and, in ZAR, an increase in intersegmentinter-segment revenues. Operating income for the first quarter of fiscal 2016, was adversely impacted by establishment costs for EPE and Smart Life did not contribute to operating income in fiscal 2015 and 2014 due to the FSB suspension of its license.Life. The South African National Credit Act, or NCA, made certain industry-wide amendments, which became effective March 13, 2015. These amendments were introduced primarily to address over-indebtedness of South African consumers and now require lenders to perform a stricter affordability assessment. We expect that complianceCompliance with the amended legislation will havehad a modest negative impact on our UEPS-based lending businesses in the fourthfirst quarter of fiscal 2015.2016. Operating income margin for the Financial inclusion and applied technologies segment was 27%25% and 29%27%, respectively, during of the thirdfirst quarter of fiscal 20152016 and 2014,2015, and has decreased primarily due to the sale of more low-margin prepaid airtime and the sale of competitively-priced financial inclusion products to address the needs of the broader market.establishment costs for EPE and Smart Life. Corporate/ Eliminations Our corporate expenses generally include acquisition-related intangible asset amortization; expenditure related to compliance with the Sarbanes-Oxley Act of 2002; non-employee directors’ fees; employee and executive bonuses; stock-based compensation; legal fees; audit fees; directors and officers insurance premiums; telecommunications expenses; property-related expenditures including utilities, rental, security and maintenance; and elimination entries.      The decrease inIn USD, our corporate expenses washave decreased primarily due to lower US government investigations-related and US lawsuit expenses, audit fees and other corporate head office-related expenses. Year to date fiscal 2015 compared to year to date fiscal 2014      The following factors had a significant influence on our results of operations during the year to date fiscal 2015 as compared with the same period in the prior year: Unfavorable impact from the strengthening of the US dollar against the ZAR:The US dollar appreciated by 8% againststronger USD on goods and services procured in other currencies, primarily the ZAR, during the year to date fiscal 2015, which negatively impacted our reported results; Increased contributionand lower amortization costs, partially offset by KSNET:Our results were positively impacted by growthmodest increases in our Korean operations; Increase in the number of SASSA grants paid:Our revenue and operating income have increased as a result of the higher number of SASSA UEPS/EMV cardholders paid during fiscal 2015 compared with 2014; and Continued growth in financial inclusion services:We continued to grow our financial inclusion services offerings during the year to date fiscal 2015, which has resulted in higher revenues and operating income from more sales of low-margin prepaid airtime and UEPS-based lending. 31 Consolidated overall results of operations      This discussion is based on the amounts which were prepared in accordance with US GAAP.      The following tables show the changes in the items comprising our statements of operations, both in US dollars and in ZAR:     In United States Dollars   Table 7   (US GAAP)       Nine months ended March 31,       2015     2014     $ %     $ ’000   $ ’000     change   Revenue   461,693     398,903     16%   Cost of goods sold, IT processing, servicing and support   217,274     187,591     16%   Selling, general and administration   118,122     121,916     (3% ) Depreciation and amortization   30,391     30,245     0%   Operating income   95,906     59,151     62%   Interest income   11,888     9,993     19%   Interest expense   3,360     5,712     (41% ) Income before income tax expense   104,434     63,432     65%   Income tax expense   32,156     22,119     45%   Net income before earnings from equity-accounted investments   72,278     41,313     75%   Earnings from equity-accounted investments   233     202     15%   Net income   72,511     41,515     75%   Less (add) net income (loss) attributable to non-controlling interest   1,690     (12 )   nm   Net income attributable to us   70,821     41,527     71%       In South African Rand   Table 8   (US GAAP)       Nine months ended March 31,       2015     2014             ZAR     ZAR     ZAR %       ’000     ’000     change   Revenue   5,182,550     4,140,654     25%   Cost of goods sold, IT processing, servicing and support   2,438,922     1,947,214     25%   Selling, general and administration   1,325,932     1,265,501     5%   Depreciation and amortization   341,142     313,947     9%   Operating income   1,076,554     613,992     75%   Interest income   133,444     103,728     29%   Interest expense   37,716     59,291     (36% ) Income before income tax expense   1,172,282     658,429     78%   Income tax expense   360,954     229,597     57%   Net income before earnings from equity-accounted investments   811,328     428,832     89%   Earnings from equity-accounted investments   2,615     2,097     25%   Net income   813,943     430,929     89%   Less (add) net income (loss) attributable to non-controlling interest   18,970     (125 )   nm   Net income attributable to us   794,973     431,054     84%        The increase in revenue was primarily due to higher prepaid airtime sales, more low-margin transaction fees generated from beneficiaries using the South African National Payment System, an increase in the number of UEPS-based loans, an increase in the number of SASSA UEPS/ EMV cardholders paid, a higher contribution from KSNET and more ad hoc terminal and card sales.      The increase in cost of goods sold, IT processing, servicing and support was primarily due to higher expenses incurred from increased usage of the South African National Payment System by beneficiaries and more prepaid airtime sold.      In ZAR, our selling, general and administration expense increased due to increases inUSD denominated goods and services purchased from third parties.      Our operating income margin for year to date fiscal 2015parties and 2014 was 21% and 15%, respectively. We discuss the components of operating income margin under “—Results of operations by operating segment.” The increase is primarily attributable to higher transaction volumes in South Africa, including prepaid airtime sales, lending and SASSA grants paid. 32      Depreciation and amortization were higher primarily as a result of an increase in depreciation related to more terminals used to provide transaction processing in Korea, which was partially offset by no Eason intangible asset amortization as these intangible assets were fully amortized at the end of June 2014.      Interest on surplus cash increased to $11.9 million (ZAR 133.4 million) from $10.0 million (ZAR 103.7 million), due primarily to higher average daily ZAR cash balances.      Interest expense decreased to $3.4 million (ZAR 37.7 million) from $5.7 million (ZAR 59.3 million), due to a lower average long-term debt balance on our South Korean debt and a lower interest rate.      Fiscal 2015 tax expense was $32.2 million (ZAR 361.0 million) compared to $22.1 million (ZAR 230.0 million) in fiscal 2014. Our effective tax rate for fiscal 2015, was 30.8% and was higher than the South African statutory rate as a result of non-deductible expenses (including consulting and legal fees and the interest expense related to our long-term South Korean borrowings). Our effective tax rate for fiscal 2014, was 34.9% and was higher than the South African statutory rate as a result of non-deductible expenses (including interest expense related to our long-term Korean borrowings and stock-based compensation charges). Results of operations by operating segment      The composition of revenue and the contributions of our business activities to operating income are illustrated below Table 9   In United States Dollars (US GAAP)       Nine months ended March 31,       2015     % of     2014     % of     %   Operating Segment $ ’000     total   $ ’000     total     change   Revenue:                               South African transaction processing   176,678     38%     173,312     43%     2%   International transaction processing   121,981     26%     110,524     28%     10%   Financial inclusion and applied technologies   199,558     43%     143,502     36%     39%          Subtotal: Operating segments   498,217     107%     427,338     107%     17%          Intersegment eliminations   (36,524 )   (7% )   (28,435 )   (7% )   28%                 Consolidated revenue   461,693     100%     398,903     100%     16%   Operating income (loss):                               South African transaction processing   39,740     41%     22,726     38%     75%   International transaction processing   19,671     21%     15,305     26%     29%   Financial inclusion and applied technologies   53,340     56%     42,559     72%     25%          Subtotal: Operating segments   112,751     118%     80,590     136%     40%          Corporate/Eliminations   (16,845 )   (18% )   (21,439 )   (36% )   (21% )                Consolidated operating income   95,906     100%     59,151     100%     62%   Table 10   In South African Rand (US GAAP)       Nine months ended March 31,       2015           2014                   ZAR     % of     ZAR     % of     %   Operating Segment   ’000     total     ’000     total     change   Revenue:                               South African transaction processing   1,983,228     38%     1,798,996     43%     10%   International transaction processing   1,369,249     26%     1,147,251     28%     19%   Financial inclusion and applied technologies   2,240,059     43%     1,489,565     36%     50%          Subtotal: Operating segments   5,592,536     107%     4,435,812     107%     26%          Intersegment eliminations   (409,986 )   (7% )   (295,158 )   (7% )   39%                  Consolidated revenue   5,182,550     100%     4,140,654     100%     25%   Operating income (loss):                               South African transaction processing   446,085     41%     235,898     38%     89%   International transaction processing   220,809     21%     158,867     26%     39%   Financial inclusion and applied technologies   598,747     56%     441,766     72%     36%          Subtotal: Operating segments   1,265,641     118%     836,531     136%     51%          Corporate/Eliminations   (189,087 )   (18% )   (222,539 )   (36% )   (15% )                Consolidated operating income   1,076,554     100%     613,992     100%     75%   33 South African transaction processing      In ZAR, the increase in segment revenues was primarily due to more low-margin transaction fees generated from beneficiaries using the South African National Payment System and more inter-segment transaction processing activities. In addition, revenue from the distribution of social welfare grants grew modestly during the year and was in-line with the increase in unique welfare cardholder recipients, net of removal of invalid and fraudulent beneficiaries, partially offset by the loss of MediKredit revenue as a result of the sale of that business.      Our operating income margin for the year to date fiscal 2015 and 2014 was 22% and 13%, respectively, and has increased primarily due to more higher-margin inter-segment transaction processing activities, the elimination of MediKredit losses and an increase in the number of beneficiaries paid in fiscal 2015. International transaction-based activities      Revenue and operating income increased primarily due to higher transaction volume at KSNET during the year to date fiscal 2015. Operating income margin for the year to date fiscal 2015 and 2014, was 16% and 14%, respectively. Financial inclusion and applied technologies      Financial inclusion and applied technologies revenue and operating income increased primarily due to higher prepaid airtime sales driven by the rollout of our prepaid airtime product, an increase in the number of UEPS-based loans as we rolled out our product nationally, and, in ZAR, an increase in intersegment revenues. Fiscal 2014 operating income includes expenses related to the national roll-out of our UEPS-based lending offering and the establishment of the allowance for doubtful finance loans in fiscal 2014. Smart Life did not contribute to operating income in fiscal 2015 and 2014 due to the FSB suspension of its license.      Notwithstanding the national roll-out expenses incurred in fiscal 2014, operating income margin for the Financial inclusion and applied technologies segment decreased to 27% from 30%, primarily as a result of more low-margin prepaid airtime and the sale of competitively-priced financial inclusion products to address the needs of the broader market. Corporate/ Eliminations      Our corporate expenses generally include acquisition-related intangible asset amortization; expenditure related to compliance with the Sarbanes-Oxley Act of 2002; non-employee directors’ fees; employee and executive bonuses; stock-based compensation; legal fees; audit fees; directors and officers insurance premiums; telecommunications expenses; property-related expenditures including utilities, rental, security and maintenance; and elimination entries.      The decrease in our corporate expenses was primarily due to lower US government investigations-related and US lawsuit expenses, audit fees and other corporate head office-related expenses.fees. Liquidity and Capital Resources At March 31,September 30, 2015, our cash balances were $111.0$125.6 million, which comprised mainly ZAR-denominated balances of ZAR 1.21.4 billion ($103.6101.0 million), KRW-denominated balances of KRW 1.6 billion ($1.5 million) and USU.S. dollar-denominated balances of $4.3$16.1 million and other currency deposits, primarily Botswana Pula,euros and British pounds of $1.7$8.5 million. The increase in our cash balances from June 30, 2014,2015, was primarily due to the expansion of all of our core businesses, and to a lesser extent, to the cash conservation resulting from the sale of loss-incurring businesses, offset by provisional tax payments, capital expenditures and the scheduled Korean debt repayment in October 2014.strengthening of the U.S. dollar against our primary functional currencies. We currently believe that our cash and credit facilities are sufficient to fund our future operations for at least the next four quarters. We generally invest the surplus cash held by our South African operations in overnight call accounts that we maintain at South African banking institutions, and surplus cash held by our non-South African companies in the USU.S. money markets. We have invested surplus cash in Korea in short-term investment accounts at Korean banking institutions. Historically, we have financed most of our operations, research and development, working capital, capital expenditures and acquisitions through our internally generated cash. When considering whether to borrow under our financing facilities, we consider the cost of capital, cost of financing, opportunity cost of utilizing surplus cash and availability of tax efficient structures to moderate financing costs. 34 We have a short-term South African credit facility with Nedbank Limited of ZAR 400 million ($33.128.5 million)., which consists of (i) a primary amount of up to ZAR 200 million, which is immediately available, and (ii) a secondary amount of up to ZAR 200 million, which is not immediately available. The short-term facilityprimary amounts comprises an overdraft facility of up to ZAR 25050 million and indirect and derivative facilities of up to ZAR 150 million, which includes letters of guarantee, letters of credit and forward exchange contracts. As of March 31,September 30, 2015, we have used none of the overdraft and ZAR 137.2128.2 million ($11.39.1 million) of the indirect and derivative facilities to obtain foreign exchange contracts and to support guarantees issued by Nedbank to various third parties on our behalf. Refer to Note 12 to our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended June 30, 2014,2015, for additional information related to our short-term facilities. As of March 31,September 30, 2015, we had outstanding long-term debt of KRW 66.468.1 billion (approximately $60.0$56.9 million translated at exchange rates applicable as of March 31,September 30, 2015) under credit facilities with a group of South Korean banks. The loans bear interest at the South Korean CD rate in effect from time to time (2.12%(1.64% as of March 31,September 30, 2015) plus a margin of 3.10% for one of the term loan facilities and the revolver and a margin of 2.90% for the other term loan facility. We repaid the KRW 15 billion other term loan facility in full in October 2014 in accordance with the repayment schedule.revolver. Scheduled remaining repayments of the term loans and loan under the revolving credit facility are as follows: April 2016, 2017 and 2018 (KRW 10 billion each) and October 2018 (KRW 30 billion plus all outstanding loans under our revolving credit facility). Refer to Note 9 to our unaudited condensed consolidated financial statements for the three and nine months ended March 31,September 30, 2015, for additional information related to our long-term borrowings. 31 Cash flows from operating activities ThirdFirst quarter of fiscal 20152016 and 20142015 Net cash provided by operating activities for the thirdfirst quarter of fiscal 20152016 was $49.3$28.1 million (ZAR 578.0364.2 million) compared to cash provided by operating activities of $34.6$39.5 million (ZAR 376.2424.6 million) for the thirdfirst quarter of fiscal 2014.2015. Excluding the impact of interest received, interest paid under our Korean debt and taxes presented in the table below, the increasedecrease in cash from operating activities resulted from improved trading activity during fiscal 2015.the timing of receipts of cash from customers.      We paid taxes totaling $0.1 million (ZAR 1.6 million) in South Africa duringDuring the thirdfirst quarter of fiscal 2015. We also paid taxes totaling $3.02016, we made an additional tax payment of $3.4 million in other tax jurisdictions, primarily South Korea. We paid no taxes in South Africa during the third quarter of fiscal 2014. We paid provisional Korean taxes of $1.6 million related to our tax year ended December 31, 2013.      Taxes paid during the third quarter of fiscal 2015 and 2014 were as follows: Table 11   Three months ended March 31,       2015     2014     2015     2014     $    $      ZAR     ZAR       ‘000     ‘000     ‘000     ‘000   First provisional payments   135     -     1,564     -   Taxation refunds received   (40 )   (36 )   (468 )   (400 )        Total South African taxes paid   95     (36 )   1,096     (400 )        Foreign taxes paid: primarily Korea   2,991     1,606     36,042     17,330                    Total tax paid   3,086     1,570     37,138     16,930        We expect to pay our second provisional payments in South Africa(ZAR 46.8 million) related to our 2015 tax year in South Africa. We paid dividend withholding taxes of $0.8million (ZAR 10 million) during the fourthfirst quarter of fiscal 2015. Year to date fiscal 2015 and 2014      Net cash provided by operating activities for the year to date fiscal 2015 was $103.4 million (ZAR 1.2 billion) compared to cash provided by operating activities of $5.7 million (ZAR 59.1 million) for the year to date fiscal 2014. Excluding the impact of interest received, interest paid under our Korean debt and taxes presented in the table below, the increase in cash from operating activities resulted from improved trading activity during fiscal 2015.      During the year to date fiscal 2015, we paid South African tax of $18.9 million (ZAR 217.2 million) related to our 2015 tax year and $2.4 million (ZAR 26.4 million) related to prior tax years.2016. We also paid taxes totaling $7.6$0.02 million in other tax jurisdictions, primarily South Korea. During the year to datefirst quarter of fiscal 2014,2015, we paid South Africanmade an additional tax payment of $13.3$2.4 million (ZAR 137.826.4 million) related to our 2014 tax year and $0.2 million (ZAR 2.4 million) related to prior tax years.in South Africa. We also paid provisional Korean taxes of $2.6totaling $2.8 million related to ourin other tax year ended December 31, 2013.jurisdictions, primarily South Korea. 35 Taxes paid during the year to datefirst quarter of fiscal 20152016 and 20142015 were as follows: Table 12   Nine months ended March 31,   Table 7   Three months ended September 30,     2015     2014     2015     2014     2015     2014     2015     2014   $    $      ZAR     ZAR    $    $     ZAR     ZAR     ‘000     ‘000     ‘000     ‘000     ‘000     ‘000     ‘000     ‘000   First provisional payments   18,910     13,292     217,241     137,773   Taxation paid related to prior years   2,408     228     26,395     2,360     3,436     2,408     46,840     26,392   Taxation refunds received   (317 )   (36 )   (3,533 )   (400 )   (176 )   (34 )   (2,402 )   (365 ) Dividend withholding taxation   789     -     10,000     -   Total South African taxes paid   21,001     13,484     240,103     139,733     4,049     2,374     54,438     26,027   Foreign taxes paid: primarily Korea   7,638     2,613     86,857     27,507   Foreign taxes paid, primarily South Korea   17     2,786     232     30,170   Total tax paid   28,639     16,097     326,960     167,240     4,066     5,160     54,670     56,197   We expect to pay our first provisional payments in South Africa related to our 2016 tax year in the second quarter of fiscal 2016. Cash flows from investing activities ThirdFirst quarter of fiscal 2015and 20142016 and 2015 Cash used in investing activities for the thirdfirst quarter of fiscal 20152016 includes capital expenditure of $6.3$10.7 million (ZAR 74.1138.8 million), primarily for the acquisition of payment processing terminals in Korea and the rollout of ATMs in South Africa. Cash used in investing activities for the thirdfirst quarter of fiscal 20142015 includes capital expenditure of $4.8$9.4 million (ZAR 52.7101.9 million), primarily for the acquisition of payment processing terminals in Korea. Year to date fiscal 2015 and 2014      Cash used in investing activities for the year to date fiscal 2015 includes capital expenditure of $24.8 million (ZAR 278.9 million), primarily for the acquisition of payment processing terminals in Korea. We also received approximately $1.9 million resulting from the sale of NUETS business.      Cash used in investing activities for the year to date fiscal 2014 includes capital expenditure of $17.3 million (ZAR 178.9 million), primarily for the acquisition of payment processing terminals in Korea. Cash flows from financing activities ThirdFirst quarter of fiscal 20152016 and 20142015 During the thirdfirst quarter of fiscal 2016, we received approximately $3.8 million from the exercise of stock options and utilized approximately $0.7 million of our Korean borrowings to pay quarterly interest due. During the first quarter of fiscal 2015, we repurchased BVI’s remaining 1,837,432 shares of Net1 common stock for approximately $9.2 million and BVI paid $1.4 million for 12.5% of CPS’ issued and outstanding ordinary shares. We also utilized approximately $0.8$1.1 million of our Korean borrowings to pay quarterly interest due and received approximately $0.8 million from the exercise of stock options. We also paid a dividend of $1.0 million to certain of our non-controlling interests.      During the third quarter of fiscal 2014, we utilized approximately $1.0 million of our Korean borrowings to pay quarterly interest due and received approximately $0.1 million from the exercise of stock options. Year to date fiscal 2015 and 2014      During the year to date fiscal 2015, we made a scheduled Korean debt repayment of $14.1 million, repurchased BVI’s remaining 1,837,432 shares of Net1 common stock for approximately $9.2 million, received $1.4 million from BVI for 12.5% of CPS’ issued and outstanding ordinary shares and paid a dividend of $1.0 million to certain of our non-controlling interests. We also utilized approximately $3.0 million of our Korean borrowings to pay quarterly interest due and received approximately $1.8 million from the exercise of stock options during the first quarter of fiscal 2015.      During the year to date fiscal 2014, we refinanced our Korean debt and received $87 million from Korean banks. In October 2013, we used $72.6 million of these new borrowings and $14.4 million of our surplus cash to repay the $87.0 million due under our old facility. In addition, we paid the facility fees related to our new Korean borrowings of approximately $0.9 million. In January 2014, we utilized approximately $1.0 million of these new borrowings to pay quarterly interest due in Korea.      We paid approximately $2.0 million for all of the shares of KSNET we did not already own during the second quarter of fiscal 2014. We also utilized our South African short-term facility to fund our working capital requirements. 36 Off-Balance Sheet Arrangements We have no off-balance sheet arrangements. 32 Capital Expenditures We expect capital spending for the fourthsecond quarter of fiscal 20152016 to primarily include the acquisition of payment terminals for the expansion of our operations in Korea.Korea and expansion of ATMs infrastructure and branch network in South Africa. Our historical capital expenditures for the thirdfirst quarter of fiscal 20152016 and 20142015 are discussed under “—Liquidity and Capital Resources—Cash flows from investing activities.” All of our capital expenditures for the past three fiscal years were funded through internally-generated funds. We had outstanding capital commitments as of March 31,September 30, 2015, of $0.4$1.5 million related mainly to computer equipment.the procurement of ATMs. We expect to fund these expenditures through internally-generated funds. Contingent Liabilities, Commitments and Contractual Obligations The following table sets forth our contractual obligations as of March 31,September 30, 2015: Table 13   Payments due by Period, as of March 31, 2015 (in $ ’000s)   Table 8   Payments due by Period, as of September 30, 2015(in $ ’000s)          Less                 More           Less                 More           than 1     1-3     3-5     than 5           than 1     1-3     3-5     than 5     Total     year     years     years     years     Total     year     years     years     years   Long-term debt obligations (A)   68,869     3,656     23,007     42,206     -     61,774     2,983     20,595     38,196     -   Operating lease obligations   7,915     3,941     3,451     523     -     9,638     4,325     5,000     313     -   Purchase obligations   7,011     7,011     -     -     -     4,763     4,763     -     -     -   Capital commitments   403     403     -     -     -     1,521     1,521     -     -     -   Other long-term obligations (B)(C)   20,250     -     -     -     20,250     2,178     -     -     -     2,178   Total   104,448     15,011     26,458     42,729     20,250     79,874     13,592     25,595     38,509     2,178   (A) – Includes $60.0$56.9 million of long-term debt and interest payable at the rate applicable on March 31,September 30, 2015, under our Korean debt facility. (B) – Includes policy holder liabilities of $19.4$1 million related to our insurance business. (C) – We have excluded cross-guarantees in the aggregate amount of $12.0$9.1 million issued as of March 31,September 30, 2015, to Nedbank to secure guarantees it has issued to third parties on our behalf as the amounts that will be settled in cash are not known and the timing of any payments is uncertain. 37 Item 3. Quantitative and Qualitative Disclosures About Market Risk In addition to the tables below, see Note 5 to the unaudited condensed consolidated financial statements for a discussion of market risk. The following table illustrates the effect on our annual expected interest charge, translated at exchange rates applicable as of March 31,September 30, 2015, as a result of changes in the Korean CD. The effect of a hypothetical 1% (i.e. 100 basis points) increase and a 1% decrease in each of the Korean CD rate as of March 31,September 30, 2015, are shown. The selected 1% hypothetical change does not reflect what could be considered the best or worst case scenarios.   As of March 31, 2015     As of September 30, 2015   Table 14         Hypothetical     Estimated annual   Table 9         Hypothetical     Estimated annual           change in     expected interest           change in     expected interest           Korean CD     charge after           Korean CD     charge after           rate or South     hypothetical change in           rate or South     hypothetical change in     Annual     Africa     Korean CD rate or     Annual     Africa     Korean CD rate or     expected     overdraft     South African     expected     overdraft     South African     interest     facility rate,     overdraft facility rate,     interest     facility rate,     overdraft facility rate,     charge     as     as appropriate     charge     as     as appropriate     ($ ’000)   appropriate     ($ ’000)   ($ ’000)   appropriate     ($ ’000) Interest on Korean long-term debt   3,133     1%     3,734     2,698     1%     3,267           (1% )   2,533           (1% )   2,129   33 The following table summarizes our exchange-traded equity securities with equity price risk as of March 31,September 30, 2015. The effects of a hypothetical 10% increase and a 10% decrease in market prices as of March 31,September 30, 2015, is also shown. The selected 10% hypothetical change does not reflect what could be considered the best or worst case scenarios.   As of March 31, 2015     As of September 30, 2015   Table 15                         Table 10                                             Hypothetical                       Hypothetical                 Estimated fair     Percentage                 Estimated fair     Percentage                 value after     Increase                 value after     Increase     Fair           hypothetical     (Decrease) in     Fair           hypothetical     (Decrease) in     value     Hypothetical     change in price     Shareholders’     value     Hypothetical     change in price     Shareholders’     ($ ’000)   price change     ($ ’000)   Equity     ($ ’000)   price change     ($ ’000)   Equity   Exchange-traded equity securities   7,608     10%     8,369     0.16%     6,618     10%     7,280     0.14%           (10% )   6,847     (0.16% )         (10% )   5,956     (0.14% ) Item 4. Controls and Procedures Evaluation of disclosure controls and procedures Under the supervision and with the participation of our management, including our chief executive officer and our chief financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended, as of March 31,September 30, 2015. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on this evaluation, the chief executive officer and the chief financial officer concluded that our disclosure controls and procedures were effective as of March 31,September 30, 2015. Changes in Internal Control over Financial Reporting There have not been any changes in our internal control over financial reporting during the fiscal quarter ended March 31,September 30, 2015, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. 3834 Part II. Other Information Item 1. Legal Proceedings Constitutional Court Proceedings Relating to SASSA Tender Process See disclosure under “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Recent Developments—Update onCancellation of SASSA tender process”Tender” for an update regarding the proceedings in the Constitutional Court in connection with the new SASSA tender process. Challenge to Payment by SASSAUnited States securities litigation On September 16, 2015, the United States District Court for the Southern District of Additional Implementation Costs      On April 2, 2015, Corruption Watch, a South African non-profit civil society organization,New York dismissed the purported securities class action litigation originally filed a Notice of Motion with the High Court of South Africa, notifying the Court that it intends to apply for an order by the Court to review and set aside the decision of SASSA’son December 24, 2013, against us, our Chief Executive Officer and our Chief Financial Officer. In its opinion, the District Court provided plaintiff with 30 days to approvefile a second amended complaint. This deadline passed without plaintiff taking any action. Accordingly, the paymentcase has been closed. Plaintiff may file a notice of appeal until November 23, 2015. We intend to us of ZAR317 million (approximately approximately ZAR 277 million, excluding VAT). Corruption Watch claims that there was no lawful basis for the decision to make the payment to us, and that the decision was unreasonable and irrational and did not comply with South African legislation. We have been named as a respondent in the Notice of Motion. On April 17, 2015 we filed a Notice of Intention to Oppose with the Court.      As we previously disclosed, in June 2014, we received approximately ZAR 277 million, excluding VAT, from SASSA, related to the recovery of additional implementation costs we incurred during the beneficiary re-registration process in fiscal 2012 and 2013. After we signed our SASSA contract, SASSA requested that we biometrically register all social grant beneficiaries (including child grant beneficiaries), in addition to the grant recipients who were issued with the SASSA-branded UEPS/EMV smart cards. We agreed to SASSA’s request, and as a result, we performed approximately 11 million additional registrations beyond those that we were contractually required to perform in consideration for our monthly service fee. Accordingly, we claimed a cost recovery from SASSA, supported by a factual findings certificate from an independent auditing firm. SASSA agreed to pay us the ZAR 277 million as full settlementvigorously defend any appeal of the additional costs we incurred.      We believe that Corruption Watch’s claim is without merit and we intend to defend it vigorously. However, we cannot predict how the Court will rule on the matter. United States securities litigation      On March 6, 2015, plaintiff filed an opposition to our motion to dismiss its complaint and we filed a reply brief on March 27, 2015. We continue to believe this lawsuit has no merit and are defending it vigorously. Item 1A. Risk Factors      See “Item 1A RISK FACTORS” in Part I of our Annual Report on Form 10-K for the fiscal year ended June 30, 2014, for a discussion of risk factors relating to (i) our business, (ii) operating in South Africa and other foreign markets, (iii) government regulation, and (iv) our common stock. Except as set forth below and in “Item 1A RISK FACTORS in Part II of our Form 10-Q for the quarters ended September 30 and December 31, 2014, there have been no material changes from the risk factors previously disclosed in our Annual Report on Form 10-K for the fiscal year ended June 30, 2014.    We currently derive a substantial portion of our revenues from our SASSA contract for the payment of social grants and from the provision of financial and other services to our cardholder base. SASSA has initiated a new tender process. We have not yet determined whether we will participate in the process. If either we do not participate or we participate but do not win any new contract that may be awarded, we would need to replace the lost revenue from other sources or our business would suffer significantly. If we do participate and win a new contract, the terms might be substantially inferior to our current contract.      As ordered by the South African Constitutional Court in its April 2014 ruling, SASSA initiated a new tender process for a five-year contract relating to the payment of social grants by issuing an initial RFP in October 2014. Following a detailed analysis of the tender specifications, we concluded that the tender specifications were not sufficiently clear regarding a number of critical points and failed to comply with the RFP requirements specified in theDistrict Court’s ruling and, in November 2014, we applied to the Court for an order setting aside the RFP and directing SASSA to issue a corrected RFP. Although the Court did not set aside the RFP, it did order SASSA to issue a draft amended RFP. SASSA issued amended RFPs on two separate occasions (in December 2014 and February 2015). We continued to object to deficiencies in the amended RFPs and made further applications to the Court setting forth our objections. In February 2015, SASSA applied to the Court for an extension of time to address our objections.ruling. 39      In orders dated March 19 and 24, 2015, the Court ordered SASSA to effect further amendments to the RFP to address our objections. The Court ordered that, absent further objections (1) SASSA must circulate a further amended draft RFP by April 17, 2015; (2) all bids must be submitted by May 17, 2015 and (3) SASSA shall award the new tender by October 15, 2015. The Court’s April 2014 ruling does not require SASSA to award a new tender, though we expect that any decision not to make an award would be subject to judicial review and scrutiny. On April 17, 2015, SASSA issued and circulated an amended RFP to all prospective bidders. The amended RFP specifies that bidders must submit their proposals to SASSA on or before May 18, 2015.            We are currently analyzing the RFP to determine whether it is in the best interest of the Company to participate in the tender process or to focus on our other financial services businesses without being a contractor to SASSA. We have not yet made a final determination but expect to do so by the tender deadline. In any event, we cannot predict what the timing or ultimate outcome of the tender process will be, or if a new tender award will be made at all after the process is complete. If we choose not to participate in the new tender, then our current contract may be canceled in the event that SASSA awards a new contract to a third party, in which case we would lose the revenues we currently receive from our SASSA contract. In that event, we would need to replace the lost revenue with alternate sources of revenues.      As with prior SASSA tenders, any participation in the new tender, unless it is concluded promptly, will consume a substantial amount of our management’s time and attention and impact their ability to focus on other matters, including other South African and international business development activities. If we do participate in the tender process, we cannot assure you we will win a contract to continue to distribute social welfare grants nationally. If a new contract is awarded and we are not the winning bidder, we would lose the benefit of the remaining portion of our current contract. Even if we win the tender and do receive a new contract, we cannot predict the terms that such contract will contain. Any new contract we receive will likely contain pricing or other terms that would be less favorable to us than the terms of our current contract.      The Court's November 29, 2013 judgment also stated that CPS is deemed to be an “organ of state” for the purpose of the contract concluded pursuant to the previous tender process. The Court stated that, in this regard, CPS has “constitutional obligations” that go beyond its contractual obligations. It is not clear what these obligations may entail in respect of the current and any potential future government contract in South Africa. We cannot predict what the financial implications may be if we are required to continue with the provision of our services without a valid contract, or during any transitional period required for the orderly transfer of our current services to the successful bidder.      Further, in connection with the litigation challenging the award of the previous SASSA tender to us, we included our entire 2011 SASSA tender submission in the court record, which court record is in the public domain. Our previous tender submission contained competitively sensitive business information. As a result of this disclosure, our existing and future competitors have access to this information which could adversely affect our competitive position in the current tender process to the extent that such information continues to remain competitively sensitive.      Finally, if we were to be awarded one or more contracts by SASSA, an unsuccessful tenderor could seek to challenge the award, which could result in the contract being set aside or could require us to expend time and resources in an attempt to defeat any such challenge. We are, and in the future may be, subject to litigation in which private parties may seek to recover, on behalf of SASSA, amounts paid to us under our SASSA contract. If such litigation were to be successful and require us to repay substantial monies to SASSA, such repayment would adversely affect our results of operations, financial position and cash flows.      On April 2, 2015, Corruption Watch, a South African non-profit civil society organization, filed a Notice of Motion with the High Court of South Africa, notifying the Court that it intends to apply for an order by the Court to review and set aside the decision of SASSA’s Chief Executive Officer to approve the payment to us of ZAR317 million. Corruption Watch claims that there was no lawful basis for the decision to make the payment to us, and that the decision was unreasonable and irrational and did not comply with South African legislation. We have been named as a respondent in the Notice of Motion. On April 17, 2015 we filed a Notice of Intention to Oppose with the Court.      As discussed in “Item 1—Legal Proceedings,” the payments being challenged by Corruption Watch represent amounts paid to us by SASSA for the costs we incurred in performing additional beneficiary registrations beyond those that we were contractually required to perform under our SASSA contract. These amounts were paid in full settlement of the claim we submitted to SASSA for these additional costs. We believe that Corruption Watch’s claim is without merit and we intend to defend it vigorously. However, we cannot predict how the Court will rule on the matter. 40      In addition, the April 2014 Constitutional Court ruling ordering SASSA to re-run the tender process requires us to file with the Court, after completion of our SASSA contract, an audited statement of our expenses, income and net profit under the contract. It is conceivable that one or more third parties may in the future institute litigation challenging our right to retain a portion of the amounts we will have received from SASSA under our contract. We cannot predict whether any such litigation will be instituted, or if it is, whether it would be successful.      Any successful challenge to our right to receive and retain payments from SASSA that requires substantial repayments would adversely affect our results of operations, financial position and cash flows. Item 6. Exhibits The following exhibits are filed as part of this Form 10-Q:       Incorporated by Reference Herein Exhibit   Included       No. Description of Exhibit Herewith   Form Exhibit Exhibit Filing Date 31.1 Certification of Principal Executive Officer pursuant to Rule 13a-14(a) under the Exchange Act X 31.2 Certification of Principal Financial Officer pursuant to Rule 13a-14(a) under the Exchange Act X 32 Certification pursuant to 18 USC Section 1350 X 101.INS XBRL Instance Document X       101.SCH101.INS XBRL Taxonomy Extension SchemaInstance Document X       101.CAL101.SCH XBRL Taxonomy Extension Calculation Linkbase XSchema   101.DEF XBRL Taxonomy Extension Definition Linkbase X   101.LAB XBRL Taxonomy Extension Label Linkbase X       101.PRE101.CAL XBRL Taxonomy Extension Calculation Linkbase X 101.DEF XBRL Taxonomy Extension Definition Linkbase X 101.LAB XBRL Taxonomy Extension Label Linkbase X 101.PRE XBRL Taxonomy Extension Presentation Linkbase X   X SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on May 7,November 5, 2015. NET 1 UEPS TECHNOLOGIES, INC. By: /s/ Dr. Serge C.P. Belamant Dr. Serge C.P. Belamant Chief Executive Officer, Chairman of the Board and Director By: /s/ Herman Gideon Kotzé Herman Gideon Kotzé Chief Financial Officer, Treasurer and Secretary, Director 41NET 1 UEPS TECHNOLOGIES, INC. By: /s/ Dr. Serge C.P. Belamant Dr. Serge C.P. Belamant Chief Executive Officer, Chairman of the Board and Director By: /s/ Herman Gideon Kotzé Herman Gideon Kotzé Chief Financial Officer, Treasurer and Secretary, Director 35