Good afternoon and welcome to the Net1 Third Quarter Earnings. All participants are now in listen-only mode and there will be an opportunity for you to ask questions at the end of today’s presentation. [Operator Instructions] Please also note that this conference is being recorded. I’d now like to turn the conference over to Serge Belamant. Please go ahead, sir.

Thank you. Good morning to our investors in the US, and good afternoon to our investors in Europe and to those in South Africa. Thank you very much for joining us for our third quarter and fiscal 2008 earnings call. With me today as usual, Herman Kotze, our CFO, and also with me a member of our senior management team. Both our press release and our 10-Q are available on our website at www.net1ueps.com. We will be making forward-looking statements on this call and I call your attention to the cautionary language contained in our press release regarding the risks and uncertainties associated with forward-looking statements. In addition, during this call we’ll be using certain non-GAAP financial measures as defined under SEC rules, where required by these rules we have provided a reconciliation of the non-GAAP measures to the most directly comparable GAAP measures and exhibits in the press release dated yesterday. As mentioned on our previous call, it’s become apparent to Herman and I with previous practice of presenting our results in US dollars which is that in South African rand, which is non-GAAP is considered. Therefore, based on request and recommendation of our investors and analysts during this call we will primarily discuss our results in South African rand. We achieved a non-GAAP measure. We analyze our results of operations in annual report on Form 10-K. I would like to thank you and in our press release in South African rand to assist investors in understanding the changes in the real underlying trends of our business. Company’s results are significantly impacted by currency fluctuations between the US dollar and the South African rand. And, therefore, for clarification purposes I would like to reiterate that the use of South African rand is a non-GAAP measure and that the appropriate…

Thank you, Serge, and greetings to our investors around the world. I will discuss the key trends of the third quarter of fiscal 2008 compared to the third quarter of fiscal 2007 along with the key trends between the third and the second quarters of fiscal 2008. We have also updated the Frequently Asked Questions section in our press release to provide further clarity on the questions we are asked most often by our investors and the analysts. Again, for clarification purposes, I would like to mention that my following discussion will be based on our results in South African rand as this provides the best indicator of the group’s actual operational performance and this is a non-GAAP measure. In order to review our results in terms of US dollars and US GAAP, please review our quarterly filing on Form 10-Q as well as our press release filed yesterday. For Q3 of 2008, our average rand-dollar exchange rate was 7.41 compared to 7.21 for Q3 of fiscal 2007. But sequentially from the second quarter we saw a significant weakening from the 6 rand 78 to the dollar level for Q2 of fiscal 2008. Looking at the current situation, the rand has strengthened against the US Dollar during the second half of our current quarter Q4 from a tied about 8 rands of a dollar during the last weeks of Q3 and it is currently trailing at around 7 rand 60 to the dollar. Any fluctuation of the rand obviously influences the dollar equivalent as a result of our South African operations, which is why we provide you with constant currency information in our press release and on this call, as the core operational drivers are clearly visible from these numbers. I am very pleased with our third quarter results as…

Thank you very much sir. (Operator Instructions). Our first question comes from Dave Koning of Robert W. Baird. Please go ahead.

Yeah, hi guys. And thanks for all the detail on the call.

Hi Dave.

Yeah, I guess first of all in Ghana, you sort of talked about this year 17 million or so of hardware, software implementation type revenues, and then you kind of talked about for the first time another 5 million of revenue coming on to fiscal ’09, but I am wondering in addition to that you talked about some of the cards, the 2.5 million cards et cetera. I mean are we in a situation in fiscal ’09, where we actually could get up to the same amount of revenue in fiscal ’09 as we did in fiscal ’08 based on some of the cards et cetera coming on?

Yeah, it’s Serge yeah, you know I’ve got when that will be and obviously we’ve been discussing this. There are two aspects if we got to try to understand I think, at the moment if you look at the total amount of cards that had been purchased, its already in excess of 3 million. The Ghanaian population is 22 million. So, we believe that at the moment that the rate that the banks are actually coming on board, the chances are that we are going to see in my view the number of cards growing to perhaps around the 6 million mark before the market will reach a stage which I wouldn’t call it saturation, but it will reach a mature stage. So we can, we believe that as long as the project continues to go on track as it is going now. We don’t see any reason why the next 12 months should not see the similar sort of those amount of cards being bought as what’s been bought to date.

David, so if I can add to that. Of course the initial customization and software related to invoicing is not going to be repeated in the next quarter over the higher margin invoices, so…

Of course.

But if we talk about hardware then this validates your drive.

Then of course you also got the terminal base, now they are really on - around 15,000 terminal and again we believe that with that number of terminals if you look at the cost to terminal ratio, there is absolutely no doubt that there is a still potential in a country like Ghana to grow from 15,000 to around in my view 45 to 60,000 terminals. So, it certainly is a huge amount of potential for more terminals to be implemented now what I think is a little bit more exciting is I think that we tend to forget that we also get a certain amount of royalties or license fees that are payable on a yearly basis based on the number of cards that are actually implemented and that those royalties do bring us basically 100% margin business I had marked it will be $1 million or a $1.5 million per annum but at the end of the day it’s a pure margin that simply makes up for some of the stuff that Tom is talking about that’s one off.

Okay

On top of it, you’ve also got some very, very nice maintenance contracts which if our technology is as robust as what we believe it is can bring us anything between 12.5 to 6% of the value of the hardware but can bring us anything up to about 8 to 10% of the value of the software on an annual basis as well. So its another lovely income stream that will be coming in and outside of all of this we’ve still got the other projects which each bank individual, the central bank are working on, well they might actually decide and I don’t know if you remember but I did mention that we have sold them. There are a number of other project which include per example e-government application. That has not been included, now can it be wise to go for a IE government application for voting or e--government for ID cards, we would be talking about substantial amount of money, in fact more expensive than our banking products that we really believe the Ghanaian government at this point in time might also go for. Now, apart from all of this, we have still brought out with two initiatives that I think I had mentioned in one of my previous discussions. We are now working closely with the central bank to actually see where net one can participate. It is no longer simply the provision of technology but also utilizing the technology ourselves as a barred sales or in conjunctions with local partners to actually making money out of V-technology rather than out of PD selling or maintaining the technology. So I feel very comfortable but I will be surprised that Ghana continues to grow at a rate that its going. I will be very surprised if we do not generate at least equivalent numbers over the next 12 months or in fact in the next financial year as we have this year.

Okay that’s very helpful. Is the main incremental revenue stream really have on a per card basis so that you know the 3 million currency is already assigned, is that something like you know just to throw out the numbers the $2/$3 a year per card or how should we think about that?

We’ll be looking -- the 2 of $3 per card was something is a very good number. You got to look at that that for every card that is issued there should be $2 or $3 per months for the revenue that is generated by the people that you too will have the card to run a business. Okay so lets realize that one should really start to looking this and it could be 3, it could be 4, it could be 5. Now obviously we want to participate in those businesses if we can. We are already looking at one or two businesses that we have discussed with them which involved for example the fitting up of a pre-paid Eton (Ph) switching facility which as you know we do in South Africa pre-paid electricity, bill payments. Now there is no doubt that over top of products that we are in fact offering is through EasyPay. So this is where the second waves comes in with the outside of what we’ve made so far which otherwise can be replicated for at least another year, the chances are by then we will be in a position to generate in my view even bigger profits. After the second wave initiatives once the technology has become ubiquitous and is in fact in the hands of all Ghanians.

Great, thanks and just a final question, just when we look at Iraq, which is a nice job kind of laying out, kind of where you get the economics from Iraq. It looks like the biggest potential revenue stream could be that 10% of any transaction of a huge interchange type figure. You know how big can that be? How are you thinking about the size of transactions in Iraq and what the revenue stream from that piece of the pie will be?

Wow that’s great to hear thank you.

Hey Jack.

(Operator Instructions). Our next question comes from Dhruv Chopra of Morgan Stanley. Please go ahead.

Hello gentlemen.

Hello Dhruv.

I just wanted to catch a little bit on the beneficiary issue again and you know I know you provided some color that there’s been some eliminations that has taken for you people are, first of all could you give us a sense on what the gross additions were for you guys if you have that data available net of whoever came off, and then secondly as the welfare net is expanding with the child support grant age going up the pension age coming down, and the higher grant amounts, when should we start to see some of those things impact your numbers?

Dhruv, on the first question, I don’t have the exact information available, but assuming that the beneficiary will always remain flat from Q2 to Q3, and we know that about 110,000 beneficiaries remove off the ones that they’d been identified as fraudulent, I would say that the increase in new beneficiaries is probably more or less the same amount so 100 to 110,000 people over the quarter. On the second part there are you know some nuances in terms of what was announced by the Minster and now that the detail has been set out for us. The reduction in the old age grant qualifying age for male applicant from 65 to 60 is a process that will be phased in and the way that they will do it is in this current financial, government financial year. The age will be reduced from 65 to 63. a year thereafter it will be reduced from 63 to 61, and then it will be reduced in the third year to 60. So, they are following a phased approach, current estimation of that is probably 500,000 additional men in the country who would today qualify for this additional grant based on the age difference. We will think, I think we will start to see the impact of that as it was implemented in April when government’s new policy is sorted so I think that we will slowly start to see those numbers also coming in specifically in Q4, I think, there are obviously a few administration processes and treasury to do that. But I think it will start gathering momentum towards the end of this current calendar year. and the Child Support growth grants and reducing the age by one year, the government has indicated that that will commence on the 1st of January 2009. So we will not see any impact of the reduction in the qualifying age for Child Support Grants for the remainder of this calendar year and we will start to see the impact really I think in Q3 and certainly in Q4 of the following -- of fiscal 2009 for us.

Okay. Great. And, then, on the wage payment launch for next week -- I mean, can you share with us sort of generally what the strategy is, how you’re going to go about acquiring the customers, are we talking about a few thousand people here, are we talking tens of thousands, hundreds of thousands? How are you going to reach these employers and employees?

I think Dhruv nothing has changed from the previous thing. I think Monday’s launch is really the official launching of the…

Ribbon cutting.

It’s ribbon cutting. We obviously have numerous potential plans which are more from -- not so much working people, but obviously employers that are attending the launch and obviously we have invited all of the different structures that we have identified and that are willing to go out and to actually start marketing and selling the account as a product to their own customer base. So, Monday -- after Monday, we’ll be in a position to actually come back in a very, very short while after that to be able to see where we have got four or five mainstream organizations that that all represent like I mentioned before many, many hundreds of thousands, some of them millions of people that are presenting their own plans to us to actually say to us this is the way that they are going to go that and to actually touch their own customers utilizing our own product base. So, I think give us the week of next week to be able to do the launch, to consolidate all of the different people that are going to be there. We will obviously target ourselves our own customer base directly because we want to make sure that obviously it happens. But, we are not going to be able to hit 2 million people by going door to door or by signing up one or two employers. The intention of the year is to certainly utilize those four organizations to actually go out and market the product to their own customer base. They already have methodologies to do this because they touch them and see them on a weekly (technical difficulty). So, that’s really the plan Bruce (Ph) and we will be able to contractualize that some time during the next week or two.

Okay. Great. And, then, just final question if I may? Serge, in your prepared remarks, you touched on very briefly something about a new M&A program. You guys are sitting now on 4.5 bucks a share in net cash. Can you sort of just walk us through what your thought process is on the M&A side and where you potentially maybe looking?

Well, if you think about the money we have in the bank and the fact that we unless mark-up relation, (inaudible) incorrect we lack on a full (Ph) of 8. So, our thinking that the company should buy itself as an M&A program. Now, the jokes apart, Herman has probably told you and – I mean, you know better than us that obviously until this SASSA agenda is finalized after which we will know how much cash do we really need to have in our coffers to do the pre-funding if pre-funding in fact become the requirement there is still a chance that they might actually change their mind and award the tenders and do the pre-funding through treasury which candidly in our view will always make more sense. But, just on the -- we have made a decision at the executive level whereby we are now going to commence a number of haths around the world and that will imply that either we will have to spend some money in setting up ourselves or make some form of acquisition that is going to give us a footprint, the knowledge of the area, some access to some technological people or business develop people. In order to go a little bit faster long-term than at the speed that we are going now and I think that’s the top of M&A acquisition that I am referring to that we firmly believe that this is a good time in in and half of the company to actually perform this acquisition if they are available and they make sense and if they make money in order for us actually implement UEPS at a faster pace.

Great. Thank you very much.

Thank you, Dhruv.

We got time for last question.

Gentlemen, we actually have no further questions. Would you like to make some closing comments?

Well, just so much that well we like to once again to thank very much all of you for taking the time and attending this presentation. I hope that it is clearer in your minds in terms of what we are doing as a company and where we want to go. We are certainly still very, very, very excited about what we have achieved. We are very, very excited about what we have managed to do in Ghana. We still believe that is something that’s has not been achieved at any time by anybody anywhere in the world and certainly in a short space of time. We really believe and we really have some information from a number of other nearby countries that we believe that Ghana will give us the launch pad that you require to sign-up many other countries in Africa in a much – at a much faster rate. And, we really believe that that will step us up to become the organization such as a VISA, MasterCard for the developing economies of the world and we still haven’t sort of -- I know that other people sometimes they will not be a great dream. I think that dream is starting to become more and more like a reality. So, we are very, very excited and very much like to thank our shareholders, all the ones that have been sticking with us through thick and thin and thank you very much as I said to all of you for being with us and making the company and helping us to make the company what it is today. Thank you.

Thank you very much. On behalf of Net 1, that concludes this afternoon’s conference. Thank you for joining us, you may now disconnect your lines.