Final Results

15 June 2011

PME AFRICAN INFRASTRUCTURE OPPORTUNITIES PLC

("PME" or the "Group") (AIM: PMEA.L; PMEW.L)

Preliminary results for the year ended 31 December 2010

and

Appointment of Broker

PME African Infrastructure Opportunities plc, an investment company established to invest in sub-Saharan African infrastructure and infrastructure related industries, announces its results for the year ended 31 December 2010.

Financial highlights and proposed dividend

·; Net Asset Value of US$102.4 million (representing 71 cents per share) down 10.1% compared to 31 December 2009 after taking into account dividends paid and the impact of share buy-backs

·; Group's share of non-current borrowings US$2.2 million at period end (31 December 2009: US$5.8 million), reflecting lower vendor financing and borrowings at TMP Uganda and Sheltam

·; Share buy-backs of 7,905,000 ordinary shares completed during the period at an average price per share of 67 cents (cum dividend)

·; Final dividend of 14 cents per ordinary share proposed. Dividends declared and paid in 2010 of 12.6 cents per share (2009: US$ nil)

Operational highlights

·; Early signs of success following repositioning TMP Uganda and Dovetel from the retail to the business market to address the expected huge demand for effective business data connectivity and related services

·; Sasatel House in Dar es Salaam to be renamed Peninsula House and expected to be fully let and generating cash returns from June 2011

·; Sheltam successfully placed 28 of its 40 locomotive fleet by 1 April 2011, with eight in the Democratic Republic of the Congo, two in Mozambique and the rest in South Africa

Dividend timetable

The relevant dates for the dividend are set out below:

The Company is currently in discussions with its auditors, PricewaterhouseCoopers, Isle of Man, regarding the adjustment to the exercise price per warrant as a result of the dividend payment. Details of adjustments to the warrant exercise price will be announced when determined.

Appointment of Broker

The Company is pleased to announce the appointment of Oriel Securities Limited as its sole broker, with immediate effect.

Further enquiries:

Note to Editors:

·; PME African Infrastructure Opportunities plc ('PME') is a company investing in sub-Saharan African infrastructure and infrastructure related industries. Its shares were admitted to AIM in July 2007 raising US$180 million.

·; PME was established to invest in sub-Saharan African infrastructure and infrastructure related industries with a view to generating attractive returns, principally through capital growth. It is targeting opportunities arising from years of under investment in sub-Saharan African infrastructure where that infrastructure will be instrumental in allowing the continent's economic development to continue to grow.

·; The Investment Manager is PME Infrastructure Managers Limited ('PMEIM'), a joint venture between Dunkeld Trust (associated to Masazane Capital (Pty) Limited), Principle Capital Holdings S.A., Unicos Partners LLP (holding company of the Helvetica Group of companies) and the interests of Richard Bouma.

Chairman's Statement

On behalf of the Board, I am pleased to present the final results for PME African Infrastructure Opportunities plc ("PME" or "the Company") for the year ended 31 December 2010.

Investments and Valuations

PME and its subsidiaries ("the Group") presently comprises four portfolio investments, following the disposal of our investment in Econet Burundi.

These now break down into two broad holdings - our rail interests in South Africa, and our telecommunications investments in Tanzania and Uganda. Progress on these investments is described more fully in the Investment Manager's report. It is however important for shareholders to understand that these investments have very different characteristics.

The rail investments are very largely represented by our ownership of twelve locomotives. These are assets with reasonably predictable returns, for which there is an active market and for which market prices have been relatively stable. The telecommunications assets on the other hand are more subject to the vagaries of supply and demand, and to competitive pricing pressures. Moreover they are still twelve to eighteen months away from anticipated breakeven, and investment outcomes are therefore inherently more unpredictable.

The market for voice communication has been subject to intense competitive pressures, which has resulted in a rapid fall-off in average revenue per user throughout much of Africa. As detailed in the Investment Manager's report, our response has been to focus on developing our offering in the data field, where we see demand growing much more strongly, and where we also possess certain competitive advantages derived from our technology that enables us to compete effectively with capacity constrained GSM operators. We believe these investments are now at an inflection point, and expect to be able to report further on developments at the time of releasing the Interim Results.

Financial Results

Our investments in the telecommunications segment are controlling stakes and therefore for accounting purposes their operating losses are required to be consolidated in the financial statements.

The operating loss attributable to ordinary shareholders for the year ended 31 December 2010 was US$12.2 million (2009: US$13.4 million). The Groups net result includes US$4.2 million (2009: US$3.8 million) of finance income generated by our fleet of twelve C30 railway locomotives and US$3.6 million (2009: US$2.2 million) of revenues from the telecommunications segment.

At 31 December 2010, PME's Net Asset Value attributable to ordinary shareholders in accordance with IFRS was US$102.4 million (71 cents per share), 27.2% down from the US$140.6 million (93 cents per share) that was reported as at 31 December 2009. However taking into account dividends totalling $18.3m (12.6 cents per share) paid during the year this percentage drop is reduced to 14.2%. Further, the positive impact of share buy-back operations had the effect of reducing the impact on Net Assets per Ordinary Share to 10.1%.

The Group's share of non-current borrowings or gearing which is used in determining the gross asset value, was US$2.2 million (31 December 2009: US$5.8 million), reflecting a reduction in vendor finance arrangements and borrowings at two of the Company's investments: TMP Uganda and Sheltam.

Dividend Payment and Outlook

As we have previously announced, it is intended to continue returning uninvested cash to shareholders, and to concentrate on creating value in our existing investments.

During the year we paid out a dividend of 2.6 cents per Ordinary Share on 24 March 2010 to shareholders on the record as of 26 February 2010 and 10 cents per Ordinary Share on 22 October 2010 to shareholders on the record as of 24 September 2010.

We now propose to pay a final dividend of 14 cents per Ordinary Share for the year ended 31 December 2010 on 29 July 2011 to shareholders on the record as of 22 July 2011. This is subject to shareholder approval at the upcoming Annual General Meeting to be held on 19 July 2011. Details of adjustments to the Warrant exercise price will be announced when determined.

There is no change to the previously reported position with regard to the Investment Manager, PME Infrastructure Managers, or to the contract, which is capable of termination by the Board from July 2011 by giving twelve months' notice. Discussions have taken place for the negotiation of an early termination but these have not resulted in terms that the Board feels able to recommend to shareholders. In the meantime the Board has full confidence in Brian Smith of Masazane Capital, one of the shareholders in PME Infrastructure Managers and its current chief executive, with whom it has been working closely over the last twelve months.

David von Simson

Chairman

14 June 2011

Investment Manager's Report

African economies as a whole continue to develop; buoyed by strong commodity demand, domestic consumer growth and international investment. This positive trend is likely to continue over the near term. Apart from certain isolated incidents, the political environment has remained relatively stable in the region and in PME's investee countries, namely South Africa, Tanzania and Uganda.

Against this backdrop, PME has continued to restructure its portfolio. All operations have stabilised and have started to demonstrate tangible progress.

PME remains in consolidation mode and no new investments are being considered at this stage.

Dovetel Tanzania Limited and TMP Uganda Limited

The long awaited African data revolution finally appears to be gaining momentum as a number of undersea cables simultaneously touch the continent. Changes in markets such as Kenya have been profound and a similar pattern of falling prices accompanied by significant growth in customer numbers and levels of data usage can be seen in Tanzania and Uganda.

We believe that demand for effective data connectivity and related services will be huge, particularly in the business market which has traditionally been under-serviced by the large mobile network operators. We have accordingly repositioned both the Tanzanian and Ugandan businesses from the retail into the business market with some encouraging success.

The businesses have, as yet, not achieved break-even but they continue to track their business plans and we believe that a combination of the current sales momentum, strategic initiatives and stronger financial controls should address this over the next 12 to 18 months. This view is shared by a number of independent consultants retained by management and independently by the Board of PME. The next three months are critical, as a number of new initiatives are being launched in Tanzania including VoIP, the roll out of a next generation corporate network and the commercialisation of its data centre. Similar initiatives are being investigated in Uganda and may be launched towards the end of this year.

Whilst these initiatives are exciting we will adopt a pragmatic approach and continue to support both businesses subject to their delivery against specific performance criteria.

PME Properties Limited

The acquisition of the leasehold over Sasatel House located on Toure Drive in Dar es Salaam, Tanzania was completed in December 2010. Long term leases are being finalised with two blue chip tenants over the remaining unoccupied space in the building. The building will be fully let and will start to generate cash returns for PME from June 2011. The property has been independently valued by Knight Frank and the valuation indicates a strong uplift in value from the acquisition cost.

The building will be renamed "Peninsula House" to reflect the fact that the PME related operations now occupy less than a quarter of the available space. A number of options exist to expand the current development given strong demand for A grade office accommodation, with reliable power and data connectivity, on the Peninsula. These options will be investigated further towards the end of this year.

Sheltam Holdings (Pty) Limited ("Sheltam") and PME Locomotives (Mauritius) Limited

Sheltam (in which PME has a 50% stake) continues to recover following the recent market down-turn. Bulk mineral sales and transport volumes have largely recovered but it has taken time for this to be reflected in the market for locomotive services. Marketing activity and potential interest from clients have shown a marked upturn and Sheltam management are hopeful that this will manifest in firm contracts over the next few months.

Sheltam has a fleet of 40 locomotives, including 12 which are leased to Sheltam by PME. By 1 April 2011, Sheltam had placed 28 locomotives of its fleet of 40 locomotives, which is an increase from the 24 locomotives placed in December 2010. 8 of these locomotives are on contract in the Democratic Republic of the Congo, 2 in Mozambique with the balance in South Africa across various customers. A further 2 locomotives are awaiting deployment in South Africa.

Given the slower market recovery Sheltam is in arrears on its finance lease payments to PME Locomotives (Mauritius) Limited. PME remains supportive and is in discussions with Sheltam to normalise the situation. Sheltam is also investigating opportunities to replace the PME lease with Rand-based third party funding, which will offer lower cost and better currency matching.

We continue to believe significant opportunities remain open to Sheltam both in South Africa and across sub-Saharan Africa as the need for bulk transport continues to grow. No update is available on the privatisation of the South African branch lines or on access to South Africa's main lines. Should either of these developments occur the opportunities will be enormous and we believe that Sheltam will be uniquely positioned to benefit from them.

PME Infrastructure Managers Limited

Investment Manager

14 June 2011

PME African Infrastructure Opportunities plc

Consolidated Income Statement

PME African Infrastructure Opportunities plc

Consolidated Statement of Comprehensive Income

PME African Infrastructure Opportunities plc

Consolidated Balance Sheet

PME African Infrastructure Opportunities plc

Consolidated Statement of Changes in Equity

PME African Infrastructure Opportunities plc

Consolidated Cash Flow Statement

PME African Infrastructure Opportunities plc

Notes to the Financial Statements

1 General Information

PME African Infrastructure Opportunities plc (the "Company") was incorporated and is registered and domiciled in the Isle of Man under the Isle of Man Companies Acts 1931 to 2004 on 19 June 2007 as a public limited company with registered number 120060C. The investment objective of PME African Infrastructure Opportunities plc and its subsidiaries (the "Group") is to achieve significant total return to investors through investing in various infrastructure projects and related opportunities across a range of countries in sub-Saharan Africa.

The Company's investment activities are managed by PME Infrastructure Managers Limited (the "Manager"). The Company's administration is delegated to Galileo Fund Services Limited (the "Administrator"). The registered office of the Company is Millennium House, 46 Athol Street, Douglas, Isle of Man, IM1 1JB.

Pursuant to a prospectus dated 6 July 2007, there was an original placing of up to 180,450,000 Ordinary Shares with Warrants attached on the basis of 1 Warrant for every 5 Ordinary Shares. Following the close of the placing on 12 July 2007, 180,450,000 Shares and 36,090,000 Warrants were issued.

The Shares of the Company were admitted to trading on the AIM, a market of the London Stock Exchange, on 12 July 2007 when dealings also commenced.

In the year ended 31 December 2010 the Company bought back 7,905,000 Ordinary Shares for total consideration of US$5,119,300. Of these 7,530,000 shares have been repurchased and held in treasury with the remainder being cancelled upon acquisition.

Financial Year End

The financial year end for the Company is 31 December in each year.

Company Profit

In accordance with the provisions of Section 3 of the Isle of Man Companies Act 1982, no separate income statement has been presented for the Company. The amount of the Company's profit for the year recognised in the Consolidated Income Statement is US$10,681,465 (31 December 2009: loss US$4,635,413).

Dividends

In the year to 31 December 2010 the Company declared and paid dividends of US$18,307,619 (2009: US$nil).

2 Summary of Significant Accounting Policies

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all years presented unless otherwise stated.

2.1 Basis of preparation

These financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union. The financial statements have been prepared under the historical cost convention, as modified by the revaluation of financial assets at fair value through profit or loss, and the requirements of the Isle of Man Companies Acts 1931 to 2004. The preparation of financial statements in conformity with IFRS requires the use of accounting estimates. It also requires management to exercise its judgement in the process of applying the Company and Group's accounting policies.

2.2 Critical accounting estimates

The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below:

Estimated impairment of Goodwill, Telecommunication Licences and Property, Plant and Equipment.

The Group tests semi-annually whether goodwill, telecommunications licenses and property, plant and equipment held by Group companies have suffered any impairment in accordance with the accounting policies stated in notes 2.7 and 2.9. In assessing whether there are any indicators of impairment, the Group determines the recoverable amount of each cash-generating unit ('CGU') based on valuation methods and techniques generally recognised as standard within the industry. The models are adjusted based on the current performance of each CGU compared to its business plan and projected results.

In addition, the Group has engaged a specialist department of one of the major international accountancy firms to conduct a semi-annual valuation of the Group's portfolio of investments in accordance with International Private Equity and Venture Capital Guidelines dated September 2009 (IPEVC guidelines).

Investment in and loan to Associate

The Group tests semi-annually whether the investment and loan to its associate has suffered any impairment. In assessing this, the Group determines the recoverable amount of the CGU determined based on discounted cash flows. The Group also takes into account the associates' (see note 9) progress compared to its business plan. At 31 December 2010 the Group has recognised an impairment of US$579,000 with respect to its investment in associate.

In addition, the Group has engaged a specialist department of one of the major international accountancy firms to conduct a semi-annual valuation of the associate in accordance with IPEVC guidelines.

3 Risk Management

The Company's activities expose it to a variety of financial risks: market risk (including currency risk, interest rate risk and price risk), credit risk and liquidity risk. The financial risks relate to the following financial instruments: loans and receivables, cash and cash equivalents and trade and other payables. The accounting policies with respect to these financial instruments are described in Note 2. Risk management is carried out by the Investment Manager under policies approved by the Board of Directors.

Market price risk

The Group's strategy on the management of market risk is driven by the Group's investment objective. The objective of the Group is to achieve significant total return to investors through investing in various infrastructure projects and related opportunities across a range of countries in sub-Saharan Africa. The Group's market risk is monitored by the Investment Manager on a day to day basis and by the Directors at Board meetings. The Group's financial instruments have no associated market price risk.

Foreign exchange risk

Currency risk is the risk that the value of the financial instruments will fluctuate due to changes in foreign exchange rates. The Group's operations are conducted in jurisdictions which generate revenue, expenses, assets and liabilities in currencies other than US Dollars. As a result, the Group is subject to the effects of exchange rate fluctuations with respect to these currencies. The currencies giving rise to this risk are South African Rand, Tanzanian Shilling, Pound Sterling and Ugandan Shilling.

The Group's policy is not to enter into any currency hedging transactions.

The table below summarises the Group's exposure to foreign currency risk:

The Investment Manager and the Board of Directors monitor and review the Group's currency position on a continuous basis and act accordingly.

At 31 December 2010, had the US Dollar strengthened by 1.50% (2009: 1.50%) in relation to South African Rand, Tanzanian Shilling, Pound Sterling and Uganda Shilling, with all other variables held constant, the shareholders' equity would have decreased by the amounts shown below:

The direct and indirect subsidiaries do not have US Dollar as their functional currency and therefore on the Group level any effects of changes in foreign exchange rates will be included in the foreign currency translation reserve on consolidation.

Credit risk

Credit risk is the risk that a counterparty to a financial instrument will fail to discharge an obligation or commitment that it has entered into with the Group.

The carrying amounts of financial assets best represent the maximum credit risk exposure at the balance sheet date. This relates also to financial assets carried at amortised cost.

At the reporting date, the Group's financial assets exposed to credit risk amounted to the following:

The Group manages its credit risk by monitoring the creditworthiness of counterparties regularly. Cash transactions and balances are limited to high-credit-quality financial institutions (at least an Aa2 credit rating). Loan due from associate and finance lease receivables relate to the investment in Sheltam Holdings and the Investment Manager and the Board of Directors do not expect any losses from non-performance by this counterparty. A balance of US$26,000 (2009: US$296,000) included within trade and other receivables relates to trade debtors (net of provisions) all of which are less than 12 months old and are not considered past due and impaired (see note 15). The Investment Manager and the Board of Directors do not expect any losses in respect of the other balances included within trade and other receivables.

Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its obligations as they fall due. The Group currently manages its liquidity risk by maintaining sufficient cash (maturing on a weekly and monthly basis). The Group's liquidity position is monitored by the Investment Manager and the Board of Directors.

The residual undiscounted contractual maturities of financial liabilities are as follows:

Interest rate risk

Interest rate risk is the risk that the value of financial instruments will fluctuate due to changes in market interest rates. The Group is exposed to interest rate risk from the cash held in interest bearing accounts at floating rates or short term deposits of one month or less. The Company's Investment Manager and Board of Directors monitor and review the interest rate fluctuations on a continuous basis and act accordingly.

During the year ended 31 December 2010 should interest rates have decreased by 10 basis points, with all other variables held constant, the shareholders' equity and the result for the year would have been US$49,000 (2009: 25 basis points US$81,000) lower.

Capital Risk Management

The Group's primary objective when managing its capital base is to safeguard the Company's ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders.

Consistent with others in the industry, the Group has the ability to leverage its capital structure through the use of commercial borrowing and will endeavour to secure such finance for individual portfolio investments on a non-recourse basis where practicable.

Any commercial borrowings on the Group's portfolio, at the date on which any such borrowing is incurred, should not exceed a debt: equity ratio in the region of 70:30 although the Directors may from time to time review this ratio in the light of changing market circumstances and the particular investments being made by the Group in order to maintain the optimum level of gearing.

The Group evaluates levels of capital available and future capital requirements to determine where returns of capital (by way of share buy-backs) are appropriate.

Group capital comprises share capital and reserves.

No changes were made in respect of the objectives, policies or processes in respect of capital management during the years ended 31 December 2009 and 2010.

4 Operating Segments

The chief operating decision-makers have been identified as the Board and the Investment Manager. The Board and the Investment Manager review the Group's internal reporting in order to assess performance and allocate resources. It has determined the operating segments based on these reports. The Board and the Investment Manager consider the business on a project by project basis by type of business. The type of business is either telecommunications (wireless and broadband services) or transport (railway).

* Other refers to income and expenses of the Group not specific to any specific sector such as fees of the Investment Manager and income on un-invested funds. Other assets comprise cash and cash equivalents US$38,538,488 (note 16) and other assets US$2,805,129.

**Other refers to income and expenses of the Group not specific to any specific sector such as fees of the Investment Manager and income on un-invested funds. Other assets comprise; cash and cash equivalents US$63,025,210 (note 16) and other assets US$418,746

The Company is incorporated in the Isle of Man. All of the reported revenue, US$3,603,630 (2009: US$2,153,260), is from external customers from other countries. The split of revenue by country is above, Dovetel representing Tanzania and TMP Uganda representing Uganda.

The total of non-current assets other than financial instruments and deferred tax assets is US$19,489,342 (2009: US$22,465,368) and all of these are located in other countries outside of the Isle of Man. These are split between three countries as follows:

5 Investment Managers Fees

Annual fees

The Investment Manager receives a management fee of 1.25% per annum of the gross asset value of the Group from Admission, payable quarterly in advance and subject to a cap of 3% per annum of the net asset value of the Group.

The Investment Manager is entitled to recharge to the Group all and any costs and disbursements reasonably incurred by it in the performance of its duties including costs of travel save to the extent that such costs are staff costs or other internal costs of the Investment Manager. Accordingly, the Group is responsible for paying all the fees and expenses of all valuers, surveyors, legal advisers and other external advisers to the Group in connection with any investments made on its behalf. All amounts payable to the Investment Manager by the Group are paid together with any value added tax, if applicable.

Annual fees payable to the Investment Manager for the year ended 31 December 2010 amounted to US$1,687,937 (31 December 2009: US$2,040,723).

Performance fees

The Investment Manager is entitled to a performance fee of 20% of the net income and capital cash returns to the Company or any subsidiary in respect of the sale or partial sale, refinancing or restructuring of an investment in an infrastructure project ("relevant investment") provided that the "Project test" has been passed. For these purposes, the Project test will be passed if the Company or any subsidiary has received in cash the return of all its cash invested in a relevant investment and a return equivalent to an internal rate of return of 12% on such cash.

80% of the performance fee calculated will be payable to the Investment Manager within 30 days of the receipt of the relevant returns by the Company. The balance will be paid at the same time into an escrow account invested in money market deposits.

At the end of each financial year the Total Return will be calculated and the total performance fee will be calculated as 20% of the Total Return multiplied by the weighted average number of Ordinary Shares in issue during the year. This is provided that the Total Return exceeds the NAV test, being the proceeds of the Placing Shares increased at a rate of 12% per annum on an annual compound basis from the date of Admission to the Relevant End Date. Total Return is the difference between the net asset value per Ordinary Share as at the last business day of the relevant financial year and the net proceeds of the Placing Shares divided by the number of Placing Shares.

Performance fees payable for the year ended 31 December 2010 amounted to US$nil (31 December 2009: US$974,403).

6 Operating and Administration Expenses

Administrator and Registrar fees

The Administrator receives a fee of 10 basis points per annum of the net assets of the Company between £0 and £50 million; 8.5 basis points per annum of the net assets of the Company between £50 and £100 million and 7 basis points per annum of the net assets of the Company in excess of £100 million, subject to a minimum monthly fee of £4,000 and a maximum monthly fee of £12,500 payable quarterly in arrears.

Administration fees payable by the Company for the year ended 31 December 2010 amounted to US$145,516 (31 December 2009: US$165,923).

The Administrator provides general secretarial services to the Company, for which it receives a minimum annual fee of £5,000. Additional fees, based on time and charges, will apply where the number of Board meetings exceeds four per annum. For attendance at meetings not held in the Isle of Man, an attendance fee of £750 per day or part thereof will be charged. The fees payable by the Company for general secretarial services for the year ended 31 December 2010 amounted to US$15,838 (31 December 2009: US$12,183).

From 26 October 2010 the Administrator has been appointed to oversee the administration of the Mauritian subsidiaries. The minimum annual fee for each of these companies is £5,000 per annum.

Custodian fees

The Custodian receives a fixed monthly fee of £875 payable quarterly in arrears. The fee payable for the year ended 31 December 2010 amounted to US$18,736 (31 December 2009: US$19,663).

Directors' Remuneration

The maximum amount of basic remuneration payable to the Directors permitted under the Articles of Association is £200,000 per annum. The Directors are each entitled to receive reimbursement of any expenses incurred in relation to their appointment. The non-executive (excluding the Chairman) Directors are entitled to receive an annual fee of £30,000 each and the Chairman £35,000.

The Directors' fees and expenses payable by the Company for the year ended 31 December 2010 amounted to US$387,711 (31 December 2009: US$254,300) and Directors' insurance cover payable amounted to US$117,899 (31 December 2009: US$51,658). Directors' fees for the year include £75,000 payable to the Chairman in respect of identified sale transactions of which half is payable on a "success only" basis.

7 Income tax expense

The tax on the Group's loss before tax is higher than the standard rate of income tax in the Isle of Man of zero %. The differences are explained below:

There are losses carried forward in the underlying subsidiaries of approximately US$70.6m (31 December 2009: US$36.7m). There is no expiry date for the carrying forward of these losses. For prudence, tax losses are not carried as deferred tax assets in the consolidated balance sheet until the realisation of the related tax benefit through future taxable profits is probable.

8 Basic and Diluted Loss per Share

Basic loss per share is calculated by dividing the loss attributable to equity holders of the Company by the weighted average number of Ordinary Shares in issue during the year.

There is no difference between basic and diluted Ordinary Shares in issue as the Warrants are not dilutive in 2010 or 2009.

9 Investments in Subsidiaries and Associate

9.1 Investments in Subsidiaries

The direct and indirect subsidiaries held by the Company are as follows:

The Company invested in its direct subsidiaries as follows:

During the year the Company increased its investment in PME Tanco (Mauritius) Limited by US$4.8m, PME Uganco (Mauritius) Limited by US$3.9m, PME RSACO (Mauritius) Limited by US$0.2m and PME TZ Property (Mauritius) Limited by US$2.6m respectively. In May 2010 the Company received a return of capital of US$10m from PME Burco (Mauritius) Limited.

9.2 Investments in Associate

The Group's share of the results of its principal associate, which is unlisted, and its share of the aggregate assets (including goodwill) and liabilities, is as follows:

The 31 December 2010 recoverable amount of the associate has been determined based on value-in-use calculations. This calculation uses a pre-tax cash flow projection based on financial budgets approved by management covering a three-year period. Cash flows beyond the three-year period are extrapolated using the estimated growth rates stated below.

The key assumptions used for value-in-use calculations in 2010 are as follows: Growth rate (5%) and a discount rate of 15%.

The 31 December 2009 recoverable amount of the associate has been determined based on a Market approach. This calculation uses earnings multiples from comparable companies to determine its recoverable amount. The key assumptions used for value-in-use calculations in 2009 are as follows: EBITDA multiplier (6) and a discount rate of 25%.

As a result of the valuation performed, the investment in associate was impaired by US$579,000 in 2010 (2009: US$ Nil).

The valuation model was changed from a Market approach to a discounted cash flow projection due to there being a longer operating history and more management information.

Loan due from associate

The fair value of this loan approximates its carrying value at 31 December 2010.

The recoverability of the loan due from associate has been evaluated as part of the impairment review performed. The loan due from associate is unsecured, bears interest at the Prime Rate as published by the Reserve Bank of South Africa and has no fixed repayment terms, but is not expected to be receivable within the next twelve months.

10 Intangible assets

The 2010 and 2009 recoverable amounts of Dovetel and TMP Uganda's goodwill have been determined based on the cost approach which has been discounted for the initial cash invested, as these entities are still considered to be in start-up phases. The goodwill has been evaluated as part of the impairment review process and no impairment is required.

Amortisation of licences is calculated using the straight-line method to allocate the cost of licences over their estimated useful lives. The useful lives and renewal periods of licences are determined primarily with reference to the unexpired licence period.

11 Property, Plant and Equipment

There were no impairment charges in 2010.

There were no impairment charges in 2009.

12 Finance lease receivables

The present value of the lease payments is receivable as follows:

The Group has entered into finance leasing arrangements with Sheltam Holdings (Pty) Limited, an associated company, for twelve locomotives (six in December 2008 and another six in June 2009). The average term of finance leases entered into is ten years. The interest rate inherent in the leases is fixed at the contract date for the entire lease term. The average effective interest rate contracted approximates to 16.30% (2009: 16.30%). The fair value of the Group's finance lease receivables at 31 December 2010 is estimated at US$29,187,753 (31 December 2009: US$31,098,000). The lease receivables are secured on the related assets.

13 Financial assets at fair value through profit or loss

Net change in fair value of financial assets at fair value through profit or loss:

All of the Group's financial assets at fair value through profit or loss were disposed of in 2009.

14 Inventory

15 Trade and Other Receivables

* On 6 January 2010 Roy Puffet, a shareholder in Sheltam Holding (Pty) Limited, settled the amount due to the Group in full.

** Rental payments on up to 5 of the unplaced locomotives were deferred for each of the first 6 months of 2010 (and any outstanding as at 31 December 2009) through a loan note structure that was repaid at the end of September 2010.

*** During the year bad debt provisions of US$nil (2009: US$477,000) have been provided against trade receivables (see note 6).

For PME Tanco at 31 December 2010, of the total facility of US$6m, the amount loaned was US$4,250,552 of which US$4,228,000 was drawn down and US$22,552 was accrued interest. For PME Uganco at 31 December 2010, of the total facility of US$7m, the amount loaned was US$5,561,929 of which US$5,522,000 was drawn down and US$39,929 was accrued interest. Both loan facilities bear interest at the US prime rate, are unsecured and repayable on demand.

16 Cash at Bank

The deposit balances include US$nil (31 December 2009: US$244,000) held as security for a letter of credit issued by Standard Chartered Bank. This is the only figure excluded from the above balances for analysing the movements of cash and cash equivalents in the cash flow statement.

17 Share Capital

At incorporation the authorised share capital of the Company was US$10,000,000 divided into 500,000,000 Ordinary Shares of US$0.01 each and 5,000,000 C Shares of US$1.00 each. The holders of Ordinary Shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company.

The holders of C Shares would be entitled to one vote per share at the meetings of the Company. The C Shares can be converted into Ordinary Shares on the approval of the Directors. On conversion each C share would be sub-divided into 100 C Shares of US$0.01 each and will be automatically converted into New Ordinary Shares of US$0.01 each.

On 12 July 2007, the Company raised a gross amount of US$180,450,000 following the admission of the Company's Ordinary Shares to AIM. The Company placed 180,450,000 Ordinary Shares of US$0.01 par value, at an issue price of US$1.00 per share, and 36,090,000 Warrants on a 1 Warrant per 5 Ordinary Shares basis.

A registered holder of a Warrant has the right to subscribe for Ordinary Shares of US$0.01 each in the Company in cash on 30 April in any of the years 2008 to 2012 for a price of US$1.21 each (adjusted from US$1.25 effective from 11.59pm on 23 February 2010, and an additional 1,193,042 Warrants were issued). The subscription price was further adjusted from US$1.21 to US$1.00 effective from 11.59pm on 21 September 2010, and an additional 7,829,424 Warrants were issued taking the total number of Warrants in issue to 45,112,466.

During the year the Company bought back 7,905,000 Ordinary Shares with an aggregate nominal value of US$79,050. Retained earnings have been reduced by US$5,119,300, being the consideration paid for these shares. 7,530,000 of the Ordinary Shares, with an aggregate nominal value of US$75,300, are held in treasury and 375,000 of the Ordinary Shares, with an aggregate nominal value of US$3,750, have been cancelled.

18 Net Asset Value per Share

The NAV per share is calculated by dividing the net assets attributable to equity holders of the Company by the number of Ordinary Shares in issue.

19 Trade and Other Payables

ZTE Loans

ZTE Corporation of China is the supplier of the core network equipment. The loans are unsecured and currently interest free, (2009: Libor +3%).

The fair value of the above financial liabilities liabilities approximates their carrying amounts.

20 Contingent Liabilities and Commitments

The following guarantees are in place as a result of the acquisition of 50% of the Ordinary Share capital of Sheltam Holdings (Pty) Limited:

(i) Rand Merchant Bank debtors facility in the amount of US$1.5m (ZAR 10m) of which 50% has been indemnified by Roy Puffet, a shareholder in and a director of Sheltam Holdings (Pty) Limited.

(ii) FirstRand Bank suretyship in the amount of US$0.9m (ZAR 6m) in connection with a US$1.8m (ZAR 12m) working capital facility.

(iii) Rand Merchant Bank letter of support in the amount of US$0.8m (ZAR 5.5m) in connection with aircraft finance lease obligations.

Dovetel Tanzania Limited and TMP Uganda Limited have entered into a number of operating lease agreements in respect of properties (including office premises and network base station sites) and vehicles. The lease terms are between one and ten years and the majority of the lease agreements are renewable at the end of the lease period at market rates.

The Groups' future aggregate minimum lease payments under operating leases are as follows:

The directors do not expect any of these guarantees to result in significant loss to the Group.

21 Related Party Transactions

Parties are considered to be related if one party has the ability to control the other party or to exercise significant influence over the other party in making financial or operational decisions. Key management is made up of the Board of Directors and Investment Manager.

Group

Management fees of US$1,969,130 (2009: US$2,026,000) were paid to TMP Management A.S., outstanding at 31 December 2010, US$nil (2009: US$145,000).

Sheltam Holdings (Pty) Limited, an associate, had the following positions/transactions with Group companies:

- The outstanding finance lease liability owing to PME Locomotives (Mauritius) Limited as at 31 December 2010 was US$29,187,753 (31 December 2009: US$31,098,211), see note 12.

- Net finance lease interest expense due to PME Locomotives (Mauritius) Limited during the year ended 31 December 2010 amounted to US$4,221,542 (31 December 2009: US$3,783,062).

- Finance lease amounts due but not yet paid to PME Locomotives (Mauritius) Limited as at 31 December 2010 amounted to US$1,583,599 (31 December 2009: US$1,255,856).

- The loan payable to PME RSACO (Mauritius) Limited is disclosed in note 9.2.

The Directors of the Company are considered to be related parties by virtue of their influence over making operational decisions. Directors' remuneration is disclosed in note 6.

Brian Myerson, previously a director of the Company, is executive chairman of Principle Capital Holdings Limited ("PCH") and was joint chairman of the Investment Manager, PME Infrastructure Managers Limited. PCH indirectly owns 31.67% of the Investment Manager. Fees payable to the Investment Manager are disclosed in note 5.

On 15 July 2010, Brian Myerson resigned from the board of PME. John Webley replaced Mr Myerson in the role of non executive chairman of PME Infrastructure Managers Limited supported by Richard Bouma as executive vice chairman. Brian Smith of Masazane Capital, one of the shareholders in PME Infrastructure Managers Limited, was appointed as chief executive officer in charge of day to day operations. Inwezi Capital (Proprietary) Limited ("Inwezi"), which is the holding company of Masazane Capital was appointed as a consultant to the Company from 15 November 2010. A total of US$77,419 was payable to Inwezi in respect of the financial year ended 31 December 2010.

Silex Management Limited ("Silex"), an indirect subsidiary of PCH was retained by the Company to oversee the administration of the overseas subsidiaries up to 30 September 2010. A total of US$173,420 has been invoiced by Silex in respect of the financial year ended 31 December 2010 (31 December 2009: US$231,253).

Lawrence Kearns, a director of the Company, is non-executive director of the Administrator and was a non-executive director of the Custodian until 31 December 2010. Fees payable to the Administrator are disclosed in Note 6.

Company

Intercompany transactions with subsidiaries and associates are disclosed in note 15.

22 Post Balance Sheet Events

The Company terminated the custodian agreement between the Company and the Custodian with effect from 19 January 2011.

The Company was notified in May 2011 that John Webley had resigned as the Chairman of PME Infrastructure Managers Limited but that his successor had not yet been identified.

Oriel Securities Limited has been appointed as broker of the Company from 14 June 2011.