Final Results

29 May 2012

PME AFRICAN INFRASTRUCTURE OPPORTUNITIES PLC

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

Preliminary results for the year ended 31 December 2011

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 2011.

Financial highlights

·; Net Asset Value of US$57.5 million (representing 40 cents per share), down 24.2% compared to 31 December 2010 after taking into account dividends paid during the year

o reduction due primarily to writing down the two telecom investments

·; Group's share of non-current borrowings or gearing which is used in determining the gross asset value, was US$nil (31 December 2010: US$2.2 million)

·; Dividends paid of US$20.1m (14 cents per share) compared to US$18.3m in 2010 (12.6 cents per share)

Operational highlights

·; Good progress has been made by the Group's 50% owned railway leasing and maintenance business, Sheltam, in the core leasing and maintenance divisions

·; Sheltam has made excellent advances in leasing out PME Locomotives' C30 locomotives, generating good cashflow for the Group

·; Peninsula House is now fully let and generating good cash returns. Sasatel occupies less than a quarter of the building and given the prime location of the building, the Group is confident that it can fill any space that Sasatel vacates should it no longer require it

·; Dovetel ("Sasatel") was placed into administration in December 2011, in order to protect the business against the pressure primarily from its main equipment vendor and TMP Uganda was placed into liquidation in December 2011 as a result of its funding requirements and the uncertainties facing the business. PME does not expect to recover material value from either business

Return of Cash and Outlook

Since the year-end, the Group has announced that proposals will be put before shareholders for the Group's remaining investments to be realised, cash returned to shareholders, and the Company wound up.

For further information please contact:

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 2011.

Investments and Valuations

PME and its subsidiaries ("the Group") presently comprise portfolio investments which now break down into three broad holdings - our rail interests in South Africa, our telecommunications investments in Tanzania and Uganda and our property in Tanzania. Progress on these investments is described more fully in the Investment Manager's report.

As was reported in December 2011, the intensely competitive environment for data and voice services prevailing in East Africa led the Investment Manager and the Board to conclude that it was no longer in shareholders' interests to continue to provide financial support to our subsidiaries in Tanzania and Uganda. Accordingly the former have been placed in administration, and the latter in receivership. We still have our interest in Peninsula House, in Dar-es-Salaam, as more fully reported on in the Investment Manager's report.

The rail investments are very largely represented by our ownership of twelve C-30 locomotives. Good progress has been made by our 50% owned associate, Sheltam, in leasing these out.

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 2011 was US$27.9 million (2010: US$12.2 million), representing $0.1937 per Ordinary Share (2010: $0.0832).

At 31 December 2011, PME's Net Asset Value attributable to ordinary shareholders in accordance with IFRS was US$57.5 million (40 cents per share), 43.8% down from the US$102.4 million (71 cents per share) that was reported as at 31 December 2010. However, taking into account dividends totalling US$20.1m (14 cents per share) paid during the year, this percentage drop is reduced to 24.2%.

The Group's share of non-current borrowings or gearing which is used in determining the gross asset value, was US$nil (31 December 2010: US$2.2 million).

Return of Cash and Outlook

Since the year-end, we have announced that proposals will be put before shareholders for our remaining investments to be realised, cash returned to shareholders, and the Company wound up.

Our initial contractual commitment to the Investment Manager was for a five year period which ends in July, 2012. During this period, the full amounts raised in the initial public offering were not invested, resulting in disappointing investment returns. Cash has over the period been returned to shareholders. The Company is now of a size that makes its continued existence uneconomic, and no viable alternative investment management options have presented themselves to the Board.

Whilst this outcome is undoubtedly disappointing for shareholders, we believe it to be in their best interests given the circumstances.

David von Simson

Chairman

28 May 2012

Report of the Investment Manager

No new investments were made during the year ending December 2011. Our focus has continued to be on the consolidation of the Group's existing investments and in particular a strategic review of our investment in Sheltam and the locomotive assets as well as the exit and winding down of the telecommunication operations in Tanzania and Uganda.

Dovetel Tanzania Limited ("Sasatel")

Sasatel was placed into administration by the Sasatel Board in December 2011, in order to protect the business against the pressure primarily from its main equipment vendor. The business has faced increased competition from existing operators and in terms of technological advances, as well as the need to expand and improve the network to compete. To generate the revenues to bring the business to breakeven requires significant funding and time, neither of which the Manager believed to be in PME's best interests.

Extensive attempts are being made with the Sasatel management team and local shareholders to secure a sale of the business as a going concern and we are in advanced negotiations with one party in this respect. Our expectation, however, is that this will not result in a material return to PME.

TMP Uganda Limited ("Broadband Company")

Regrettably the Broadband Company faced particularly adverse conditions in 2011, including strong competition and a weak Ugandan economy. Given the funding requirements and uncertainties facing the business, it was decided that PME should no longer fund TMP and accordingly it was placed into liquidation in December 2011. The liquidation process is underway and in spite of PME being the largest creditor, it is not expected to recover material value for PME.

PME Properties Limited ("PME Properties")

PME Properties was formed originally to acquire what was then the head office of Sasatel, and is called Peninsula House. As Sasatel has reduced its operations, the building has filled up quickly with what is now a good mix of tenants, including some major international companies. The last of the penthouse flats have now also been let as office space leaving the building fully tenanted, with Sasatel occupying less than a quarter of the building. Given the prime location of the building, we are confident that we can fill the space which Sasatel occupies to the extent it ceases to require all or any of the space.

We are exploring the options for disposing of the building going forward and therefore this has been included in the disposal plan. In the meantime it is a good cash generator for the group.

Sheltam Holdings (Pty) Limited ("Sheltam")

Sheltam operates three divisions namely Locomotives, Aviation and Marine of which Locomotives is the largest and most important. The Locomotives division leases, operates, refurbish and maintains locomotives on behalf of many major mining and railway companies in South Africa and also in various other countries in sub-Saharan Africa. Sheltam owns a substantial fleet of locomotives and leases 12 GE C30 locomotives from PME Locomotives (a subsidiary of PME).

Sheltam's Aviation division operates a fleet of light aircraft in two locations namely Port Elizabeth and Durban. Services include supply of fuel, refurbishments and pilot training. The Marine division is based in Cape Town and supplies engine maintenance and overhaul services to offshore diamond mining and exploration companies. As an extension of this service this division also maintains and installs large generator sets with its diesel electric expertise.

Sheltam is now making pleasing progress, having previously found the lease of the 12 GE C30 locomotives from PME Locomotives a challenge. Due to the terms of that lease, Sheltam is highly geared to the placement of the C30 locomotives in particular and significant strides forward in this regard have been made. Key elements of this progress include:

·; the placement of C30 locomotives in Swaziland which commenced in March 2012;

·; the entering into of a maintenance contract in Mozambique which commenced in November 2011 and which has subsequently led to the placement of additional Sheltam C30 locomotives with the same operation; and

·; strong levels of enquiries relating to the placement of further locomotives are continuing and we believe the placement of further locomotives is a strong possibility subject to available capacity. We are working with the management team regarding strategies to optimise the use of the available inventory as well as securing further capacity as required.

The lease of the C30s from PME has created arrears from Sheltam to PME which was rescheduled to the end of March this year. With the recent placement of the locomotives, Sheltam has been able to recommence servicing the lease and the arrears interest and we will work with Sheltam to address repayment of the arrears from its much improved cashflow. We are also working with them on refinancing all or part of the lease with specialist lenders and will be reviewing PME's options in respect of this investment with Sheltam management and our advisors, in light of the PME Board's stated objectives.

PME Locomotives (Mauritius) Limited ("PME Locomotives")

PME Locomotives leases 12 C30 GE Locomotives to Sheltam. Because of the difficulties Sheltam experienced leasing out the locomotives, the lease payments were rescheduled last year to give Sheltam time to meet the arrears. Sheltam has now restarted servicing lease payments, as well as interest on the arrears and the finance lease is once again generating strong cashflow for the PME group. We are working with Sheltam on both a refinancing of the lease and on a process to deal with the arrears.

As announced on 21 May 2012, unfortunately two of the C30 locomotives have been involved in a serious accident in Mozambique and both have sustained substantial damage. There were fortunately no serious injuries sustained. We are still assessing the impact of the accident, but at present believe there should be minimal financial impact on PME Locomotives or Sheltam, given the contractual and insurance arrangements in place.

Outlook

With the closing down and sale of the telecom assets, PME is focused on its rail assets in Africa, which are looking very promising. Activity in the mining and energy sectors in Africa continues to strengthen. Sheltam is one of the leaders in the provision of locomotives and rail maintenance services to the private sector in Africa and it has an enviable client list. We will be working with the Board of PME to establish the best way in which shareholders can benefit most from the potential in this business and realise value for shareholders.

PME Infrastructure Managers Limited

Investment Manager

28 May 2012

Consolidated Income Statement

Consolidated Statement of Comprehensive Income

Consolidated Balance Sheet

Consolidated Statement of Changes in Equity

Consolidated Cash Flow Statement

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 its AIM admission document 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 AIM, a market of the London Stock Exchange, on 12 July 2007 when dealings also commenced.

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 loss for the year recognised in the Consolidated Income Statement is US$67,645,371 (31 December 2010: profit US$10,681,465) after impairment of inter-company balances amounting to US$15,448,016 (31 December 2010: US$nil) and impairment to its investments in subsidiaries amounting to US$50,892,477 (31 December 2010: US$ nil).

Dividends

In the year to 31 December 2011 the Company declared and paid dividends of US$20,124,265 (14 cents per share) (2010: US$18,307,619 (12.6 cents per share)).

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 properties and 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.

a) New and amended standards adopted by the Group

Annual improvements to IFRSs, effective 1 January 2011, were issued by the IASB as part of the IASB's programme of annual improvements resulting in amendments to 7 standards. The improvements have not had a significant effect on the Group or the Company.

The following new standards and amendments to standards are mandatory for the first time for the financial year beginning 1 January 2011.

Revised IAS 24 (revised), 'Related party disclosures', issued in November 2009. It supersedes IAS 24, 'Related party disclosures', issued in 2003. IAS 24 (revised) is mandatory for periods beginning on or after 1 January 2011. Earlier application, in whole or in part, is permitted. However, the standard has not yet been endorsed by the EU. The revised standard clarifies and simplifies the definition of a related party and removes the requirement for government-related entities to disclose details of all transactions with the government and other government-related entities. The Group and the Company has updated its disclosure in relation to any transactions between its subsidiaries and its associates.

IFRS 7 (amendment), 'Financial instruments', effective 1 January 2011. Emphasises the interaction between quantitative and qualitative disclosures about the nature and extent of risks associated with financial instruments. The amendment has not had any impact on the Group or the parent entity's financial statements.

IAS 1, 'Presentation of financial statements', effective 1 January 2011. Clarifies that an entity will present an analysis of other comprehensive income for each component of equity, either in the statement of changes in equity or in the notes to the financial statements. This has not had a significant effect on the Group or the parent entity's financial statements.

IAS 27, 'Consolidated and separate financial statements', applicable to annual periods beginning on or after 1 July 2010. Clarifies that the consequential amendments from IAS 27 made to IAS 21, 'The effect of changes in foreign exchange rates', IAS 28, 'Investments in associates', and IAS 31, 'Interests in joint ventures', apply prospectively for annual periods beginning on or after 1 July 2010, or earlier when IAS 27 is applied earlier. This has not had any impact on the Group or the parent entity's financial statements.

b) Standards, amendments and interpretations to existing standards relevant to the Group, that are not yet effective and have not been early adopted by the Group

IFRS 9, 'Financial instruments', issued in November 2009. This standard is the first step in the process to replace IAS 39, 'Financial instruments: recognition and measurement'. IFRS 9 retains but simplifies the mixed measurement model and establishes two primary categories for financial assets: amortised cost and fair value. The basis of classification depends on the entity's business model and the contractual cash flow characteristics of the financial asset. For financial liabilities, IFRS 9 retains most of the IAS 39 requirements, but in cases where the fair value option is taken, the part of a fair value change in a financial liability due to an entity's own credit risk is recorded in other comprehensive income rather than the income statement (unless this creates an accounting mismatch). The standard is not applicable until 1 January 2015 but is available for early adoption. However, the standard has not yet been endorsed by the EU. The Group is yet to assess IFRS 9's full impact.

IFRS 10, 'Consolidated financial statements', issued in May 2011. This standard builds on existing principles by identifying the concept of control as the determining factor in whether an entity should be included within the consolidated financial statements. The standard provides additional guidance to assist in determining control where this is difficult to assess. This standard is applicable for periods beginning on or after 1 January 2013. The Group is yet to assess the full impact of IFRS 10, but the adoption may change the entities that are consolidated as subsidiaries from 1 January 2013. This standard has not yet been endorsed by the EU.

IFRS 12, 'Disclosure of interests in other entities', issued in May 2011. This standard includes the disclosure requirements for all forms of interests in other entities, including joint arrangements, associates, special purpose vehicles and other off balance sheet vehicles. This standard will be applicable for periods beginning or after 1 January 2013. The Group, subject to EU endorsement, will adopt this standard from 1 January 2013. It is not expected to have a significant impact on the Group.

b) Standards, amendments and interpretations to existing standards relevant to the Group, that are not yet effective and have not been early adopted by the Group (continued)

IFRS 13, 'Fair value measurement', issued in May 2011. This standard aims to improve consistency and reduce complexity by providing a precise definition of fair value and a single source of fair value measurement and disclosure requirements for use across IFRSs. The requirements, which are largely aligned between IFRSs and US GAAP, do not extend the use of fair value accounting but provide guidance on how it should be applied where its use is already required or permitted by other standards within IFRSs or US GAAP. This standard is applicable for periods beginning on or after 1 January 2013. The Group is yet to assess IFRS 13's full impact. This standard has not yet been endorsed by the EU.

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 2.10. 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 ongoing 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 associate's (see note 10) progress compared to its business plan. At 31 December 2011 the Group has recognised an impairment of US$nil (31 December 2010: 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.

2.3 Foreign currency translation

(a) Functional and presentation currency

Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates ('the functional currency'). The consolidated financial statements are presented in US Dollars, which is the Company's functional and the Group's presentation currency.

(b) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the consolidated income statement.

(c) Group companies

The results and financial position of all the Group entities that have a functional currency different from the presentational currency are translated into the presentational currency as follows:

(i) assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet;

(ii) income and expenses for each income statement are translated at average exchange rates; and

(iii) all resulting exchange differences are recognised as a separate component of equity.

On consolidation, exchange differences arising from the translation of the net investment in foreign operations are taken to other comprehensive income. When a foreign operation is partially disposed or sold, exchange differences that were recorded in equity are recognised in the income statement as part of the gain or loss on sale.

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate.

2.4 Revenue and expense recognition

Revenue comprises the fair value of the consideration received or receivable for the sale of goods and services in the ordinary course of the Group's activities. Revenue is shown net of value-added tax, returns, rebates and discounts and after eliminating sales within the Group.

The Group recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the Group and when specific criteria have been met for each of the Group's activities as described below. The amount of revenue is not considered to be reliably measurable until all contingencies relating to the sale have been resolved. The Group bases its estimates on historical results, taking into consideration the type of customer, the type of transaction and the specifics of each arrangement.

The main categories of revenue and the bases of recognition are:

(i) Post Paid Products

·; Connection fees: Revenue is recognised on the date of activation by the CDMA operator of a new Subscriber Identification Module (SIM) card.

·; Access charges: Revenue is recognised in the period to which the charges relate.

·; Airtime: Revenue is recognised on the usage basis commencing on the date of activation.

(ii) Prepaid Products

·; SIM kits: Revenue is recognised on the date of sale.

·; Connection fees: Revenue is recognised on the date of activation.

·; Airtime: Revenue is recognised on the usage basis commencing on the date of activation.

Rental income from property is recognised within revenue in discontinued operations in profit or loss on a straight line basis over the term of the lease. Lease incentives granted are recognised as an integral part of the total rental income, over the term of the lease.

Interest income is recognised in the financial statements on a time-proportionate basis using the effective interest method. Interest expense for borrowings is recognised in the financial statements using the effective interest method.

The effective interest method is a method of calculating the amortised cost of a financial asset or financial liability and of allocating the interest income or interest expense over the year.

Expenses are accounted for on an accruals basis.

2.5 Basis of consolidation

Subsidiaries

Subsidiaries are all entities (including special purpose entities) over which the Group has the power to govern the financial and operating policies generally accompanying a shareholding of more than one half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity. The Group also assesses existence of control where it does not have more than 50% of the voting power but is able to govern the financial and operating policies by virtue of de-facto control. De-facto control may arise in circumstances where the size of the Group's voting rights relative to the size and dispersion of holdings of other shareholders give the Group the power to govern the financial and operating policies, etc.

Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.

The Group applies the acquisition method to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred to the former owners of the acquiree and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. The Group recognises any non-controlling interest in the acquiree on an acquisition-by-acquisition basis, either at fair value or at the non-controlling interest's proportionate share of the recognised amounts of acquiree's identifiable net assets.

Goodwill is initially measured as the excess of the aggregate of the consideration transferred and the fair value of non-controlling interest over the net identifiable assets acquired and liabilities assumed. If this consideration is lower than the fair value of the net assets of the subsidiary acquired, the difference is recognised in profit or loss.

Transactions and non-controlling interests

The Group treats transactions with non-controlling interests that do not result in a loss of control as transactions with equity owners of the Group.

Transactions eliminated on consolidation

Intra-group balances and transactions, and any unrealised gains/losses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements.

Associates

Associates are those entities in which the Group has a significant influence, but no control, generally accompanying a shareholding of between 20% and 50% of the voting rights. Investments in associates are accounted for using the equity method of accounting and are initially recognised at cost. The Group's investment in associates includes goodwill identified on acquisition, net of any accumulated impairment loss. The consolidated income statement includes the Group's share of its associates' profits or losses, after adjustments to align the accounting policies with those of the Group, from the date that significant influence commences until the date that significant influence ceases. When the Group's share of losses exceeds its interest in an associate, the carrying amount of that interest (including any long-term investment) is reduced to US$nil and the recognition of further losses is discontinued except to the extent that the Group has an obligation or has made payments on behalf of the associate.

Unrealised gains on transactions between the Group and its associates are eliminated to the extent of the Group's interest in the associates. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of the associates have been changed where necessary to ensure consistency with the policies adopted by the Group.

2.6 Operating segments

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker is the person or group that allocates resources to and assesses the performance of the operating segments of an entity. The Group has determined that its chief operating decision-makers are the Board and the Investment Manager of the Company.

2.7 Intangible assets

Goodwill

Goodwill represents the excess of the cost of an acquisition over the fair value of the Group's share of the net identifiable assets (including intangible assets) of the acquired subsidiary. Goodwill is tested annually for impairment and carried at cost less accumulated impairment losses.

Telecommunication licences

Licence fees paid to governments, which permit telecommunication activities to be operated for defined periods, are initially recorded at cost and amortised from the time the network is available for use to the end of the licence period.

Computer software licences

Computer software licences are capitalised on the basis of the cost incurred to acquire and bring the specific software into use. The cost is amortised over the useful life of the software of three to five years.

2.8 Assets held for sale

Groups of non-current assets (or disposal groups) are reclassified as held for sale when a sale within one year is highly probable and the assets are available for immediate sale in their present condition. Property plant and equipment and intangible assets held for sale are remeasured at the lower of fair value less cost to sell or the carrying amounts at the date they meet the held for sale criteria. Any resulting impairment loss is recognised in the profit & loss account.

2.9 Financial assets and financial liabilities

The Group classifies its financial assets in the following categories: at fair value through profit or loss, and loans and receivables. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition.

At 31 December 2011 and 2010 the Group did not have any financial assets at fair value through profit or loss. Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for maturities greater than 12 months after the balance sheet date which are classified as non-current assets. The Group's loans and receivables comprise 'loan due from associate', 'finance lease receivables', 'trade and other receivables' and 'cash at bank' in the balance sheet (notes 10.2, 13, 15 and 16).

The Group classifies its financial liabilities in the following categories: at fair value through profit or loss and other liabilities. At 31 December 2011 and 2010 the Group did not have any financial liabilities at fair value through profit or loss. Other liabilities are loans and trade creditors which are included in 'trade and other payables' in the balance sheet (note 20).

2.10 Impairment of non-financial assets

Assets that have an indefinite useful life - for example, goodwill or intangible assets not ready to use - are not subject to amortisation and are tested semi-annually for impairment. Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). Non-financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at each reporting date.

2.11 Property, plant and equipment

Properties are shown at fair value, based on valuations by external independent valuers, less subsequent depreciation. Valuations are performed with sufficient regularity to ensure that the fair value of a revalued asset does not differ materially from its carrying amount. Any accumulated depreciation at the date of revaluation is eliminated against the gross carrying amount of the asset, and the net amount is restated to the revalued amount of the asset. All other categories of property, plant and equipment are initially recorded at historical cost. Subsequently, the assets are stated at historical cost, less accumulated depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Subsequent costs are included in the assets' carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the consolidated income statement during the financial year in which they occurred.

Depreciation is calculated on the straight-line basis to allocate their costs to their residual values over their estimated useful lives as follows:

Properties 25 years

Locomotives 15 years

Network infrastructure and equipment 3 to 15 years

Other 3 to 6 years

The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.

Capital work in progress

Property, plant and equipment under construction is stated at initial cost and depreciated from the date the asset is placed in use over its useful life. The cost of self-constructed assets includes expenditure on materials and direct labour. Assets are transferred from capital work in progress to an appropriate category of property, plant and equipment when commissioned and ready for the intended use.

When the carrying amount of an asset is greater than its estimated recoverable amount, it is written down immediately to its recoverable amount.

Gains or losses on disposals are determined by comparing the disposal proceeds with the carrying amount and are included in the consolidated income statement.

Amounts due from lessees under finance leases are recorded as receivables at the amount of the Group's net investment in the leases. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the Group's net investment outstanding in respect of the leases.

2.13 Inventory

Inventories are stated at the lower of cost and net realisable value. Cost is determined on a weighted average basis, and includes expenditure incurred in acquiring the inventories, and other costs incurred in bringing them to their existing location and condition. Net realisable value is the price at which inventories can be sold in the normal course of business after allowing for the costs of realisation.

2.14 Loans and receivables

Loans and receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for impairment is established when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of the receivables.

2.15 Trade and other receivables

Trade and other receivables are initially stated at fair value and subsequently measured at amortised cost using the effective interest method, less impairment.

A provision for impairment is established when there is objective evidence that the Group will not be able to collect all amounts to be received. Significant financial difficulties of the counterparty, probability that the counterparty will enter bankruptcy or financial reorganisation, and default in payments are considered indicators that the amount to be received is impaired. Once a financial asset or a group of similar financial assets has been written down as a result of an impairment loss, interest income is recognised using the rate of interest used to discount the future cash flows for the purpose of measuring the impairment loss.

2.16 Cash and cash equivalents

Cash and cash equivalents comprise cash deposited with banks held with original maturities of less than three months.

2.17 Investments in subsidiaries

Investments in subsidiaries are accounted for in the Company balance sheet at cost less impairment. Cost also includes directly attributable costs of investments.

2.18 Trade and other payables

Trade and other payables are recognised initially at fair value and subsequently at amortised cost using the effective interest method.

2.19 Taxation

The Company is resident for taxation purposes in the Isle of Man and is subject to income tax at a rate of zero per cent. The Group is liable to tax on the activities of its subsidiaries and associates in accordance with the applicable tax laws in the countries in which they are incorporated.

The tax expense represents the sum of the tax currently payable, which is based on taxable profits for the year. The Group's liability is calculated using the tax rates enacted or substantially enacted at the balance sheet date.

Deferred tax is recognised using the balance sheet method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following temporary differences: the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit, and differences relating to investments in subsidiaries and jointly controlled entities to the extent that they probably will not reverse in the foreseeable future. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date.

A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which temporary differences can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

2.20 Retirement benefit obligations

The Group's subsidiaries, Dovetel Tanzania Limited and TMP Uganda Limited, contribute to the National Social Security Fund, "Fund", in Tanzania and Uganda respectively. These are defined contribution plans. A defined contribution plan is a pension plan under which the Group' subsidiaries pay fixed contributions into a separate entity. The Group has no legal or constructive obligations to pay further contributions if the Fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods. The contributions by the Group's subsidiaries are recognised as an employee benefit expense when they are due.

2.21 Share capital

Ordinary Shares are classified as equity. Incremental costs directly attributable to the issue of new shares are shown in equity as a deduction, net of tax, from the proceeds.

2.22 Dividends

Dividends are recognised as a liability in the year in which they are declared and approved.

3 Risk Management

The Company's activities expose it to a variety of financial risks: market risk (including foreign currency risk and interest rate 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.

Foreign currency risk

Foreign currency risk is the risk that the value of 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 2011, had the US Dollar weakened by 3% (2010: strengthened 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 increased/(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.

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. 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 2011 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$24,000 (2010: 10 basis points US$49,000) 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.

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 2010 and 2011.

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 telecommunications (wireless and broadband services), transport (railway) and leasehold.

* 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$11,575,230 and other assets US$208,999.

* 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 and other assets US$224,475.

The total of non-current assets other than financial instruments is US$29,212 (2010: US$19,489,342) 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 Manager's 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. On 6 July 2011, the Company served formal notice on the Investment Manager to terminate the Management agreement dated 6 July 2007 between the Company and the Investment Manager, to take effect on 6 July 2012.

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 2011 amounted to US$1,288,727 (31 December 2010: US$1,687,937).

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 2011 amounted to US$nil (31 December 2010: US$nil).

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 2011 amounted to US$158,683 (31 December 2010: US$145,516).

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 2011 amounted to US$30,783 (31 December 2010: US$15,838).

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. Administration fees of the Mauritian subsidiaries for the year ended 31 December 2011 amounted to US$80,427 (31 December 2010: US$nil).

Custodian fees

The Custodian received a fixed monthly fee of £875 payable quarterly in arrears. The Company terminated the custodian agreement between the Company and the Custodian with effect from 19 January 2011. The fee payable for the year ended 31 December 2011 amounted to US$1,037 (31 December 2010: US$18,736).

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 payable by the Company for the year ended 31 December 2011 amounted to US$219,393 (31 December 2010: US$387,711) and Directors' insurance cover payable amounted to US$31,327 (31 December 2010: US$117,899). Directors' fees for the year include £nil (31 December 2010: £75,000 adjusted to £57,500 in 2011) payable to the Chairman in respect of identified sale transactions.

7 Finance Income

8 Income Tax Expense

The tax on the Group's profit/(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$2.3m (31 December 2010: US$70.6m). There is no expiry date for the carrying forward of 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.

9 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 2011 or 2010.

10 Investments in Subsidiaries and Associate

10.1 Investments in Subsidiaries

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

* applied to the High Court of Tanzania on 14 December 2011 to be placed into administration

** a liquidator was appointed on 19 December 2011

PME Burco (Mauritius) Limited, a wholly owned subsidiary, was liquidated during the year.

The Company invested in its direct subsidiaries as follows:

10.2 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 Group's share of losses made by its associate not recognised in the financial statements as the carrying value of the investment is US$nil, is as follows:

The 31 December 2011 and 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 the financial periods to 31 December 2013. Cash flows beyond this period are extrapolated using the estimated growth rates stated below.

The key assumptions used for value-in-use calculations in 2011 are as follows: Growth rate 3% and a discount rate of 16.4% (2010: Growth rate 5% and a discount rate of 15%).

As a result of the valuation performed, the investment in associate and loans due from associate were not impaired in 2011 (2010: investment impaired by US$579,000).

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.

Loans due from associate

The loans due from associates are as follows:

* shareholder loan repayable to PME RSACO (Mauritius) Limited, unsecured and has no fixed repayment terms.

** rescheduled debt agreement repayable to PME Locomotives (Mauritius) Limited in relation to the finance lease arrears amounts to 30 June 2011 plus lease payments outstanding up to 31 March 2012.

The fair value of these loans approximates their carrying value.

11 Intangible assets

* loss of control was due to the appointment of a liquidator (see note 17)

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.

12 Property, Plant and Equipment

* loss of control was due to the appointment of a liquidator (see note 17)

13 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% (2010: 16.30%). The fair value of the Group's finance lease receivables at 31 December 2011 is estimated at US$26,890,605 (31 December 2010: US$29,187,753). The lease receivables are secured on the related assets.

14 Inventory

All inventory has now been transferred to the disposal group under assets held for sale (see note 17).

15 Trade and Other Receivables

A total of US$3,173,700 was drawn down by PME Tanco during the year in respect of its intercompany loan facility provided by the Company. Interest of US$195,635 was accrued on this facility over the year. The balance at 31 December 2011 has been impaired by US$7,617,726.

A total of US$1,673,200 was drawn down by PME Uganco during the year in respect of its intercompany loan facility provided by the Company. Interest of US$208,280 was accrued on this facility over the year. The balance at 31 December 2011 has been impaired by US$7,441,640.

Both loan facilities bear interest at the US prime rate, are unsecured and repayable on demand.

PME TZ Property and PME RSACO were lent US$17,950 and US$21,100 respectively to cover operational expenditure. These balances are interest free, unsecured and repayable on demand.

The recharge balances at 31 December 2011 have been impaired by US$387,651.

16 Cash and Cash Equivalents

17 Non-Current Assets Held for Sale and Discontinued Operations

The assets and liabilities of PME Tanco (Mauritius) Limited, Dovetel Tanzania Limited, PME TZ Property (Mauritius) Limited and PME Properties Limited have been presented as held for sale following the approval by the Group's management to sell these companies. The results for these companies are therefore included under discontinued operations.

Additionally, TMP Uganda Limited appointed a liquidator on 19 December 2011 and its results are therefore also included under discontinued operations. This loss of control resulted in a write back of payables of US$1,476,325 (see note 17(d)) and recycling of foreign exchange losses from reserves to the consolidated income statement of US$4,426,088 (see note 17(c)).

(a) Assets of disposal group classified as held for sale

(b) Liabilities of disposal group classified as held for sale

ZTE Corporation of China is the supplier of the core network equipment. The loans are unsecured and currently interest free.

(c) Cumulative income or expense recognised in other comprehensive income relating to disposal group classified as held for sale

Analysis of the result of discontinued operations, and the result recognised on the re-measurement of assets of disposal group, is as follows: