Bushveld Minerals Regulatory News (BMN)

Bushveld Minerals Ltd

("Bushveld", the "Company", or the "Group")

Audited Final Results for the period 1 January 2012 to 28 February 2013

Bushveld Minerals Limited (AIM: BMN) presents the audited annual results for the period 1 January 2012 to 28 February 2013.

Significant milestones reached, including:

·; Raised net proceeds £4.5m on 26 March 2012 through an IPO and admission to AIM

·; Cash of £1.30 million at 28 February 2013

·; Mokopane Tin Project progressing well following further drilling and metallurgical test work

Post period end:

·; Scoping study released with positive economics and low capital expenditure

·; Announced intention to make an off-market takeover offer to acquire all the ordinary shares in Lemur Resources Limited

The following is an extract from the Annual Report that is available in full at the Company's website www.bushveldminerals.com

Enquiries: info@bushveldminerals.com

- ENDS -

Consolidated Income Statement

for the period to 28 February 2013

All results relate to continuing activities.

The notes on pages 24 to 42 form part of these financial statements.

Consolidated Statement of Comprehensive Income

for the period to 28 February 2013

Consolidated Statement of Financial Position

As at 28 February 2013

The notes on pages 24 to 42 form part of these financial statements.

The financial statements were authorised and approved for issue by the Board of Directors and authorised for issue on 27 June 2013.

G N SPROULE

Director

27 June 2013

Consolidated Statement of Changes in Equity

for the period ended 28 February 2013

Equity attributable to owners of the parent company

Consolidated Statement of Cash Flows

for the period ended 28 February 2013

The notes on pages 24 to 42 form part of these financial statements.

1. Corporate information and principal activities

Bushveld Minerals Limited ("Bushveld") was incorporated and domiciled in Guernsey on 5 January 2012, and admitted to the AIM market in London on 26 March 2012.

The Bushveld Group comprises Bushveld Minerals Limited and its wholly owned subsidiaries headed by Bushveld Resources Limited ("BRL") and Greenhills Resources Limited ("GRL"), companies registered and domiciled in Guernsey together with their South African subsidiaries.

The wholly owned Guernsey subsidiaries BRL and GRL were acquired by Bushveld under the terms of a Share Exchange Agreement entered into on 15 March 2012.

BRL is an investment holding company formed to invest in resource-based iron ore exploration companies in South Africa. The South African subsidiaries are Pamish Investments No. 39 (Proprietary) Limited ("Parish 39") in which BRL holds a 64% equity interest, Amaraka Investments No. 85 (Proprietary) Limited ("Amaraka 85") in which BRL holds 68.5% and Frontier Platinum Resources (Proprietary) Limited in which BRL holds 100% equity interest. The minority shareholder in Pamish 39 is Izingwe Capital (Proprietary) Limited and the minority shareholders of Amaraka 85 is Afro Multi Minerals (Proprietary) Limited.

GRL is an investment holding company formed to invest in resource-based tin exploration companies in South Africa. The South African subsidiaries are Mokopane Tin Company (Proprietary) Limited in which GRL holds 100% equity interest and Renetype (Proprietary) Limited ("Renetype") in which GRL holds a 74% equity interest. The minority shareholders in Renetype are African Women Enterprises Investments (Proprietary) Limited and Cannosia Trading 62 CC who own 10% and 16% respectively.

As at 28 February 2013, the Bushveld Group was comprised as follows:

These financial statements are presented in pounds sterling because that is the currency the Group has raised funding on the AIM market. Foreign operations are included in accordance with the policies set out in note 3.

2. Adoption of new and revised standards

Standards issued but not yet effective

The following standards and amendments to existing standards have been published and are mandatory from the financial year on or after the effective dates shown below but are not currently relevant to the Company (although they may affect the accounting for future transactions and events).

2. Adoption of new and revised standards (continued)

The directors do not expect that the adoption of the standards listed above will have a material impact on the financial statements of the Group in future periods.

3. Significant accounting policies

Basis of accounting

These financial statements have been prepared in accordance with International Financial Reporting Standards, International Accounting Standards and Interpretations (collectively "IFRS") issued by the International Accounting Standards Board ("IASB") as adopted by the European Union ("adopted IFRSs"), and are in accordance with IFRS as issued by the IASB.

The consolidated financial statements have been prepared under the historical cost basis, except for the revaluation of financial instruments. Historical cost is generally based on the fair value of the consideration given in exchange for the assets. The principal accounting policies are set out below.

Going concern

In preparing the financial statements, the directors have considered the current financial position of the Group and the likely future cash flows for the period to 30 June 2014. The cashflow forecasts to 30 June 2014 assume that a cash injection of circa £1.5m completes in July 2013. The purpose of the cash injection by means of a round of fundraising currently in discussion is to focus on theGroup's strategy is to create commodity focused platforms that can attract project specific funding post a Scoping Study. With the Scoping Study for the Iron Ore Project complete, as announced to the market on 22 April 2013, the Group is now in discussions with several potential strategic partners for funding the project to completion of feasibility studies.

The Tin Project is currently in a resource definition and metallurgical studies stage with a scoping study expected to be completed within Q4 2013, after which a strategic partner will be sought for the further development of the project.

The directors are therefore confident the cash injection of circa £1.5m will be successful and that this will ensure that the Group will have adequate cash resources to pay debts as they fall due and to continue its operations for the foreseeable future and for this reason they continue to adopt the going concern basis in preparing the Group's financial statements.

With the current cash position of around £430,000, without the cash injection the Group would not be able to complete all its intended projects and certain expenditure planned will need to be curtailed. The financial statements do not include the adjustments that would result if the Group was unable to continue as a going concern.

3. Significant accounting policies (continued)

Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries) made up to 28 February. Control is achieved where the Company has the power to govern the financial and operating policies of an investee entity so as to obtain benefits from its activities.

The results of the subsidiaries acquired or disposed of during the period are included in the consolidated income statement from the effective date of acquisition. Where necessary, the adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by the Group. All intra-group transactions, balances, income and expenses are eliminated in full on consolidation.

Non-controlling interests in subsidiaries are identified separately from the Group's equity therein. Those interests of non-controlling shareholders that are present ownership interests entitling their holders to a proportionate share of the net assets upon liquidation are initially measured at fair value. Subsequent to acquisition, the carrying amount of non-controlling interests is the amount of those interests at initial recognition plus the non-controlling interests' share of subsequent changes in equity. Total comprehensive income is attributed to non-controlling interests even if this results in the non-controlling interests having a deficit balance.

Foreign currencies

Functional and presentational currency

The individual financial statements of each Group company are prepared in the currency of the primary economic environment in which they operate (its functional currency). For the purpose of the consolidated financial statements, the results and financial position of each Group company are expressed in pound sterling, which is the functional currency of the Company, and the presentation currency for the consolidated financial statements.

Transactions and balances

Transactions in foreign currencies are initially recorded at the rates of exchange prevailing on the dates of the transaction. At each reporting date, monetary assets and liabilities that are denominated in foreign currency are translated into the reporting currency at the rate prevailing on that date. Non-monetary assets and liabilities are carried at cost and are translated into the reporting currency at the rate prevailing on the reporting date.

Gains and losses arising on retranslation are included in profit or loss for the period, except for exchange differences on non-monetary assets and liabilities, which are recognised directly in other comprehensive income when the changes in fair value are recognised directly in other comprehensive income.

On consolidation, the assets and liabilities of the Group's overseas operations are translated into the Group's presentational currency at exchange rates prevailing at the reporting date. Income and expense items are translated at the average exchange rates for the period unless exchange rates have fluctuated significantly during the period, in which case the exchange rate at the date of the transaction is used. Exchange differences arising, if any, are taken to other comprehensive income and the Group's translation reserve. Such translation differences are recognised as income or as expenses in the period in which the operation is disposed of.

3. Significant accounting policies (continued)

Finance income

Interest revenue is recognised when it is probable that economic benefits will flow to the Group and the amount of revenue can be measured reliably. Interest revenue is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset's net carrying amount on initial recognition.

Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax charge is based on taxable profit for the year. The Group's liability for current tax is calculated by using tax rates that have been enacted or substantively enacted by the reporting date.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the "balance sheet liability" method.

Deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled based upon rates enacted and substantively enacted at the reporting date. Deferred tax is charged or credited to profit or loss, except when it relates to items credited or charged to other comprehensive income, in which case the deferred tax is also dealt with in other comprehensive income.

Intangible exploration and evaluation assets

All costs associated with mineral exploration and evaluation including the costs of acquiring prospecting licences, mineral production licences and annual licences fees, rights to explore, topographical, geological, geochemical and geophysical studies, exploratory drilling, trenching, sampling and activities to evaluate the technical feasibility and commercial viability of extracting a mineral resource, are capitalised as intangible exploration and evaluation assets and subsequently measured at cost.

If an exploration project is successful, the related expenditures will be transferred at cost to property, plant and equipment and amortised over the estimated life of the commercial ore reserves on a unit of production basis (with this charge being taken through profit or loss). Where a project does not lead to the discovery of commercially viable quantities of mineral resources and is relinquished, abandoned, or is considered to be of no further commercial value to the Group, the related costs are recognised in profit or loss.

The recoverability of deferred exploration costs is dependent upon the discovery of economically viable ore reserves, the ability of the Group to obtain necessary financing to complete the development of ore reserves and future profitable production or proceeds from the extraction or disposal thereof.

Impairment of exploration and evaluation assets

Whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable, the asset is reviewed for impairment. Assets are also reviewed for impairment at each balance sheet date in accordance with IFRS 6. An asset's carrying value is written down to its estimated recoverable amount (being the higher of the fair value less costs to sell and value in use) if that is less than the asset's carrying value. Impairment losses are recognised in profit or loss.

3. Significant accounting policies (continued)

An impairment review is undertaken when indicators of impairment arise but typically when one of the following circumstances applies:

• unexpected geological occurrences that render the resources uneconomic; or

• title to the asset is compromised; or

• variations in mineral prices that render the project uneconomic; or

• variations in the foreign currency rates; or

• the Group determines that it no longer wishes to continue to evaluate or develop the field.

Property, plant and equipment

Property, plant and equipment is stated at historical cost less accumulated depreciation.

Depreciation is provided on all plant and equipment at rates calculated to write each asset down to its estimated residual value, using the straight-line method over their estimated useful life of the asset as follows:

• Geological Equipment over 2 years;

• Motor Vehicles over 3 years; and

• Office Equipment and Computers over 2 years.

The estimated useful lives, residual values and depreciation methods are reviewed at each period end and adjusted if necessary.

Gains or losses on disposal are included in profit or loss.

Impairment of property, plant and equipment

At each Statement of Financial Position date, the Group reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that are independent from other assets, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Where there has been a change in economic conditions that indicate a possible impairment in a cash-generating unit, the recoverability of the net book value relating to that field is assessed by comparison with the estimated discounted future cash flows based on management's expectations of future oil prices and future costs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised as an expense immediately, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Where conditions giving rise to impairment subsequently reverse, the effect of the impairment charge is also reversed as a credit to the income statement, net of any depreciation that would have been charged since the impairment.

3. Significant accounting policies (continued)

Financial assets and liabilities

Financial assets and financial liabilities are recognised in the Group's balance sheet when the Group becomes a party to the contractual provisions of the instrument. Financial instruments are classified into specified categories dependent upon the nature and purpose of the instruments and are determined at the time of initial recognition. All financial assets are recognised as loans and receivables or available for sale investments and all financial liabilities are recognised as other financial liabilities.

Trade and other receivables

Trade and other receivables are stated initially recognised at the fair value of the consideration receivable less any impairment. Impairment provisions are recognised when there is objective evidence that the Group will be unable to collect all of the amounts due under the terms of the receivable, the amount of such a provision being the difference between the carrying amount and the present value of the future expected cash flows associated with the impaired receivable.

Trade and other receivables are subsequently measured at amortised cost, less any impairment.

Cash and cash equivalents

Cash and cash equivalents comprise cash at hand and deposits on a term of not greater than three months.

Trade and other payables

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

Available for sale financial assets

Listed shares held by the Group that are traded in an active market are classified as being available for sale and are stated at fair value. The fair value of such investments is determined by reference to quoted market prices.

Gains and losses arising from changes in fair value are recognised in other comprehensive income and accumulated in the investments revaluation reserve with the exception of impairment losses. Where the investment is disposed of or is determined to be impaired, the cumulative gain or loss previously recognised in the investments revaluation reserve is reclassified to profit or loss.

Dividends on available for sale equity instruments are recognised in profit or loss when the Group's right to receive the dividends is established.

Financial liabilities and equity

Financial liabilities (including loans and advances due to related parties) and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities. When the terms of a financial liability are negotiated with the creditor and settlement occurs through the issue of the Company's equity instruments, the equity instruments are measured at fair value and treated as consideration for the extinguishment of the liability. Any difference between the carrying amount of the liability and the fair value of the equity instruments issued is recognised in profit or loss.

4. Use of estimates and judgements

In the application of the Group's accounting policies, which are described in note 3, the directors are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

Estimates and judgements are continually evaluated. Revisions to accounting estimates are recognised in the period in which the estimates are revised if the revision affects only that period, or in the period of revision and in future periods if the revision affects both current and future periods.

Management's critical estimates and judgements in determining the value of assets, liabilities and equity within the financial statements relate to the valuation of intangible exploration assets of £53.3 million and the going concern assumptions.

The valuation of intangible exploration assets is dependent upon the discovery of economically recoverable deposits which, in turn, is dependent on future iron ore and tin prices, future capital expenditures and environmental and regulatory restrictions.

5. Segmental reporting

The reporting segments are identified by the directors of the Group (who are considered to be the chief operating decision makers) by the way that Group's operations are organised. As at 28 February 2013 the Group operated within two operating segments, mineral exploration activities for Iron Ore and for Tin. All exploration activities take place in South Africa.

Segment revenue and results

The following is an analysis of the Group's revenue and results by reportable segment.

The reconciliation of segmental gross loss to the Group's loss before tax is as follows:

5. Segmental reporting (continued)

Other segmental information

Segmental assets and liabilities disclosed in the reports to the Board of Directors for the purpose of resource allocation and assessment of segmental performance consist of the amounts capitalised as intangible exploration expenditure. All other assets and liabilities are classified as unallocated.

All of the Group's operations are based in South Africa.

6. Loss for the period

The loss for the period has been arrived at after charging:

No depreciation charge has been recognised in the consolidated income statement. The whole charge has been capitalised as part of intangible exploration expenditure.

7. Administrative expenses by nature

Key management personnel have been identified as the Board of Directors. Details of key management remuneration is shown in note 22.

8. Investment revenue

Interest revenue:

9. Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax charge is based on taxable profit for the year. The Bushveld Group's liability for current tax is calculated by using tax rates that have been enacted or substantively enacted by the reporting date.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the "balance sheet liability" method.

Deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled based upon rates enacted and substantively enacted at the reporting date. Deferred tax is charged or credited to profit or loss, except when it relates to items credited or charged to other comprehensive income, in which case the deferred tax is also dealt with in other comprehensive income.

The provision for income taxes is different to the expected provision for income taxes for the following reasons:

10. Loss per share

From continuing operations

The calculation of a basic loss per share of 0.96 pence, is calculated using the total loss for the period attributable to the owners of the company of £2,253,939 and the weighted average number of shares in issue during the period of 235,900,175. There are no potentially dilutive shares in issue.

11. Intangible assets

The Company's subsidiary, Bushveld Resources Limited has a 64% interest in Pamish Investment No 39 (Proprietary) Limited ("Pamish") which holds an interest in Prospecting right 95 ("Pamish 39"). Bushveld Resources Limited also has a 68.5% interest in Amaraka Investment No 85 (Proprietary) Limited ("Amaraka") which holds an interest in Prospecting right 438 ("Amaraka 85").

Under the agreements to acquire the licenses within Bushveld Resources, the group is required to fully fund the exploration activities up to the issue of the corresponding mining licenses. As the non controlling interest party retains their equity interest, the funding of their interest is accounted as deemed purchased consideration and is included in the additions in the period to exploration activities. A corresponding increase is credited to non controlling interest.

The Company's other directly owned subsidiary, Greenhills Resources Limited, has a 74% interest in Renetype (Proprietary) Limited ("Renetype") which holds an interest in Prospecting right 2205 ("Renetype 2205").

12. Investments

On 8 November 2012, the Group acquired 5,150,000 shares in Lemur Resources Limited for a consideration of £386,053. This holding represents a strategic non-controlling interest of 2.67%. This investment is not held for trading and accordingly is classified as an available for sale investment.

The fair value of this holding as at 28 February 2013 is based on the quoted market price as at that date resulting in a fair value loss to be recognised in the statement of comprehensive income of £138,628.

Further information on the Group's shareholding in Lemur Resources Limited can be found in note 21 to these financial statements.

13. Property, plant and equipment

Depreciation of £38,131 has been capitalized as exploration activities in the period.

14. Trade and other receivables

The directors consider that the carrying amount of trade and other receivables approximates to their fair value due to their short term nature. As at the period end, no receivables are past their due date, hence no allowance for doubtful receivables is provided.

The amount of trade and other receivables denominated in South African Rand amount to £27,976.

15. Cash and cash equivalents

Cash and cash equivalents (which are presented as a single class of assets on the face of the Statement of Financial Position) comprise cash at bank and other short-term highly liquid investments with an original maturity of three months or less. The director's consider that the carrying amount of cash and cash equivalents approximates their fair value. The amount of cash and cash equivalents denominated in South African Rand amount to £723,078.

16. Trade and other payables

Trade and other payables principally comprise amounts outstanding for trade purchases and ongoing costs. The average credit period taken for trade purchases is 30 days.

The Group has financial risk management policies in place to ensure that all payables are paid within the pre-arranged credit terms. No interest has been charged by any suppliers as a result of late payment of invoices during the period.

The directors consider that the carrying amount of trade and other payables approximates to their fair value.

The amount of trade and other payables denominated in South African Rand amount to £79,333.

17. Share capital

The Company was incorporated on 5 January 2012 with unlimited authorised share capital. On incorporation 100 ordinary shares of £1.00 each were issued at par. On 12 March 2012 the ordinary shares were subsequently converted into 10,000 ordinary shares of 1 pence each.

On 15 March 2012 255,304,110 ordinary shares of 1 pence were issued at 20 pence per share as fully paid in exchange for the acquisition of Bushveld Resources Limited and Greenhills Resources Limited for total consideration of £51,060,822. Share premium of £48,507,781 arose as a result of the transaction.

On admission to the AIM Market of the London Stock Exchange ('AIM') on 26 March 2012 a further 28,665,000 ordinary shares of 1 pence each were issued at 20 pence per share. Of this amount, 27,300,000 were issued for cash consideration and fully paid on admission raising £5,460,000. 1,365,000 shares were issued for non cash consideration. Share premium of £5,446,350 arose as a result of the transactions.

The board may, subject to Guernsey Law, issue shares or grant rights to subscribe for or convert securities into shares. It may issue different classes of shares ranking equally with existing shares. It may convert all or any classes of shares into redeemable shares. The Company may also hold treasury shares in accordance with the law. Dividends may be paid in proportion to the amount paid up on each class of shares.

18. Share premium account

19. Acquisition of subsidiaries

On 15 March 2012 the Company acquired a 100 per cent shareholding in Bushveld Resources Limited ('BRL') and Greenhills Resources Limited ('GRL') obtaining control of these companies. Both BRL and GRL are mineral development groups which hold various prospecting licences in South Africa. The acquisitions have been accounted for as asset acquisitions as they do not meet the definition of a business combination set out in IFRS3.

The amounts recognised in respect of the identifiable assets acquired and liabilities assumed are as set out in the table below.

The fair value of the ordinary shares issued as the consideration for the acquisitions of 20 pence per share was determined on the basis of the value of the shares of the Company issued on admission to the AIM Market on 26 March 2013.

Acquisition related costs included in administrative expenses amount to £1,443,097.

Neither of the acquired Companies contributed any revenue to the Group for the period between the date of acquisition and the Statement of financial position date. Bushveld Resources Limited contributed £15,813 of profit and Greenhills Resources Limited contributed £182,497 of loss to the Group's loss for the period between the date of acquisition and the Statement of Financial Position date.

If the acquisition of both Companies had been completed on the first day of the financial period, Group revenues for the period would have been £nil and the Group loss for the period would have remained at £2,392,567.

The non-controlling interest relates to the interest held by the minority shareholders of the South African subsidiaries as set out in note 1.

20. Financial instruments

The Group is exposed to the risks that arise from its use of financial instruments. This note describes the objectives, policies and processes of the Group for managing those risks and the methods used to measure them. Further quantitative information in respect of these risks is presented throughout these financial statements.

Capital risk management

The Group manages its capital to ensure that entities in the Group will be able to continue as going concerns while maximising the return to shareholders. In order to maintain or adjust the capital structure, the Group may issue new shares or arrange debt financing. Currently the Group has £nil net debt.

The capital structure of the Group consists of cash and cash equivalents and equity, comprising issued capital and retained losses.

The Group is not subject to any externally imposed capital requirements.

Significant accounting policies

Details of the significant accounting policies and methods adopted including the criteria for recognition, the basis of measurement and the bases for recognition of income and expenses for each class of financial asset, financial liability and equity instrument are disclosed in note 3.

Principal financial instruments

The principal financial instruments used by the Group, from which financial instrument risk arises, are as follows:

·; Trade and other receivables

·; Cash at bank

·; Trade and other payables

·; Available for sale investments

Categories of financial instruments

At 28 February 2013, the Group held the following financial assets:

20. Financial instruments (continued)

At 28 February 2013, the Group held the following financial liabilities:

General objectives, policies and processes

The Board has overall responsibility for the determination of the Group's risk management objectives and policies. The Board receives reports through which it reviews the effectiveness of the processes put in place and the appropriateness of the objectives and policies it sets.

The overall objective of the Board is to set polices that seek to reduce risk as far as possible without unduly affecting the Group's competitiveness and flexibility. Further details regarding these policies are set out below:

Credit risk

The Group's principal financial assets are bank balances, trade and other receivables and available for sale investments.

Credit risk arises principally from the Group's cash balances with further risk arising due to its other receivables and available for sale investments. Credit risk is the risk that the counterparty fails to repay its obligation to the Group in respect of the amounts owed. The Group gives careful consideration to which organisations it uses for its banking services in order to minimise credit risk. The Group has no sales hence credit risk relating to other receivables is minimal. There are no formal procedures in place for monitoring and collecting amounts owed to the Group. A risk management framework will be developed over time, as appropriate to the size and complexity of the business.

The concentration of the Group's credit risk is considered by counterparty, geography and by currency. The Group has a significant concentration of cash held on deposit with large banks in South Africa and the United Kingdom with A ratings and above (Standard and Poor). At 28 February 2013 the concentration of credit risk was as follows:

Of the above amounts £634,239 of the balance held with Investec was held in South African Rand, the remaining amount being held in £ Sterling. Of the remaining balances £88,839 was held in Rand with the remainder held in £ Sterling.

20. Financial instruments (continued)

There are no other significant concentrations of credit risk at the balance sheet date.

At 28 February 2013, the Group held no collateral as security against any financial asset. The carrying amount of financial assets recorded in the financial statements, net of any allowances for losses, represents the Group's maximum exposure to credit risk without taking account of the value of any collateral obtained. At 28 February 2013, no financial assets were past their due date. As a result, there has been no impairment of financial assets during the year. An allowance for impairment is made where there is an identified loss event which, based on previous experience, is evidence of a reduction in the recoverability of the cash flows. Management considers the above measures to be sufficient to control the credit risk exposure.

Liquidity risk

Liquidity risk is the risk that the Group will encounter difficulty in meeting its financial obligations as they fall due. Ultimate responsibility for liquidity risk management rests with the Board of Directors. The board manages liquidity risk by regularly reviewing the Group's gearing levels, cash flow projections and associated headroom and ensuring that excess banking facilities are available for future use.

The Group maintains good relationships with its banks, which have high credit ratings and its cash requirements are anticipated via the budgetary process. At 28 February 2013, the Group had £1,305,089 of cash reserves.

Market risk

The Group's activities expose it primarily to the financial risk of changes in foreign currency exchange rates and interest rates.

Interest rate risk

With the exception of cash and cash equivalents, the Group has no interest bearing assets or liabilities. The Group was therefore exposed to minimal interest rate risk during the period. For this reason, no sensitivity analysis has been performed regarding interest rate risk.

Foreign exchange risk

As highlighted earlier in these financial statements, the functional currency of the Group is £Sterling. The Group also has foreign currency denominated assets and liabilities. Exposures to exchange rate fluctuations therefore arise. The carrying amount of the Group's foreign currency denominated monetary assets and liabilities, all in £Sterling, are shown below in the Group's functional currency:

The Group suffers from a level of foreign currency risk. Due to the minimal level of foreign transactions; the directors currently believe that foreign currency risk is at an acceptable level.

20. Financial instruments (continued)

The Group does not enter into any derivative financial instruments to manage its exposure to foreign currency risk.

The following table details the Group's sensitivity to a 10% increase and decrease in £Sterling against the Rand. 10% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management's assessment of the reasonable possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 10% change in foreign currency rates. The table below shows the effect of a 10% weakening and strengthening of £Sterling against the Rand:

Maturity of financial liabilities

All of the Group's financial liabilities and its financial assets in the period to 28 February 2013 are either payable or receivable within one year, with the exception of the available for sale investments totalling £248,854.

21. Events after the balance sheet date

On 13 May 2013, the company announced the launch of an off-market take-over bid for Lemur Resources Limited, a coal project development company listed on the ASX. This bid follows the acquisition by Bushveld Minerals of 5.15 million shares in Lemur Resources (for the sum of £386,053), which was announced on 8 November 2012.

The all-scrip offer of three Bushveld shares for every five Lemur shares values Lemur at A$19.1 million or A$0.099 per share, which is a 65.5% premium to Lemur's closing price on Friday May 10, 2013. Lemur Resources has a 136 million tonne thermal coal project in Madagascar, known as the Imaloto coal project, as well as A$17.5m in cash.

22. Related party transactions

Balances and transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this note.

VM Investments is a related party due to two of the Executive Directors of Bushveld Minerals Limited being majority shareholders of VM Investments. At the period end, the Group owed VM Investments Ltd £23,261. During the period, VM Investments charged the Group £112,771 for office accommodation and other office services.

Oak Trust is also a related party. During the year, £29,981 was paid to Oak Trust for secretarial fees. The Group did not owe Oak Trust any monies at 28 February 2013.

The remuneration of the directors, who are the key management personnel of the Group, is set out below. Further information about the remuneration of individual directors is provided in the Directors' Remuneration Report on page 17.

Included within the above figure of short-term employee benefits is an amount of £72,000 which has been capitalised as part of intangible exploration expenditure.

23. Comparative Figures

The financial statements as presented are for the period 5 January 2012 to 28 February 2013. As these are the first financial statements of the Group no comparative figures are reflected.