Trading statement for the half year ended 27 June 2014 Delta EMD Limited (Incorporated in the Republic of South Africa) Registration number 1919/006020/06 ISIN: ZAE000132817 Share code: DTA ("Delta EMD" or "the Group") TRADING STATEMENT FOR THE HALF YEAR ENDED 27 JUNE 2014 Shareholders are referred to the trading statement released on SENS on 9 May 2014, wherein shareholders were advised that at the annual general meeting held on 9 May 2014, a resolution to discontinue the business was duly approved. The discontinuation of the business is well underway and includes the conversion of work-in-process and the final production of EMD. Good progress has been made with many of the activities required by the discontinuation program. Severance packages as well as the staggered retrenchment of the Nelspruit based employees were agreed with employee representatives. The retrenchment of the first 82 employees, representing approximately one-half of all Nelspruit employees, was completed by 27 June 2014 with payment of their retrenchment packages to be completed on 10 July 2014. The total value of the severance packages for all 160 Nelspruit employees is estimated to be approximately R40 million (Forty million rand). The book value of fixed assets held for sale was reviewed and is considered to reasonably reflect fair value. Inventory, WIP and consumable goods values were impaired during the period by R30 million (thirty million rand). The marketing of assets held for sale has begun. Proceeds from the sale of assets will only be accounted for when ownership transfer on receipt of payment takes place. No ownership of assets was transferred during the period ended 27 June 2014. The Group’s underlying trading results for the period are expected to be lower than those of the prior period due to lower sales volume, the required reduction of production volume, and the additional costs detailed immediately below. Following the decision to discontinue the business, the Group has accounted for R78.5 million (Seventy eight million and five hundred thousand rand) of expenses relating to the discontinuation for the period ended 27 June 2014. This amount includes provisions for inventory impairment of R30 million, retrenchment of R40 million, retention incentives of R5 million and use of external advisors of R3.5 million. Cash flow for the period ended 27 June 2014 is estimated to be cash positive due to the reduction in working capital, and cash balances are forecasted to between R130 million and R133 million for the period ended 27 June 2014. The period ending cash balances do not reflect the payment of the first retrenchment payments, which will be made during the second half. Including the foregoing expenses the Group forecasts an after tax loss for the period of between R96 million and R99 million (2013: earnings after tax of R9.3 million). The Group’s loss per share and headline loss per share for the period is expected to be between 195 cents and 199 cents (2013: earnings & headline earnings per share 18.90 cents). The forecast financial information on which this trading statement is based has not been reviewed and reported on by the Group’s external auditors. Delta EMD’s interim results for the period are expected to be released on SENS on or about 22 August 2014. 1 July 2014 Nelspruit Merchant bank and sponsor RAND MERCHANT BANK (a division of FirstRand Bank Limited) Date: 01/07/2014 11:45:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.