re: woolworths limited off-market buy back booklet … · level 4 50 bridge street ... attached is...

16 September 2010 The Manager Companies Australian Securities Exchange Company Announcements Office Level 4 50 Bridge Street Sydney NSW 2000 Dear Sir/Madam, Re: WOOLWORTHS LIMITED OFF-MARKET BUY BACK BOOKLET Attached is a copy of the Buy-Back booklet that is being mailed to all eligible shareholders together with personalised tender forms. Eligible shareholders are those who were on the register on 6 September 2010 with addresses in Australia, New Zealand, the United Kingdom, the United States, Hong Kong (professional investors only), Singapore and Japan. Woolworths may accept a tender submitted by foreign shareholders residing outside of these jurisdictions if the shareholder can demonstrate to the satisfaction of Woolworths that its participation in the Buy-Back will not breach the laws of any jurisdiction. Restricted employee shares, shares issued under the dividend reinvestment plan with respect to the 2010 final dividend and shares held by excluded foreign shareholders may not be tendered into the Buy-Back (as detailed in the Buy-Back booklet). The Buy-Back tender period opens on 20 September 2010 and is scheduled to close on 8 October 2010. Full details are contained in the Buy-Back booklet. For further information contact the Information Line on 1300 368 664. Yours sincerely, WOOLWORTHS LIMITED

PETER J HORTON Group General Counsel and Company Secretary Encls. F

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WoolWorths limitedA.B.N 88 000 014 675

THIS IS AN IMPORTANT DOCUMENT

If you are in doubt as to the action you should take, please consult your financial, taxation or other professional adviser immediately.

Off-Market Buy-Back Booklet

Financial Advisers Legal Adviser

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Woolworths Limited | Off-Market Buy-Back Bookletp a g e 2

Important Dates

August 2010

Announcement of Woolworths’ results and of Buy-Back Thursday, 26 August

Last day that Shares can be acquired to be eligible for Buy-Back franking entitlements Thursday, 26 August

Buy-Back Ex-Entitlement Date: the date that Shares commence trading on an ex-Buy-Back basis. Shares acquired on the ASX on or after this date will not confer an entitlement to participate in the Buy-Back

Tuesday, 31 August

September 2010

Buy-Back Record Date: determination of eligible shareholders entitled to participate in the Buy-Back

Monday, 6 September

Dividend ex-entitlement date: the date that Shares commence trading on an ex-entitlement date for the 2010 final dividend. Shares acquired on the ASX on or after this date will not confer an entitlement to receive the 2010 final dividend

Monday, 13 September

Dividend record date: determination of eligible shareholders entitled to receive the 2010 final dividend

Friday, 17 September

Mailing of Buy-Back Documents to shareholders completed by Friday, 17 September

Tender Period Opening Date Monday, 20 September

October 2010

Tender Period Closing Date: Tenders must be received by the Registry no later than 7.00pm (Sydney time)

Friday, 8 October

Buy-Back Date: determination of the Buy-Back Price and scale back (if any) and entry into Buy-Back Contracts

Monday, 11 October

Payment date for final dividend Friday, 15 October

Dispatch/crediting of Buy-Back proceeds to participating shareholders. Updated holding statements sent to participating shareholders by

Monday, 18 October

While Woolworths does not anticipate any changes to these dates and times, it reserves the right to vary them without notifying you. Any change in date or time will take effect from the time it is authorised by the Board and will be publicly announced as soon as practicable following the Board’s authorisation. Any such change will be taken to amend this booklet (and the other Buy-Back Documents) accordingly. Woolworths may in its absolute discretion also decide not to proceed with the Buy-Back and may vary the size of the Buy-Back depending on a number of factors including shareholder demand, market conditions and forecast future capital requirements.

Citi and Greenhill Caliburn are acting as financial advisers to Woolworths in relation to the Buy-Back. Mallesons Stephen Jaques are acting as legal adviser to Woolworths in relation to the Buy-Back.

The date of this booklet is 6 September 2010.

elIgIbIlIty to partIcIpate

Subject to the following, you are eligible to participate in the Buy-Back if Shares are registered in your name on the Buy-Back Record Date (Monday, 6 September 2010) and, in accordance with the Settlement Rules, the Shares confer an entitlement to receive this Invitation.

Restricted Employee Shares and shares issued under the DRP with respect to the 2010 final dividend may not be tendered into the Buy-Back.

Excluded Foreign Shareholders are not eligible to participate in the Buy-Back (other than in the limited circumstances as described in Section 4.3).

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p a g e 3Woolworths Limited | Off-Market Buy-Back Booklet

corporate actIons

Shareholders should be aware that Woolworths may be involved in exploratory discussions with third parties from time to time regarding potential corporate transactions and other strategic initiatives. In the event that a significant corporate transaction develops as a result of these discussions, and if it is not appropriate to immediately disclose the transaction, it may become necessary for the Company to terminate or extend the Buy-Back to ensure that the Buy-Back only proceeds in circumstances where shareholders are fully informed of all material information. Any decision to terminate or extend the Buy-Back will only be made after due consideration of the best interests of Woolworths’ shareholders.

buy-back summary

Woolworths is seeking to buy back up to $700 million worth of its Shares through an off-market tender. The Buy-Back is an opportunity for you to sell some or all of your Shares by submitting a Tender.

Buy-Back size Woolworths is seeking to buy back up to $700 million worth of its Shares. However, Woolworths may vary the size of the Buy-Back depending on a number of factors including shareholder demand, market conditions and forecast future capital requirements

Tender Discount Range Tenders can be lodged at discounts of 8 per cent to 14 per cent inclusive (at 1 per cent intervals) to the Market Price. The Market Price is calculated as the VWAP of Woolworths shares over the five trading days up to and including the Closing Date. The Market Price will be announced to the market as soon as possible after 4.30pm (Sydney time) on the Closing Date and will be available to shareholders on Woolworths’ website (www.woolworthslimited.com.au) or by calling the Buy-Back Information Line on 1300 368 664 from within Australia and +61 3 9415 4055 from outside Australia

Buy-Back Price The Buy-Back Price will be calculated by applying the Buy-Back Discount selected by Woolworths under the tender process to the Market Price

Capital component of the Buy-Back Price

$3.08(1)

Dividend component of the Buy-Back Price

The Buy-Back Price less the $3.08 capital component

Multiple Tender Discounts With the exception of shareholders who own 85 Shares or less, eligible shareholders can tender different parcels of Shares at different Tender Discounts. Shareholders that own 85 Shares or less can only tender Shares at one discount or as a Final Price Tender

Final Price Tender Shareholders may submit a Final Price Tender which is an offer to sell Shares at the Buy-Back Price ultimately determined by Woolworths – see above

Eligible Shareholders You are eligible to participate in the Buy-Back if Shares are registered in your name on the Buy-Back Record Date (Monday, 6 September 2010) and you are resident in, or are holding Shares on behalf of someone resident in, Australia, New Zealand, the United Kingdom, the United States, Hong Kong (professional investors only), Singapore or Japan

Ineligible Shares Restricted Employee Shares and shares issued under the DRP with respect to the 2010 final dividend may not be tendered into the Buy-Back (see Section 4.2)

Shares held by Excluded Foreign Shareholders may not be tendered into the Buy-Back (other than in the limited circumstances as described in Section 4.3)

(1) This amount is subject to ATO approval (see Section 2.1).For

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How to partIcIpate

It is your choice whether or not to participate in the Buy-Back.

If you choose NOT to participate in the Buy-Back, you do not need to take any action, and the number of Shares you hold will not change as a result of the Buy-Back.

If you DO choose to participate in the Buy-Back:

• You can choose the Tender Discount(s) within the Tender Discount Range at which you are willing to sell some or all of your Shares (your Tender price):

- If the Buy-Back Price is higher than your Tender price, you will receive the higher Buy-Back Price for any of your Shares that are bought back by Woolworths; and

- If the Buy-Back Price is less than your Tender price, Woolworths will not buy back your Shares. Under no circumstances will your Shares be bought back at a price lower than your Tender price;

• Alternatively, you can choose to Tender some or all of your Shares as a Final Price Tender. This means you are willing to sell your Shares at the Buy-Back Price that Woolworths determines following the tender process;

• If your Shares are bought back, you will receive a fully franked dividend as part of the Buy-Back Price; and

• You should not have to pay brokerage or appoint a stockbroker to sell your Shares.

To participate in the Buy-Back, you need to:

STEP 1 Decide how many Shares you wish to sell

STEP 2 Sele ct your Tender Discount(s) and/or a Final Price Tender

STEP 3 Select your Minimum Price (optional)

STEP 4 Submit your Tender(s) by completing the enclosed Tender Form

Further details regarding each of these steps are set out in Section 1.15.

enquIrIes

If you have any questions in relation to the Buy-Back or the content of this booklet, please call the Buy-Back Information Line on 1300 368 664 from within Australia or on +61 3 9415 4055 from outside Australia between the hours 8.30am to 5.30pm (Sydney time), Monday to Friday. Alternatively, information on the Buy-Back is also available on the Woolworths website at www.woolworthslimited.com.au.

DefInItIons anD InterpretatIon

Some words used in this booklet have defined meanings. Section 5 ‘Definitions and Interpretation’ defines the capitalised words used throughout this booklet.

furtHer aDvIce

This document does not provide financial product advice and has been prepared without taking into account your particular objectives, financial situation or needs. You should consider obtaining independent advice before making any financial decisions.F

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cHaIrman’s letter

Dear Shareholder,

On behalf of the Board of Directors, I am pleased to invite you to participate in an off-market buy-back tender to sell some or all of your Woolworths Shares:

• At specified discounts of between 8 per cent to 14 per cent inclusive (at 1 per cent intervals) to the Market Price; or

• As a Final Price Tender (which is an election to receive the Buy-Back Price). In other words you choose to sell your Shares at the price determined by Woolworths following receipt of the Tenders lodged by participating shareholders.

Woolworths is aiming to buy back up to $700 million worth of Shares representing up to 2.4 per cent of its outstanding Shares. The actual number of Shares bought back will be determined by Woolworths having regard to a number of factors including the Tenders lodged by shareholders, market conditions and forecast capital requirements. We will only buy back Shares at a price we believe is in the best interests of all shareholders, including those who choose not to participate in the Buy-Back. Further details of the tender process are set out in Section 1 of this booklet.

Woolworths has obtained a preliminary indication from the Australian Taxation Office that for Australian tax purposes, the Buy-Back Price will comprise a capital component of $3.08, with the remainder of the price paid to you deemed a fully franked dividend. Woolworths expects that this will be confirmed by the ATO in a Class Ruling. The Buy-Back will have different tax consequences for different shareholders depending on their original purchase price and individual tax situations. Detailed information on the Australian tax consequences for participants is provided in Section 2 of this booklet.

The Board and management are committed to growing our business and managing our capital so we can increase shareholder value and increase returns to you, our shareholders. The Buy-Back is aimed at achieving a balance between returning capital, retaining sufficient flexibility to invest capital, pursuing growth options and maintaining strong credit metrics.

Participation in the Buy-Back is optional. If you wish to submit a Tender, you must ensure that your completed and signed Tender Form is received by the Registry if you have an Issuer Sponsored Holding or, if you have a CHESS Holding, your controlling participant (usually your broker) processes your Tender, no later than 7.00pm (Sydney time) on the Closing Date.

I urge you to consider this document carefully. If you have any queries on any aspects of the Buy-Back after reading this booklet, please call the Woolworths Buy-Back Information Line on 1300 368 664 within Australia or +61 3 9415 4055 from outside Australia.

Yours faithfully

James StrongChairman

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table of contents

1 Overview of the Buy-Back and the Tender Process 7

2 Australian Tax Implications for Shareholders 21

3 Effect of the Buy-Back on Woolworths 26

4 Additional Information on the Buy-Back 31

5 Definitions and Interpretation 38For

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Overview of the Buy-Back and the Tender Process

1

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This booklet invites you to tender your Shares to Woolworths in the Buy-Back. It sets out the terms of the Buy-Back and other information to assist you in making a decision on whether or not to participate in the Buy-Back.

1.1 wHat Is a buy-back?Under a buy-back, a company buys its own shares from its shareholders. Any shares bought back are cancelled, with the result that the number of shares on issue is reduced by the number of shares bought back.

1.2 wHy Is woolwortHs ImplementIng anotHer buy-back?The Buy-Back is being undertaken as part of Woolworths’ capital management strategy designed to achieve a balance between returning capital, retaining sufficient flexibility to invest capital, pursuing growth options and maintaining strong credit metrics.

1.3 wHat are tHe aDvantages anD DIsaDvantages of tHe buy-back?

Conducting the Buy-Back as an off-market tender provides a number of advantages to Woolworths and its shareholders. The advantages for Woolworths (and therefore its shareholders generally) include the following:

• The Buy-Back is expected to improve EPS and ROE for shareholders who continue to hold Woolworths shares;

• The Buy-Back allows Woolworths to buy back Shares at a discount of between 8 per cent to 14 per cent to the Market Price. This is likely to enable Woolworths to buy back a greater number of Shares than under an on-market buy-back for the same amount of capital;

• The Buy-Back represents an efficient means of returning capital to shareholders;

• Woolworths is able to determine the most appropriate number of Shares to buy back based on shareholder demand; and

• Woolworths’ targeted amount of capital can be bought back within a relatively short period of time.

The advantages for individual shareholders of participating in the Buy-Back may include:

• Participation is optional and shareholders who choose to participate can tailor their participation to suit their own circumstances. In particular, you can choose:

- Whether to tender your Shares into the Buy-Back;

- How many Shares to tender if the number of Shares you own and that you intend to tender is greater than 85 Shares; and

- The basis upon which to tender your Shares (for example, at what Tender Discount(s) or as a Final Price Tender, with the option to make your Tender conditional on a Minimum Price);

• For some shareholders, depending on their tax status, the after-tax return from participating in the Buy-Back may be greater than the sale of their Shares on-market;

• Shareholders with Small Holdings are able to sell all of their Shares into the Buy-Back so as not to be left with a small parcel of Shares; and

• Shareholders should not have to pay any brokerage to sell their Shares into the Buy-Back.

The disadvantages for individual shareholders of participating in the Buy-Back may include:

• You may be able to sell your Shares for a higher price on the stock market, and may receive a higher after-tax return, depending on your tax position: refer to Section 2.5 for a comparison of illustrative examples of the total after-tax proceeds if you tender your Shares under the Buy-Back or sell them on the stock market;

• There is no assurance that any Tender will be successful; and

• Successful Tenders may be subject to a scale back and hence might not be accepted in full.

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1.4 can I offer to sell sHares In tHe buy-back?You may offer to sell Shares in the Buy-Back if you were an eligible shareholder and the registered holder of those Shares at the close of business on the Buy-Back Record Date (Monday, 6 September 2010) (in accordance with the ASTC Settlement Rules). The maximum number of Shares you may tender is set out on your personalised Tender Form.

Shares acquired on the ASX on or after the Buy-Back Ex-Entitlement Date (Tuesday, 31 August 2010) will not be registered in your name by the Buy-Back Record Date (Monday, 6 September 2010) and therefore will not carry an entitlement to participate in the Buy-Back.

Restricted Employee Shares and shares issued under the DRP with respect to the 2010 final dividend may not be tendered into the Buy-Back.

Excluded Foreign Shareholders are not eligible to participate in the Buy-Back (other than in the limited circumstances as described in Section 4.3).

1.5 Do I Have to partIcIpate In tHe buy-back?No, participation in the Buy-Back is optional. If you do not want to sell any of your Shares, you do not need to take any action.

If you do nothing, the number of Shares you hold will not change as a result of the Buy-Back, although your proportional shareholding in Woolworths will increase slightly.

1.6 How many sHares wIll woolwortHs buy back?Woolworths currently intends to buy back up to $700 million worth of Shares equivalent to approximately 2.4 per cent of issued capital based on an assumed Market Price of 27.00 and an assumed 14 per cent Buy-Back Discount. However, Woolworths may, in its complete discretion, choose to buy back a significantly higher or lower amount or no Shares at all, depending on a number of factors including the Tenders lodged by shareholders and market conditions.

If the total number of Shares tendered at or below the Buy-Back Price and as Final Price Tenders exceeds the number of Shares Woolworths determines to buy back, Woolworths will scale back the allocations to the successful participants.

Under the Corporations Act, Woolworths has discretion to buy back any number of Shares up to a maximum of 10 per cent of the smallest number of Shares it has had on issue over the 12 months preceding the Buy-Back.

1.7 How long wIll tHe buy-back be open?The Buy-Back will be open from the Opening Date (Monday, 20 September 2010) to the Closing Date (Friday, 8 October 2010). Shareholders may only lodge Tenders within this period. Woolworths, in its absolute discretion, may withdraw or extend this period, but does not expect to do so. If the Tender Period is extended, the new Closing Date will be announced to the ASX.

1.8 How wIll tHe buy-back be conDucteD?Woolworths is conducting this Buy-Back through an off-market tender process. All shareholders eligible to participate in the Buy-Back will be able to submit offers to sell their Shares (“Tenders”) at specified discounts in the Tender Discount Range from 8 per cent to 14 per cent (at 1 per cent intervals) to the Market Price or as a Final Price Tender (see Section 1.15).

At the end of the Tender Period, Woolworths and its advisers will consider the Tenders and determine the Buy-Back Price. All successful Tenders will receive the Buy-Back Price for each Share bought back, even if they tendered Shares at a Tender Discount greater than the Buy-Back Discount. Any Shares tendered at a Tender Discount lower than the Buy-Back Discount will not be accepted. If the number of Shares tendered at or above the Buy-Back Discount (including Final Price Tenders) exceeds the number of Shares Woolworths determines to buy back, a scale back will operate on the basis set out in Section 1.11 (see examples therein for more details on the Tenders that will be successful).

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Woolworths Limited | Off-Market Buy-Back Bookletp a g e 1 0

1.9 wHat prIce wIll woolwortHs pay to buy back my sHares?All Shares successfully tendered will be bought back at the Buy-Back Price. The Buy-Back Price will be calculated by applying the Buy-Back Discount to the Market Price (see below). The Buy-Back Discount is the largest Tender Discount in the range of 8 per cent to 14 per cent inclusive (at 1 per cent intervals) to the Market Price that will allow Woolworths to purchase the amount of capital it determines to buy back.

For each Share purchased from you under the Buy-Back, you will receive a cash payment determined in accordance with the following formula:

A = B x (1 - C); where:

A = Buy-Back PriceB = Market PriceC = Buy-Back Discount (expressed as a decimal to 2 places)

For example, if the relevant Market Price is $27.00 and the Buy-Back Discount is 14 per cent, then the Buy-Back Price would be $23.22 (i.e. $27.00 x (1-0.14)).

Woolworths does not intend to set the Buy-Back Price at a level above the Tax Value. The Tax Value is the price used by the ATO to determine the market value of the relevant Shares when the Buy-Back occurs for Australian tax purposes. See Section 2.2 for a detailed explanation of the method for determining the Tax Value.

1.10 wIll all tHe sHares I tenDer be bougHt back?Whether all or any of the Shares you tender will be bought back by Woolworths will depend on the Tender Discount to the Market Price at which you offer to sell your Shares and the number of Shares and Tender Discounts set out in the Tenders lodged by you and other shareholders. Successful Tenders and the scale back process will be determined as follows:

• If your Tender Discount is equal to or greater than the Buy-Back Discount or if you lodged a Final Price Tender, your Tender will be successful and your Shares will be bought back, subject to any scale back and, if applicable, any Minimum Price condition;

• If your Tender Discount is less than the Buy-Back Discount, your Tender will be rejected and your Shares will not be bought back; and

• If you have chosen a Minimum Price and the Buy-Back Price is below that price, your Tender will be rejected and your Shares will not be bought back.

1.11 How wIll a scale back affect my tenDer?There is no assurance that any Tender will be successful in the Buy-Back, or that successful Tenders will be accepted in full. Woolworths will need to apply a scale back if the number of Shares tendered at Tender Discounts greater than or equal to the Buy-Back Discount and as Final Price Tenders exceeds the total number of Shares that Woolworths determines it will buy back. The scale back will be undertaken on a pro-rata basis after taking into account Small Holding Tenders and Priority Parcels.

As Restricted Employee Shares do not confer an entitlement to Tender, those shares will be disregarded in determining whether a shareholder has tendered 100 per cent of their Shares and whether a Small Holding would otherwise arise as a result of a Tender being successful.

The details of any scale back will be announced after the close of the Buy-Back. Woolworths expects to make this announcement on the Buy-Back Date (Monday, 11 October 2010). Note that when the scale back is calculated all Shares bought back will be rounded down to the nearest Share.F

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p a g e 1 1Woolworths Limited | Off-Market Buy-Back Booklet

wHat Is a small HolDIng tenDer?A Small Holding Tender is a Tender submitted by a shareholder who has tendered all of their Shares at one or more Tender Discounts greater than or equal to the Buy-Back Discount and/or as a Final Price Tender and who would otherwise be left with 85 Shares or less as a result of a scale back. No scale back will apply to such Tenders.

wHat Is a prIorIty parcel?A Priority Parcel applies to shareholders who have tendered Shares at one or more Tender Discounts greater than or equal to the Buy-Back Discount and/or as a Final Price Tender and whose Tenders are subject to scale back. In such cases, Woolworths will buy back a Priority Parcel from each shareholder. The scale back will only apply to the Shares remaining after the Priority Parcel has been acquired.

A Priority Parcel is equal to a parcel of 210 Shares or such lesser number of Shares as determined by Woolworths to ensure that applying this minimum to every successful Tender does not cause the value of Shares bought back to exceed the amount of capital Woolworths wishes to buy back.

Where the aggregate number of Shares tendered at Tender Discounts greater than or equal to the Buy-Back Discount is less than or equal to 210 Shares (i.e. the Priority Parcel), such Shares will be purchased without any scale back.

If the Buy-Back Discount is set between 8 per cent and 13 per cent inclusive:

Tender submitted Outcome

Final Price Tender Tenders accepted in full

The Tender Discount you select is greater than the Buy-Back Discount (1)

Tenders accepted in full

The Tender Discount you select is equal to the Buy-Back Discount (1)

• Tenders (other than Final Price Tenders, Priority Parcels and Small Holding Tenders) will be accepted but will be scaled back on a pro-rata basis (2)

• A Priority Parcel will be bought back from each shareholder• Small Holding Tenders will be accepted in full

The Tender Discount you select is smaller than the Buy-Back Discount

Tenders will be rejected

If the Buy-Back Discount is set at 14 per cent:

Tender submitted: Outcome

Final Price Tender and/or the Tender Discount you select is equal to the Buy-Back Discount (1)

• Tenders (other than Priority Parcels and Small Holding Tenders) will be accepted but will be scaled back on a pro-rata basis (2)

• A Priority Parcel will be bought back from each shareholder• Small Holding Tenders will be accepted in full

The Tender Discount you select is smaller than the Buy-Back Discount

Tenders will be rejected

(1) If a Minimum Price has been specified in addition to the Tender Discount, and the Buy-Back Price is below the Minimum Price, then the Tender will be rejected in full and none of the Shares tendered will be bought back.

(2) Fractions of Shares will be rounded down to the nearest Share.

Example 1: 14 per cent Buy-Back Discount and a 50 per cent scale back (illustrative example only)

In Example 1, it is assumed that the Market Price is $27.00 and the Buy-Back Discount is 14 per cent, resulting in a Buy-Back Price of $23.22. It is also assumed in this example that the Priority Parcel is 210 Shares, the Small Holding Tender is 85 Shares, there is a 50 per cent scale back and shareholders have not specified a Minimum Price condition. Please note that this is an example only. You should not rely on $27.00 being the Market Price, $23.22 being the Buy-Back Price, a Priority Parcel being 210 Shares, a Small Holding Tender being 85 Shares or 50 per cent being the level of scale back.

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On the basis of these assumptions, the outcome of each Tender would be as follows:

ShareholderTotal Holding

of SharesShares

TenderedTender

DiscountPrice Represented by

Tender Discount Outcome

A 2,400

1,200 - Final Price Tender Partially successful, 705 Shares bought back

1,200 13% $23.49 Not successful, no Shares bought back

B 200 200 14% $23.22 Successful, all 200 Shares bought back

C 250 250 14% $23.22 Successful, all 250 Shares bought back

D 250

200 14% $23.22 Successful, all 200 Shares bought back

50 13% $23.49 Not successful, no Shares bought back

E 600 600 13% $23.49 Not successful, no Shares bought back

• Shareholder A tendered 1,200 Shares as a Final Price Tender and 1,200 Shares at a 13 per cent Tender Discount. The Final Price Tender would be successful but only 705 of the 1,200 Shares tendered would be bought back as a result of the Priority Parcel and the 50 per cent scale back. The Tender submitted at a 13 per cent Tender Discount would not be successful. Following the Buy-Back, Shareholder A would be left with 1,695 Shares.

• Shareholder B tendered 200 Shares at a 14 per cent Tender Discount. Shareholder B would have the entire Tender accepted in full as a result of the Priority Parcel.

• Shareholder C tendered 250 Shares at a 14 per cent Tender Discount. Shareholder C would have the entire Tender accepted in full as 230 Shares would be bought back under the Priority Parcel and the 50 per cent scale back and the residual Small Holding of 20 Shares would be bought back under the Small Holding Tender.

• Shareholder D tendered 200 Shares at a 14 per cent Tender Discount and 50 Shares at a 13 per cent Tender Discount. Shareholder D would only have the 200 Shares tendered at the Buy-Back Discount bought back. Even though Shareholder D is left with a Small Holding of 50 Shares after the 200 Shares are bought back, the residual Small Holding would not be bought back because Shareholder D submitted the Tender at a Tender Discount less than the Buy-Back Discount.

• Shareholder E tendered 600 Shares at a 13 per cent Tender Discount which is less than the Buy-Back Discount. Shareholder E would have the entire Tender rejected.

See the following scale back table for Example 1.

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Shareholder

Shares tendered at a 14% Tender

Discount or as Final Price Tenders

Shares subject to scale back(1) Scale back(2)

Tender post scale back

and Priority Parcel(2),(3)

Shares remaining(4)

Small Holding Tender?(5)

Shares that are bought

back

A 1,200 990 50% 705 495 No 705

B 200 0 - 200 0 No 200

C 250 40 50% 230 20 Yes 250

D 200 0 - 200 0 No 200

E - - - - - -

(1) Under the Priority Parcel, the first 210 Shares are bought back from each shareholder who tenders Shares at the Buy-Back Discount (including Shares tendered as a Final Price Tender under this example), before the scale back applies.

(2) A scale back of 50 per cent means 50 per cent of the Shares subject to scale back would be bought back (not including Priority Parcels and Small Holding Tenders).

(3) When the scale back is calculated, fractions of Shares will be rounded down to the nearest Share.(4) Shares remaining refer only to Shares remaining from those Shares which were tendered at a 14 per cent Tender Discount or as Final Price Tenders.(5) Shareholder C tendered all of their Shares at the Buy-Back Discount. As a result of the Priority Parcel and scale back, Shareholder C would be left with a

Small Holding Tender (i.e. 85 Shares or less).

Example 2: 13 per cent Buy-Back Discount and 30 per cent scale back (illustrative example only)

In Example 2, it is assumed that the Market Price is $27.00 and the Buy-Back Discount is 13 per cent, resulting in a Buy-Back Price of $23.49. It is also assumed in this example that the Priority Parcel is 210 Shares, there is a 30 per cent scale back, the Small Holding Tender is 85 Shares and shareholders have not specified a Minimum Price condition. Please be aware that this is an example only. You should not rely on $27.00 being the Market Price, $23.49 being the Buy-Back Price, a Priority Parcel of 210 Shares, a Small Holding Tender of 85 Shares or 30 per cent being the level of scale back.

On the basis of these assumptions, the outcome of each Tender would be as follows:

ShareholderTotal Holding

of SharesShares

TenderedTender

DiscountPrice Represented by

Tender Discount Outcome

A 2,400

1,200 - Final Price Tender Successful, all 1,200 Shares bought back

1,200 13% $23.49 Partially successful, 903 Shares bought back

B 200 200 14% $23.22 Successful, all 200 Shares bought back

C 250 250 14% $23.22 Successful, all 250 Shares bought back

D 250



E 600 600 13% $23.49 Partially successful, 483 Shares bought back

• Shareholder A tendered 1,200 Shares as a Final Price Tender and 1,200 Shares at a 13 per cent Tender Discount. The Final Price Tender would be accepted in full. The 1,200 Shares tendered at a 13 per cent Tender Discount would be successful but only 903 of the 1,200 Shares tendered would be bought back as a result of the Priority Parcel first being bought back (210 Shares) and the 30 per cent scale back applying to the balance of 990 Shares, meaning that only 693 of these Shares are bought back. Following the Buy-Back, Shareholder A would therefore be left with 297 Shares.

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• Shareholder B tendered 200 Shares at a 14 per cent Tender Discount which is greater than the Buy-Back Discount. Hence, Shareholder B would have the entire Tender accepted in full.

• Shareholder C tendered 250 Shares at a 14 per cent Tender Discount which is greater than the Buy-Back Discount. Hence, Shareholder C would have the entire Tender accepted in full.

• Shareholder D tendered 200 Shares at a 14 per cent Tender Discount and 50 Shares at a 13 per cent Tender Discount. Shareholder D would have the 200 Shares tendered at a 14 per cent Tender Discount, which is greater than the Buy-Back Discount, bought back in full. The 50 Shares tendered at a 13 per cent Tender Discount would be bought back in full under the Priority Parcel.

• Shareholder E tendered 600 Shares at a 13 per cent Tender Discount which is equal to the Buy-Back Discount. Shareholder E would only have 483 of the 600 Shares tendered bought back as a result of the Priority Parcel first being bought back (210 Shares) and the 30 per cent scale back applying to the balance of 390 Shares, meaning that only 273 of these Shares are bought back. Following the Buy-Back, Shareholder E would therefore be left with 117 Shares.

See the following scale back table for Example 2.

Shareholder

Shares tendered at a 13% Tender Discount(1)

Shares subject to

scale back(2) Scale back(3)

Tender post scale back

and Priority Parcel(3),(4)

Shares remaining(5)

Small Holding Tender?(6)

Shares that are bought

back

A 1,200 990 30% 903 297 No 903

B - - - - - Scale back not applicable

C - - - - - Scale back not applicable

D 50 0 - 50 0 No 50

E 600 390 30% 483 117 No 483

(1) Shares tendered as Final Price Tenders or at Tender Discounts greater than the Buy-Back Discount (i.e. 13 per cent) are not shown here as they are not subject to scale back if the Buy-Back Discount is not the largest Tender Discount of 14 per cent.

(2) Under the Priority Parcel, the first 210 Shares are bought back from each shareholder who tenders Shares at the Buy-Back Price, before the scale back applies. (3) A scale back of 30 per cent means 70 per cent of the Shares subject to scale back would be bought back (not including Priority Parcels and Small

Holding Tenders).(4) When the scale back is calculated, fractions of Shares will be rounded down to the nearest Share.(5) Shares remaining refer only to Shares remaining from those Shares which were tendered at a 13 per cent Tender Discount.(6) Shareholder E tendered all of their Shares at the Buy-Back Discount. As a result of the Priority Parcel and scale back, Shareholder E would be left with more

than 85 Shares and so the Tender is not a Small Holding Tender.

1.12 wIll I stIll receIve tHe fInal DIvIDenD If my sHares are bougHt back?

Yes. All shareholders with a registered holding on the final dividend record date (Friday, 17 September 2010) will be entitled to receive the final dividend of 62¢ per Share. It is expected to be paid on Friday, 15 October 2010.

Under the Buy-Back, Shares will not be bought back until the Buy-Back Date (Monday, 11 October 2010) which is after the final dividend record date. As a result, you will still receive the final dividend on any Shares that are bought back from you under the Buy-Back, as long as you are the registered holder of those Shares on the final dividend record date (Friday, 17 September 2010).

If you intend to offer to sell all of your Shares into the Buy-Back and you currently participate in the DRP for any of the Shares, you should reconsider your DRP participation. Shares issued under the DRP in respect of the final dividend will not carry an entitlement to participate in the Buy-Back as they will not be issued until after the Closing Date. If you would like to change your DRP nomination please call 1300 368 664 from within Australia or +61 3 9415 4055 from outside Australia, or see Woolworths’ website, www.woolworthslimited.com.au.

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1.13 How Does tHe buy-back compare to sellIng my sHares on tHe stock market?

Refer to Section 2.5 for illustrative examples of the total after-tax proceeds if you sell your Shares under the Buy-Back and if you sell your Shares on the stock market. You may be able to sell your Shares for a higher price on the stock market. However, you may have to pay brokerage if you sell your Shares on the stock market. You should not have to pay brokerage if you sell your Shares in the Buy-Back.

The market price of Woolworths Shares on the ASX may be, or may move, higher than the Buy-Back Price during the Tender Period. It may also vary significantly in the future. By making the Invitation and in setting the Tender Discount Range, Woolworths is not making any recommendation or giving any advice on the value of its Shares, or whether (or how) you should sell your Shares.

Before you decide what to do with your Shares, we strongly recommend you seek your own professional advice (including taxation advice).

1.14 How Have woolwortHs sHares performeD over recent tImes?

The closing price of Woolworths Shares on the ASX on Wednesday, 25 August 2010, being the last trading day before the Company announced details of the Buy-Back, was $26.90.

The highest and lowest market sale prices of Woolworths Shares during each of the six months up to 31 August 2010 were as follows:

Period Low (1) High (1) VWAP (2)

March 2010 $27.54 $28.78 $28.22

April 2010 $26.82 $28.78 $27.52

May 2010 $26.35 $27.48 $26.87

June 2010 $26.71 $27.91 $27.30

July 2010 $25.56 $27.11 $26.32

August 2010 $25.75 $28.06 $27.26

Note: (1) Based on the closing prices for Woolworths Shares.(2) As per the definition of VWAP in Section 5 ‘Definitions and Interpretation’.

Source: IRESS

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A graph indicating the Share price performance of Woolworths over the period from 1 January 2008 to 31 August 2010 is set out below.

Woolworths share price

$20.00

$22.00

$24.00

$26.00

$28.00

$30.00

$32.00

$34.00

$36.00

J an 08 May 08 Aug 08 Dec 08 May 09 Aug 09 Dec 09 May 10 Aug 10

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ce

Source: IRESS

1.15 How Do I partIcIpate In tHe buy-back?step 1 – DecIDe How many sHares you wIsH to sell

To participate in the Buy-Back, you first need to consider how many Shares you wish to sell.

The personalised Tender Form accompanying this booklet sets out the maximum number of Shares you can tender into the Buy-Back.

If you hold more than 85 Shares, you may tender any number of Shares in different parcels at one or more Tender Discounts or as a Final Price Tender. The total number of Shares you tender must not be greater than the number in Box A of your Tender Form. If you hold 85 Shares or less, and you wish to tender Shares into the Buy-Back, you must tender all your Shares at the same Tender Discount or as a Final Price Tender.

You should not sell to others the Shares you have offered to sell to Woolworths.

step 2 – select your tenDer DIscount(s) anD/or a fInal prIce tenDer

Once you have determined the number of Shares you wish to sell, you need to indicate the Tender Discount, or Tender Discounts, to the Market Price at which you are willing to sell these Shares.

You may tender your Shares at any of the specified discounts between 8 per cent to 14 per cent inclusive (at 1 per cent intervals) to the Market Price as set out on the Tender Form and/or as a Final Price Tender.

If you hold more than 85 Shares, you may tender different parcels of your Shares at different Tender Discounts and/or as a Final Price Tender. However, you may not tender the same Shares at different Tender Discounts (or at both a specified Tender Discount and as a Final Price Tender). Each parcel of Shares tendered at a different Tender Discount or as a Final Price Tender is a separate Tender.

If you hold 85 Shares or less, you may only submit one Tender in respect of all of your Shares and such a Tender must be at one of the specified Tender Discounts or as a Final Price Tender.

You should note that if you submit a Tender, there is no obligation on Woolworths to accept your Tender and therefore there is no guarantee that your Shares will be bought back by Woolworths. Whether a Tender is successful will depend upon the Tender Discount to the Market Price at which you offer to sell your Shares relative to the Buy-Back Discount and any applicable scale back (see Section 1.11 for more details of the scale back process).

By submitting a Final Price Tender, however, you will ensure that at least some of your Shares will be bought back, unless the Buy-Back does not proceed for some reason.

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What is a Final Price Tender?

Shareholders wishing to increase the likelihood that their Tender will be successful should submit a “Final Price Tender”. Final Price Tenders are designed to make it easier for retail shareholders to participate successfully in the Buy-Back.

A Final Price Tender means the shareholder is willing to sell Shares at whatever Buy-Back Price is determined under the Buy-Back tender process. The Buy-Back Price could be as low as a 14 per cent discount to the Market Price.

Final Price Tenders will only be scaled back if the Buy-Back Price is set at a 14 per cent discount to the Market Price and the total number of Shares tendered at that discount and as Final Price Tenders is more than Woolworths determines to buy back (see Section 1.11 for more details on the scale back process).

step 3 – select your mInImum prIce (optIonal)In addition to choosing to tender your Shares at the specified Tender Discounts and/or as a Final Price Tender, you may also elect to impose a Minimum Price condition on your Tender. You do not need to select a Minimum Price on your Tender Form.

What is a Minimum Price?

If you choose to tender Shares into the Buy-Back, you will need to nominate a Tender Discount or lodge a Final Price Tender. In addition, you may make your Tender conditional on the Buy-Back Price being no less than one of the specified Minimum Prices set out on the Tender Form. Note that this is an additional option available to you but it may affect the success of your Tender. If you do not wish to specify a Minimum Price, leave the Minimum Price section on the Tender Form blank. You must ensure that you still nominate a Tender Discount or a Final Price Tender.

If you are concerned that movements in the Woolworths Share price after you lodge your Tender may result in your Tender corresponding to a lower Buy-Back Price than you are willing to sell your Shares for, then you may wish to make your Tender conditional on the Buy-Back Price being no less than a specified Minimum Price. If the Buy-Back Price is below your Minimum Price, then your Tender will be rejected and your Shares will not be bought back. Please remember that if you fail to nominate a Tender Discount or a Final Price Tender, and only make your Tender conditional on a specified Minimum Price, your Tender will be invalid and will not be accepted by Woolworths.

step 4 – submIssIon of tenDers

The way you complete Step 4 will depend on the type of holding you have. This will be specified on your Tender Form.

Tenders must be received no later than 7.00pm (Sydney time) on the Closing Date.

(a) Issuer Sponsored Holdings

If you have an Issuer Sponsored Holding and wish to submit a Tender for your Shares to be bought back, you need to complete and sign your personalised yellow Tender Form and return it to the Registry at either of the following addresses:

If sending by mailWoolworths Limited Buy-Backc/o Computershare Investor Services Pty LimitedGPO Box 2115Melbourne VIC 8060

You can use the enclosed reply-paid envelope if you are posting in Australia. You should allow sufficient time for your yellow Tender Form to be received by the Registry.

If delivering in person (during business hours only)Computershare Investor Services Pty LimitedLevel 4, 60 Carrington StreetSydney NSW 2000

(b) CHESS Holdings

If you have a CHESS Holding, you will need to contact your controlling participant (usually your broker) in sufficient time for your controlling participant to process your Tender no later than 7.00pm (Sydney time) on the Closing Date. The name of the controlling participant who manages your CHESS Holding as at the Buy-Back Record Date is printed on your blue Tender Form.

You should not send your blue Tender Form to the Registry.

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1.16 can I wItHDraw or amenD my tenDer?Once you have submitted a Tender, you may only withdraw or amend your Tender by following the procedures set out below:

(a) Issuer Sponsored Holdings

If you have an Issuer Sponsored Holding, you can withdraw or amend a Tender you have submitted by completing and submitting a Withdrawal/Amendment Form to the address provided so that it is received by no later than 7.00pm (Sydney time) on the Closing Date. A copy of the Withdrawal/Amendment Form is included at the back of this booklet or on the Woolworths website at www.woolworthslimited.com.au.

Any amendment or withdrawal will NOT be effective unless it is received by 7.00pm (Sydney time) on the Closing Date.

(b) CHESS Holdings

If you have a CHESS Holding, you will need to contact your controlling participant (usually your broker) in sufficient time for your controlling participant to process your withdrawal no later than 7.00pm (Sydney time) on the Closing Date.

The effect of your controlling participant withdrawing or amending your Tender will be to withdraw your previous Tender in favour of your replacement Tender (if any). You will need to give your controlling participant instructions in relation to your replacement Tender (if any) as if you had not previously submitted a Tender.

The effect of withdrawing or amending one or more of your Tenders will be to withdraw those Tenders, and in the case of an amendment to replace the amended Tenders with new Tenders.

If you are a CHESS Holder, you will receive written confirmation from CHESS of the withdrawals/amendments made in relation to your holding. Irrespective of its wording, this confirmation is not an acceptance by Woolworths of your withdrawal or amendment of any Tender.

usIng a wItHDrawal/amenDment form

Withdrawal of Tenders

You may withdraw your Tender by ticking the “Withdrawal Box” on the Withdrawal/Amendment Form at the back of this booklet, completing your shareholder details, signing the form and sending it to the Registry at the address provided or to your controlling participant so that it is received or processed (as applicable) by no later than 7.00pm (Sydney time) on the Closing Date. You may not withdraw your Tender after this time.

Amendment of Tenders

If you wish to change the terms of your Tender, you must tick the “Amendment Box” on the Withdrawal/Amendment Form at the back of this booklet, complete your shareholder details complete the details of your revised Tender on that form in accordance with the instructions shown on it and send it to the Registry or to your controlling participant as specified above.

The effect of submitting a Withdrawal/Amendment Form will be to withdraw your previous Tender in favour of your replacement Tender (if any). On the Withdrawal/Amendment Form you will need to complete the details of your revised Tender as if you had not previously submitted a Tender and ensure the form is received by the Registry or processed by your controlling participant no later than 7.00pm (Sydney time) on the Closing Date.

1.17 How can I obtaIn aDDItIonal tenDer wItHDrawal/amenDment forms?

If you require replacement Tender Forms or additional Withdrawal/Amendment Forms, please call the Buy-Back Information Line on 1300 368 664 within Australia or +61 3 9415 4055 from outside Australia.

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1.18 How wIll I receIve payment for sHares bougHt back?Woolworths will send you a cheque for your Buy-Back proceeds, unless you have a valid direct credit authority in place before 7.00pm (Sydney time) on the Closing Date. In either case, you are taken to have accepted the risks associated with the payment.

If you have an existing direct credit authority for the payment of dividends, by submitting your Tender Form you authorise Woolworths to pay your Buy-Back proceeds (if any) into your nominated account.

If you do not currently have a direct credit authority in place for the receipt of dividends, or if you wish to receive your Buy-Back proceeds by direct credit to a new or different bank account, you must complete and submit a new direct credit authority form which you can obtain by calling the Buy-Back Information Line on 1300 368 664 within Australia or +61 3 9415 4055 from outside Australia – the Registry must receive your direct credit authority form before 7.00pm (Sydney time) on the Closing Date.

Please note that if you choose to complete a new direct credit authority form, your nominated bank account details in that form will be used for the payment of the Buy-Back proceeds and will be taken to be your nominated bank account for future payments (including dividends) by Woolworths to you.

Cheques and direct credit advices will be mailed to your address as shown on the Woolworths Share Register at 7.00pm (Sydney time) on the Closing Date at your own risk. It is your responsibility to inform the Registry of any changes to your contact details. Payments to bank accounts and dispatch of cheques are expected to be completed by Monday, 18 October 2010. Payments to the accounts and the dispatch of cheques to the addresses on the Woolworths Share Register will satisfy Woolworths’ obligation to pay you for any Shares bought back.

1.19 wHat If I Have more tHan one HolDIng of sHares?You will receive a personalised Tender Form for each separate holding of Shares (for example, if you hold some Shares in your name and some Shares jointly with your spouse you will receive two Tender Forms). You may tender Shares in the Buy-Back from any or all of your separate holdings provided that you complete the Tender Form and follow the instructions on each Tender Form for each holding you wish to tender.

1.20 wHat If I HolD my sHares joIntly wItH anotHer person?If you hold your Shares jointly with another person (for example, your spouse) you must complete and return the Tender Form in accordance with instructions for joint holdings on the Tender Form.

1.21 can I stIll vote If a general meetIng Is HelD DurIng tHe tenDer perIoD?

Yes. Shareholders who tender their Shares to Woolworths will still be entitled to vote (in accordance with the voting rights attached to their Shares) at any general meeting of Woolworths held during the Tender Period. In any event, it is not intended that any general meeting be held during that period.

The 85th Annual General Meeting of Woolworths will be held on Thursday, 18 November 2010 which is after completion of the Buy-Back.

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1.22 can I traDe my sHares after submIttIng a tenDer?Once you have tendered Shares in the Buy-Back, you must not sell or offer to sell those Shares before the Buy-Back Date unless you withdraw or amend your Tender. In addition, you must not convert the Shares you tender from an Issuer Sponsored Holding to a CHESS Holding or vice versa or move them between CHESS Holdings – for example, if you change your HIN or your controlling participant (normally your broker).

If you sell Shares after you submit a Tender Form, you must ensure that you hold at least the number of Shares you have tendered at the close of the Tender Period.

If you have submitted a Tender, the number of Shares you have tendered will be removed from your holding and placed in a “subposition” in the Woolworths Share Register. You will not be able to deal with those Shares until they have been released from the subposition. For the Shares to be released from that subposition you must withdraw or amend your Tender in accordance with the procedures set out in Section 1.16 of this booklet. Accordingly, if you wish to sell any of the Shares in respect of which you have submitted a Tender, you must withdraw or amend your Tender in accordance with this booklet.

Withdrawals or amendments made in accordance with these procedures may not take immediate effect. You should take this into consideration if you wish to sell any of your Shares in respect of which you have submitted a Tender. If you sell any Shares after you submit a Tender such that at the Buy-Back Date you do not hold at least the number of Shares you successfully tendered, Woolworths may, in its absolute discretion, reject your Tender in its entirety or treat the Tender as if you had tendered the number of Shares held by you at the Closing Date (see Section 4.14 for further detail).

1.23 can I transfer my rIgHts to partIcIpate In tHe buy-back?No. Your rights to participate in the Buy-Back are personal and not transferable.

1.24 can I partIcIpate If I am resIDent outsIDe australIa?Yes you may if you are a shareholder who is resident in Australia, New Zealand, the United Kingdom, the United States, Hong Kong (professional investors only), Singapore or Japan, or are holding for the account of persons in these jurisdictions, but it is anticipated that this Buy-Back may be less favourable for non-Australian residents. You will need to seek professional advice on the taxation implications of the Buy-Back in your country of residence. Shares held by Excluded Foreign Shareholders may not be tendered into the Buy-Back (other than in the limited circumstances as described in Section 4.3).

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2Australian Tax Implications for ShareholdersF

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2.1 IntroDuctIon

This discussion is intended only as a general summary of the Australian income tax implications of participating in the Buy-Back for Australian resident individuals, Australian resident companies and non-resident shareholders. It does not address the taxation implications faced by non-residents in their country of residence. This general summary also applies to an Australian complying superannuation fund provided it does not have a current pension liability.

Woolworths has applied for a Class Ruling from the ATO. The following comments are based on a draft Class Ruling that Woolworths has received from the ATO in relation to the Buy-Back. When the final Class Ruling is issued by the ATO, it is possible that it will contain a different opinion to the one set out below.

This summary does not apply to shareholders who hold Shares on revenue account, who are professional share traders, banks, or insurance companies or who have made an election under the taxation of financial arrangements (“TOFA”) regime that affects the recognition of gains and losses in respect of their Shares.

This summary is not intended to be legal or tax advice and you should not rely upon it as such. You should obtain your own tax advice on participating in the Buy-Back, specific to your own particular circumstances.

Unless otherwise specified, this discussion is based on income tax legislation and administrative practice (which may reflect announced but not yet legislated tax reforms) as at 9.00am on the 6 September 2010. Shareholders should note that these laws, the interpretation of them by the courts, and administrative practice may change at any time, possibly with retrospective effect.

The Buy-Back will constitute an “off market” buy-back for the purposes of the Income Tax Assessment Act 1936. Woolworths has obtained an indication from the ATO that the capital component of the Buy-Back Price will be $3.08 and that all of the Buy-Back Price in excess of $3.08 will be treated as a frankable distribution.

2.2 capItal gaIns tax

australIan resIDent sHareHolDers

The Buy-Back constitutes the disposal of an asset for CGT purposes. A shareholder participating in the Buy-Back will be deemed to have disposed of each Share on the Buy-Back Date (Monday, 11 October 2010) for a Sale Consideration comprising capital proceeds of $3.08 plus the amount (if any) by which the Tax Value exceeds the Buy-Back Price.

A shareholder will make a capital gain to the extent that the Sale Consideration exceeds the cost base of the Shares disposed of under the Buy-Back. The shareholder’s CGT cost base for the Shares will generally include the amount the shareholder paid to acquire the Shares, any incidental costs of acquisition such as stamp duty and brokerage and any incidental costs of disposal. A shareholder that acquired Shares prior to 1 July 1999 may increase the cost base of those Shares by an indexation factor for the period to 30 September 1999.

A shareholder who is an individual or a complying superannuation fund and who has held their Shares for 12 months or longer at the time of disposal under the Buy-Back may apply the discount capital gain method in calculating any capital gain on disposal. Pursuant to this method, the shareholder will only include in their assessable income one-half (for individuals) or two-thirds (for complying superannuation funds) of any net capital gain (calculated without any indexation adjustment).

A company is not entitled to apply the discount capital gain method.

A shareholder who is an individual or a complying superannuation fund will make a capital loss to the extent that the Sale Consideration is less than the reduced cost base of the Shares disposed of under the Buy-Back. The reduced cost base of the Shares does not include any adjustment for indexation.

Where a shareholder is a company, the amount of any capital loss is reduced by the lesser of:

• The part of the dividend component of the Buy-Back Price that is franked; and

• The amount of the capital loss.

non-resIDent sHareHolDer

No CGT implications should arise from a non-resident participating in the Buy-Back unless the non-resident shareholder holds Shares as part of a business conducted through a permanent establishment in Australia. Specific Australian taxation advice should be obtained in this latter case.

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wHat Is tHe tax value?The ATO sets out the methodology for determining the Tax Value for shares bought back off-market in Taxation Determination TD2004/22.

For the purposes of the Buy-Back, the ATO has indicated that the Tax Value will be determined in accordance with the following formula:

$26.36(1) xClosing level of S&P/ASX 200 on the Closing Date

4,323.4(2)

(1) $26.36 was the VWAP of Shares over the last five trading days before the announcement of the Buy-Back, adjusted to an ex-dividend basis.(2) 4,323.4 was the opening level of the S&P/ASX 200 on Thursday, 26 August 2010.

If the movement in the S&P/ASX 200 Index is significantly different from the movement in Woolworths’ ordinary share price on the ASX over the relevant period, Woolworths may approach the ATO to seek to vary the methodology used to determine the Tax Value.

If the Buy-Back Price is greater than the Tax Value, a portion of the dividend component equal to the difference between the Buy-Back Price and the Tax Value would be deemed to be an unfranked dividend. Woolworths does not intend to buy back any Shares for an amount in excess of the Tax Value.

2.3 Income tax – DIvIDenD component

For income tax purposes, the dividend component will be treated in the same manner as any other franked dividend. On the basis that the Buy-Back Price will not exceed Tax Value, the dividend component will be fully franked.

australIan resIDent sHareHolDer

An Australian resident shareholder participating in the Buy-Back will be deemed to have received a frankable distribution equal to the difference between the capital component of $3.08 and the Buy-Back Price for each Share bought back.

If a shareholder satisfies the holding period rules (discussed in Section 2.4 below), the shareholder will be required to include in their assessable income the amount of the frankable distribution, grossed up by an amount equal to the company tax attributable to the frankable distribution. The gross up amount is calculated by multiplying the amount of frankable distribution by 30/70. The shareholder will then be entitled to a franking credit equal to the gross up amount. This franking credit may be offset against the total tax payable by the shareholder on their taxable income. To the extent the franking credit exceeds the total tax payable by the shareholder on their taxable income, a shareholder that is an individual or complying superannuation fund may be entitled to a refund of that excess.

non-resIDent sHareHolDer

As the frankable distribution arising on the Buy-Back will be fully franked, a non-resident shareholder will not be liable to Australian withholding tax on any part of the Buy-Back Price, nor will it include the dividend component of the Buy-Back Price in its assessable income provided it does not hold the Shares through a permanent establishment in Australia.

2.4 frankIng creDIts anD tHe HolDIng perIoD rules

Shareholders participating in the Buy-Back should be aware of a number of features of Australia’s taxation laws which are designed to discourage trading in franking credits. Where these features apply, a shareholder may be denied the benefit of franking credits attaching to the frankable distribution arising on the Buy-Back.

Woolworths expects that any Class Ruling issued by the ATO will confirm that the terms of the Buy-Back will not give rise to a determination to deny shareholders the benefit of franking credits attaching to the frankable distribution arising under the Buy-Back pursuant to either the franking credit anti-streaming or the franking credit general anti-avoidance provisions.

However, shareholders should also have regard to the operation of the holding period rules (“the 45-day rule” and “the related payments rule”) in relation to their participation in the Buy-Back. Broadly:

• The 45-day rule requires a shareholder to have held their Shares at risk for a period of 45 days (excluding the days of acquisition and disposal) in order to qualify for the benefit of franking credits attaching to frankable distributions paid on those Shares as part of the Buy-Back Price; and

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• If a shareholder makes a payment that passes the benefit of a distribution to another person, the related payments rule requires a shareholder to have held their Shares at risk for an additional period in order to qualify for the benefit of franking credits attaching to distributions paid on those Shares as part of the Buy-Back Price.

The holding period rules are complex, but generally speaking, a shareholder who acquired Shares on or after Friday, 27 August 2010 would not satisfy the holding period rule in respect of those Shares. This is due to the fact that the determination of the Buy-Back allocations (including any scale back) will occur on Monday, 11 October 2010 will result in the Shares ceasing to be held at risk from that date. Shareholders who acquired Shares on or after Friday, 27 August 2007 will not have held those Shares at risk for the required period prior to Monday, 11 October 2010.

The holding period rules work on a last-in-first-out basis so that a shareholder will be deemed to have disposed of their most recently acquired Shares under the Buy-Back for the purpose of applying those rules. Thus, as a general rule, if the most recently acquired Shares were acquired on or after Friday, 27 August 2010, the shareholder may not qualify for the franking credits attaching to dividends paid on all of the Shares sold into the Buy-Back. Woolworths expects the Class Ruling to confirm that Shares purchased on the ASX on or after the Buy-Back Ex-Entitlement Date (Tuesday, 31 August 2010) will be excluded from the last-in-first-out rule.

Shareholders who are individuals and whose total franking credit entitlement for the income year does not exceed $5,000 are not subject to the 45-day rule (provided they satisfy the related payments rule). Shareholders should seek advice in relation to the implications of the holding period rules for their participation in the Buy-Back, in light of their specific circumstances.

Where the shareholder does not qualify for the benefit of the franking credits attached to the frankable distribution paid on the Shares, then the franking credit is not included in the assessable income of the shareholder.

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2.5 workeD tax examples for australIan resIDent InDIvIDuals anD australIan complyIng superannuatIon funDs

Australia Resident Individuals – Income(1), (2)

Super Fund $0-$6,000

$6,001-$37,000

$37,001-$80,000

$80,001-$180,000 $180,000+

Per share A$ Methodology15.0%

tax rate0.0%

tax rate16.5%

tax rate31.5%

tax rate38.5%

tax rate46.5%

tax rate

Basic assumptions(1) Assumed Tax Value(3) $27.00 $27.00 $27.00 $27.00 $27.00 $27.00(2) Assumed Buy-Back Price $23.22 $23.22 $23.22 $23.22 $23.22 $23.22(3) Assumed cost base $15.00 $15.00 $15.00 $15.00 $15.00 $15.00(4) Capital component $3.08 $3.08 $3.08 $3.08 $3.08 $3.08(5) Marginal tax rate(1), (2) 15.0% 0.0% 16.5% 31.5% 38.5% 46.5%(6) Capital gains discount 33.3% 50.0% 50.0% 50.0% 50.0% 50.0%

Income tax consequences (deemed dividend)(7) Fully franked dividend = (2) - (4) $20.14 $20.14 $20.14 $20.14 $20.14 $20.14(8) Add: gross up for

franking credits(4) = (7) x 0.3/0.7 $8.63 $8.63 $8.63 $8.63 $8.63 $8.63

(9) Assessable income = (7) + (8) $28.77 $28.77 $28.77 $28.77 $28.77 $28.77(10) Tax on assessable income = (9) x (5) ($4.32) $0.00 ($4.75) ($9.06) ($11.08) ($13.38)(11) Tax offset = (8) $8.63 $8.63 $8.63 $8.63 $8.63 $8.63(12) Net tax offset (tax payable) = (10) + (11) $4.31 $8.63 $3.88 ($0.43) ($2.45) ($4.75)(13) After tax proceeds = (7) + (12) $24.45 $28.77 $24.02 $19.71 $17.69 $15.39

CGT tax consequences (capital)(14) Capital component = (4) $3.08 $3.08 $3.08 $3.08 $3.08 $3.08(15) Add: excess of Tax Value

over Buy-Back Price(3) = (1) - (2) $3.78 $3.78 $3.78 $3.78 $3.78 $3.78

(16) Sale Consideration = (14) + (15) $6.86 $6.86 $6.86 $6.86 $6.86 $6.86(17) Less: assumed cost base = (3) $15.00 $15.00 $15.00 $15.00 $15.00 $15.00(18) Nominal capital

gain/(loss) on disposal = (16) - (17) ($8.14) ($8.14) ($8.14) ($8.14) ($8.14) ($8.14)

(19) Discounted capital gain/(loss)(5) = (18) x (100% - (6)) ($5.43) ($4.07) ($4.07) ($4.07) ($4.07) ($4.07)

(20) Tax impact of capital loss/(gain)(6) = (19) * (5) $0.81 $0.00 $0.67 $1.28 $1.57 $1.89

(21) Add: capital component = (4) $3.08 $3.08 $3.08 $3.08 $3.08 $3.08(22) After tax proceeds = (20) + (21) $3.89 $3.08 $3.75 $4.36 $4.65 $4.97(23) Total after tax proceeds = (13) + (22) $28.34 $31.85 $27.77 $24.07 $22.34 $20.36

Comparison with sale of shares on ASX at $27.00(24) Assumed sales proceeds $27.00 $27.00 $27.00 $27.00 $27.00 $27.00(25) Less: assumed cost base = (3) $15.00 $15.00 $15.00 $15.00 $15.00 $15.00(26) Nominal capital

gain/(loss) on disposal(7) = (24) - (25) $12.00 $12.00 $12.00 $12.00 $12.00 $12.00

(27) Discounted capital gain/(loss)(5) = (26) * (100% - (6)) $8.00 $6.00 $6.00 $6.00 $6.00 $6.00

(28) Tax impact of loss/(gain)(6) = (27) * (5) ($1.20) ($0.00) ($0.99) ($1.89) ($2.31) ($2.79)(29) Total after tax proceeds = (24) + (28) $25.80 $27.00 $26.01 $25.11 $24.69 $24.21

(1) The marginal tax rate for individuals includes the Medicare levy at a rate of 1.5 per cent. The liability of an individual to pay the Medicare levy depends on the individual’s own circumstances.

(2) Marginal tax rates based on individual income tax rates for Australian resident individuals for the financial year ending 30 June 2011.

(3) Assumed Tax Value of $27.00 for illustrative purposes only. The actual Tax Value will be determined as outlined in Section 2.2.

(4) This assumes the shareholder is fully entitled to the franking credits.

(5) This assumes that the discount capital gains method is used, which adjusts the total capital gain by a discount factor (50 per cent for individuals and 33.33 per cent for complying superannuation funds). Although capital losses, as such, are not subject to discount, it is assumed that capital losses are offset against capital gains and that the net amount is then discounted. If capital losses are offset against capital gains which cannot be discounted (e.g. on assets held for less than 12 months), the tax impact of the capital loss will be greater (more favourable) than shown in the table.

(6) This assumes shareholders will be able to fully utilise capital losses to offset capital gains derived from other assets. The capital loss, arising under the Buy-Back, may be different to any capital gain/(loss) which may arise under an equivalent sale of Shares on-market. This is because the capital proceeds (“Sale Consideration”) under the Buy-Back is the aggregate of $3.08 (the capital component) plus $3.78 (the excess of the assumed Tax Value over the assumed Buy-Back Price).

(7) No brokerage fees have been assumed when selling on the ASX.

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3Effect of the Buy-Back on WoolworthsF

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3.1 summary of full year results anD outlook

On 26 August 2010, Woolworths announced a 10.1 per cent increase in net profit after tax to $2,020.8 million for the full year ended 27 June 2010. This is at the higher end of Woolworths’ prior guidance and is a solid result given the economic challenges of cycling the prior year’s stimulus packages, the significant decline in inflation and a more conservative consumer in the second half of the year.

Other financial highlights included:

• 4.8 per cent increase in sales, excluding petrol, to $51,694 million (up 4.2 per cent including petrol);

• 9.4 per cent increase in earnings before interest, tax, depreciation and amortisation;

• 9.5 per cent increase in earnings before interest and tax to $3,082.1 million;

• 10.6 per cent increase in fully franked dividend to 115 cents per share; and

• Solid increase in operating cash flows.

These results were underpinned by a significant investment in reducing shelf prices in Australia which helped to drive increased market share, customer numbers, items sold and basket size.

There are still significant opportunities for Woolworths to improve its core business over the medium term through:

• Further enhancement to its supply chain including next generation replenishment, continued improvement in distribution centre systems and processes and significant improvements to its merchandising system;

• Exclusive brands growth across the business;

• Cost reductions in a new initiative called ‘Quantum’ aimed at reducing costs and better leveraging synergies from all areas of the business over the next five years;

• Ongoing space roll out through new stores and refurbishments utilising the strength of the balance sheet;

• Continuing gross margin benefits from increased direct sourcing, reduced shrinkage and other initiatives;

• Customer engagement strategies;

• Continuing attention to improving the basics including presentation, store standards, service and convenience;

• Absolute focus on fresh foods; and

• Continuing price reductions across all Woolworths brands funded by operational and buying improvements.

Since the start of the 2010 financial year, Woolworths has returned approximately $1.6 billion to shareholders through $1.3 billion in dividends and $325 million in the on-market buy-back announced in February 2010.

Dividends per share increased 10.6 per cent to 115 cents from 104 cents in FY09. The Board believes that after the Buy-Back, Woolworths has the capacity to continue to invest capital in existing businesses and pursue growth opportunities with a focus of enhancing long term shareholder value.

The prospects for the 2011 financial year appear more positive overall. However, the first half will see some impact from the continued cycling of the Government stimulus packages, economic uncertainty particularly in developed markets and a cautious domestic consumer.

Woolworths expects net profit after tax for FY11 will grow between 8 per cent and 11 per cent. This guidance is subject to the following:

• Consumer confidence levels;

• Inflation;

• Interest rates; and

• Global economic conditions.

Electronic copies of Woolworths’ preliminary final report and analyst presentation for the full year ended 27 June 2010 can be found on the Woolworths website at www.woolworthslimited.com.au.

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3.2 corporate actIons

Shareholders should be aware that Woolworths may be involved in exploratory discussions with third parties from time to time regarding potential corporate transactions and other strategic initiatives. In the event that a significant corporate transaction develops as a result of these discussions, and it is not appropriate to immediately disclose the transaction, it may become necessary for Woolworths to terminate or extend the Buy-Back to ensure that the Buy-Back only proceeds in circumstances where shareholders are fully informed of all material information. Any decision to terminate or extend the Buy-Back will only be made after due consideration of the best interests of Woolworths’ shareholders.

3.3 How wIll tHe buy-back be funDeD?It is intended that the Buy-Back will be ultimately financed via long term debt issued into both domestic and international (in particular the United States) debt capital markets within the coming months, subject to financial market conditions. Woolworths also has access to sufficient undrawn bank facilities to fund the Buy-Back.

The Buy-Back is not expected to hinder Woolworths’ ability to discharge its indebtedness or to conduct and grow its business.

3.4 Impact of tHe buy-back on key fInancIal InDIcators

While the precise impact of the Buy-Back cannot be determined until the Buy-Back Price and the size of the Buy-Back is known, the Buy-Back is expected to improve Woolworths’ EPS and ROE in FY11 and later years, while gearing and interest cover will remain at prudent levels.

3.5 Impact of tHe buy-back on woolwortHs’ creDIt ratIngs

The Board believes that after the Buy-Back, Woolworths will remain strongly capitalised. Woolworths believes that the Buy-Back will have no immediate impact on Woolworths’ credit ratings or outlook.

3.6 Impact of tHe buy-back on woolwortHs’ frankIng account

If the Buy-Back proceeds, Woolworths will distribute to shareholders around $260 million of franking credits assuming a $700 million Buy-Back and a Buy-Back Price of $23.22. At the completion of the Buy-Back and after taking into account amounts provided for current tax liabilities in the FY10 accounts, the Woolworths group (including all non-wholly owned subsidiaries) is expected to have a franking credit balance of approximately $1,040 million.

Woolworths expects to continue to be in a position to fully frank its dividends for the foreseeable future.

3.7 Impact of tHe buy-back on woolwortHs’ balance sHeet

The table below sets out Woolworths’ Consolidated Statement of Financial Position as at 27 June 2010 and a Consolidated Pro-forma Statement of Financial Position post the Buy-Back (assuming $700 million worth of Shares are bought back).

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pro-forma balance sHeet

$ millionReported as at 27 June 2010

Adjustment for Buy-Back(1)

Pro-forma balances as at 27 June 2010

Assets

Cash 713.4 713.4

Trade and other receivables 916.8 916.8

Inventories 3,438.8 3,438.8

Assets held for sale 37.3 37.3

Other financial assets 92.7 92.7

Total current assets 5,199.0 5,199.0

Trade and other receivables 13.3 13.3

Other financial assets 132.3 132.3

Property, plant and equipment 7,639.1 7,639.1

Intangibles 5,071.0 5,071.0

Deferred tax assets 432.6 432.6

Total non-current assets 13,288.3 13,288.3

Total assets 18,487.3 18,487.3

Liabilities

Trade and other payables 5,278.9 5,278.9

Borrowings 871.7 871.7

Current tax liabilities 199.0 199.0

Other financial liabilities 24.7 24.7

Provisions 779.1 779.1

Total current liabilities 7,153.4 7,153.4

Borrowings(2) 2,670.4 700.0 3,370.4

Other financial liabilities 236.7 236.7

Provisions 416.3 416.3

Other 192.8 192.8

Total non-current liabilities 3,516.2 700.0 4,216.2

Total liabilities 10,669.6 700.0 11,369.6

Net assets 7,817.7 (700.0) 7,117.7

Equity

Issued capital(3) 3,784.4 (92.9) 3,691.5

Shares held in trust (41.2) (41.2)

Reserves (28.0) (28.0)

Retained Earnings(3) 3,855.2 (607.1) 3,248.1

Equity attributable to members of Woolworths 7,570.4 (700.0) 6,870.4

Non-controlling interest 247.3 247.3

Total equity 7,817.7 (700.0) 7,117.7

(1) Pro-forma calculations assume the Buy-Back Price is $23.22 (assuming a 14 per cent Buy-Back Discount to an assumed Market Price of $27.00), the number of shares bought back is 30.1 million and $700 million worth of Shares are bought back. You should not rely on this price as being the Buy-Back Price. See Section 1.9 for an explanation on how the Buy-Back Price will be determined.

(2) Pro-forma calculations assume, for illustrative purposes, that the Buy-Back is funded from Woolworths’ existing debt facilities.

(3) Assuming a Buy-Back Price of $23.22, $3.08 per Share of the Buy-Back Price will be debited to issued capital and the assumed balance of $20.14 per Share will be debited to retained earnings.

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3.8 Impact of tHe buy-back on woolwortHs’ IssueD sHares

Woolworths currently has on issue around 1,231 million Shares. The table below sets out the number of Shares and the percentage of total issued Shares which would be bought back at different Buy-Back Prices assuming a total of $700 million worth of Shares are bought back. All Shares that Woolworths buys back will be cancelled.

Tender DiscountBuy-Back Price assuming a Market Price of $27.00

Number of Shares bought back

Percentage of total issued shares

14% $23.22 30.1 million 2.4%

13% $23.49 29.8 million 2.4%

12% $23.76 29.5 million 2.4%

11% $24.03 29.1 million 2.4%

10% $24.30 28.8 million 2.3%

9% $24.57 28.5 million 2.3%

8% $24.84 28.2 million 2.3%

3.9 wHat effect wIll tHe buy-back Have on tHe control of woolwortHs?

Given the percentage of issued Shares being bought back and the diversity of the Woolworths Share Register, the Buy-Back is not expected to have any change of control implications for Woolworths.

3.10 forwarD lookIng statements

Certain statements contained in this booklet, including statements in Section 3.1 and statements regarding the implementation of the Buy-Back and its effect on our business and securities, may constitute “forward-looking statements”. Woolworths undertakes no obligation to revise the forward-looking statements included in this booklet to reflect any future events or circumstances.

Woolworths’ actual results, performance or achievements could differ materially from the results expressed in, or implied by, these forward-looking statements. Factors that could cause or contribute to such differences include the number of Shares bought back pursuant to the Invitation, the Buy-Back Price and general trading and economic conditions affecting Woolworths.

Further information about Woolworths, its business and factors affecting its operations is contained in Woolworths’ full year results for 2010 and other reports, which can be accessed on its website at www.woolworthslimited.com.au.

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4Additional Information on the Buy-BackF

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4.1 sIze of tHe buy-back

Under the Corporations Act, Woolworths may, without shareholder approval, buy back any number of Shares provided that the number of voting shares bought back in the Buy-Back and in any other Buy-Back conducted in the previous 12 months, does not exceed 10 per cent of the smallest number, at any time during the 12 months preceding the Buy-Back, of votes attaching to Woolworths’ voting shares. Noting that Woolworths bought back 1.0 per cent on-market earlier this year, this limit would permit it to buy back around 111,039,602 Shares under the Buy-Back. Woolworths currently intends to buy back up to $700 million worth of Shares equivalent to approximately 2.4 per cent of issued capital. However, Woolworths may, in its complete discretion, choose to buy back a significantly higher or lower amount or no Shares at all, depending on the tenders lodged by shareholders and market conditions.

4.2 restrIcteD employee sHares anD sHares acquIreD unDer tHe Drp

Restricted Employee Shares and shares acquired under the DRP with respect to the 2010 final dividend will not carry an entitlement to participate in the Buy-Back. Any shares which are held in these plans are not included on your Tender Form. Only those Shares that you are free to trade will be included on your Tender Form.

4.3 excluDeD foreIgn sHareHolDers

This Invitation is not made to any Excluded Foreign Shareholder and, without limiting the rights that Woolworths otherwise has in relation to Tenders, a Tender submitted by an Excluded Foreign Shareholder will not be accepted by Woolworths unless that shareholder can demonstrate to the satisfaction of Woolworths that its participation in the Buy-Back will not breach the laws of any jurisdiction. If the Excluded Foreign Shareholder is able to prove this to the satisfaction of Woolworths, it may make a Tender.

Any person receiving any of the Buy-Back Documents must not, directly or indirectly, distribute or send them into any jurisdiction, or otherwise make them available to any person in any jurisdictions where to do so would breach the laws of that jurisdiction.

4.4 note to sHareHolDers locateD In tHe unIteD states

If you are a shareholder located in the United States, you should be aware that the disclosure requirements regarding the Buy-Back are different from the requirements that would apply if the Buy-Back was for shares of a United States company. Furthermore, because all of Woolworths’ Directors and executive officers reside outside the United States and substantially all of the assets of these persons and of Woolworths are located outside the United States, it may not be possible for shareholders to effect service of process within the United States upon such persons or to enforce against them judgments obtained in United States courts predicated upon the civil liability provisions of the federal securities laws of the United States.

4.5 note to sHareHolDers locateD In Hong kong

This document is not a prospectus within the meaning of the Hong Kong Companies Ordinance (Cap 32) nor is it an advertisement, invitation or document subject to section 103(1) of the Hong Kong Securities and Futures Ordinance (Cap 571) (“SFO”).

None of the Shares, this document or the contents have been authorised by the Hong Kong Securities and Futures Commission and no invitation, advertisement or other document, whether in Hong Kong or elsewhere, has been or will be issued, which is directed at, or the contents of which are likely to be accessed or read by the public in Hong Kong within the meaning of the SFO.

This document will be given to designated recipients only and may not be provided, assigned or transferred, to any other person. The contents of this document have not been reviewed by any regulatory authority in Hong Kong. You are advised to exercise caution in relation to the Buy-Back. If you are in any doubt about any of the contents of this document, you should obtain independent professional advice.

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Buy-Back Documents that are sent to a person with an address in, or by a person known to Woolworths to be holding on behalf of a person resident in, Hong Kong, will be accompanied by a certificate asking the ultimate holder to confirm their status as a “professional investor” under the SFO.

4.6 sHares HelD by trustees anD nomInees

Trustees and nominees who hold Shares should inform the beneficial owners of the Shares about the Buy-Back, subject to any legal restrictions in the countries where such beneficial owners are resident and then aggregate all Tenders received from beneficial owners. It is the responsibility of the trustee or nominee to complete one aggregated Tender Form on behalf of all beneficial owners other than Excluded Foreign Shareholders (if any).

For Issuer Sponsored Holdings, the trustee or nominee must ensure that an aggregated Tender Form is received by the Registry by 7.00pm (Sydney time) on the Closing Date. For CHESS Holdings, the trustee or nominee will need to aggregate all Tenders received from beneficial owners and provide instructions to its controlling participant in time for the aggregated Tender to be processed by 7.00pm (Sydney time) on the Closing Date.

Any scale back that applies to Shares tendered by trustees and nominees will be performed on a registered shareholder basis.

4.7 margIn lenDIng arrangements

If you hold Shares under margin lending arrangements or if they are held as security for a loan or as Australian Clearing House collateral, you should ensure that your participation in the Buy-Back is permitted by those margin lending arrangements or that loan and security documentation or by Australian Clearing House.

Note that by submitting a Tender you warrant to Woolworths that when you tender your Shares for sale in the Buy-Back, and on the Buy-Back Date, the Shares are free from any mortgage, charge, lien or other encumbrance (whether legal or equitable) and from any third party rights.

4.8 sHareHolDers wItH more tHan one HolDIng of sHares

You will receive a personalised Tender Form for each separate registered holding of Shares. For example, if you hold some Shares in your name and some Shares jointly with your spouse, you will receive two Tender Forms. You may tender Shares into the Buy-Back from any or all of your separate registered holdings provided that you complete the Tender Form and follow the instructions for each holding you wish to tender. Any scale back that applies to Shares tendered into the Buy-Back (including any consideration relating to Priority Parcels or Small Holdings) will be applied to each of those registered holdings as if they were held by different persons.

4.9 joInt sHareHolDers

If you hold your Shares jointly with another person (for example, your spouse) and you have an Issuer Sponsored Holding, you must complete and return the Tender Form in accordance with the instructions for joint holdings on the Tender Form.

4.10 sHareHolDers wHo receIve a government pensIon or allowance

The effect your participation in the Buy-Back will have on your government pensions or allowances (or those of your dependants) will depend on, amongst other things, the value of the Shares bought back and on the level of your other income and assets. It will also depend upon your particular circumstances. If you are in any doubt as to the action you should take, you should consult your legal, financial or other professional adviser immediately.

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4.11 restrIctIons on tHe payment of buy-back proceeDs

Woolworths will pay shareholders the Buy-Back Price for each of their Shares that are bought back, unless it is prohibited from doing so.

4.12 rIgHts unDer tHe buy-back cannot be transferreD

This Invitation is personal to you. You cannot transfer your rights under this Invitation.

4.13 tHe effect of submIttIng a tenDer

A Tender constitutes an offer to sell the tendered Shares to Woolworths on the terms and conditions set out in the Buy-Back Documents. A Tender does not, of itself, constitute a binding contract for the sale of the tendered Shares and cannot be enforced against Woolworths. Woolworths retains the discretion to accept or reject any Tender, and may choose to reject all Tenders.

If Woolworths accepts your Tender, a binding Buy-Back Contract is formed between you and Woolworths, and you must sell the tendered Shares to Woolworths on the terms and conditions set out in the Buy-Back Documents, including the terms and conditions set out below.

By submitting a Tender Form (whether by returning a Tender Form to the Registry if you have an Issuer Sponsored Holding, or, if you have a CHESS holding, by instructing your controlling participant), you:

• Agree to the terms and conditions set out in the Buy-Back Documents;

• Offer to sell to Woolworths on the Buy-Back Date the number of Shares nominated for sale on your Tender Form (adjusted in accordance with the terms and conditions set out in the Buy-Back Documents) at your Tender Discount(s) and/or as a Final Price Tender (subject to any Minimum Price you may have chosen);

• Agree that Woolworths posting an announcement on its website at www.woolworthslimited.com.au on the Buy-Back Date in relation to the Buy-Back Price and other details is:

- Effective notice or communication of Woolworths’ acceptance of your Tenders that are submitted either

� At a Tender Discount equal to or greater than the Buy-Back Discount; or

� As a Final Price Tender,

and which are submitted in accordance with the Buy-Back Documents at a price which is not less than your Minimum Price (if you have chosen one) and which are not rejected by Woolworths; and

- Effective notice of Woolworths’ rejection of any of your Tenders submitted at a Tender Discount less than the Buy-Back Discount or where your Minimum Price (if you have chosen one) is greater than the Buy-Back Price;

• Agree that a Buy-Back Contract is formed for the purchase of the relevant Shares upon the Board accepting your Tender in accordance with the terms and conditions of this Buy-Back and posting an announcement on its website, and that the purchase of the relevant Shares is taken to occur at that time;

• Waive any requirement to receive further notice or communication from Woolworths of its acceptance or rejection of any Tender submitted by you;

• Warrant to Woolworths that at all times after you tender your Shares for sale into the Buy-Back, and on the Buy-Back Date, you are the registered holder of the Shares that you have tendered and that they are fully paid up, free from any mortgage, charge, lien or other encumbrance (whether legal or equitable) and from any third-party rights and otherwise able to be sold freely by you;

• Warrant that you are a person to whom the Invitation may lawfully be made, can receive the proceeds of the sale of your Shares and whose participation in the Buy-Back is permitted under the laws of the jurisdiction in which you are resident, and that you are not an Excluded Foreign Shareholder;

• Authorise Woolworths (and its officers, agents, contractors or advisers) to correct any error in or omission from your Tender Form and/or Withdrawal/Amendment Form, and to insert any missing details;

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• Undertake not to sell or offer to sell Shares to any other person if, as a result, you will at any time after you submit your Tender until the Buy-Back Date hold fewer Shares than the number of Shares you have tendered;

• Acknowledge that neither Woolworths nor any other party involved in the Buy-Back has provided you with financial product advice, or any securities recommendation, or has any obligation to provide this advice or recommendation, concerning your decision to participate in the Buy-Back;

• Authorise Woolworths to make payment:

- By cheque mailed to your address shown on the Woolworths Share Register at 7.00pm (Sydney time) on the Closing Date, if you do not have a valid direct credit authority in place before that date; or

- By direct credit to your nominated account if you:

� Have an existing direct credit authority for the payment of dividends - by submitting your Tender Form, you authorise Woolworths to pay your Buy-Back proceeds to that nominated account; or

� Submit to the Registry by 7.00pm (Sydney time) on the Closing Date a completed direct credit authority form notifying Woolworths of your new account details. You can obtain a direct credit authority form by calling the Buy-Back Information Line on 1300 368 664 within Australia or +61 3 9415 4055 from outside Australia. If you complete and submit a direct credit authority form, you acknowledge that your nominated bank account details in that form will be taken to be your nominated bank account for future payments (including dividends) by Woolworths to you,

and, in each case, you will be taken to have accepted the risk associated with the payment;

• Agree that damages is not an adequate remedy for breach of these covenants, undertakings, agreements, representations and warranties;

• Undertake that if you breach any of these covenants, undertakings, agreements, representations or warranties you will indemnify Woolworths for all its costs or losses arising from the breach; and

• Agree that any obligation of Woolworths to buy back Shares tendered to you is conditional on your compliance with the covenants, undertakings, agreements, representations and warranties listed above.

You will be taken to have submitted a Tender when the Registry receives your validly signed and completed Tender Form if you have an Issuer Sponsored Holding or, if you have a CHESS Holding, your Tender is processed by your controlling participant through CHESS.

4.14 woolwortHs’ rIgHt to accept or reject tenDers anD tenDer forms

At any time, Woolworths may (at its sole discretion):

• Accept or reject any Tender or Tender Form; and/or

• Accept or reject a Tender not made on the terms and conditions set out in the Buy-Back Documents, or a Tender Form not submitted in accordance with the procedures set out in the Buy-Back Documents.

Woolworths may do each of these things in relation to all or some of the Tenders or the Tender Forms it receives, in its absolute discretion.

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4.15 woolwortHs’ rIgHt to vary Dates anD tImes or to termInate tHe buy-back

While Woolworths does not anticipate changing any of the dates and times set out in the Buy-Back Documents (including, without limitation, the Closing Date and the Buy-Back Date), it reserves the right to vary them. Any change in date or time will take effect from the time it is authorised by the Board and will be publicly announced on the ASX as soon as practicable following the Board’s authorisation. Any such change will be taken to amend this booklet (and the other Buy-Back Documents) accordingly.

Woolworths may also decide not to proceed with the Buy-Back. Without limitation, Woolworths reserves the right to terminate the Buy-Back at any time prior to the date on which Woolworths enters into Buy-Back Contracts by making an announcement to the ASX to that effect.

4.16 woolwortHs’ rIgHt to aDjust tenDers

Woolworths may, in its absolute discretion and at any time, deem any Tender it receives to be a valid Tender, disregard any Tender it believes should be disregarded and may waive any or all of the requirements for making, amending or withdrawing a Tender. It may do each of these things in relation to some, all or any number of Tenders it receives.

If you are an eligible shareholder, you are entitled to sell into the Buy-Back the lesser of:

• The number of Shares registered in your name on the Buy-Back Record Date (Monday, 6 September 2010) (and which, in accordance with the applicable Settlement Rules, confer an entitlement to participate in the Buy-Back); and

• The number of Shares you hold on the Closing Date, (your “Entitled Shares”).

If you submit one Tender of more than your Entitled Shares and Woolworths accepts your Tender, Woolworths will buy back only the number of your Entitled Shares.

If you submit more than one Tender and, in aggregate, you have tendered more than your Entitled Shares, Woolworths will buy back only the number of your Entitled Shares in the following order of priority:

• First acquiring that number of Entitled Shares as forms part of your Tender with the largest Tender Discount, which is equal to or greater than the Buy-Back Discount or submitted as a Final Price Tender (and, if you have chosen one, where your Minimum Price is satisfied); and

• Then acquiring the remaining number of your Entitled Shares from your Tender with the second highest Tender Discount, which is equal to or greater than the Buy-Back Discount (and, if you have chosen one, where your Minimum Price condition is satisfied) and will repeat this process until all of your Entitled Shares successfully tendered are bought back.

If you select more than one Minimum Price, your Tender will be deemed conditional on the highest Minimum Price you have specified.

4.17 stamp Duty

Stamp duty will not be payable on the cancellation of your Shares following acceptance of your Tender(s).

4.18 brokerage

You should not have to pay brokerage if you sell your Shares in the Buy-Back.

4.19 unsuccessful tenDers

Shares that have been tendered into the Buy-Back but are not bought back will be released to shareholders’ holdings as soon as processing of the Buy-Back has been completed after the Closing Date.

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4.20 partIcIpatIon by DIrectors anD senIor management

Woolworths Directors and senior management directly involved in implementing the Buy-Back will not participate in the Buy-Back.

4.21 asIc anD asx relIef

asIc relIef

ASIC has granted Woolworths an exemption under subsection 257D(4) of the Corporations Act. This exemption permits Woolworths:

• To conduct the Buy-Back in substantially the same manner as an equal access buy-back, in accordance with Division 2 of Part 2J.1 of the Corporations Act;

• To use the scale back mechanism described in Section 1.11;

• To invite all shareholders to offer for sale Shares in accordance with the terms and conditions of the Invitation; and

• To invite shareholders with 85 Shares or less to offer to sell Shares only if they submit one Tender for all their Shares at the same Tender Discount or as a Final Price Tender,

provided certain conditions are met, including that the Buy-Back Price is calculated by applying the Buy-Back Discount selected by Woolworths following the end of the Tender Period to the Market Price and that eligible shareholders are permitted to lodge a Tender conditional on a Minimum Price.

asx relIef

The ASX has granted Woolworths the following:

• A waiver from Listing Rule 7.40 to permit Woolworths to dispatch the Buy-Back Documents to shareholders no later than eight business days following the Buy-Back Record Date; and

• A waiver from Listing Rule 3.8A to permit Woolworths to lodge an Appendix 3F at least half an hour before the commencement of trading on the second business day after the Closing Date,

provided certain conditions are met.

4.22 prIvacy

Woolworths is carrying out the Buy-Back in accordance with the Corporations Act. This involves the personal information contained in Tender Forms being collected to enable Woolworths to determine the quantum of Shares, if any, and the price at which it will buy back Shares under the Buy-Back. If you do not provide this information, Woolworths and its agents may be hindered in, or prevented from, processing your Tender.

The personal information collected by Woolworths will only be disclosed to Computershare Investor Services Pty Limited in its capacity as share registrar of Woolworths and a print and mail service provider, to Woolworths’ advisers in relation to the Buy-Back and to financial institutions in respect of payments to you in connection with the Buy-Back or as required or authorised by law.

You may access the individual information collected by Woolworths in relation to your shareholding by writing to:

Woolworths Limited Buy-BackC/o Computershare Investor Services Pty LimitedGPO Box 2115Melbourne VIC 8060

4.23 applIcable law

This Invitation, your Tender, and the Buy-Back generally, are governed by the laws of New South Wales.

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5Definitions and Interpretation

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DefInItIons In the Buy-Back Documents unless the context otherwise requires:

ASIC means the Australian Securities and Investments Commission.

ASTC means ASX Settlement Pty Limited (ABN 49 008 504 532), the securities clearing house of the ASX.

ASX means ASX Limited (ABN 98 008 624 691).

ATO means the Australian Taxation Office.

Australian Clearing House means ASX Clear Pty Limited (ABN 48 001 314 503), which provides clearing and settlement services in relation to products traded on the ASX.

Board or Woolworths Board means the board of Directors of Woolworths or any duly constituted committee of the board.

Buy-Back means the buy-back of Shares by way of a tender process as set out in the Buy-Back Documents.

Buy-Back Contract means the contract formed on the Buy-Back Date between you and Woolworths at the time that Woolworths accepts your Tender (if and to the extent that Woolworths accepts your Tender).

Buy-Back Date means the date and time the Woolworths Board determines the Buy-Back Price, the total number of Shares to be bought back and the details of any scale back and accepts your Tender in accordance with the terms and conditions of this Buy-Back.

Buy-Back Discount means the discount to be selected by Woolworths, being the largest Tender Discount within the range of 8 per cent to 14 per cent inclusive (at 1 per cent intervals), which will enable Woolworths to buy back the amount of capital that it determines to buy back.

Buy-Back Documents means this booklet, the Tender Form and the Withdrawal/Amendment Form.

Buy-Back Ex-Entitlement Date means the date that Shares commence trading on the ASX on an ex-Buy-Back basis.

Buy-Back Price means the price at which Woolworths will buy back Shares from Tenders it accepts in the Buy-Back, rounded to the nearest cent. This price is determined by applying the Buy-Back Discount selected by Woolworths to the Market Price.

Buy-Back Record Date means Monday, 6 September 2010 being the date of determination of shareholders entitled to participate in, and the number of Woolworths ordinary shares entitled to be tendered into, the Buy-Back.

CGT means capital gains tax.

CHESS means the Clearing House Electronic Subregister System.

CHESS Holder means a holder of Shares on the CHESS subregister of Woolworths.

CHESS Holding means a holding of Shares on the CHESS subregister of Woolworths.

Class Ruling means the ruling to be issued by the ATO on the tax implications of the Buy-Back for shareholders of Woolworths who participate in the Buy-Back.

Closing Date means the scheduled date of Friday, 8 October 2010 unless Woolworths announces a later date.

Corporations Act means the Corporations Act 2001 (Cth), as modified by the relief described in Section 4.21.

DRP means Dividend Reinvestment Plan.

Directors means the directors of Woolworths.

Entitled Shares has the meaning in Section 4.16.

EPS means earnings per Share.

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Excluded Foreign Shareholder means any person holding Shares:

(a) to whom Woolworths would be prohibited from paying money pursuant to relevant laws prohibiting Woolworths from making payments to certain foreign persons;

(b) to whom the Invitation may not be lawfully made under the laws of the jurisdiction in which they are resident;

(c) whose participation in the Buy-Back is not permitted under the laws of the jurisdiction in which they are resident; or

(d) who is not resident in Australia, New Zealand, the United Kingdom, the United States, Hong Kong (professional investors only), Singapore or Japan, or who is not holding on behalf of a person resident in these jurisdictions.

Final Price Tender means a Tender in which the shareholder elects to receive the Buy-Back Price, whatever Woolworths determines it to be.

HIN means a holder identification number.

Invitation means the invitation by Woolworths to eligible shareholders to offer to sell Shares to Woolworths as set out in the Buy-Back Documents.

Issuer Sponsored Holding means a holding of Shares on the issuer sponsored subregister of Woolworths.

Market Price means the VWAP of Woolworths ordinary shares on the ASX over the five trading days up to and including the Closing Date, calculated to four decimal places, as determined by Woolworths at 4.30pm (Sydney time) on the Closing Date.

Minimum Price means one of the three specified minimum prices on the Tender Form, which a shareholder may select in order for their Tender to be conditional upon the Buy-Back Price being not less than that amount.

Opening Date means the scheduled date of Monday, 20 September 2010 unless Woolworths announces a later date.

Priority Parcel means 210 Shares or such lesser number of Shares as is required to ensure that Woolworths is able to buy back only the number of Shares it determines to buy back.

Registry means Computershare Investor Services Pty Limited, in their capacity as agent of Woolworths’ Share Register.

Restricted Employee Shares means fully paid ordinary shares of Woolworths held pursuant to an employee incentive scheme where, as at the Buy-Back Record Date, the holder would not be entitled to sell those shares into the Buy-Back or where the shares are subject to forfeiture or restrictions on disposal under the terms of the scheme.

ROE means return on equity.

Sale Consideration has the meaning given to that term in Section 2.2.

Settlement Rules means the settlement rules of the ASTC as amended from time to time.

Shares means fully paid ordinary shares in the capital of Woolworths on issue as at the Buy-Back Record Date excluding Restricted Employee Shares.

Small Holding means a holding of fewer than or equal to 85 Shares, except that it will not be a Small Holding where the holder has become the registered holder of more shares in Woolworths as at the Closing Date than were held by the holder as at the Buy-Back Record Date.

Small Holding Tender has the meaning given to that term in Section 1.11.

Tax Value for the purposes of the Buy-Back means:

$26.36(1) xClosing level of S&P/ASX 200 on the Closing Date

4,323.4(2)

(1) $26.36 was the VWAP of Shares over the last five trading days before the announcement of the Buy-Back, adjusted to an ex-dividend basis.(2) 4,323.4 was the opening level of the S&P/ASX 200 on Thursday, 26 August 2010.

If the movement in the S&P/ASX 200 Index is significantly different from the movement in Woolworths’ market price on the ASX over the relevant period, Woolworths may approach the ATO to seek to vary the methodology used to determine the Tax Value.

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Tender means a shareholder’s offer to sell Shares to Woolworths at a specified Tender Discount or as a Final Price Tender and on the terms and conditions set out in the Buy-Back Documents as amended in accordance with the procedures set out in the Buy-Back Documents.

Tender Discount means one of the specified discounts to the Market Price (from 8 per cent to 14 per cent inclusive, at 1 per cent intervals) as set out on the Tender Form.

Tender Discount Range means the range of Tender Discounts at which shareholders can submit Tenders, being 8 per cent to 14 per cent inclusive, at 1 per cent intervals.

Tender Form means the form of offer by a shareholder to sell Shares to Woolworths under the Buy-Back, which is enclosed with this booklet, or represented by instructions from a CHESS Holder’s controlling participant (and includes a Tender Form amended in accordance with the procedures set out in the Buy-Back Documents).

Tender Period means the period within which shareholders may lodge, withdraw or amend a Tender in accordance with the Buy-Back Documents.

VWAP for a share over a period means the volume weighted average price of all trades on ASX’s trading platform including the closing single price auction, but excluding all off market trades including but not limited to special crossings, crossings prior to the commencement of the open session state, crossings during overnight trading, overseas trades, trades pursuant to the exercise of options over shares, and any other trades that the Directors determine to exclude on the basis that the trades are not fairly reflective of supply and demand.

Withdrawal/Amendment Form means the form entitled ‘Withdrawal/Amendment Form’, a copy of which is included at the back of this booklet, and which may be accessed via Woolworths website (www.woolworthslimited.com.au) that is required to withdraw or amend a previously submitted Tender.

Woolworths or Company means Woolworths Limited (ABN 88 000 014 675).

Woolworths Share Register means the share register of Woolworths.

You or shareholder means a holder of Shares in Woolworths.

InterpretatIon

In the Buy-Back Documents, unless the context otherwise requires:

• Singular includes the plural, and vice versa;

• Words importing one gender include other genders;

• Other parts of speech and grammatical forms of a word or phrase defined in this document have a corresponding meaning;

• Terms used in the Buy-Back Documents and defined in the Corporations Act have the meanings ascribed to them in the Corporations Act;

• A reference to currency is to Australian dollars; and

• A reference to time is to Sydney time.

The postal acceptance rule does not apply to Tenders.

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PLEASE PRINT YOUR REGISTERED NAME AND ADDRESS DETAILS HERE

W O W W O W W A

Withdrawal/Amendment FormTHIS DOCUMENT IS IMPORTANT. IF YOU DO NOT UNDERSTAND IT PLEASE CONSULT YOUR PROFESSIONAL ADVISER.Please refer to the instructions on the back of this form.

I/we tender the following Shares to Woolworths Limited at the specified Tender Discount(s) and/or as a Final Price Tender, on the terms and conditions set out in the Buy-Back Booklet:

Please insert your Securityholder Reference Number (SRN) or Holder Identification Number (HIN)

A

E

F

G

B

C

D

Insert the number of Shares (if any) you wish to tender as a Final Price Tender.

Insert the number of Shares (if any) you wish to tender next to the Tender Discount(s) at which you wish to tender those Shares.

If you hold 85 Shares or less, you may only submit one Tender in respect of all of your Shares and the Tender must be at one of the specified Tender Discounts or as a Final Price Tender.

TOTAL NUMBER OF SHARES TENDEREDAdd up the number of Shares in Boxes B and C and write that number in Box D.

Shares you can tender as at 6 September 2010

Please provide your contact details in case we need to speak to you about your Withdrawal/Amendment Form:

Please sign within the appropriate boxes below. By signing this form you confirm that you have read the terms and conditions of the Buy-Back and you make the representations in Section 4.13 of the Buy-Back booklet and on the reverse of this form.

THIS BOX G IS OPTIONAL - EITHER LEAVE IT BLANK OR TICK ONE MINIMUM PRICE ONLY: You should only tick a Minimum Price if you wish to make your Tender conditional on the Buy-Back Price being no less than one of the following prices. You will not receive less than this amount for your Shares, however your Shares will not be bought back if the Minimum Price you tick is higher than the Buy-Back Price.

Contact name Contact daytime telephone Date/ /

as a FINAL PRICE TENDER

at an 8% Tender Discount

The number of Shares in Box D must not be more than the number in Box A.

at a 9% Tender Discount






WITHDRAWAL/AMENDMENT FORMS MUST BE RECEIVED BY 7.00PM (SYDNEY TIME) ON 8 OCTOBER 2010IN ACCORDANCE WITH THE INSTRUCTIONS ON THE REVERSE OF THIS FORM

Individual or Joint Shareholder 1 Joint Shareholder 2 Joint Shareholder 3

Sole Director and Sole Company Secretary Director/Company Secretary Director

A$22.00 A$23.00 A$24.00

119605_W - V6

Tick one box only. One box must be completed.Withdrawal: I/we withdraw my/our previous Tender(s) in accordance with the Buy-Back booklet (complete Box F only).

Amendment: I/we withdraw my/our previous Tender(s) in accordance with the Buy-Back booklet and wish to submit a replacement Tender(s) as set out below (complete Boxes A to G).

OR

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Withdrawing or Amending your Tender(s)Shareholders who have tendered their Shares into the Buy-Back and who now wish to either withdraw or amend their Tender(s) must lodge this Withdrawal/Amendment Form.How to complete the Withdrawal/Amendment FormThe instructions below are cross-referenced to the relevant section of this form. Defined terms have the same meaning as in the Buy-Back document. Please complete the form using black ink only. Mark only one of the two boxes:

Withdrawal – Tick the “Withdrawal” Box if you wish to withdraw your previous Tender(s) and you do not wish to submit Tender(s). Please complete Box F.

or Amendment – Tick the “Amendment” Box if you wish to withdraw your previous Tender(s) and submit a replacement Tender(s). Please complete Box A through to Box G.

Insert the total number of Shares registered in your name as at 6 September 2010 that confer an entitlement to participate in the Buy-Back. If you wish to participate in the Buy-Back, you can offer to sell some or all of these Shares to Woolworths Limited by ticking the Amendment box and following the instructions set out below. If you need to check the total number of Shares you may tender into the Buy-Back, please call the Woolworths Limited Buy-Back Information Line on 1300 368 664 (within Australia) or +61 3 9415 4055 (from outside Australia).

Final Price TenderInsert the number of Shares (if any) you wish to tender as a Final Price Tender.

After indicating the number of Shares you wish to tender as a Final Price Tender (Box B) and/or at a specified Tender Discount(s) (Box C), you need to add up the number of Shares in Boxes B and C and write the total in Box D.Note that the number of Shares in Box D must not be more than the number of Shares in Box A.If the number of Shares in Box D is more than the number of Shares in Box A, you will be deemed to have offered only the number of Shares shown in Box A and, if you have selected more than one Tender Discount and/or a Final Price Tender, your Tender will be adjusted in the manner set out in Section 4.16 of the Buy-Back booklet.

THIS BOX G IS OPTIONAL – EITHER LEAVE IT BLANK OR TICK ONE MINIMUM PRICE ONLY: You should only tick a Minimum Price if you wish to make your Tender conditional on the Buy-Back Price being no less than one of the specified prices. You will not be paid less than this amount for your Shares, however if the Minimum Price you select is higher than the Buy-Back Price your Shares will not be bought back. If you complete Box G, you must also complete Box B and/or Box C. Tick no more than one Minimum Price in Box G – if you tick more than one Minimum Price, your Tender will be deemed to be conditional on the highest Minimum Price that you have specified.

You must sign this form in Box F. By signing and returning this Withdrawal/Amendment Form, you acknowledge that you have read and understood the Buy-Back booklet and agree to, and make an offer to, sell your Shares on the terms and conditions set out in the Buy-Back Documents (including the covenants, undertakings, agreements, representations and warranties set out in the Buy-Back booklet).Individual holders Where a holding is in one name, the registered shareholder must sign.Joint holders All holders must sign.Under Power of Attorney If not already noted by the Registry, an originally certified copy of the power of attorney must be sent to the Registry. Where this

form is signed under power of attorney, the attorney declares that the attorney has no notice of revocation of the power or the death of the donor of the power.

Deceased Estate All executors should sign and, if not already noted by the Registry, send an originally certified copy of probate or letters of administration to the Registry.

Company This form must be signed by 2 directors, a director and company secretary or, in the case of a company with a sole director who is also the sole company secretary, the sole director.

By signing this Withdrawal/Amendment Form you confirm that you are not an Excluded Foreign Shareholder. Shares under the DRP with respect to the 2010 final dividend and Restricted Employee Shares may not be tendered into the Buy-Back.

Please provide your contact details in case we need to speak to you about your Withdrawal/Amendment Form.

AND/OR

Tender DiscountInsert the number of Shares (if any) you wish to tender at the specified Tender Discount. You may offer to sell parcels of Shares at up to 7 different specified Tender Discounts. Each parcel is treated as a separate Tender.If you hold 85 Shares or less, you may only submit one Tender in respect of all of your Shares and the Tender must be at one of the specified Tender Discounts or as a Final Price Tender.If you hold more than 85 Shares, you may tender different parcels of Shares at one or more Tender Discounts and/or as a Final Price Tender.

Payment for Shares bought backWoolworths Limited expects to dispatch payments for Shares bought back no later than 18 October 2010.Woolworths Limited will send you a cheque for your Buy-Back proceeds (if any), unless you have a valid direct credit authority in place before 7.00pm (Sydney time) on 8 October 2010. If you have an existing direct credit authority for the payment of dividends, by submitting this Tender Form you authorise Woolworths Limited to pay your Buy-Back proceeds (if any) into your nominated account.If you do not currently have a direct credit authority in place for the receipt of dividends, or if you wish to receive your Buy-Back proceeds by direct credit to a new or different bank account, you must complete and submit a new direct credit authority form which you can obtain by calling the Woolworths Limited Buy-Back Information Line – the Registry (for Issuer Sponsored Holdings) must receive your direct credit authority form before 7.00pm (Sydney time) on 8 October 2010. Your controlling participant (for CHESS Holdings) must receive your direct credit authority form in sufficient time for your controlling participant to process it by no later than 7.00pm (Sydney time) on 8 October 2010.Please note that if you choose to complete a new direct credit authority form, your nominated bank account details in that form will be used for the payment of the Buy-Back proceeds and will be taken to be your nominated bank account for future payments (including dividends) by Woolworths Limited to you.CHESS HoldingsYou will need to instruct your controlling participant in sufficient time for them to process this form by no later than 7.00pm (Sydney time) on the Closing Date (8 October 2010).

Issuer Sponsored HoldingsYour completed Withdrawal/Amendment Form must be received no later than 7.00pm (Sydney time) on 8 October 2010, at: If sending by mail:Woolworths Limited Buy-BackC/o Computershare Investor Services Pty LimitedGPO Box 2115MELBOURNE VIC 8060

Hand Delivery:Computershare Investor Services Pty LimitedLevel 4, 60 Carrington StreetSYDNEY NSW 2000AUSTRALIA

This Withdrawal/Amendment Form relates to the Woolworths Limited Buy-Back Booklet dated 6 September 2010 and should be read in conjunction with that booklet. If you require further information on how to complete this form please contact the Woolworths Limited Buy-Back Information Line

on 1300 368 664 (within Australia) or +61 3 9415 4055 (from outside Australia).WITHDRAWAL/AMENDMENT FORMS MUST BE RECEIVED BY 7.00PM (SYDNEY TIME) ON 8 OCTOBER 2010.

A

B

D

G

FE

C

119605_W - V6

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corporate DIrectory

Woolworths LimitedPrincipal registered office in Australia1 Woolworths WayBella Vista NSW 2153 Tel: (02) 8885 0000Web: www.woolworthslimited.com.au

BIG WWeb: www.bigw.com.au

National SupermarketsWeb: www.woolworths.com.au

Woolworths’ PetrolTel: 1300 655 055Web: www.woolworthspetrol.com.au

BWSWeb: www.beerwinespirits.com.au

Dan Murphy’s789 Heidelberg RoadAlphington VIC 3078Tel: (03) 9497 3388Fax: (03) 9497 2782Web: www.danmurphys.com.au

Dick Smith Electronics/Tandy2 Davidson StreetChullora NSW 2190Tel: (02) 9642 9100Fax: (02) 9642 9111Web: www.dse.com.au

Progressive Enterprises Limited80 Favona RoadMangere 2024 Auckland New ZealandTel: +64 (9) 275 2788Fax: +64 (9) 275 3074Web: www.progressive.co.nz

ALH Group Pty Ltd Registered Office1 Woolworths WayBella Vista NSW 2153 Tel: (02) 8885 0000Web: www.alhgroup.com.au

Victorian OfficeGround Floor16-20 Claremont StreetSouth Yarra VIC 3141Tel: (03) 9829 1000

Queensland OfficeLevel 1152 Oxford StreetBulimba QLD 4171Tel: (07) 3909 4800

Company SecretaryPeter Horton

Share RegistrarComputershare Investor Services Pty LimitedLevel 460 Carrington StreetSydney NSW 2000Tel: 1300 368 664Fax: (02) 8234 5050Web: www.computershare.com.au

AuditorDeloitte Touche Tohmatsu225 George StreetSydney NSW 2000Tel: (02) 9322 7000Web: www.deloitte.com.au

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Woolworths Limited | Off-Market Buy-Back Bookletp a g e 4 8197CAI0014

WoolWorths limitedA.B.N 88 000 014 675

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W O W W O W B I

THIS DOCUMENT IS IMPORTANT. IF YOU DO NOT UNDERSTAND IT PLEASE CONSULT YOUR PROFESSIONAL ADVISER.If you do not wish to participate in the Buy-Back do not return this form.Please refer to the instructions on the back of this form.

Tender Form - Issuer Sponsored Holders

Please complete the following using black ink onlyI/we tender the following Shares to Woolworths Limited at the specified Tender Discount(s) and/or as a Final Price Tender, on the terms and conditions set out in the Buy-Back Documents:

A

E

F

G

B

C

D



If you hold 85 Shares or less (as shown in Box A), you may only submit one Tender in respect of all of your Shares and the Tender must be at one of the specified Tender Discounts or as a Final Price Tender.



Please provide your contact details in case we need to speak to you about your Tender:













TENDER FORMS MUST BE RECEIVED BY THE REGISTRY BY 7.00PM (SYDNEY TIME) ON 8 OCTOBER 2010



A$22.00 A$23.00 A$24.00

119605_I - V5

I 1234567890 IND

Securityholder Reference Number (SRN)

000001000 1301011221012102012221332120133322113SAM

MR JOHN SAMPLEFLAT 123SAMPLE STREETSAMPLE STREETSAMPLE STREETSAMPLETOWN VIC 3030

*I1234567890*

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119605_I - V5

How to complete this Tender FormThe instructions below are cross-referenced to the relevant section on the front of this form. Defined terms have the same meaning as in the Buy-Back booklet. Please complete the form using black ink only.

This is the total number of Shares registered in your name as at 6 September 2010 that confer an entitlement to participate in the Buy-Back. If you wish to participate in the Buy-Back, you can offer to sell some or all of these Shares to Woolworths Limited (by following the instructions set out below).




You must sign this form in Box F. By signing and returning this Tender Form, you acknowledge that you have read and understood the Buy-Back booklet and agree to, and make an offer to, sell your Shares on the terms and conditions set out in the Buy-Back Documents (including the covenants, undertakings, agreements, representations and warranties set out in Section 4.13 of the Buy-Back booklet).Individual holders Where a holding is in one name, the registered shareholder must sign.Joint holders All holders must sign.Under Power of Attorney If not already noted by the Registry, an originally certified copy of the power of attorney must be sent to the Registry. Where

this form is signed under power of attorney, the attorney declares that the attorney has no notice of revocation of the power or the death of the donor of the power.



By signing this Tender Form you confirm that you are not an Excluded Foreign Shareholder. Shares under the DRP with respect to the 2010 final dividend and Restricted Employee Shares may not be tendered into the Buy-Back.

Please provide your contact details in case we need to speak to you about your Tender Form.

AND/OR

Tender DiscountInsert the number of Shares (if any) you wish to tender at the specified Tender Discount. You may offer to sell parcels of Shares at up to 7 different specified Tender Discounts. Each parcel is treated as a separate Tender.If you hold 85 Shares or less, you may only submit one Tender in respect of all of your Shares and the Tender must be at one of the specified Tender Discounts or as a Final Price Tender.If you hold more than 85 Shares, you may tender different parcels of Shares at one or more Tender Discounts and/or as a Final Price Tender. However, you must tender a minimum of 85 Shares in aggregate.

Payment for Shares bought backWoolworths Limited expects to dispatch payments for Shares bought back no later than 18 October 2010. Woolworths Limited will send you a cheque for your Buy-Back proceeds (if any), unless you have a valid direct credit authority in place before 7.00pm (Sydney time) on 8 October 2010. If you have an existing direct credit authority for the payment of dividends, by submitting this Tender Form you authorise Woolworths Limited to pay your Buy-Back proceeds (if any) into your nominated account. If you do not currently have a direct credit authority in place for the receipt of dividends, or if you wish to receive your Buy-Back proceeds by direct credit to a new or different bank account, you must complete and submit a new direct credit authority form which you can obtain by calling the Woolworths Limited Buy-Back Information Line – the Registry must receive your direct credit authority form before 7.00pm (Sydney time) on 8 October 2010. Please note that if you choose to complete a new direct credit authority form, your nominated bank account details in that form will be used for the payment of the Buy-Back proceeds and will be taken to be your nominated bank account for future payments (including dividends) by Woolworths Limited to you.

Submitting your Tender FormSend your completed and signed Tender Form or, if mailing in Australia, use the enclosed reply-paid envelope so that your Tender Form is received no later than 7.00pm (Sydney time) on 8 October 2010.

If sending by mail Hand delivery (during business hours only):Woolworths Limited Buy-Back Computershare Investor Services Pty Limited C/o Computershare Investor Services Pty Limited Level 4, 60 Carrington Street GPO Box 2115 SYDNEY NSW 2000MELBOURNE VIC 8060 AUSTRALIAAUSTRALIA

This Tender Form relates to the Woolworths Limited Buy-Back booklet dated 6 September 2010 and should be read in conjunction with that booklet. If you require further information on how to complete this form please contact the Woolworths Limited Buy-Back Information Line on

1300 368 664 (within Australia) or +61 3 9415 4055 (from outside Australia).TENDER FORMS MUST BE RECEIVED BY THE REGISTRY BY 7.00PM (SYDNEY TIME) ON 8 OCTOBER 2010.

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W O W W O W B C

THIS DOCUMENT IS IMPORTANT. IF YOU DO NOT UNDERSTAND IT PLEASE CONSULT YOUR PROFESSIONAL ADVISER.If you wish to participate in the Buy-Back, you must instruct your controlling participant (normally your broker) to submit your Tender(s), for your Tender(s) to be effective. Do NOT return this form to the Registry.Please refer to the instructions on the back of this form. Controlling CHESS participant as at 6 September 2010:

Tender Form - CHESS Holders

Please complete the following using black ink onlyI/we tender the following Shares to Woolworths Limited at the specified Tender Discount(s) and/or as a Final Price Tender, on the terms and conditions set out in the Buy-Back Documents:

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If you hold 85 Shares or less (as shown in Box A), you may only submit one Tender in respect of all of your Shares and the Tender must be at one of the specified Tender Discounts or as a Final Price Tender.



Please provide your contact details in case we need to speak to you about your Tender:













TENDER FORMS MUST BE PROCESSED BY YOUR CONTROLLING PARTICIPANT BY 7.00PM (SYDNEY TIME) ON 8 OCTOBER 2010.



A$22.00 A$23.00 A$24.00

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Holder Identification Number (HIN)

000001000 1301011221012102012221332120133322113SAM

MR JOHN SAMPLEFLAT 123SAMPLE STREETSAMPLE STREETSAMPLE STREETSAMPLETOWN VIC 3030

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How to complete this Tender FormThe instructions below are cross-referenced to the relevant section on the front of this form. Defined terms have the same meaning as in the Buy-Back booklet. Please complete the form using black ink only.

This is the total number of Shares registered in your name as at 6 September 2010 that confer an entitlement to participate in the Buy-Back. If you wish to participate in the Buy-Back, you can offer to sell some or all of these Shares to Woolworths Limited (by following the instructions set out below).




You must sign this form in Box F. By signing and returning this Tender Form, you acknowledge that you have read and understood the Buy-Back booklet and agree to, and make an offer to, sell your Shares on the terms and conditions set out in the Buy-Back Documents (including the covenants, undertakings, agreements, representations and warranties set out in Section 4.13 of the Buy-Back booklet).Individual holders Where a holding is in one name, the registered shareholder must sign.Joint holders All holders must sign.Under Power of Attorney If not already noted by the Registry, an originally certified copy of the power of attorney must be sent to the Registry. Where this

form is signed under power of attorney, the attorney declares that the attorney has no notice of revocation of the power or the death of the donor of the power.



By signing this Tender Form you confirm that you are not an Excluded Foreign Shareholder. Shares under the DRP with respect to the 2010 final dividend and Restricted Employee Shares may not be tendered into the Buy-Back.

Please provide your contact details in case we need to speak to you about your Tender Form.

AND/OR

Tender DiscountInsert the number of Shares (if any) you wish to tender at the specified Tender Discount. You may offer to sell parcels of Shares at up to 7 different specified Tender Discounts. Each parcel is treated as a separate Tender.If you hold 85 Shares or less, you may only submit one Tender in respect of all of your Shares and the Tender must be at one of the specified Tender Discounts or as a Final Price Tender.If you hold more than 85 Shares, you may tender different parcels of Shares at one or more Tender Discounts and/or as a Final Price Tender.

Payment for Shares bought backWoolworths Limited expects to dispatch payments for Shares bought back no later than 18 October 2010.Woolworths Limited will send you a cheque for your Buy-Back proceeds (if any), unless you have a valid direct credit authority in place before 7.00pm (Sydney time) on 8 October 2010. If you have an existing direct credit authority for the payment of dividends, by submitting this Tender Form you authorise Woolworths Limited to pay your Buy-Back proceeds (if any) into your nominated account.If you do not currently have a direct credit authority in place for the receipt of dividends, or if you wish to receive your Buy-Back proceeds by direct credit to a new or different bank account, you must complete and submit a new direct credit authority form which you can obtain by calling the Woolworths Limited Buy-Back Information Line – your controlling participant (usually your broker) must receive your direct credit authority form before 7.00pm (Sydney time) on 8 October 2010. Please note that if you choose to complete a new direct credit authority form, your nominated bank account details in that form will be used for the payment of the Buy-Back proceeds and will be taken to be your nominated bank account for future payments (including dividends) by Woolworths Limited to you.Submitting your Tender Form

You will need to contact your controlling participant in sufficient time for your controlling participant to process your Tender no later than 7.00pm (Sydney time) on 8 October 2010.DO NOT RETURN THIS FORM TO WOOLWORTHS LIMITED OR THE REGISTRY This Tender Form relates to the Woolworths Limited Buy-Back booklet dated

6 September 2010 and should be read in conjunction with that booklet.If you require further information on how to complete this form please contact the

Woolworths Limited Buy-Back Information Line on 1300 368 664 (within Australia) or +61 3 9415 4055 (from outside Australia).TENDER FORMS MUST BE PROCESSED BY YOUR CONTROLLING PARTICIPANT BY 7.00PM (SYDNEY TIME) ON 8 OCTOBER 2010.

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Woolworths Limited’s off-market buy-backCertificate for Hong Kong “professional investors”

I certify that:

• by submitting a tender form as part of Woolworths Limited’s 2010 off-market buy-back; and• by signing and returning a copy of this certificate to the company,

I am a type 1 “professional investor” that falls into one of the below categories for the purposes of the Securities and Futures Ordinance (Cap 571) (“SFO”) (please circle the applicable category below):

(a) a recognized exchange company, recognized clearing house, recognized exchange controller or recognized investor compensation company, or a person authorized to provide automated trading services under section 95(2) of the SFO;

(b) an intermediary, or a person carrying on the business of the provision of investment services and regulated under the law of any place outside Hong Kong (or their respective wholly-owned subsidiary or 100% holding company);

(c) an authorized financial institution, or a bank which is not an authorized financial institution but is regulated under the law of any place outside Hong Kong (or their respective wholly-owned subsidiary or 100% holding company);

(d) an insurer authorized under the Insurance Companies Ordinance (Cap 41), or a person carrying on insurance business and regulated under the law of any place outside Hong Kong;

(e) a scheme which: (i) is a collective investment scheme authorized under section 104 of the SFO; or (ii) is similarly constituted under the law of any place outside Hong Kong and, if it is regulated under the

law of such place, is permitted to be operated under the law of such place, or a person by whom any such scheme is operated;

(f) a registered scheme as defined in section 2(1) of the Mandatory Provident Fund Schemes Ordinance (Cap 485), or its constituent fund as defined in section 2 of the Mandatory Provident Fund Schemes (General) Regulation (Cap 485 sub. leg. A), or a person who, in relation to any such registered scheme, is an approved trustee or service provider as defined in section 2(1) of that Ordinance or who is an investment manager of any such registered scheme or constituent fund;

(g) a scheme which: (i) is a registered scheme as defined in section 2(1) of the Occupational Retirement Schemes Ordinance

(Cap 426); or (ii) is an offshore scheme as defined in section 2(1) of that Ordinance and, if it is regulated under the law

of the place in which it is domiciled, is permitted to be operated under the law of such place, or a person who, in relation to any such scheme, is an administrator as defined in section 2(1) of that

Ordinance; or

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(h) a government (other than a municipal government authority), an institution which performs the functions of a central bank, or a multilateral agency.

ORI am a type 2 “professional investor” that falls into one of the below categories for the purposes of the SFO and the Securities and Futures (Professional Investor) Rules and I have attached certified copies of the documents specified below (please circle the applicable category below):

(a) a trust corporation having been entrusted under the trust or trusts of which it acts as a trustee with total assets of not less than HK$40 million (or its equivalent in any foreign currency):

(i) as stated in the most recent audited financial statement prepared in respect of the trust corporation or any of the trusts within the last 16 months; or

(ii) as ascertained by referring to one or more custodian statements issued to the trust corporation in respect of the trust or any of the trusts within the last 12 months;

(b) a corporation or partnership having (i) a portfolio of not less than HK$8 million (or its equivalent in any foreign currency); or (ii) total assets of not less than HK$40 million (or its equivalent in any foreign currency):

(i) as ascertained by referring to the most recent audited financial statement prepared in respect of the corporation or partnership (as the case may be) within the last 16 months; or

(ii) as ascertained by referring to one or more custodian statements issued to the corporation or partnership (as the case may be) within the last 12 months;

(c) an individual, either alone or with any of his associates on a joint account, having a portfolio of not less than HK$8 million (or its equivalent in any foreign currency):

(i) as stated in a certificate issued by an auditor or a certified public accountant of the individual within the last 12 months; or

(ii) as ascertained by referring to one or more custodian statements issued to the individual (either alone or with the associate) within the last 12 months; or

(d) a corporation the sole business of which is to hold investments and which is wholly owned by an individual who, either alone or with any of his associates on a joint account, falls within the description in paragraph (c) above.

I further acknowledge that:

• the off-market buy-back booklet (“Booklet”) is not a prospectus within the meaning of the Companies Ordinance (Cap 32) nor is it an advertisement, invitation or document subject to section 103(1) of the SFO;

• none of Woolworth Limited’s shares, the Booklet nor its contents have been reviewed by any regulatory authority in Hong Kong nor authorized by the Hong Kong Securities and Futures Commission and no invitation, advertisement or other document, whether in Hong Kong or elsewhere, has been or will be issued, which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong within the meaning of the SFO; and

• the Booklet may not be provided, assigned or transferred to any other person.

Signature

Full name (print)

Representative of (print - if applicable)

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