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WHL - Woolworths Holdings - Notification of impact of rand strength on year end

Release Date: 01/07/2009 16:38
Code(s): WHL
Wrap Text

WHL - Woolworths Holdings - Notification of impact of rand strength on year end results WOOLWORTHS HOLDINGS LIMITED (Incorporated in the Republic of South Africa) (Registration number 1929/001986/06) Share code: WHL ISIN: ZAE000063863 ("Woolworths Holdings" or "the Company") NOTIFICATION OF IMPACT OF RAND STRENGTH ON YEAR END RESULTS In line with its stated treasury policy, the group takes out forward exchange contracts ("FEC`s") to cover imported merchandise commitments. FEC`s with a value of $50m covering imports for the summer season remained open as at 30 June 2009. The group uses the pool method to manage these commitments and to provide an effective economic hedge. However due to the complexity in documenting the relationship between hedging instruments and hedged items required in terms of IAS 39, the group does not apply hedge accounting to these transactions. The FEC`s were taken out at an average spot rate 15% higher than the year end rate and consequently, a non-cash, unrealised foreign exchange loss of R79m will be recognised in the income statement for the year ended 30 June 2009. As the selling price of the merchandise for which the cover was taken out as an economic hedge will be based on the forward contract rate, the group expects the impact of the foreign exchange loss to reverse during the financial year ended 30 June 2010. In future, the group will communicate similar material unrealised foreign exchange gains and losses to investors at reporting period ends. Cape Town 1 July 2009 Merchant bank and sponsor RAND MERCHANT BANK (A division of FirstRand Bank Limited) Date: 01/07/2009 16:38:01 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.

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