HUGE GROUP LIMITED - Restatement

Restatement

HUGE GROUP LIMITED
(Registration number 2006/023587/06)
Share code: HUG ISIN: ZAE000102042
(“Huge” or “the Company”)

RESTATEMENT

Shareholders are advised that the Company’s application (“the Application”) 
to the High Court: Gauteng Local Division Johannesburg (“the Court”) to set 
aside the decision of the JSE Limited (“the JSE”) of 27 October 2014 
(“the Decision”) directing the Company to restate its annual financial
statements (“AFS”) for the years 2010, 2011 and 2012 (“the Restatement”) was
dismissed.

In terms of the Decision, the Company is required to announce the
Restatement on the JSE’s Stock Exchange News Service (SENS) and include
the full details of the Restatement in Huge’s next annual financial statements,
being the annual financial statements for the year ended 28 February 2018
(“the Next AFS”).

The Restatement is related to the accounting treatment in Huge’s 2010 (and
by implication the 2009 comparative), 2011 and 2012 annual financial
statements (“the Relevant AFS”) of 80 455 single stock futures (“SSF”)
contracts that Huge acquired in October 2008.

Huge, on the advice of its statutorily appointed auditors, reflected the SSF
contracts in the Relevant AFS as derivative financial instruments and
accounted for the movement in the fair value of the SSF contracts through
profit and loss and ultimately retained income in equity. In terms of the
Decision, Huge should have reflected the SSF contracts in the Relevant AFS as
equity instruments and accounted for the movement in the fair value of the
SSF contracts through share capital in equity.

Fair value losses relating to the SSF contracts of R17 881 163 and R7 059 948
were recorded in the 2009 and 2010 AFS respectively, a fair value gain
relating to the SSF contracts of R3 252 619 was recorded in the 2011 AFS and
fair value losses relating to the SSF contracts of R1 783 148 and R4 202 350
were recorded in the 2012 and 2013 AFS respectively. The aggregate fair
value losses relating to the SSF contracts and recorded from 2009 to 2013
amounted to R27 673 990. The Company accounted for these losses through
profit and loss and ultimately retained income in equity, instead of through
share capital in equity, as is required by the Decision.

Huge has considered the impact of the Restatement on the Next AFS and in
this regard Accounting Standard (“IAS”) 8: Accounting Policies, Changes in
Accounting Estimates and Errors is applicable. Because the cumulative
impact of the Restatement is both a debit and a credit to equity in the same
amount (being a debit to share capital in equity and a credit to retained
income in equity of the same amount) and the Company closed out the SSF
contracts on 18 December 2013, there will be no impact on assets, equity or
liabilities of the current or comparative period of the Next AFS.

Johannesburg
11 August 2017

Sponsor
Questco (Pty) Ltd

Date: 11/08/2017 05:50:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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