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1.18 Taxation (continued)

Current taxation is the expected taxation payable/receivable,

calculated on the basis of taxable income for the period,

using the taxation rates enacted or substantively enacted at

the reporting date, and any adjustment of taxation payable/

receivable for previous periods.

Deferred taxation is recognised in respect of temporary

differences between the taxation base of an asset or liability

and its carrying amount. Deferred taxation is not recognised

for the following temporary differences: the initial recognition

of goodwill; the initial recognition of assets and liabilities

in a transaction that is not a business combination and that

affects neither accounting nor taxable profit; and temporary

differences relating to investments in subsidiaries to the

extent that they probably will not reverse in the foreseeable

future. Deferred taxation is measured at the taxation rates

that are expected to be applied to temporary differences when

they reverse, based on the laws that have been enacted or

substantively enacted by the reporting date.

Deferred taxation assets are recognised for all deductible

temporary differences and assessed losses to the extent that

it is probable that taxable profit will be available against

which such deductible temporary differences and assessed

losses can be utilised. Deferred taxation assets are reviewed

at each reporting date and are reduced to the extent that it is

no longer probable that the related taxation benefit will be


Deferred taxation assets and liabilities are off-set if there is a

legally enforceable right to off-set current taxation liabilities

and assets, and they relate to income taxes levied by the

same taxation authority on the same taxable entity, or on

different tax entities, but they intend to settle current taxation

liabilities and assets on a net basis, or their taxation assets

and liabilities will be realised simultaneously.

1.19 Employee benefits

Short-term employee benefits

The cost of all short-term employee benefits are recognised

in the income statement during the period in which the

employee renders the related service.

The accruals for employee entitlements to wages, salaries,

annual and sick leave represent the amount which the

RCS Group has a present obligation to pay as a result of

employees’ services provided to the reporting date. The short-

term benefits have been calculated at undiscounted amounts

based on current wage and salary rates.

Defined contribution plans

The holding company and its subsidiaries contribute to

several defined contribution plans.

Post-employment benefits

A defined contribution plan is a post-employment benefit plan

under which an entity pays fixed contributions into a separate

entity and will have no legal or constructive obligation

to pay further amounts. Obligations for contributions to

defined contribution pension, provident and retirement

funds are recognised as an employee benefit expense in the

income statement as the related service is provided. Prepaid

contributions are recognised as an asset to the extent that

cash refund or a reduction in future payments is available.

Medical aid schemes

The RCS Group contributes to medical aid schemes for the

benefit of permanent employees and their dependants.

The contributions to the schemes are recognised in the

consolidated income statement as the related service is


Accounting Policies


for the period ended 31 December 2015