HSRC Integrated Annual Report 2018/2019

106 / HSRC INTEGRATED ANNUAL REPORT 2018/19 PART E: ANNUAL FINANCIAL STATEMENTS NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2019 (Continued) Reconciliation of carrying value Total Land and Buildings Lease Improvements Artwork Motor vehicles Office furniture Equipment Computer Equipment Medical Equipment R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000 Closing net carrying amount 423 663 377 356 3 731 1 262 17 526 7 844 7 829 7 865 250 Gross carrying amount 519 171 404 568 13 623 2 123 20 049 13 996 25 424 37 033 2 355 Accumulated depreciation (95 508) (27 212) (9 892) (861) (2 523) (6 152) (17 595) (29 168) (2 105) Historical cost would have been: 80 301 79 381 - 920 - - - - - The land is registered as Stand 3242 Pretoria, measuring 7 655 m², registration division JR, Transvaal and is situated at 134 Pretorius Street, Pretoria. The buildings classification combines land, lifts, telephone systems, fixtures and buildings and comprises a reception area, offices, parking area, conference centre and a cafeteria built on land as mentioned above. The valuation was conducted on 15 March 2018 by an independent valuer, Mr Nathan Theron of Spectrum Valuations and Asset Solutions (Pty) Ltd, using the Net Income Capitalisation Method of Valuation to determine the value of the property. The method determines the net normalised annual income of the property, assuming the property is fully let at market related rentals, and market escalations, with an allowance made for vacancies (where applicable). Market related operating expenses are incurred, resulting in a net annual income which is then capitalised at a market related rate. A capitalisation rate of 11.% was applied. The capitalisation rate is determined from the market and is influenced in general by rates of return of similar properties, risk obsolescence, inflation, market rental growth rates, rates of return on other investments, as well as mortgage rates. The building is not held as security for any obligations. Artwork belonging to the HSRC was revalued on 31 March 2015. The valuation was performed by Mr Gerrit Dyman of Absolut Art Gallery by observing similar artwork in the market and the prices such artwork would cost on the valuation date. 6 Property, Plant and Equipment (continued) Balance at 31 March 2018