HSRC Integrated Annual Report 2018/2019

112 / 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) Johannesburg Lease Agreement The HSRC leases property in Johannesburg from South Point Management Services (Pty) Ltd situated at 41 De Korte Street, Braamfontein, Johannesburg. The lease agreement was for six months effective from 1 April 2018 and expired on 30 September 2018. The contract operated on a month-to-month basis until 31 March 2019. The lease payment per month was R32 400 (VAT excluded). The HSRC did not have the option to acquire the building at the end of the lease agreement but has an option to renew the lease agreement. Council for Scientific and Industrial Research (CSIR) Lease Agreement The HSRC leases property in the CSIR campus located in Building 14, Scientia. Total space acquired is 63m 2 utilised as a disaster recovery site. The lease agreement was renewed on 1 October 2014 for a period of three years expiring on 30 September 2017. The lease agreement was further renewed for another three years commencing 1 October 2017 until 30 September 2020. The contract has no fixed escalation rate, the escalation percentage is agreed by both Parties on an annual basis. The current lease rental payment per month is R7 562.54 (VAT excluded). The HSRC does not have the option to acquire the building at the end of the lease agreement but has an option to renew the lease agreement. 2019 March 2018 March R’000 R’000 7.2 Operating Lease Arrangements as the Lessor 7.2.1 Future Minimum Lease Payments Up to 12 months Department of Public Works lease 1 980 1 839 Evolution Technology Group 101 - Thakhu Trading (Pty) Ltd 472 - Kopano Solutions Company - 36 2 553 1 875 One year to five years Evolution Technology Group 201 - Thakhu Trading (Pty) Ltd 974 - 1 175 - 7.2.2 Other Disclosures Department of Public Works Lease (Pretoria) The operating lease is undertaken between the HSRC (the lessor) and the Department of Public Works (the lessee) on behalf of the Department of Social Development. The leased building is situated at 134 Pretorius Street, Pretoria. The existing contract was signed on 30 May 2014 for a three year period, with a commencement date of 1 May 2014. Monthly rental receivable is R1 980 363.09 (excluding VAT), with an escalation clause of 8% compounded annually. The contract currently runs on a month-to-month basis awaiting renewal finalisation. Kopano Solutions Company The operating lease is undertaken between the HSRC (the lessor) and the Nashua Kopano Solutions Company (Pty) Ltd (the lessee). The leased premises are Unit A (1SA01, 1SA04, 1SA08, 1SA12 and 1SA16), situated at 1 st floor, 134 Pretorius Street, Pretoria. The lease commenced on 1 August 2015 and it expired on 31 July 2018. The monthly rental receivable is R9 775.99 (excluding VAT), with an escalation clause of 8% compounded annually. Thakhu Trading (Pty) Ltd The operating lease is undertaken between the HSRC (the lessor) and the Thakhu Trading (Pty) Ltd (the lessee). The leased premises is the HSRC Cafeteria, situated on the ground floor at 134 Pretorius Street, Pretoria. The lease commenced on 22 February 2019 for a three year period. The monthly rental receivable is R39 130.43 (excluding VAT). The contract has an escalation of 5.3%. Thakhu Trading(Pty) Ltd does not have the option to acquire the building at the end of the lease agreement but has an option to renew the lease agreement.