HSRC Integrated Annual Report 2018/2019

HSRC INTEGRATED ANNUAL REPORT 2018/19 / 133 NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2019 (Continued) financial year also had an impact on this line item. Other operating income is utilised to augment the parliamentary grant in the maintenance of the building and other operational costs within the HSRC. 29.5 Administrative Expenses Administration costs mainly include audit fees, subscriptions and manuscripts, insurance related costs, printing and photocopying expenses as well as postal and delivery costs. Spending on this line itemwas below forecasted expenditure largely due to cost containment measures implemented at the beginning of the financial year. This resulted in targeted cost saving initiatives to compensate for the reduction of parliamentary grant funding in 2018/19. 29.6 Research Cost Research costs were below the budgeted amount largely due to less research activities being undertaken in the 2018/19 financial year compared to the prior year. A number of major projects have been finalised and earmarked for the new financial year ahead (2019/20). Research activities are funded from external research revenue. 29.7 Staff Cost Staff costs spending was in line with approved budget. 29.8 Other Operating Expenses Other operating expenditure was below the budgeted amount for the financial year due to stringent cost containment measures which continue to be implemented to drive the sustainability of the organisation in the long term, channelling more funding towards core research activities. 29.9 Depreciation, Amortization and Impairment Expense Depreciation expenses exceeded budgeted amounts largely due Increase largely due to depreciation on the HSRC’s Pretoria Building as a result of building revaluations effected. The revaluation surplus amounted to R208 million which depreciates over the estimated lifespan of the building. 30 Financial Instruments 30.1 Financial Instruments consist of receivables, payables and cash and cash equivalents. In the case of all financial instruments, the carrying value approximates the fair value based on the discounted cash flow method which was used to estimate the fair value. As at 31 March 2019 the carrying amounts and fair values for the Financial assets and liabilities were as follows: Note 2019 March 2018 March Carrying Value Fair Value Carrying Value Fair Value R’000 R’000 R’000 R’000 Financial assets Cash and Cash Equivalents 1 44 797 44 797 43 755 43 755 Trade and other receivables 2 57 446 57 446 43 782 43 782 102 243 102 243 87 537 87 537 Financial liabilities Measured at amortised cost Trade and other payables 8 42 958 42 958 36 400 36 400 42 958 42 958 36 400 36 400 In the course of the HSRC operations, the entity is exposed to interest rate, credit, liquidity and market risk. The HSRC has developed a comprehensive risk strategy in order to monitor and control these risks. The risk management process relating to each of these risks is discussed and disclosed under the headings below: