Annual Review 2009/2010
rics.org
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Advancing standards and professionalism in land, property and construction RICS is the world’s leading professional qualification when it comes to land, property and construction. Wherever you are in the world, the designation ‘RICS’ stands for professional excellence and integrity. It’s why over 100 000 property professionals have recognised the importance of securing RICS status by becoming members. Given the close link between property markets and economic performance, people, governments, banks and commercial organisations are looking for more certainty around standards and ethics. As one of the few professions to have established arm’s length self regulation of members and firms, RICS is able to set and maintain the highest standards, whilst operating as an independent, not-for-profit organisation in the public interest. Our key roles: • advancing the highest ethical and technical standards for professionals in land, property and the built environment • protecting and benefiting consumers by enforcing standards and codes of best practice • providing expert impartial advice to governments, business and the public • equipping RICS members with leading edge advice, market insight and professional training • promoting RICS status and standards in key world markets as the mark of property professionalism. Our annual review provides a snapshot of our achievements between August 2009 and July 2010 as well as some of the key issues on our agenda for the forthcoming year.
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Contents Introduction
Foreword from the President
04
Message from the Chief Executive
05
Overview of the year
06
Economist’s eye view
07
Corporate performance
Setting standards
08
Protecting consumers and giving markets confidence
10
Achieving recognition of RICS standards
12
Growing our membership
14
Equipping the profession – products and services
16
Responsible business, responsible employer
18
Financial review
20
Group summary income statement
20
Group summary balance sheet
21
RICS governance structure
22
RICS management structure
23
Annual Review 03
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Foreword from the President RICS is at an exciting time in its 142-year history. As president, I am proud to lead a cutting edge, global organisation, recognised in major markets around the world as the body setting the gold standard for professionalism in land, property and the built environment. During my year as president, I will be taking every opportunity to promote the role of property in economies and societies and the vitally important role of RICS in property. Markets in some parts of the world continue to reel from the after effects of the financial crisis although others are thriving. For all major economies, though, it is clear that, from the real estate perspective, property, economics, politics and the fabric of society are totally intertwined. Our sector therefore demands wise and holistic leadership. By being very clear about its mission and vision, RICS is continuing to grow its influence and recognition through thought leadership, technical and ethical standards and high quality products and services for our sector. Our starting point is what makes RICS special. RICS is a professional body and not a members’ association or trade body. In our collective and individual dealings with our clients, market leaders, politicians and the public at large, we have the major advantage of being seen as a body of independent, objective professionals. Strong expertise, integrity and the public interest sit at the heart of our approach.
In this review you will find more on how RICS is equipping its members to bring professional excellence to a wide range of market needs, demonstrating the value of our profession’s diversity. To name just a few, I see our top priorities as the global valuation challenge and how RICS is leading the way; the need for skills and cross-border standards in construction; the importance of strategic asset management in the public and private sector; sustainability in the built environment; and the benefits of profession-led regulation. The world demands top quality technical competence as well as lateral thinking and integration of a wide range of interconnected skills to solve its problems. RICS, through its many members around the world, is well placed to deliver both.
Robert Peto FRICS RICS President 2010/2011
04 Annual Review
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Message from the Chief Executive This year has been one of change, opportunity and development for RICS and I see a truly exciting future ahead of us. I was delighted to be appointed chief executive in April 2010, taking up the post in September following the departure of Louis Armstrong, RICS chief executive of 12 years. Louis worked with members to steer through a series of reforms that laid the foundations for the organisation to become the world’s leading professional body for qualifications and standards in land, property and construction. As he departs, RICS has become one of the world’s largest and most diverse professional bodies and is superbly placed to build on its success. Thanks to our global reach and our partnership approach, with RICS members and staff working together to form our strategy and achieve our goals, RICS has delivered strong results in tough economic conditions. The value of standards and professionalism, even at a time of financial constraint and challenge in some of our key markets, is best demonstrated by the fact that our professional subscription renewals in 2010 were £1m ahead of the 2009 figures. And, over the last year, our reach has broadened with our standards being recognised by governments and markets in India and Australia, amongst many other places. I am particularly pleased by how our website (rics.org) has been performing – since its re-launch in September 2009, 2.7millions visitors went onto the site during the year of which 43% were from new visitors.
One of my first actions as chief executive was to appoint a new executive team, putting us in a position to realise our vision and ambitions. Our focus is on achieving recognition of RICS and RICS’ standards in our world markets. The team I have put in place will work with our active members to set ambitious targets for growth of recognition, ensuring that RICS standards are demanded by land, property and construction markets around the world. Our strong financial position means that we can invest in the foundations of further success. Over the last year we have finished refurbishing our global headquarters on Parliament Square in London, creating a world-class space that befits the status of the profession. We have embarked on a major overhaul of our technology capability to enable strong presence in the digital world. There is much more we need to do to ensure that our standards are embedded throughout the world of land, property and construction. Our plans for 2011 and beyond will be in tune with the demands of our markets and focused on creating genuine value for our members and the many customers of our products and services. I am passionate about what RICS can achieve and the opportunities in front of us.
Sean Tompkins RICS Chief Executive
Annual Review 05
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Overview of the year
November 2009 September 2009
August 2009 RICS delivers UK Manifesto. A number of policy ideas for a vibrant and sustainable property market were adopted by UK political parties in their own manifestos.
July 2010 RICS offers project management and facilities management pathways for the new AssocRICS qualification in Hong Kong.
RICS signs the Copenhagen Communiqué on climate change and hands to the UN SecretaryGeneral, Ban Ki-moon. It urges governments to agree on an ambitious and equitable global deal to address climate change.
May 2010 The new UK Housing Minister, Grant Shapps MP, gives his first official speech at RICS HQ following the election. He outlines his vision for the housing market in England.
June 2010 RICS Ireland is formally established following discussions with the Society of Chartered Surveyors (SCS) in Ireland.
October 2009 Grand final of RICS Awards 2009 held. The illustrious event showcases projects in the land, property and construction arena and the much coveted Project of the Year is awarded to St Paul’s Cathedral in London for its tercentenary project.
RICS launches Global Climate Change Strategy in New York. The strategy represents RICS’ global commitment to concrete action in terms of research, member guidance, training and advice given to governments.
March 2010 Consumer-friendly HomeBuyer Report replaces HomeBuyer and Valuation service for residential property surveyors and purchasers in the UK.
April 2010 RICS welcomes its youngest member into the profession. Aged 23, having successfully passed his APC, Tarun Mathur is currently the youngest qualified surveyor in the UK.
06 Annual Review
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December 2009 World Bank publishes Safer Homes, Stronger Communities, a post-disaster reconstruction handbook, in partnership with RICS and United Nations’ International Disaster Reduction Secretariat.
January 2010 RICS launches facilities management qualification pathway in the UK for its new associate grade of membership, AssocRICS.
February 2010 RICS Training opens for business with a wide range of technical, professional and managerial courses for property professionals.
Economist’s eye view The year from a macro-economic perspective The last year has seen the global economy perform rather more strongly than was generally anticipated as fears of a so-called ‘double-dip’ recession eased. This was largely but not entirely down to robust growth in many ‘emerging’ parts of the world including China, India and Latin America. Core Europe led by Germany also surprised on the upside while problems continued to mount on the outer reaches of the euro area and in the US, where activity remained relatively subdued despite a significant monetary and fiscal stimulus. Developments in property markets broadly reflected the underlying economic fundamentals with renewed concerns over emerging real estate ‘bubbles’ in some parts of Asia and continued price weakness and flat transactions levels in many of the more ‘advanced’ economies. Reflecting this, while interest rates began to be pushed higher in, amongst other countries, China, India, Korea and Brazil, central bankers in the more mature parts of the globe were forced to think creatively about measures that could help address the shortfall in finance from the banking sector. The outlook for land, property and construction Looking forward over the next year, there are good reasons for expecting a broadly similar pattern of global economic growth. While the authorities in China are clearly now intent on taking steps to cool the level of activity, construction output will continue to grow strongly as the government aims to meets its ambitious target for housing development. Strong infrastructure growth will, meanwhile, remain a key theme underpinning the rapid
advance of the Indian economy. The prospect of commodity markets remaining tight for some time to come, supported by generally favourable demographic and economic trends, augurs well for both Brazil and Russia. It also suggests that the real estate sector in both of these countries is likely to be a beneficiary of the relatively benign business climate. In many of the more mature economies, the worst of the news for the property sector probably lies in the past but with little evidence that credit conditions are likely to loosen in a meaningful way in the foreseeable future, significant challenges will persist. Many banks with large books of real estate loans will look to lessen their exposure to the sector rather than increase it and there is inevitably going to continue to be a level of caution from lenders about encouraging any level of speculative development. Central banks will, meanwhile, have at some stage to put in place an exit strategy from, what are, extremely accommodating monetary policies. However, the silver lining for the real estate world in even more troubled economies is that inflation is not about to rear its ugly head. Crucially, this means that the pressure to start raising interest rates in the US, the euro area, Japan and the UK will remain modest enabling the economic recovery now underway to become more firmly entrenched. Simon Rubinsohn RICS Chief Economist
Annual Review 07
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Corporate performance Setting standards Centres for excellence Professional standards and knowledge lie at the intellectual core of RICS. Our wide range of internationally recognised standards, supported by high quality guidance notes and technical information, enable our members across the world to perform their professional duties to the highest professional standards.
Examples of practice standards and guidance published in 2009/2010: • • • • • • • • •
Valuation standards (2010) Residential agency standards Energy strategies for rural businesses Valuation of land for affordable housing Flooding and flood defence Historic building conservation Land surveying and the use of global navigation satellite systems Spatial planning and infrastructure delivery Sustainability and commercial property
In addition, RICS produced a range of practical guides from the role of social media in commercial property to the top ten business models for management consultancy surveyors.
Raising standards globally Other highlights from the year included collaboration with the UAE Government in finalising its own measuring code based on the 6th edition of RICS Code of Measuring Practice. This code became the first translation into Arabic of an RICS guidance note. In India, RICS is developing core valuation guidance for local members with a view to publishing an Indian edition of RICS’ valuation standards – the Red Book.
08 Annual Review
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Business tools With pressure growing for property occupiers and owners to improve the sustainability of existing stock as well as new buildings, RICS led the development of Ska Rating, a new assessment scheme that focuses 100% on fit-outs. Ska Rating comprises 99 good practice measures across energy and C02, waste, water, pollution, transport, materials and wellbeing. This product earned the Eco-Innovation prize from the Association of Interior Specialists. RICS HomeBuyer Report, the consumer-friendly update to the long established HomeBuyer Survey and Valuation Service, was officially launched with associated software. The new report offers an easy-to-use format for the end user with a traffic light system setting out the condition of property for prospective purchasers.
Establishing the rainbow standards The Red Book remains our leading global standard, equipping RICS Valuation Surveyors across the world with standards and guidance to perform commercial and residential real estate valuations to the highest levels of competence, protecting clients and third parties. This year we have made headway in establishing standards in other disciplines. The Quantity Surveying and Construction ‘Black Book’, the Facilities Management ‘White Book’ and the Residential ‘Blue Book’ are recognised as leading the field in industry standards. Our standards must stay relevant for our markets and we will continue to develop and improve them in consultation with our members and those who use their services.
Chair of Knowledge Board: Steve Williams FRICS Director of Practice Standards and Technical Guidance: Gary Strong FRICS
Annual Review 09
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Protecting consumers and giving markets confidence Principles-based regulation In 2007, RICS established a principles-based regulatory framework, creating a clear line between RICS’ regulatory and representational functions. This separation starts with regulatory governance and runs through all regulation operations: for instance, our Regulatory Board and disciplinary panels have non-member majorities. This governance approach helps to establish confidence with markets, clients and governments. Expanding regulation We have always regulated members’ professional conduct. Our current approach means that firms are now also regulated, adding an extra layer of assurance for end users of property services. With around 10 000 UK firms now regulated by RICS, we are extending our regulatory operations to other markets. In 2009, we launched regulation of firms in Hong Kong and are planning to introduce a firms’ scheme across mainland Europe in November 2010. Improving transparency Markets and societies around the world are demanding greater transparency in many fields, including the provision of professional services. As part of a wider programme of work on professional ethics, during the year, RICS consulted and reported on transparency in property transaction fees in the UK. The group that led this exercise, chaired by the then RICS President Max Crofts FRICS, called for greater transparency across the industry, particularly on the declaration of commission income. RICS is now working on an implementation programme to put the recommendations into practice. Building market confidence 2009 saw the start of a major RICS initiative in the core practice area of valuation. Following an extensive consultation exercise with members and external stakeholders, RICS Governing Council approved the introduction of a registration scheme for valuers. When the scheme was introduced in Autumn 2010, it signalled the beginning of enhanced level of market confidence in RICS Registered Valuers through continued monitoring of professional competence. The scheme will become mandatory in the UK from April 2011. Mandatory dates for other countries will be announced during the year.
Assured regulation for a global market The global climate has changed dramatically in the last two or three years and, following a number of market failures, markets and governments are now demanding higher standards from professionals with greater levels of technical, ethical and professional quality assurance from those that purport to regulate them. RICS Regulation is well placed to support professionals in land, property and construction in providing confidence to clients and the consumer public. Building on our principles-based regulatory framework, now well established in the UK, RICS is further developing a risk-based regulatory intervention in other markets to help inspire confidence in professionals and the services they provide. In recent years we have delivered the basic building blocks that enable us to assert with some confidence that RICS members and regulated firms conduct their business to the highest standards. We are now working on the introduction of consistent standards and ethics frameworks through the life of a professional in a global environment.
Chair of Regulatory Board: Eve Salomon Director of Professional Regulation: Steven Gould
10 Annual Review
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Annual Review 11
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Achieving recognition of RICS standards Through our thought leadership and influencing programmes, we seek to establish the importance of property in the economy and the role of RICS in property. Our objective is to achieve recognition of RICS’ standards and to build the status of the profession as a vital element in successful markets. Opportunities to inspire, engage and influence A major priority for RICS is equipping members with the professional and technical expertise to meet client demands for greater energy efficiency and sustainability in construction and buildings. Our influencing agenda in the climate change arena is designed to promote RICS’ standards and members as key players in achieving climate change targets through their advice and expert involvement in the construction and management of land and property. At the beginning of the RICS business year we signed the Copenhagen Communiqué, an initiative of the Prince of Wales’ Corporate Leaders Group on Climate Change. The Communiqué was handed to the UN Secretary-General, Ban Ki-moon, at the UN General Assembly Climate Summit in New York. The World Bank selected RICS as a partner for its postdisaster shelter reconstruction handbook, Safer Homes, Stronger Communities. We provided case studies and technical content. The handbook highlights the importance of chartered surveyors in disaster management.
The UK general election provided major opportunities for RICS to influence party manifestos and to build relationships with existing and new Westminster politicians. RICS produced its own manifesto, highlighting the important role of property in the economy and setting out RICS’ policy priorities for a sustainable and vibrant property market. We hosted the first 2010 election property hustings. It was standing room only at a lively debate on property policy between the minister and shadow ministers of the three main parties. The debate was the first RICS event to be posted on YouTube and generated nearly 500 views. RICS’ influence with UK politicians was further solidified when the new UK Housing Minister, Grant Shapps MP, gave his first official policy speech at RICS HQ. We pursued opportunities for influencing and engagement around the world. RICS Americas held talks with President Obama’s adviser on energy policy, Alex Lasky of Positive Energy. The then RICS President Max Crofts met the Indian Minister for Transport to promote RICS standards and their important contribution to the country’s sustained growth. In Europe, we concentrated on engagement with the European Commission to establish RICS as a lead player in setting valuation standards.
Profile building Recognition of RICS’ brand saw an increase in the year. In a survey of RICS’ stakeholders, 87% of key employers, business leaders, decision makers and opinion formers confirmed their view of RICS as the mark of property professionalism worldwide – a 20% increase in our brand equity in 12 months. RICS’ media profile continued to rise with all RICS world regions reporting major increases in the volume of positive media coverage.
Award winning RICS India received an award for ‘Real Estate Professional Body of the Year’ at an awards function organised by the Builder Information Bureau in India. RICS UK Public Affairs team won in-house team of the year at the Public Relations Consultants Association annual awards. In their 20th year RICS’ own awards saw the highest level of entrants from a wide range of projects across the world. The much coveted Project of the Year accolade was awarded to St Paul’s Cathedral for its tercentenary renovations work.
12 Annual Review
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Networking the profession With an established presence across Twitter, Facebook, LinkedIn, YouTube and Flickr, RICS is opening up access to the latest news, research, commentary, video and images to members and new audiences. RICS’ corporate Twitter account became the fifth most influential property account worldwide, leading to a new level of engagement between RICS, consumers, the surveying profession and their clients. Traffic to our website (rics.org) continues to grow following its re-launch in September 2009, receiving 2.7million visitors during the year of which 43% were from new visitors. Credibility through thought leadership and expert commentary RICS economics team has continued to build RICS’ profile and credibility through market commentary, survey results and forecasting. Our market surveys for construction, commercial and residential property were cited for the first time in the Bank of England’s credit report. The RICS construction and building research conference, COBRA, was held in Cape Town, South Africa. This annual international gathering of academics and researchers in construction and real estate goes from strength to strength, positioning RICS as a leader in high quality research for the built environment.
Many more bodies, groups, businesses and organisations now feel the need to be involved in influencing and profile building than might have wished to enter this territory in the past. The field is very crowded with lobbyists, self promoters and the narrowly self-interested. Being influential and building a voice and a strong profile is a challenge across the world and it can sometimes seem that he or she who shouts loudest gets heard. RICS does not aim to build influence, credibility and profile as a means in itself. We talk about building RICS, the mark of property professionalism worldwide, as a globally recognised brand, but this is a complex task. RICS is a standards and professionalism brand and our aim in building it is to achieve recognition of our standards – recognition by markets, governments, opinion formers and policy makers. In 2009/2010 we have achieved increases across the board in terms of external recognition, influence and media coverage in all of our major markets. In the UK we were recognised as 113th in the Top 500 Superbrands, well ahead of many other property organisations and almost all professional bodies. Brand profile is essential but for RICS it amounts to little of value unless it is underpinned by the credibility of our standards, our expert, public interest-focused commentary and our thought leadership. In 2011 we intend to build on these successes. Our external communications will be closely aligned with the geographic and professional sector priorities in our business plan. As well as targeting opportunities for recognition of RICS’ standards, we will place increased emphasis on promoting the value of the profession to clients and the public.
Chair of Communications Board: Ian McRae FRICS Director of Corporate Affairs: Gillian Charlesworth
Annual Review 13
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Growing our membership RICS’ designations FRICS – Fellow of RICS A prestigious award – only members who are high achievers in their careers may apply to become a fellow. They will be leaders; active people who have completed unique projects or contributed to the profession.
Pathways launched in 2009/2010: • Quantity Surveying and Construction (UK) • Project Management - Construction (UK) • Facilities Management (UK) • Residential Estate Agency (UK) • Residential Survey and Valuation (UK)
MRICS – Member of RICS
• Quantity Surveying and Construction (Hong Kong)
For members who have undergone a period of rigorous study and training. RICS membership is only awarded to those who are prepared to maintain exemplary standards – for the public advantage.
• Project Management – Construction (Hong Kong)
AssocRICS – Associate of RICS AssocRICS is a non-chartered grade for technical and support staff working in the land, property and construction sectors. The new entry-level grade offers members a progressive, non-graduate route to chartered status.
• Facilities Management (Hong Kong). Pathways planned for 2011: • Valuation (India) • Building Surveying • Building Control
“Unlike membership bodies and trade associations, RICS’ aim is not to increase its membership for the sake of growth. Our core objective is to increase recognition of RICS’ standards, leading to growth of demand for those standards by markets, governments, employers and consumers.” Sean Tompkins RICS Chief Executive
• Commercial Property • Valuation • Residential Property Management
Opening up the profession
• Land Surveying and Geomatics
At a time when the issues of fair access to the professions and the shortage of skills in the market place are under scrutiny, the Associate membership grade has arrived at a key time for the profession. By tapping into the widest pool of talent, regardless of background, the surveying profession will continue to secure a competitive advantage both in terms of standards and professionalism.
• Marine Surveying and Hydrographics.
14 Annual Review
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➜
11%
Europe (including Ireland) Members
116 767
12 072
2%
Asia Members
14%
➜
3 657
UK Members
➜
Americas Members
14 275 ➜
6%
Oceania Members
6 211 ➜
4%
Total Members
163 904 ➜
5%
10 252 21%
India Members
670 72%
➜
MENEA Members ➜
Total figures for each region includes student and trainee members and are for the period 2009/2010.
Annual Review 15
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Equipping the profession – products and services RICS offers a growing range of products and services for members and other customers in the land, property and construction markets. Our product offerings are increasingly relevant and available to markets in our world regions. RICS Training RICS Training launched in February 2010 with a portfolio of 28 training courses. We provide training to prospective RICS members and continuing professional development for members. The courses are delivered through a combination of face-to-face sessions in the UK as well as distance learning, available internationally. By the end of the year, RICS had taken over 700 bookings with the business skills course ‘Conduct rules, ethics and professional practice’ proving the most popular. Of the technical courses, ‘Introduction to Valuation’ was the most popular, closely followed by ‘Introduction to Inspection’. The RICS Training course portfolio now comprises 45 courses, with more in development. RICS launched its online academy recently and already has over 4 000 users signed up. The academy is a virtual learning environment and provides a range of information, resources, e-learning material and podcasts. It allows users to study RICS courses at a time and pace to suit them as well as provide supplemental information to a number of face-to-face courses. isurv isurv is the online information service for the surveying profession and was re-launched in April 2010. The new site has improved design and navigation, and a channel on building defects has been added. Subscriptions to isurv continued to grow thanks to the release of new channels in the year, including building defects, construction contracts, residential lettings and cases. The launch of the RICS SurveyWriter which enables surveyors to complete the RICS HomeBuyer Report also saw a strong growth for the isurv brand.
16 Annual Review
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Library and Information Services The year saw increasing use of RICS’ Library and Information Services via online channels and the introduction of a new ebooks service (rics.org/ebooks) and a new ejournal service (rics.org/ejournals). During the year these services were used by nearly 6 000 members. Dispute Resolution Services (DRS) DRS appoints dispute resolvers in commercial rent reviews and other property related disputes. In the year, RICS appointed expert members to handle 3 860 rent review applications, 651 construction adjudication applications and 472 agricultural applications. We also launched a planning mediation service in October 2009. Building Cost Information Services (BCIS) BCIS’ Rebuilding Cost Model is accepted as the standard for surveyors and loss adjusters. The year was successful for BCIS, despite difficult economic conditions in its major market, the UK. The team undertook a research contract for the UK Communities and Local Government Department to assess the cost of lifetime homes standards. Additionally BCIS launched a new service, BCIS online rates database, which allows users to access pricing information quickly and easily online.
In March 2010, insurance aggregator comparethemarket.com signed contracts with BCIS to use its Insurance Rebuild Lookup service. RICS’ expertise is now available to all users of this service. Twelve month contracts for BCIS insurance data feeds were signed with Marshall & Swift (part of MDA corporation), VFA (a US facilities management software house), MoneySupermarket.com (insurance aggregator), TescoCompare and Lloyds Banking Group. Events RICS delivers a programme of conferences, seminars and technical update sessions for members and many other professionals in land, property and construction. Over 1 000 events were delivered during the course of the year, including the sustainability conference in London, the City Scape exhibition in Abu Dhabi, the Realty Plus Conclave and Awards 2010 in India and the Seattle Valuation Conference. Find a Surveyor This service enables clients to get in touch with 14 000 RICS registered firms across the world. During the year, nearly 210 000 visits were made to the site by people looking for RICS members or firms. Chair of Business Development Board: Chris Boulton MRICS Executive Director of Product Development: Mark Powell
New UK legislation (Community Infrastructure Levy Regulations 2010) came into force, requiring that the BCIS All-in Tender Price Index is used to adjust the levy paid. As a result, RICS members’ advice is more likely to be sought.
Annual Review 17
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Responsible business, responsible employer In the past year we have shaped RICS’ approach to the challenge of tackling climate change. In the run-up to the December 2009 Copenhagen Climate Summit, RICS launched its Global Climate Change Strategy in New York, signed the Copenhagen Communiqué alongside leading world business leaders and co-organised a fringe event at the summit. A number of research pieces were launched, including: ‘Doing Well by Doing Good’ which provided the first evidence of energy efficiency certified buildings achieving higher yields in the US; ‘Why Do Companies Rent Green?’ highlighted the increasing impact of companies’ corporate social responsibility policies on property investment decision making; ‘Redefining Zero: Carbon Profiling As A Solution To Whole Life Carbon Measurement In Buildings’; and ‘Life Cycle Costing of Sustainable Design’. We focused on providing members with the tools to meet market requirements and set harmonised standards for measurement. Member guidance included ‘Sustainability and the Property Life Cycle’, the ‘Valuation Information Paper’, ‘Sustainability and Commercial Property Valuation’ and the ‘Global Glossary of Sustainability Terms’. To enhance awareness around this crucial issue, a new dedicated sustainability web page (rics.org/sustainability) was created. Encouraged by growing commitment and opportunity to lead direction and practice in this area, a number of member groups have been set up in France, Germany, the Americas and Asia complementing the work of the existing cross-professional Sustainability Working Group and the Oceania group. On a practical note, the refurbishment of RICS’ HQ in Parliament Square, London, incorporated a wide range of energy efficiency and waste reduction measures. In 2011 we will extend our responsible business strategy into new areas such as procurement.
Helping local communities As a responsible business we strongly encourage RICS staff to undertake volunteering activities. RICS staff can volunteer for one day a year to help local charities and organisations. 122 volunteering days were given to local communities in 2009/2010. Additionally, during the year RICS employees raised £10 000 for a range of charities including over £3 500 for Save the Children – the organisation’s chosen charity for 2009/2010. The annual RICS Christmas Charity Auction organised in Brussels, raised over €1 000 in one night. Highly respected UK Arts and Antiques Surveyor, Roger Hollest, a retired partner from Bonhams, auctioned off 15 ‘Green Christmas’ lots to a competitive audience. The proceeds went to a Brussels orphanage. Charity Property Help Since its launch in March 2009 Charity Property Help has continued to grow in popularity and recognition. RICS called on surveying firms in the UK to give their services pro bono to charities and voluntary organisations looking for advice on property issues. Over 280 firms have responded by joining the scheme, which provides access to one hour’s free consultancy from a qualified and experienced RICS regulated firm. A number of organisations, including the British Lung Foundation, have benefited from the advice they’ve received. CSVS The Chartered Surveyor Voluntary Service (CSVS) is a registered charity and is supported by RICS. The service provides free property advice to people who would otherwise be unable to get professional assistance in the normal way. Almost 300 RICS members working for the CSVS give their advice on a voluntary basis under this scheme. LionHeart LionHeart is the international benevolent fund for past and present members of RICS and their families. The charity relies heavily on voluntary donations and fundraising by RICS members as well as corporate support from firms in the property industry to raise over £1million every year to fund a range of services. Among other things, LionHeart provides advice and help to members and their families who have suffered bereavement, accident, ill-health or disability.
18 Annual Review
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Disaster Management Commission/BuildAction RICS’ Disaster Management Commission contributed to the World Bank’s Disaster Reconstruction Handbook, launched at an RICS hosted event in Brussels; and has been elected Co-Chair of Bond, a network of 370 international development organisations, including many of the major charities. In January, RICS organised and hosted an international conference funded by the UN Food and Agriculture Organisation on global guidelines for the governance of land tenure – an attempt to secure some of the most basic human rights and Millennium Development Goals. RICS now sits on the UN FAO Advisory Board for the project, which met in Washington in April to coincide with a UN/World Bank conference addressed by RICS Honorary Secretary Rob Mahoney FRICS.
Case study: Haiti The day after Haiti was hit by a devastating earthquake in January, RICS’ DMC Director Shailesh Kataria spoke on BBC TV news about the need to build back better once the immediate humanitarian offer was over and the cameras had moved on. He had been in Haiti six months earlier with Sanjay Amin of RICS Caribbean advising on locally appropriate building codes and planning regulations, at the request of the Haitian government and the World Bank. Since the earthquake RICS BuildAction volunteers Grenville Phillips and Simon Morrow have been in Haiti providing damage assessment training and reconstruction advice.
A suite of projects over the year has focused on Kenya: village mapping and land use planning for flood prone villages; pro bono land and property advice for vulnerable women (initiated by RICS Kenya); and fire risk reduction in informal settlements. In Uganda RICS has undertaken, with The Good Earth Trust, a viability analysis for the use of interlocking stabilised soil blocks – extremely low-cost, low-carbon, non-fired bricks. The study found cost savings of 20 per cent for brickwork and 50 per cent for blockwork. It is hoped that this technology can be applied extensively in the developing world.
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Financial review Group summary income statement – for the year ended 31 July 2010 31 July 2010 Income Expenditure Total £’000 £’000 £’000 Income
31 July 2009 Total £’000
Professional Subscription and Entry Fees Learning, Professional Development and Other Member Services
37,051 16,550
(1,398) (12,490)
35,653 4,060
34,200 4,733
53,601
(13,888)
39,713
38,933
Key activities and services Creating and enforcing professional standards - (6,637) (6,637) Gaining influence and building brand profile - (7,381) (7,381) Regional development and local service provision - (10,634) (10,634) Technology development - (751) (751) Legal and governance - (3,146) (3,146) Technology operations - (4,144) (4,144) Property operations and lifecycle maintenance - (1,911) (1,911) Finance operations and ongoing compliance - (1,893) (1,893) Depreciation - (2,488) (2,488) Central Activities - (1,182) (1,182)
(6,859) (7,209) (10,961) (2,540) (4,133) (2,430) (1,749) (1,967) (895)
Total expenditure on key activities and services
(40,167)
(38,743)
Other Costs Charitable trusts and donations - (167) (167) Refurbishment of property at Parliament Square, London - (391) (391) Loss on foreign exchange (188) (188)
(105) (1,144) (81)
Total other costs
-
(746)
(746)
(1,330)
Operating result before exceptional item Exceptional item2 Operating result after exceptional item
53,601 - 53,601
(54,801) (1,023) (55,824)
(1,200) (1,023) (2,223)
(1,140) (1,140)
Profit/(loss) on sale of fixed assets Result before interest and taxation
93 53,694
- (55,824)
93 (2,130)
(1,111) (2,251)
Investment income Other interest receivable and similar income
587 264
- -
587 264
619 590
Result before taxation
54,545
-
(40,167)
(55,824)
(1,279)
(1,042)
Taxation charge
(93)
(196)
Net deficit/for year after taxation
(1,372)
(1,238)
20 Annual Review
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Group summary balance sheet – as at 31 July 2010
31 July 2010 £’000
31 July 2009 £’000
Fixed assets Intangible assets 70 41 Tangible assets 24,983 19,851 Listed and unlisted investments 24,036 21,033 49,089 40,925 Current assets Stocks 361 453 Debtors 5,056 4,211 Short term investments 5,193 6,212 Cash at bank and in hand 2,558 2,915 13,168 13,791 Creditors Amounts falling due within one year (28,739) (24,747) Net current liabilities (15,571) (10,956) Total assets less current liabilities 33,518 29,969 Creditors Amounts falling due after one year (1,220) (1,253) Net assets before pension asset/(liability) 32,298 28,716 Pension asset/(liability) 877 (911) Net assets after pension asset/(liability) 33,175 27,805 Reserves Free reserves 31,397 26,034 Restricted reserves 1,778 1,771 33,175 27,805
In a year which saw the challenging economic conditions continue for many global markets, for our profession and for RICS itself, we delivered operationally ahead of plan. Financial headlines • • • • •
A tough environment in RICS’ largest market – the UK Growth of membership subscription revenue – in markets outside the UK Serious challenge to commercial revenue lines Interest on deposits notably lower than last year We delivered to plan thanks to tight control of discretionary spend and headcount.
Investing the future Strategic investment in key areas will keep us fit for the future: • • •
Enhanced technology will enable us to increase our worldwide reach and deliver services online in a more efficient and effective manner Our property life cycle programme continues through refurbishment of our buildings, RICS Parliament Square HQ in London and Manor Place, Edinburgh Successful launch and growth of a new training business.
Despite tough global economic conditions, RICS put in a strong performance and finished slightly ahead of target. Membership subscription income was up by over £1m thanks to strong growth in markets outside the UK. Whilst our commercial income took a small dip, it still exceeded 2007 levels. We have kept ahead by being nimble in controlling costs and being prudent in the pace of investment for future growth.
The statements have been extracted from RICS’ unaudited full financial statements for the year ended 31 July 2010.
1
The exceptional item shown in the accounts for £1,023,000 relates to the net repayment of VAT to HMRC (after recovery of professional fees). RICS had originally declared this as income in its annual accounts for the year ended 31 July 2008 following the resolution of third party actions at that time. On 1 September 2010 HMRC issued assessments against RICS to reclaim these payments. In order to protect its position RICS repaid these funds on 30 September 2010. RICS continues to explore all opportunities to challenge the position of HMRC. As the success or otherwise of these actions cannot be accurately predicted the recognition of a contingent asset is not considered appropriate.
2
Chair of Finance Committee: Alex Baird FRICS Executive Director of Finance and Corporate Services: Violetta Parylo Annual Review 21
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RICS governance structure RICS’ strategic direction is set by a 70-strong Governing Council incorporating the leadership team and member representatives from across the world.
Grants and awards Royal Charter.
Privy Council
The Council, chaired by RICS’ President, is supported by a number of groups and boards, populated by around 1 000 active members, RICS staff and ‘lay’ (non) members. These include world regional boards, national councils, 17 specialist professional group boards, policy committees and boards covering membership, communications, knowledge and the arm’s length Regulatory Board.
Management of Royal Charter obligations, setting direction and strategy.
Governing Council
Regulatory Board
World Boards
Communications Board
Audit Committee
Membership Board
Knowledge Board
Management Board
Finance Committee
Day-to-day performance and delivery of the business plan.
Business Development Board
22 Annual Review
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RICS management structure Leadership Team
President
Robert Peto FRICS
(2010/2011 financial year)
President Elect
See Lian Ong FRICS
Senior Vice President
Alan Collett FRICS
Vice President
Michael Newey FRICS
Honorary Secretary
Robert Mahoney FRICS
Honorary Treasurer
Alex Baird FRICS
Management Board
Chair
James Carter FRICS
(2010/2011 financial year)
Vice Chair
Amanda Clack FRICS
Members
Richard Cotton FRICS
Mark Holden FRICS
Ian Perry FRICS
Vacant
Independent non executive
Dennis Heywood
Independent non executive
Vacant
Independent non executive
Vacant
Chief Executive Officer
Sean Tompkins
Executive Director of Finance and Corporate Services
Violetta Parylo
Executive Team
Chief Executive Officer
Sean Tompkins
(2010/2011 financial year)
Executive Director of Finance and Corporate Services
Violetta Parylo
Executive Director of Developing Markets
Marcus Potter
Executive Director, UK
Vacant
Executive Director of Product Development
Mark Powell
Director of Corporate Affairs
Gillian Charlesworth
Director of Professional Regulation
Steven Gould
Interim Director of Human Resources
Ali McManus
Director of Professional Standards
Vacant
Annual Review 23
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rics.org
RICS HQ
Advancing standards in land, property and construction.
Parliament Square London SW1P 3AD United Kingdom
RICS is the world’s leading qualification when it comes to professional standards in land, property and construction.
Worldwide media enquiries:
In a world where more and more people, governments, banks and commercial organisations demand greater certainty of professional standards and ethics, attaining RICS status is the recognised mark of property professionalism.
e pressoffice@rics.org Contact Centre: e contactrics@rics.org t +44 (0)870 333 1600 f +44 (0)20 7334 3811
Over 100 000 property professionals working in the major established and emerging economies of the world have already recognised the importance of securing RICS status by becoming members. RICS is an independent professional body originally established in the UK by Royal Charter. Since 1868, RICS has been committed to setting and upholding the highest standards of excellence and integrity – providing impartial, authoritative advice on key issues affecting businesses and society. RICS is a regulator of both its individual members and firms enabling it to maintain the highest standards and providing the basis for unparalleled client confidence in the sector. RICS has a worldwide network. For further information simply contact the relevant RICS office or our Contact Centre.
DECEMBER 2010/ VP/827IC
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Europe (excluding United Kingdom) Rue Ducale 67 1000 Brussels Belgium
United Kingdom Parliament Square London SW1P 3AD United Kingdom
Asia Room 1804 Hopewell Centre 183 Queen’s Road East Wanchai Hong Kong
Africa PO Box 3400 Witkoppen 2068 South Africa
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