Welcome to our Transparency Report
A message from our Managing Director
Transparency and accountability have been and shall continue to be framing the way we deliver our work.
Christos Vasiliou, Managing Director
I am very pleased to present to you our 2022 Transparency Report. The report contains insightful information about our strategy, our performance, our corporate governance and quality control systems for 2022.
KPMG has been operating in Cyprus since 1948 and currently employs an average of 836 professionals working from 6 offices across the island. It is a member of KPMG International Limited, a global organisation of independent professional services firms providing Audit, Tax and Advisory services. KPMG operates in 143 countries and territories and has approximately 265.000 people working in member firms around the world.
KPMG in Cyprus is a leading professional services organisation with revenues which amount to €46m and which has contributed significantly to government revenues during the year to December 2022. This amounted to €17,8 million, including income tax, special contribution for defence, PAYE, VAT, GHS and social insurance contributions.
2022 was yet another challenging year for the professional services sector. The prolongation of the pandemic as well as the outburst of the war in Ukraine inevitably negatively affected the anticipated rate of growth of the economy. Despite the above challenges, we managed to maintain our revenues at satisfactory levels recording a growth of 0.4% to reach €46m.
Our strategy during 2022 has concentrated towards building on our most important growth pillars namely, advancing on our digital and technological capabilities both internally as well as externally helping our clients, strengthening our bundle of innovative services offered to our clients and maintaining the highest standards of quality in everything we do. We have also invested and will continue doing so, in our ESG capabilities, starting from transitioning our Organisation by committing to become carbon neutral by 2030 and continue assisting our clients in their ESG journey. We have also invested heavily into training and upskilling of our people across all functions. Despite the several challenges faced by the Audit profession in 2022, as in every year, we continued our commitment to quality. We continuously strive to deliver high quality services to our clients across all functions of the Firm. We achieve this by applying the KPMG Values of integrity, excellence, and courage in everything we do.
Commitment to our communities is also fundamental to our values. Together we made a positive impact to the society through a number of specific CSR initiatives under four different pillars: education (CIM scholarship, career fairs, Global Cyber day), health (blood donations, Movember, race for the cure), environment (plant a tree at fire affected areas) and social inclusion (Sophia for children, Hope for children, adopt a family for Christmas and Easter).
All the above could not be achieved without the help of our most valuable asset, our people, to whom we are so grateful.
Despite the social distancing and the disruption that was caused by the war, they have all been working so hard, contributing positively to our deliverables.
Transparency and accountability have been and shall continue to be framing the way we deliver our work.
Two of our audit partners have opted for a career in other industries at the end of 2022. I wish them both every success in their new positions.
In 2023, we announced the appointment of Petros Mavrommatis as a new Audit Partner effective from 01/03/2023. On behalf of all of our partners, I wish Petros every success in the KPMG family.
Our strategy is fully aligned with the strategic priorities of KPMG International, tailor-made to the needs of the market in Cyprus.
All our partners and members of staff are fully engaged in maintaining KPMG as the Clear Choice for our clients, our people and the society in general.
How we’ve performed
Total revenue
Tax contributions
Revenue
26,4mStaff
387Audit
As the world continues to change, we know that out role and our purpose at KPMG has never been more important. As the leading provider of audit and assurance services in Cyprus we know that the trust placed in us can never be taken for granted.
The quality of our services is directly tied to our success. Achieving this level of excellence requires hard work, dedication and focus, as well as ongoing investment in people and technology. Our remarkable people are at the heart of our success. Despite the challenges of recent years, our people have demonstrated exceptional resilience and a deep commitment to delivering the highest quality services to clients and stakeholders whilst upholding our values and prioritising ethical conduct.
We, in turn, prioritise the wellbeing and professional development of our people, recognising that their individual growth is essential to our collective success. As we move past the challenging ties of the past few years, we continue to invest in the systems, tools, wellness support and skills needed to help our teams work effectively and thrive. These investments include direct support for physical and mental health and enhanced training, coaching and on the job learning.
To enhance the audit experience, we have invested in KPMG Clara, a cloud-based audit methodology and workflows platform that combines the best of technology and human expertise to deliver smarter, data-driven outcomes and deeper insights. This technology supports our audit professionals in delivering consistent, high-quality audits. In addition, we have strengthened our quality management system globally to align with the new International Standard on Quality Management (ISQM 1) and meet the evolving demands of clients, regardless of their size or location.
We recognise the essential role we play in building confidence in our capital markets and we continue to take meaningful steps towards this with steadfast commitment to our core values. As the world changes rapidly, we remain deeply committed to all our stakeholders as we continually monitor and improve our system of quality control and invest in the future of audit. This commitment is the foundation of our success.
Sylvia A. Loizides, Board Member, Head of Audit
* average staff numbers for Year 2022
Revenue
8,4mStaff
111Tax & Legal
The challenges faced in the past few years have been unparalleled. From the global shock of COVID-19 to the Ukrainian war, humanity has been shaken to the bone. So was business.
Early 2022 statistics indicate that the business of the tax function recovered from the pandemic impact, mostly due to the steps taken to diversify our business and adapt to the new conditions. Early 2022 figures indicated a healthy growth rate reaching pre-pandemic figures. However, the war decelerated the business growth especially considering the volume of Russian related FDI (inbound and outbound).
However, due to the measures already planned as a response to the pandemic and intensified as a result of the war, the diversification to new markets, the identification of new services and the re-adjustment of client relationships on new grounds has mitigated the impact of war to the tax function even with a deceleration of the growth rate; proper and prudent business transformation has even led to a growth in revenue.
Same as in 2021 and given the new circumstances, the tax practice, locally and internationally, continued to focus on identifying measures and markets that would mitigate the impact of the war and ensure the proper disengagement from the Russian business, especially after the exit of the KPMG network from Russia.
In 2022, our agile team of professionals has relentlessly worked towards identifying new markets and industries for growth and meticulously targeted new endeavors with success.
In this respect and especially considering the continuing nature of both COVID-19 but most importantly the war, the high inflation rates and the need to care for our people, we will continue reflecting on the transformation of our business more imminently than ever. Our in-progress efforts to identify new markets and industries and switch our focus will continue and intensify with the aim to reach the growth rate initially planned prior to the beginning of the war.
In this respect, we will also increase our efforts to seek out diversified skills. We need to continue our quest to recruit and invest in different sets of capabilities and diversified mindsets, diversify the services offered and provide more integrated solutions to our clients. In this effort, innovation is KEY. Going forward we plan to invest in innovative ways of increasing our business and furthering our quality deliverable always keeping into account our clients’ needs as regards to tax compliance, tax reporting and regulation and enhancing the trust placed in the quality of our services.
Our commitment to leadership is granted. In 2023 we will continue to develop our tax function setting it as the CLEAR CHOICE for our clients, the society and our people, our most valuable asset.
George Markides, Board Member, Head of Tax
* average staff numbers for Year 2022
Revenue
11,2mStaff
173Advisory
Our Advisory function continued its growth in 2022 and its involvement in high-profile projects, adding value to both our clients and the society.
Amid the continuation of the COVID-19 virus worldwide, we observed that the market returned to normality. As a result, our Advisory business has shown a growth of c. 5% to (net fees) €11,3m in 2022 compared to €10,8m in 2021. Our Advisory function consisted of 173 professionals and seven full time advisory partners at the end of 2022, split in the functions of Management Consulting, Risk Consulting and Deal Advisory.
Over 2022, we worked with a wide variety of clients in all major industries including banking, financial services, insurance companies, utilities, corporates, and the government. In addition, we further expanded our collaboration with other KPMG member firms providing our services abroad in the areas of digital transformation, data analytics, financial modelling, actuarial, risk and regulatory services.
We invested considerable time and resources in understanding our clients’ needs and we have managed to develop tailor-made solutions for them to address these needs effectively and in a cost-efficient manner. Our clients appreciated our efforts demonstrating their endorsement. This means a lot to us; it means that they trust our consistent focus on valuable outcomes. They trust that our approach delivers results which impact their businesses.
We continued winning valuable, challenging work that allowed us to demonstrate the depth of our talent and the quality of our work, assisting our clients to overcome the challenges they face.
Our Deal Advisory department handled several M&A and Valuations work and facilitated clients in their expansion plans both in Cyprus and abroad.
Our Risk Consulting department worked on a number of high-profile projects in the banking, insurance, and financial services industries as well as in government and utilities.
Our Management Consulting department continues its effort and penetration in the digital transformation arena, data governance and management, change management and cybersecurity.
Our focus is on providing the highest quality of services which add value to our clients and give our People the opportunity to develop and enhance their skills and knowledge.
Our effort to apply a multidisciplinary and connected approach in delivering engagements, comprising the right combination of expertise to work on the right solution, is intensified. For us, this is a standardised approach of a more connected and collaborative business. Our clients appreciate us for the level of expertise that we share with them and our power to resonate and tackle their issues effectively.
Our clients are extremely important to us, but our People are our most valuable asset. We are proud to employ highly-skilled and results-oriented professionals. Our intention is to continue to attract even more talent and accelerate our growth, guided by our winning strategy. We will also continue to invest in technology and innovation on a scale which gives us a competitive advantage and renders our Advisory practice the first choice of employment.
Guided by our values, we will increase our efforts to follow the highest code of ethics possible, we will continue to learn and improve, to think and act boldly in all interactions, to work together with our colleagues both within KPMG in Cyprus and abroad and try to draw strength from our differences while continuing tirelessly to do what matters most for a better future for our clients, partners, and our People.
Marios Lazarou, Board Member, Head of Advisory
* staff numbers as of 31st December 2022
A message from our Chairman
Challenges come and go, change over time, increase in intensity and diversity and require a firm response. This is where we play a vital role. We respond firmly and positively as one powerful team, the KPMG team.
Michael Antoniades, Chairman
The dynamics of the economic developments worldwide are affecting our lives. Cost push inflation combined with interest rates increases are becoming significant challenges for modern organisations. We are noting record price increases for basic and non-basic commodities. Companies are trying to adjust by increasing prices for products and services and simultaneously negotiate the level of price charges from suppliers. Suddenly, liquidity and financing are stretched, requiring prompt and aggressive management and serious renegotiations with banks and financiers.
Again, as professional accountants, we are at the upfront trying to assist our clients and add value. As KPMG professionals, we have always targeted a holistic approach on all of our projects by investing appropriate time to understand the needs of our clients, then develop a plan to address those effectively and finally execute delivery in a cost-efficient manner. The general message coming from clients so far continues to be “a thank you” to the family of KPMG. We have always been aiming professionalism by following our values.
Sometimes all come together in one package, called professional performance under pressure, an underlying principle of our esteemed profession. As professionals, we have a major role to service stakeholders, the economy and our society and this is what makes our profession special. Apart from learning and becoming better every day, there is an important self-satisfaction that comes together with these achievements.
Challenges come and go, change over time, increase in intensity and diversity and require a firm response. This is where we play a vital role. We respond firmly and positively as one powerful team, the KPMG team.
KPMG in Cyprus is one of the largest firms and one of the largest employers on the island. We do have an impact on our society, and we want that to be positive! Our vision is to be the clear choice both for clients, our people and the society in general.
Hard work doesn’t come without a cost. It consumes our energy. I will repeat and stress what you heard me say many times: ‘Our wellbeing is very important’. Within KPMG we take this seriously and that is why you have seen us launching initiatives that promote wellbeing, ranging from working environment initiatives, to social activity events, to the KPMG Gym and of course to our Running Club.
We are a strong team; we have sound support and values. We aim a positive contribution to the economy and firm assistance to the adjustment of our society, during these challenging times!
The impact we’ve made
Cyprus offices 6
