Welcome to our Transparency Report
A message from our Managing Director
Our strategy during 2023 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.
Christos Vasiliou, Managing Director
I am very pleased to present to you our 2023 Transparency Report. The report contains insightful information about our strategy, our performance, our corporate governance and quality control systems for 2023.
KPMG has been operating in Cyprus since 1948 and currently employs an average of 819 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 273,000 people working in member firms around the world.
KPMG in Cyprus is a leading professional services organisation with revenues which amount to €47.4m and which has contributed significantly to government revenues during the year to December 2023. This amounted to €17.7m, including income tax, special contribution for defence, PAYE, VAT, GHS and social insurance contributions.
Another challenging and difficult year during which we felt the effects of the Russian sanctions even more heavily, the slowdown in activity due to the high interest rates and inflation, the disruption in the supply chain as well as the turmoil in the Middle East, to name a few. Unpredictability and vulnerability have become the norm in recent years.
Despite the above challenges, by adhering to our strategic priorities, we managed to successfully navigate through 2023. This has been achieved by becoming even more agile and flexible and by adhering strictly to our pre-planned Strategic Growth Initiatives. We have been proactive enough to substitute to a very satisfactory degree the lost revenues stemming from the above. We have also expanded our collaboration with the network even more.
The expected reduction in net revenues because of our decision to terminate client relationships in compliance with Laws and Regulations as well as with our KPMG Global guidelines was around 10%. Despite the above, by staying focused on our Collective Strategy, we managed to increase our net revenues from €46m to €47.4m.
Our strategy during 2023 has concentrated towards building on our most important growth pillars namely, advancing on our digital and technological capabilities both internally as well as a service to 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 invested heavily into training and upskilling of our people across all functions. Despite the several challenges faced by the Audit profession in 2023, 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 several specific CSR initiatives under four different pillars: education, health, environment and social inclusion.
All the above could not be achieved without the help of our most valuable asset, our people, to whom we are so grateful.
Transparency and accountability have been and shall continue to be framing the way we deliver our work.
In 2023, we announced the appointment of Petros Mavrommatis as a new Audit Partner effective from 01/03/2023. On behalf of all our partners, I wish Petros every success in the KPMG family.
During 2024, we will continue pursuing our Vision to be the most trusted and trustworthy professional services firm on the island. A firm that is known for its high-quality services offered on a timely basis in line with our KPMG Global Collective Strategy. We will continue capitalising on our existing growth pillars as well as developing new innovative services which are relevant to our clients’ and market’s needs.
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
27,1mStaff
382Audit
Committed to Delivering Excellence
Excellence is not merely an objective but a benchmark against which we consistently measure ourselves. It serves as the cornerstone for fostering trust with our clients, stakeholders, and within the wider KPMG community. Upholding high standards of quality is fundamental to the continued cultivation of trust, a legacy that has distinguished KPMG for over 150 years.
At KPMG, trust is paramount to our success, and it commences with a steadfast commitment to excellence—particularly in an era marked by unprecedented transformation. The convergence of technological innovation, geopolitical shifts, and environmental challenges underscores the criticality of maintaining quality amidst change.
The rapid pace of change reinforces our determination to ensure that our services remain adaptable, consistent, and of the highest quality to meet the demands of the future. Our foremost priority remains the assurance of audit quality. We have consistently embraced a risk-based approach to our System of Quality Management, aligning with the standards outlined in the International Standard on Quality Management (ISQM) 1.
We are making substantial investments across our global network to remain at the vanguard. These investments are complemented by advancements in technology and talent acquisition, fostering a more cohesive, integrated approach across borders.
We have revolutionized the audit experience through the implementation of a fully digital approach, enhancing efficiency, consistency, and adaptability.
We are leveraging cutting-edge technologies, including artificial intelligence, to further enhance quality and provide more value through deeper analysis of businesses.
We’re upskilling our people and building teams that are fluent in ESG assurance reporting to help our clients meet the goals necessary to build a more sustainable future.
While no process, technology, or investment is infallible, our commitment to maintaining the highest standards of excellence remains steadfast. We learn from our experiences and continually seek opportunities for improvement. Leveraging the breadth of our expertise, we are dedicated to serving our clients and stakeholders in the public interest, with an unwavering commitment to delivering superior audit and assurance services.
* average staff numbers for Year 2023
Revenue
9,2mStaff
124Tax & Legal
The volatility of the last years have had a significant impact on economic activity and the way we do business, leading all professional advisors through an adaptive path.
Tax could not remain unaffected; international developments both at the EU level and the international scene called for diversification.
Drawing from the needs of past years, the tax function in 2023 continued to implement and reinforce steps aimed at diversifying our business and adapting to the new conditions. The diversification to new markets, the identification of new services and the re-adjustment of client relationships on new grounds lead to a proper and prudent business transformation achieving a significant growth in revenue in the double digits.
In 2023, our agile team of professionals relentlessly worked towards identifying new markets and industries for growth. We meticulously targeted new endeavors with success, creating specialised teams of tax professionals to handle key, niche areas of taxation and thus increasing the quality of our deliverables.
Over the course of the year, we worked with a wide variety of clients in all major industries including banking, financial services, insurance companies, utilities, corporates, and last but not least, tech. In addition, we further expanded our collaboration with other KPMG member firms providing our services abroad in the areas of transfer pricing, M&A and Global Compliance Management Services among others.
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 transfer pricing team intensified client meetings, international presence and collaboration winning valuable work and delivering value to our clients. Newly formed lines of business exhibited an outstanding level of delivery contributing substantially to the overall growth of our tax function.
Given our proven record of growth and recognising the necessity for agility to shield our people from the adverse effects of volatility and high inflation rates, we will persist and amplify our endeavors to transform and expand our business through diversification. Our ongoing efforts to identify new markets and industries and shift our focus will continue and escalate, aiming to maximise growth and counteract the pressures of the economy.
In this regard, we will intensify our efforts to seek out niche talent and diversified resources. Our aim is to recruit and invest in diverse sets of capabilities and mindsets, ultimately leading to the provision of wholly integrated solutions to our clients. Innovation is paramount in this endeavor. Moving forward, we plan to continue investing in innovative approaches to expand our business and enhance the quality of our deliverables, always prioritising our clients' needs in terms of tax compliance, reporting, and regulation, thereby bolstering the trust placed in the quality of our services.
Our commitment to leadership is granted. In 2024 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.
* average staff numbers for Year 2023
Revenue
11,1mStaff
168Advisory
2023 was a challenging year for our Advisory function, mainly due to the shifting geopolitical developments worldwide. Despite the challenges, our net fees stabilised at €11.1 million and our gross revenues surpassed €13 million, which included billings from other KPMG member firms and third parties. Our team consisted of 168 professionals and seven full-time advisory Board Members, split between the Consulting and Deal Advisory functions.
This was also a year of opportunities and many successes. Throughout 2023 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 in the areas of ESG, transformation, financial modelling and regulatory compliance. Our clients' appreciation of our efforts was demonstrated by their endorsement, signifying their trust in our firm’s commitment to delivering valuable outcomes consistently.
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 Consulting department worked on several high-profile projects in the banking, insurance, and financial services industries as well as in government and utilities. In addition, we continued our efforts in the digital transformation arena, data governance and management, change management, actuarial, credit modelling, ESG and regulatory compliance. An important accomplishment this year was the increase in revenue generated from work with other KPMG member firms, fulfilling one of our key objectives. We remain committed to strengthening our ties within the KPMG network and delivering high quality services to our global clientele.
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 and we are being recognised for the level of expertise that we bring to the table and our ability to resonate and tackle issues effectively. Our People are our most valuable asset and we are very proud of our highly-skilled, talented, results-oriented professionals and aim to attract more talent to support our growth strategy. We invested in technology and innovation across various areas including actuarial, client management, due diligence and financial modeling and will continue to do so, ensuring our Advisory practice remains ahead of the competition and the top choice for employment. Our focus is on delivering high-quality services that benefit our clients and allow our team to develop their skills.
Driven by our values and work ethic, we will continue to learn and improve, to think and act boldly in all interactions and to work collaboratively with our colleagues both within KPMG in Cyprus and abroad. Embracing our differences, we will remain committed in working tirelessly for a better future and the benefit of our clients, Board Members, and our People.
* staff numbers as of 31st December 2023
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
Integrity is the first value on the list of KPMG values. We do what is right, irrespective of cost or consequences. We do that when we work, together, in teams, across teams and with other organizations. Doing the right thing should be embedded in our personal values. Our behavior in the office and the interaction that we all have with clients and people internally and externally should be as ethical as possible, in a similar way that we approach our family members and friends. In critical phases of meetings there is no time to think. We have to act naturally, and our response should be the correct one. This should give us a feeling of pride and happiness for being part of the KPMG family. We behave naturally. It is great to be able to apply our personal values daily!
The end result of Integrity is a clear direction for dealing with challenges internally and externally eventually aiming of course success. Happy clients and colleagues, friendly operating environment, health and self-fulfillment.
Having a clear direction during modern times is of primary importance for applying the correct approach when dealing with challenges. Cost push inflation increases have been and continue to be a significant headache for modern organisations. We have been noting record price increases for basic and non-basic commodities. Leaving aside the humanitarian aspect, the wars in Ukraine and Israel have material side effects on the transportation costs of products from Asia coming into Europe. These are expected to continue to rise for the foreseeable future implying that cost push inflation is expected to continue. Companies have been trying to adjust by increasing prices for products and services. Liquidity and financing are stretched, require prompt and aggressive management and serious renegotiations with banks and financiers.
We have been acting with Integrity and Professionalism, have been trying to assist our clients and add value. As KPMG 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 continuous to be a thank you to the family of KPMG. Of course, we have always been aiming professionalism by following our values.
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 achievements and by living our corporate and personal values on a daily basis.
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, ethically 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.
The impact we’ve made
Cyprus offices 6
