Managing the firm

PricewaterhouseCoopers Ltd is a limited liability company, which is wholly owned by its members/shareholders who, in professional firms, are commonly referred to as partners.

The Executive Board is responsible for developing and implementing the policies, strategy, direction and management of the firm. It is chaired by the Territory Senior Partner, Phidias K Pilides, whose second five year term of office ends on 31 December 2011. The Chairman appoints five Executive Board members and the other five are elected. All the Executive Board members are partners in the firm.

The members of the Executive Board all of whom have served throughout the period from 1 January 2007 are:

Phidias K Pilides (TSP)
Dinos N Papadopoulos (Deputy TSP)
Panikos N Tsiailis
Chris K Santis
Stephos D Stephanides
Costas L Mavrocordatos
Vasilis Hadjivassiliou
George M Loizou
Pantelis G Evangelou
Evgenios C Evgeniou
Philippos C Soseilos

The Executive Board holds one main monthly meeting, but also conducts formal business at additional meetings as necessary.

Assisting the TSP in the day to day operational management of the firm is the Management Team which has also been enlarged to four persons comprising the TSP, the Deputy TSP, Dinos Papadopoulos as well as Panikos Tsiailis and Chris Santis. The management team meets on a need basis to discuss and resolve matters arising.

Chris Santis who served as a member of the Executive Board and the Management Team until 30 June 2011 has resigned from his position as he was elected a member of the Oversight Board and subsequently Chairman of the Body.

Service Line Leaders in FY11

Our client facing activities are managed through a Lines of Service structure and the firm operated under five separate Service Lines:

New Leadership

In September 2010 the shareholders of the Firm have elected Evgenios Evgeniou as the new TSP to take office as from 1 January 2012 to succeed Phidias Pilides who completes his career with the firm on 31 December 2011.

Evgenios Evgeniou has served for five years as an elected member of the Executive Board, as the firm’s Human Capital Leader and as the responsible partner for services to the Banking industry. He was a member of the leadership team for Assurance in Europe. He is an Assurance partner working with clients in the financial services sector, in particular banks, investment management companies and funds.

He joined PwC in 1990 and was admitted to partnership in 2001. He has worked with PwC in London and on secondment in Athens and Moscow.

He was the Chairman of the Capital Markets Committee of the Institute of Certified Public Accountants of Cyprus and he has written articles on corporate reporting and banking issues.

Evgenios graduated from Imperial College, London University, he is a Fellow of the Institute of Chartered Accountants of England and Wales and he has participated in a number of PwC and Business School professional development programmes.

He is married with two children.

New management structure

Following the election of the new TSP who will take his position on 1 January 2012, Evgenios Evgeniou will serve as the Managing Partner of the firm as from 1 July 2011.

In addition the firm’s Management Board as of July 2011 will consist of:

Evgenios C Evgeniou, Managing Partner & Head of Markets
Costas L Mavrocordatos, Head of Tax & Legal
Liakos M Theodorou, Head of Assurance & Advisory
Theodoros C Parperis, In charge of Global Compliance Services
Philippos C Soseilos, Head of Human Capital
Christos M Themistocleous, Head of Quality, Risk Management & Independence
Angelos M Loizou, Head of Operations

To become more integrated the firm will be organised in two Service Lines: Tax & Legal (headed by Costas Mavrocordatos), which will encompass Global Compliance Services, Direct Tax, Indirect Tax, Small & Medium Enterprises and Legal, and Assurance & Advisory (headed by Liakos Theodorou) which will encompass, Financial Assurance, Risk Assurance Consulting, Performance Improvement Consulting and Deals and Corporate Finance.

To become more markets focused, a strong Markets Function is set up that will be headed by Evgenios Evgeniou. George Loizou will be responsible for Business Relationships with responsibility for PwC Experience, Human Capital headed by Philippos Soseilos, Operations headed by Angelos Loizou, Quality, Risk Management & Independence headed by Christos Themistocleous, Finance headed by Stavros Kattamis. Stephos Stephanides will be the Chairman of the purchasing committee. 

Corporate governance

Sound governance and transparency form the bedrock of leadership. At PricewaterhouseCoopers, we are committed to serving as a force for integrity, good sense and wise solutions to the problems facing businesses and the capital markets today.

Transparency and good standards of corporate governance – both in our clients’ businesses and in our own – are central to our ability to achieve those objectives. We aim to continue to achieve them from a position of strength as a leader in our profession.

Oversight Board

As part of implementing the governance directives of PwC International, the shareholders/partners of the firm have elected on 29 April 2011 the five members of the Oversight Board to hold office for 3 years from 1 July 2011 to 30 June 2014. The first five elected members are Chris Santis, Andreas Constantinides, Constantinos Constantinou, Chrysilios Pelekanos and George Lambrou. On the same day the 5 elected members of the Oversight Board have unanimously elected Chris Santis as the first Chairman of the body.

Role and powers of the Oversight Board

The Oversight Board’s primary role will be to hold management (including the elected TSP) accountable to partners and to provide effective governance over the firm’s affairs on their partners’ behalf. Their powers and responsibilities primarily lie in the following areas:

Corporate governance

• Holding management accountable
• Overseeing the direction of the firm and its governance system
• Protecting partners’ interests and ensuring fairness between partners
• Communicating with partners and holding itself accountable to the partnership

New directors

We focus on recruiting and retaining top talented people and developing them to be the next generation leaders. On 1 July 2011, five Senior Managers were appointed Directors of Operations: George Georgiou, ACA and Theodoros Stylianou, ACA both in Assurance Services, George Georgiades, ACA and Efstathios Efstathiou, ACCA both in Global Compliance Services and Martha Lambrou, ACA in Tax Services.

Global knowledge local expertise

161.000 people in 154 countries working together to offer solutions that build public trust and enhance value for clients and stakeholders.

At PwC Cyprus, we utilize the knowledge and experience of our international network to help our local clients solve complicated business problems and manage risk in an extremely competitive environment. In a global network like PwC, people from different countries and cultures have the opportunity to exchange knowledge, ideas and experience that result in new ways to support our clients.

But PwC is not only a recipient of the global network’s benefits. We have also contributed with some of our own talented people holding positions in the network.

Ethics and business conduct

PricewaterhouseCoopers (“PwC”) is one of the world’s pre-eminent professional services organisations. As professional advisers we help our clients solve complex business problems and aim to enhance their ability to build value, manage risk and improve performance. As business advisors we play a significant role in the operation of the world’s capital markets. We take pride in the fact that our services add value by helping to improve transparency, trust and consistency of business processes. In order to succeed, we must grow and develop, both as individuals and as a business. Our core values of excellence, teamwork and leadership help us to achieve this growth.

While we conduct our business within the framework of applicable professional standards, laws, regulations and internal policies, we also acknowledge that these standards, laws, regulations and policies do not cover all types of behaviour.

As a result, we also have a code of conduct for all PwC people and firms. This code is based on our values and it takes them to the next level demonstrating our values in action. The code also provides a frame of reference for PwC firms to establish more specific supplements to address territorial issues.

The numerous accreditations and awards, which we have received throughout the years, are a recognition that our firm excels in providing quality services to our clients, as well as in managing our people. These independent third-party, local and international awards and accreditations, make us proud of the quality of our work and innovative Human Capital Management practices.

Our goal is to continuously improve our working environment and facilitate the provision of high quality services to our clients.

• 2010 – ICPAC Quality Checked certificate – a quality assurance programme carried out by ACCA on behalf of the Institute of Certified Public Accountants of Cyprus (ICPAC) to all member firms holding a practising certificate.
• 2010 – Best Workplace Award – awarded to PwC during the ‘2010 Financial and Business Excellence Awards’ organised by the Cyprus Employers’ and Industrialists’ Federation.

In 2005, the European Council adopted the 8th Directive which has been enacted in Cyprus in April 2009 as the Auditors and Statutory Audits of Annual and consolidated Accounts Law of 2009 (The Transparency Law). The legislation requires that audit firms must prepare a transparency report and post it on their website within 3 months of the end of their financial year. In our case, that means before 30 September of each year.

We, at PwC, being at the leading edge of what is happening in our profession have introduced this reporting three years ago with a view to give the reader an impression of the design of the quality control system of PricewaterhouseCoopers Limited (the audit firm in the meaning of the Transparency Law), as well as of the effectiveness of its operation in the past financial year. Within this framework, the present report looks at the following aspects:

Legal and organisational structure

PricewaterhouseCoopers Limited, the audit firm, is owned 100% by the Partners of the Cyprus firm who are professional practitioners working with the firm, either directly or through PricewaterhouseCoopers, a partnership registered in Cyprus.

The CEO, together with the Executive Board, is responsible for the design, maintenance and operation of an effective quality control system. They are therefore designated as policymakers in the meaning of the Transparency Law.

External auditors

The policy within the audit firm is that only experienced professionals at partner and director level can be designated as external auditors in the meaning of the 8th Directive. All other employees operate under the responsibility of, and report to, the external auditor in charge of the engagement and have no authority to sign opinions.

Business units

The audit line of service is dividend into business units (BUs). The tasks of the Assurance Line of Service Leader (ALSL) include the following:

• implement relevant regulations in the field of quality, risk management and Code of Conduct
• pursue objectives in terms of revenue, productivity and profitability
• develop and manage an effective infrastructure (required staffing and resources, industry knowledge
• manage staffing with a focus on client service and also monitor the development, experience and behaviour of our people. The ALSL is assisted in this respect by the Assurance Human Capital partner.

In addition to the Human Capital partner, the ALSL is also supported by the Assurance Risk Management Partner who ensures compliance with the set quality and risk management standards. Among other things, these relate to the acceptance, continuation and implementation of statutory audits.

Independence office

Our organisation has been strengthened with an Independence Officer ‘conflict checking’ independence and monitoring. This supervision concerns assessing the effectiveness of our internal quality assurance and control system. The assessment comprises both the organisation and its procedures as well as the quality guidelines to be applied per individual engagement.

We have developed various systems to secure our independence. Apart from meeting the personal independence requirements, it is also extremely important to meet the requirements applicable to the other services (other assurance services).

Organisational structure of the international network

PricewaterhouseCoopers' (PwC's) member firms operate locally in countries around the world. But by working together, member firms also comprise a vigorous global network. This structure provides PwC firms with the flexibility to operate simultaneously as the most local and the most global of businesses. As a direct result, we are able to serve a broad range of clients: large, publicly-listed multinationals; small, private, domestic companies; and almost everything in between.

In most parts of the world, the right to practice accountancy is granted only to national firms in which locally qualified professionals have majority or full ownership. Consequently, PwC member firms are locally owned and managed which confers two additional strengths: a deep understanding of local markets; and the sense of individual responsibility and initiative that comes from having a stake in the practice.

The member firms are linked together through membership in PricewaterhouseCoopers International Limited (PwCIL), a UK membership-based company. PwCIL does not provide services to clients. Its primary activities are to: identify broad market opportunities and develop associated strategies; strengthen PwC’s internal product, skill, and knowledge networks; promote the PwC brand; and develop and work for the consistent application of common risk and quality standards by member firms, including compliance with independence processes.

Member firms are also part of regional groups that promote cooperation and application of common strategies, risk, and quality standards.

The unit of organisation most critical to our success is also its smallest and most fluid: the client engagement team. Much of the decision-making authority relating to how client needs are met rests with engagement teams. The team also has primary responsibility for building and expanding client relationships. And the team is where much of our people’s professional development occurs and PwC’s culture is passed to younger professionals. As a consequence, each piece of the PwC network shares a single, overriding aim: to help engagement teams connect with clients, win work, and mentor the next generation of leaders.

Commitment to quality

Quality assurance is a constant concern at PwC Cyprus. We very much appreciate the confidence our clients and the Cyprus market continue to show in us and are aware of the fact that our unrestricted commitment when it comes to quality assurance greatly contributes to our success.

During the year the process for implementing the new PwC International audit tool Aura has been completed together with the training of all Assurance members of staff. This tool will be used on all audit engagements starting from 1 July 2011.

Therefore, at PwC Cyprus we are committed to assuring the highest standards of quality at all times from our client acceptance process right through to the execution and completion of our audit work. Prior to accepting a client mandate we carry out a rigorous vetting procedure to ensure that we only work with reputable companies, be they large multinationals, SMEs (Small and Medium sized Enterprises) or family businesses. This process asks questions about how the business is run and looks into topics like beneficial ownership and compliance with money laundering legislation.

The work of PwC Cyprus itself is subject to regular reviews. In our case these come from several sources: the PwC global network’s quality review, our own internal review, the local Cyprus Institute of Accountants and finally our compliance with the ISQC1 standard.

Via the PwC global network’s quality review, one third of audit partners work is reviewed every year by other audit practices in the PwC international network. In addition to this, at PwC Cyprus we also perform internal reviews each year of the audit work of those partners who have fallen outside the scope of the global network’s quality review. 

Public Interest Entities

Staff expertise policy

To meet our stringent professional standards, PwC can rely on the services of competent professionals. By means of a good organisational and technical infrastructure, our professionals are encouraged to maintain and expand their professional expertise. The basis of this infrastructure is formed by our professional policy. Part of this infrastructure consists of the quality assurance system where our professionals can access all professional rules and regulations (both external and internal PwC rules) through a single portal. The Assurance Risk Management Manual (ARM) is particularly important in this connection.

Modern audit practice demands the use of a broad range of specialists. Our training programme is especially geared to meeting these needs. The PwC audit methodology is highly advanced and client-focused. Our people receive regular training in the application of this functionality, according to the level of their work.

Revenue

The total revenue for the financial year ended 30 June 2011 of PricewaterhouseCoopers Limited amounted to €73.6m (year ended 30 June 2010: €72.2m).

The revenue of the audit line of service breaks down as follows:

The other Assurance services include the voluntary annual audits and work relating to e.g. capital market transactions. Other services concern administrative support, among other things.

Partners’ remuneration

The firm has implemented a remuneration system for partners which reflects three elements, responsibility, equity and performance of each individual partner.

The responsibility component is paid in the form of monthly salary and is based on what work a partner is asked to do and the degree of complexity and responsibility of this work.

The equity component is paid by way of dividend to all equity holding partners on the basis of the ordinary shares held by each partner in PricewaterhouseCoopers Ltd.

The performance component is paid to partners in the form of dividends based on the preference shares of PricewaterhouseCoopers Ltd held through a trust for the partners. The preference shares are paid incentive achievement dividends.

Sanctions policy

We consider compliance with regulations, directions and instructions in the field of quality policy a matter of the utmost importance. Non-compliance not only jeopardises the good reputation and financial position of PwC, but also that of others. A sanctions policy is in place as part of our overall quality assurance and control system in order to implement the applicable quality policy. Action is therefore taken in the event of any instance of non-compliance with the (external and internal) rules. This may eventually result in a sanction varying from a written warning or reprimand to, in extreme cases, actual dismissal of the employee or termination of the affiliation agreement.

The sanctions policy contains an overview of possible sanctions and the manner in which certain regulatory infringements are referred to relevant bodies. The latter takes place in conformity with the carefully prepared procedures and, depending on the nature of the infringement and the phase of the process in question, to bodies such as the Complaints Committee, the Business Conduct Committee, the Independence Sanctions Committee or other administrative and supervisory bodies.

We plan(t) for the future: Experience for life

The financial crisis generated considerable uncertainty but responsible business is a very necessary condition for sustained social progress. Society’s expectations of companies are growing significantly and we must look beyond those needs and make a positive and responsible contribution.

Since the very beginning, we, in PwC Cyprus aspire to be a great corporate citizen by playing a leading role in the community.

The CSR activity in our organisation is all about abiding with our Code of Conduct and our main values in our relationships with all our stakeholders.

Employees, stakeholders, customers, suppliers and the society are the recipients of a series of activities and behaviors that are integrated into our organisation’s program which has 5 pillars:

Our CSR activities are led by a committee chaired by Stelios Anastasiou, Director (Global Compliance Services).

Our mission is reflected in our Corporate Social Responsibility (CSR) Motto: We plan for the future: Experience for life

Our Strategy

In PwC, CSR is integral to what we do; an inherent part of our core business. Economic goals and social objectives can no longer be regarded as separate and distinct. Our Corporate Social Responsibility strategy comes to life through a multidimensional Corporate Social Responsibility Program that aims at addressing the social, financial and environmental requirements that respond to Cyprus society's real needs. More specifically:

PwC Cyprus supports and promotes the ideal of Volunteering and supports the community through donations and sponsorships. Moreover, we focus on Corporate Community Leadership, sharing knowledge, experiences and skills through surveys. We are concerned about the environment’s well being and we motivate our people to adopt an eco-friendly behaviour. Last but not least we are involved in the provision of pro bono services where is needed.

Our people are enthusiastically getting involved not only in local projects but also in initiatives driven globally by the Global Communities of PwC, understanding how they can positively make a difference. It is encouraging to see that 83% (Source: Global People Survey 2011) of our people in Cyprus are satisfied with the actions we take to be socially responsible and that 77% (2011) are satisfied that PwC is responding appropriately to address the impact of our business activities on the environment.

Volunteering

Our people are our most significant asset and their commitment to our responsibility towards our community and our environment is a key competitive advantage. Therefore, we support local community and charity initiatives both financially and by the sharing of our time and skills.

A total of 80 people from our organisation volunteered spending 183 hours for some of our activities such as Blood Donation, Child On Line Safety and workshops we run during the year for children and siblings of our people for career, counseling and IT.

Giving

The magnitude of our giving touches the lives of many children and underserved people every year.

This year PwC donated around €45.000 to non-profit organizations, contributing significantly in their mission. It is worth mentioning that PwC supports the Cyprus Anti - Cancer Society for the renovation of the building of the Palliative Care Centre Arodaphnousa as well as the Cyprus Radiomarathon.

Moreover, we offered proceeds from our Christmas party to the Centre for Preventive Paediatrics and donated to the “Association for the Prevention and Handling of Violence in the Family“ the symbolic amount of €2.700 (€5 for each of our 540 female colleagues) on Women’s Day, 8 March in an effort to support the Association so as to build a new home for abused women in Nicosia.

Other charitable organisations we have supported this year were the “Make a wish”, “Young Volunteers” “Unicef” and many others.

Corporate community leadership

Corporate community leadership is about sharing knowledge, experiences and skills with our stakeholders through surveys publications, seminars and through participation of our people in the boards of business association, specialised agencies and educational institutions.

During FY11 our main focus under this pillar was on the following activities:

• The issue and distribution of publications and other material in an effort to share our knowledge and experiences with society.
• The participation of our people in community and/or business organisations.
• The introduction of surveys in an effort to bring to the surface topical issues and new perspectives, which we can share with our society.
• The granting of awards to top university and college students focusing on supporting talented people, the future business leaders.
• Support of our Olympic athlete Andreas Cariolou, member of the Cyprus Olympics sailing team who will represent us at the London 2012 Olympic Games.

Some of our projects

Since the middle of the last decade, PwC has launched a systematic research study on the position of women in the Cypriot Economy. The “Women in PwC Cyprus” Committee has carried out, in cooperation with the PwC chair in Business Research at the University of Nicosia, the new survey cycle of this initiative. The aim of this survey was to record and understand the perceptions of Cypriot CEOs of large private corporations, firms listed on the CSE and governmental organisations, on work issues concerning women and their career prospects.

Moreover, PwC Cyprus has signed along with another 18 Cypriot organizations the European Road Safety Charter and committed to improve road user behavior of our members and their dependents on road safety issues like speed, alcohol use and driving, seat belts and vehicles safety. We strongly support this initiative by introducing road safety sessions in the induction seminars of our new colleges.

In addition to the above projects it is worth mentioning that more than 120 of our people serve as members of the boards of business and social associations.

Environment

Companies face mounting expectations of their social and environmental behaviour, even as they confront the worst economic crisis in the last decade. We believe that the world’s social and environmental problems could not wait until the crisis is gone and for this reason we put a lot of effort in improving the sustainability of the environment. To fulfill this goal, we must protect the environment in which we work and live. A healthy planet and a healthy community go hand in hand.

We set high standards for our operating units in the area of environmental responsibility — striving for performance that does not merely comply with regulations but reduces our environmental impacts. Due to the nature of our organisation we have a relatively low impact on the environment. However, we do everything in our power to eliminate our impact.

Moreover, we very much believe that we can make a difference on the environment’s preservation and for that reason we have elaborated a number of activities.

First of all we have implemented an environmental policy, according which we minimize the use of electricity, water, paper, introduction of paper recycling. Moreover, we have reducted CO2 emissions by replacing some travelling with electronic conference calls. Our building management system uses environmental friendly cleaning products. The environmental plan of our organisation is communicated to our people through our CSR policy.

Providing professional services - Pro-bono

During FY11, 41 partners and staff were involved in the provision of pro-bono and discounted services to a number of community organisations and charitable institutions worth about €60.000. In total, more than some 500 hours were charged by partners and staff under this pillar.