2011 European fraud survey Presentation of Romania findings June 2011

2011 European Fraud surveyPage 2 Survey approach and participant profile Between 4th January and 1st February 2011, our researchers conducted a total of 2,365 interviews with employees in 25 European countries either online or by telephone in the local language. Participants were employed in companies with over 500 employees, stock exchange listed or multinationals. Overall 104 interviews were conducted in Romania, profiled as follows: Number of employees globally % Above – – – – Less than Not available 0 Role within organization% Board director0 Senior management9 Other management21 Other employees70 Throughout the report comparisons are made to respondents in Emerging Markets: the Baltics (Estonia, Latvia and Lithuania), Croatia, Czech Republic, Hungary, Poland, Romania, Russia, Slovakia, Turkey, Ukraine; Mature Markets: Austria, France, Germany, Greece, Ireland, Italy, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, UK and to the overall European findings. Please note that, due to rounding, some figures may not sum to 100%

Summary 2011 European Fraud surveyPage 3 ►Business conditions are improving in Romania, where respondents think that there is less pressure to reduce costs (52%) and make redundancies (31%) than two years ago. ►However companies must guard against complacency, as 86% of those surveyed in Romania still think that more companies will get into financial difficulties over the next year (93% in 2009), which is considerably higher than across Europe as a whole (64%). ►With the shift away from cost cutting, there is even more focus on boosting profits – with the number of Romanians feeling under pressure to increase profits doubling since the last survey (26% vs 12% in 2009). ►A substantial 59% of employees believe management will cut corners to meet performance targets. This view is not shared by management respondents, with just 29% of those surveyed saying that they would consider cutting corners (much lower than across Europe, 50%). ►23% of management would offer personal gifts and services to win or retain business, and 23% would offer cash payments. ►15% of employees think it acceptable to misstate accounts. ►Over half consider the economic downturn to have increased the level of corrupt practices. A substantial 88% believe that bribery or corrupt practices are widespread in Romania, significantly higher than across Europe (62%). ►16% of Romanian companies surveyed have experienced a significant fraud within the last two years (Europe 16%)

Summary (cont’d) 2011 European Fraud surveyPage 4 ►Despite a third of Romanian respondents reporting an increased focus on anti-fraud efforts at their companies, awareness of specific anti-fraud measures is lower than in 2009 – particularly for expenditure controls (43% vs 67% in 2009) and confidential reporting lines (9% vs 27% in 2009). ►However, more respondents in Romania have received anti-bribery training (41%) than any other country surveyed. Consistent with the overall findings, code of conduct, tone from the top and the communication of clear penalties are also key elements of corporate anti-bribery culture in Romania. ►With bribery and corrupt practices considered to be widespread in Romania, 72% of respondents believe there is a real commercial advantage to having a strong reputation for ethical behavior. Furthermore, the majority say they would be unwilling to hire suppliers that have been involved in a major bribery or corruption case (64%, 53% across Europe). ►Demand is growing for greater regulatory supervision in Romania to reduce the risk of fraud, bribery and corruption - up to 89% from 81% in ►However, respondents are skeptical of regulators, believing they are unwilling to prosecute bribeyr and corruption or ineffective in doing so. Many of these respondents think that bribery and corruption are too widespread (74%) and that regulators do not wish to damage businesses during the economic downturn (41%). ►79% of respondents in Romania think that the kind of compensation package offered by the Dodd- Frank Act will encourage whistleblowing. This level is significantly higher than across emerging markets as a whole (69%).

% Mature Markets % Emerging Markets % Overall Europe European Fraud surveyPage 5 Businesses remain under pressure Q. Following the difficult economic conditions of the last two years, which of the following do you expect to be the biggest pressures affecting your company in the next 12 months? Base: All Romania respondents 2011 (104); 2009 (100); Mature Markets (1,335); Emerging Markets (1,030); Overall Europe (2,365) Increased pressure to reduce costs Redundancies / job losses Increased pressure to comply with regulations Increased pressure to boost profit margins Increased pressure to boost revenues None of these

2011 European Fraud surveyPage 6 Businesses remain under pressure Q. Following the difficult economic conditions of the last two years, which of the following do you expect to be the biggest pressures affecting your company in the next 12 months? % Applies % Board/ Management % Other employees Base: All Romania respondents 2011 (104); Board level / senior management or other management (31) Other employee/ Other (73) Increased pressure to reduce costs Redundancies / job losses Increased pressure to comply with regulations Increased pressure to boost profit margins Increased pressure to boost revenues None of these

Many companies still facing financial difficulties 2011 European Fraud surveyPage 7 Base: All Romania respondents 2011 (104); 2009 (100); Overall Europe (2,365) Q. To what extent do you agree or disagree with the following statement about the impact of the current global economic situation? More companies will get into financial difficulties over the next 12 months % Strongly agree Mature Markets27 Emerging Markets27 % Strongly disagree % Tend to disagree % Tend to agree % Strongly agree % Don’t know % Neither agree nor disagree Europe 2011 Romania 2011 Romania 2009

Fewer anticipated redundancies than in European Fraud surveyPage 8 Q. To what extent do you agree or disagree with the following statement about the impact of the current global economic situation? There will be an increase in the number of redundancies as companies cut costs Base: All Romania respondents 2011 (104); 2009 (100); Overall Europe (2,365) % Strongly agree Mature Markets25 Emerging Markets30 % Strongly disagree % Tend to disagree % Tend to agree % Strongly agree % Don’t know % Neither agree nor disagree Europe 2011 Romania 2011 Romania 2009

Bribery seen as widespread in many markets Q. For each of the following, can you let us know whether you think it applies, or does not apply to your country/industry or whether you don’t know? 2011 European Fraud survey Page 9 Base: All Romania respondents (104); Overall Europe (2,365) Bribery/corrupt practices happen widely in business in this country Has been an increase in corrupt practices due to economic downturn In our sector, it is common practice to use bribery to win contracts % Applies Europe

2011 European Fraud survey Pressure on management to improve financial performance remains high Q. To what extend do you agree or disagree that managers will be under increased pressure to deliver good financial performance over next 12 months? Page 10 Base: All Romania respondents 2011 (104); 2009 (100); Overall Europe (2,365) % Strongly agree Mature Markets35 Emerging Markets38 % Strongly disagree % Tend to disagree % Tend to agree % Strongly agree % Don’t know % Neither agree nor disagree Europe 2011 Romania 2011 Romania 2009

2011 European Fraud survey Management perceived to be likely to cut corners Q. To what extent do you agree or disagree that company management is likely to cut corners to meet targets when economic times are tough? Board level/ senior management / other management Page 11 Base: Board level/senior management / other management (Romania 31; Europe 709); Other non-management employees (Romania 73; Europe 1656) Other non-management employees % Strongly disagree % Tend to disagree % Tend to agree % Strongly agree % Don’t know % Neither agree nor disagree % Agree Europe 50 62

Unethical behavior is widespread in some markets 2011 European Fraud surveyPage 12 Base: Board level / senior management or other management (31) Other employee/ Other (73); Overall Europe (2,365) Q. Which of the following do you feel can be justified if they help a business achieve growth? Offering personal gifts or services to win or retain business Offering cash payments to win or retain business Offering entertainment to win or retain business Deliberately misstating a company's financial performance None of the above Don't know % Overall Europe

Significant fraud experienced in the last 2 years Q. Has your organization experienced a significant fraud in the last 2 years? 2011 European Fraud surveyPage 13 % Yes Russia 37 Hungary 27 Croatia 26 Baltics 21 Portugal 21 Greece 20 Poland 19 Czech Rep 17 Turkey 17 Ireland 16 Romania 16 TOTAL 16 Ukraine 16 Germany 13 Norway 12 Spain 12 Switzerland 12 France 11 Italy 11 Austria 10 Netherlands 10 Sweden 10 UK 10 Slovakia 5 Base: All Romania respondents (104) % Yes Mature Markets13 Emerging Markets20

2011 European Fraud Survey Room for improvement in corporate anti-fraud efforts Q. Would you say your company’s efforts to combat fraud have been increasing or decreasing over the last few years? % Increasing% Decreasing Turkey4210 Hungary383 Ireland376 Slovakia373 France346 Poland348 Romania349 Switzerland337 Austria322 Portugal3210 Greece317 Norway296 UK295 TOTAL297 Italy266 Germany257 Croatia248 Ukraine235 Netherlands224 Spain2211 Baltics215 Czech Republic 206 Russia1914 Sweden174 Page 14 Base: All Romania respondents (104) % Decreasing% Increasing% Don’t know% No difference % Increasing Mature Markets28 Emerging Markets29

% Mature Markets % Emerging Markets % Overall Europe Anti-fraud efforts falling behind Q. Does your company have any of the following anti-fraud measures in place? 2011 European Fraud surveyPage 15 Base: All Romania respondents (104); Mature Markets (1,335); Emerging Markets (1,030); Overall Europe (2,365) % 2011% 2009 Internal auditing External auditing Stronger controls/scrutiny of expenditure Code of conduct HR/legal counsel Legal due diligence Person with a position of confidentiality Anti-fraud training No measures in place Don’t Know

Embedding anti-bribery / anti-corruption culture in business 2011 European Fraud surveyPage 16 Q. Which of the following, please let us know whether it applies, or does not apply, to your organization, or whether you don’t know? Base: All Romania respondents (104); Overall Europe (2,365) % Overall Europe

% Applies % Board/ Management % Other employees European Fraud surveyPage 17 Embedding anti-bribery / anti-corruption culture in business Q. Which of the following, please let us know whether it applies, or does not apply, to your organization, or whether you don’t know? Base: All Romania respondents 2011 (104); Board level/senior management or other management (31); Other non-management employees (73) We have an anti-bribery/anti- corruption policy and code of conduct Senior management has strongly communicated its commitment to our anti- bribery/anti-corruption policies There are clear penalties for breaking our anti- bribery/anti-corruption policies The guidance on anti- bribery/anti- corruption is available in local languages There is training on our anti- bribery/anti-corruption policies People have been penalized for breaching our anti- bribery/anti- corruption policies

Impact of anti-bribery / anti-corruption measures on corporate behavior 2011 European Fraud surveyPage 18 Base: All Romania respondents 2011 (104); Overall Europe (2,365) Q. To what extent do you agree or disagree with the following statements? There is a commercial advantage in being a company with a strong reputation for ethical behavior Our anti-bribery/anti-corruption code of conduct is adequate in preventing and detecting bribery/corrupt practice I have seen people with questionable ethical standards being promoted in this company Employees of my company comply with the anti-bribery/anti-corruption policy / code of conduct Our anti-bribery/anti-corruption policy has little impact on how people actually behave I don’t trust our management to behave ethically % Agree Europe % Strongly disagree % Tend to disagree % Tend to agree % Strongly agree % Don’t know % Neither agree nor disagree

2011 European Fraud surveyPage 19 % Yes Board director / senior management /other management 45 Other employee40 Q. Have you personally received anti-bribery/anti-corruption training? Extent of anti-bribery/anti-corruption training % Yes Mature Markets23 Emerging Markets 18 % Yes Romania 41 Ireland 38 Norway 32 Switzerland 32 Greece 29 UK 26 Italy 22 Slovakia 22 Sweden 21 TOTAL 21 Turkey 20 Poland 18 Russia 18 France 17 Hungary 17 Portugal 17 Spain 17 Netherlands 16 Austria 15 Germany 15 Ukraine 14 Czech Rep 13 Baltics 11 Croatia 5 Base: All Romania respondents (104)

Perception of companies involved in major bribery cases 2011 European Fraud surveyPage European Fraud surveyPage 20 Q. And if they were a supplier or agent, which, if any of the following would apply? Q. Thinking about your perceptions of a company that had been involved in a major bribery or corruption case, which, if any of the following would apply? Base: All Romania respondents (104); Overall Europe (2,365) % Europe

The expected impact of the Dodd-Frank Act on reporting of suspected fraud, bribery and corruption 2011 European Fraud surveyPage 21 Q. Do you think such an approach will encourage employees of US publicly listed companies to report cases of suspected fraud, bribery or corruption? % Yes Overall Europe66 Mature Markets63 Emerging Markets69 Board level / senior management / other management 84 Other employee 77 Base: All Romania respondents (104) As you may know, the United States of America introduced the Dodd-Frank Act in In summary, this makes whistleblowers – employees (of any nationality) who reveal new information about suspected illegal corporate behavior of a US publicly listed company to the US securities regulator – eligible, in certain circumstances, to receive a substantial reward, up to 30% of any fines of more than $1million.

Perception of regulators across different countries 2011 European Fraud surveyPage 22 Q. Thinking about regulators and law enforcement authorities in your country, which of the following statements best describes their approach to cases of bribery/corruption? % Unwilling to prosecute % Feel is ineffective Ireland 5124 Ukraine 5116 Croatia 4452 Czech Rep 41 Russia 3738 Greece 3643 Slovakia 3655 Hungary 3453 Portugal 3438 Romania 3451 Baltics 3142 Turkey 3043 Netherlands 2737 TOTAL 2642 France 2439 Poland 2356 Spain 1844 Austria 1443 Italy 1367 UK 1230 Germany 1041 Norway 1035 Switzerland 848 Sweden 731 Base: All Romania respondents (104) % Mentioning

Perceived challenges to the effectiveness of regulators 2011 European Fraud surveyPage 23 % Mature Markets % Emerging Markets % Overall Europe Base: All Romania respondents answering codes 2 or 3 at Q33 (88); Mature Markets (782); Emerging Markets (830); Overall Europe (1612) Q. Why do you say regulators and law enforcement authorities are not willing to prosecute cases of bribery/corruption or are not effective in securing convictions? % Mentioning

Demand for increased supervision by regulators Q. To what extent do you agree or disagree with each of the following statements? There should be more supervision by regulators and government in the future, to try to reduce the risk of fraud, bribery and corruption 2011 European Fraud surveyPage 24 Base: All Romania respondents (104); 2009 (100); Overall Europe (2,365) % Strongly agree Mature Markets37 Emerging Markets57 % Strongly disagree % Tend to disagree % Tend to agree % Strongly agree % Don’t know % Neither agree nor disagree Europe 2011 Romania 2011 Romania 2009

Employees want more aggressive regulatory oversight Q. To what extent do you agree or disagree with each of the following statements? I would feel more secure in my job knowing that government / regulators were scrutinizing our company more closely 2011 European Fraud surveyPage 25 Base: All Romania respondents (104); 2009 (100); Overall Europe (2,365) % Strongly agree Mature Markets25 Emerging Markets39 % Strongly disagree % Tend to disagree % Tend to agree % Strongly agree % Don’t know % Neither agree nor disagree Europe 2011 Romania 2011 Romania 2009

Burcin Atakan Senior Manager Fraud Investigation & Dispute Services Tel: Fax: Ernst & Young Assurance | Tax | Transactions | Advisory About Ernst & Young Ernst & Young is a global leader in assurance, tax, transaction and advisory services. Worldwide, our 141,000 people are united by our shared values and an unwavering commitment to quality. We make a difference by helping our people, our clients and our wider communities achieve their potential. For more information, please visit © 2011 Ernst & Young. All Rights Reserved. Thank you!