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Rules governing the Supervisory Board's Audit Committee Royal BAM Group nv
 
These rules have been prepared on 15 September 2004 on the basis of article 5.2 of the rules of the Supervisory Board of Royal BAM Group N.V. and have come into force on 1 October 2004. These rules have been amended on 18 November 2009.
 
Article 1 Responsibilities 
1.1  Without prejudice to article 5.1 of the Supervisory Board’s rules, the Audit Committee assists and advises the Supervisory Board in relation to the issues mentioned in article 1.2 of these rules and prepares resolutions of the Supervisory Board in relation thereto.
1.2 The responsibilities of the Audit Committee shall include supervising and assessing:
  1. the effect of internal risk management and control systems, including supervision of the enforcement of the relevant legislation and regulations, and supervising the effect of the internal codes of conduct;
  2. the financial information by the company (the reporting process and the outcome thereof), choice of accounting policies, application of general accepted accounting rules, applied policies in relation to the financial reporting and the assessments of the Executive Board thereto, clarity of the notes, application of the effects of new legislation in this area, clear information on the treatment of estimated entries (schattingsposten) in the annual accounts, forecasts and the involvement of the external auditor thereto, etc.;
  3. the compliance of recommendations and observations of the external auditors;
  4. the internal and external audit-process and the audit plan of the external auditor and the internal audit function;
  5. the policy of BAM Group on tax planning;
  6. the financing of BAM Group;
  7. application of information and communication technology (ICT) and the reliability, continuity and protection of the ICT systems;
  8. the financial-administrative organization.

    9.   Furthermore the audit committee has the following responsibilities: 

  9. to be informed about (i) opinions of legislative and supervising institutions and (ii) changes in (international) accounting standards;
  10. advising with respect to the risks and other relevant issues which relate to (i) take-overs and other substantial investments and (ii) lawsuits against the company and group companies;
  11. maintaining frequent contact and supervising the relationship with the external auditor, including in particular (i) assessing the external auditor's independence, (ii) assessing and proposing with regard to the remuneration and instructions to the external auditor to provide non-audit services for BAM Group, (iii) determining the involvement of the external auditor in respect of the contents and publication of financial reporting by the company other than the annual accounts, and (iv) as first contact, taking note of irregularities in respect of the content of the financial reporting as may be reported by the external auditor within the scope of his engagement;
  12. recommending the appointment of an external auditor by the company’s general meeting of shareholders;
  13. preparing the approval by the Supervisory Board of (i) the annual accounts for adoption by the general meeting of shareholders (ii) the dividend policy and profit distribution and (ii) the annual operational plan and substantial capital investments of the company;
  14. assessing the propagation by the Executive Board and management of the proper management culture through communicating the importance of internal risk management.
1.3 The Audit Committee shall prepare after each meeting a report of its deliberations and findings and shall distribute said report to the members of the Supervisory Board. The same applies to each advice adopted outside a meeting.
1.4 At least once a year the Audit Committee, shall, together with the Executive Board, report to the Supervisory Board on the developments concerning the relationship with the external auditor, in particular his independence, and including the desirability of rotation of partners within a firm of external auditors that is responsible for the company's audit, and of the desirability of any non-auditing work for the company by the same external auditor. The selection and recommendation of the external auditor will also depend on the outcome of this report.
1.5 At least every four years, the Executive Board, shall, together with the Audit Committee, thoroughly assess the functioning of the external auditor in the various entities and capacities in which the external auditors operates. The main conclusions of the assessment shall be notified to the general meeting of shareholders for the purpose of considering the recommendation for the appointment of the external auditor of the company.
1.6 The Audit Committee ensures that the external accountant shall receive the financial information underlying the adoption of the quarterly and half yearly accounts and other interim financial reports and shall be given the opportunity to respond to all information.
1.7 If there is no internal audit function, the Audit Committee shall review annually the need for an internal auditor. Based on this review, the Supervisory Board shall make a recommendation on this to the Executive Board in line with the proposal of the Audit Committee, and shall include this recommendation in the report of the Supervisory Board.
Article 2 Composition, expertise and independence of the audit committee 
2.1  The Audit Committee is one of the Supervisory Board’s standing committees.
2.2 The Audit Committee shall consist of at least three members. The members shall be appointed and dismissed by the Supervisory Board.
2.3 Without prejudice to article 3.3 of the Supervisory Board’s rules, the following requirements must be observed in composing the Audit Committee:
  1. at least one of its members must have relevant expertise in financial administration and accounting for listed companies or other large companies;
  2. all of its members must be independent within the meaning of article 3.3 under d) of the Supervisory Board’s rules, with the exception of no more than one member;
  3. neither the chairman of the Supervisory Board nor any of the company's former members of the Executive Board, may be the chairman of the Audit Committee.
Article 3 Chairman 
3.1  Subject to article 2 of these rules, the Supervisory Board shall appoint one of the committee members as chairman. The chairman shall be primarily responsible for the proper functioning of the Audit Committee. The chairman shall act as the spokesman of the Audit Committee and shall be the main contact for the Supervisory Board.
Article 4 Audit committee meetings (committee calendar, participants, minutes) 
4.1  The Audit Committee will meet whenever one or more of its members have requested a meeting. Audit Committee meetings are generally held at the offices of the company, but may also take place elsewhere.
4.2 The Audit Committee may also adopt an advice outside a meeting, provided that none of its members has objected to this form of advising and each of them is in favour for the resolution in question. The chairman shall ensure that the advice given in this manner will be put in writing and will be signed by all the committee members.
4.3 The Audit Committee shall decide if and when the chairman of the Executive Board, the Executive Board member responsible for financial affairs and the external auditor and, if appointed, the internal auditor of the company have to be present at its meetings.
The Audit Committee will at least once a year hold a meeting with the external auditor of the company without any the company's Executive Board members or offices being present.
The external auditor of the company may ask the chairman of the Audit Committee to be present at Audit Committee meetings.
4.4 Audit Committee meetings shall be convened by or on behalf of the chairman of the Audit Committee or by any other member requesting the meeting. Notices convening a meeting and the agenda of items to be considered and discussed therein shall be dispatched as early as possible before the meeting and sent to each member of the Audit Committee.
The internal auditor, if appointed, shall have excess to the external auditor and to the chairman of the Audit Committee.
4.5 Of each meeting minutes shall be prepared. They shall generally be adopted in the next meeting. If all members of the committee agree on the contents of the minutes they may be adopted earlier. The minutes shall be signed for adoption by the chairman.
4.6 In order to be able to properly execute its duties the Audit Committee shall receive, inter alia, from the Executive Board the following documentation; 
  • (with respect to the meeting in March) the internal annual accounts, the annual accounts, the report of the Executive Board and the report of the Supervisory Board;
  • (with respect to the meeting in March) the report of the external auditor to the Supervisory Board;
  • (with respect to the meeting in March) the management letter of the external auditor;
  • each time the financial report on intermediate results;
  • press releases with respect to the annual result and intermediate results;
  • (with respect to the meeting in March) the audit plan of the current year;
  • (with respect to the meeting in September) a progress report on the follow up of the recommendations of the external auditor;
  • twice a year an overview of the major operational and financial risks;
  • the operational plan of the following year.
Article 5 Rules of the Supervisory Board applicable 
5.1  Articles 1.1, 1.5, 8.1, 8.2, 17 and 18 of the rules of the Supervisory Board shall apply mutatis mutandis to these rules.
Bunnik, 18 November 2009
W.K. Wiechers
Chairman of the Supervisory Board