Rules of procedure for the Supervisory Board's Audit Committee Adoption and amendment of the rules of procedure. Article 1. 1.1. These rules of procedure were adopted by the Supervisory Board as from 1 January 2016. 1.2. These rules of procedure can be amended by a resolution of the Supervisory Board after advice from the Executive Board and pursuant, as the occasion arises, to a proposal from the Audit Committee. 1.3. In the event of any conflict between the provisions of these rules of procedure and provisions of the law, the Rabobank Articles of Association or other internal or external regulations binding on the Supervisory Board, then the latter provisions and regulations shall prevail. 1.4. The text of these rules of procedure has been brought to the attention of the Executive Board and the competent co-determination body. 1.5. These rules of procedure and the membership of the Audit Committee will be published on the Rabobank external website. 1.6. Terms used in this document have the same meaning as in the Rabobank Articles of Association. Membership. Article 2. 2.1. The Audit Committee consists of at least four members, including the Chairman of the Supervisory Board and the Chairman of the Risk Committee. All members shall be members of the Supervisory Board. 2.2. The membership of the Audit Committee must be such that a number of members have an in-depth knowledge of internal control, issues relating to the annual accounts, requirements for financial reporting, audits and the developments in these areas, as well as recent and relevant experience in the financial markets or have the necessary experience to allow proper supervision of the aforementioned areas.

1

2.3.

2.4.

2.5.

2.6.

The Audit Committee shall include at least one financial expert, i.e. a person who has acquired relevant knowledge and experience of financial administration and accounting issues at listed companies or at other large legal entities. The Audit Committee must also possess knowledge of information and communications technology and of the compliance role. The members of the Audit Committee shall be independent in the sense of articles 6.2 and 6.3 of the Supervisory Board’s rules of procedure, with the exception of a maximum of one member (other than the Chairman of the Audit Committee). The Audit Committee appoints a Chairman and Deputy Chairman from its midst. The Chairmanship may not be held by the Chairman of the Supervisory Board or a former director of Rabobank. The secretary of the Executive Board shall act as the secretary of the Audit Committee. The Audit Committee's secretary can delegate the secretary's duties pursuant to these rules of procedure either in whole or in part to members of the Executive Board Secretariat.

Duties and powers. Article 3. 3.1. The Audit Committee carries out the preparations for the supervision of the Executive Board relating to the following issues: a. the establishment, maintenance and operation of the internal risk management and control systems which ensure controlled business activities. This includes monitoring compliance with (i) the relevant legislation and regulations, (ii) the procedures for preparing and publishing the management report, the annual accounts, the halfyearly management report and the half-yearly accounts (hereinafter jointly referred to as the "external reporting") and other financial information and (iii) the performance of the (internal) codes of conduct, the effectiveness and adequacy of the business activities b.

and the protection of the assets; the introduction and maintenance of internal procedures that ensure that the Executive Board is cognisant of all important financial information, including the financial information of the group divisions so as to provide assurances for the timeliness, completeness and accuracy of the external reports;

2

c.

d.

e.

f. g. h.

i. j. k.

l. m.

the external reporting, including Rabobank reports to the supervisory authority (the selection of accounting policies, application and assessment of effects of relevant new rules, insight into the handling of “estimated items” in the annual accounts, forecasts, etc., and the underlying processes and activities of the internal and external auditors); the assessment of (i) the information to be provided to the Supervisory Board concerning developments at Rabobank and its affiliated company or companies as referred to in Article 30 of the Supervisory Board’s rules of procedure, (ii) the half-yearly audit report, (iii) the annual management letter published pursuant to Article 31 of the Supervisory Board’s rules of procedure and (iv) the reports from ratings institutions as referred to in Article 32 of the Supervisory Board’s rules of procedure that have assigned Rabobank a rating; monitoring compliance with recommendations and the timely resolution of shortcomings in the internal control and noncompliance with policy and (internal and external) regulations as reported by the internal auditors, external auditors and supervisory authorities; the role and the (independent) performance of the internal audit function; the Rabobank group’s policy on tax compliance; the relationship with the external auditor (see also Article 5 of these rules of procedure) including, in particular, the independence of the external auditor, the remuneration and any non-auditing work for Rabobank and its affiliated company or companies; the financing of Rabobank and its affiliated company or companies; the reliability and continuity of the applications of information and communications technology for the processing of financial data; the design and performance of the compliance organisation, including an independent compliance position, adequate reporting lines and the transparent allocation of responsibilities as laid down in the Compliance Charter of the Rabobank group; the management of the Rabobank group’s compliance risks; the supervision of the existence of regulations pursuant to which bank staff (i) may report their concerns, in confidence, about

3

3.2.

3.3.

3.4.

3.5.

3.6.

inaccuracies in external reports and other financial information and (ii) are able to submit an internal report potential or actual infringements of the provisions of the Capital Requirements Regulation or the law. The Audit Committee prepares the Supervisory Board’s report for the (half-yearly) management report and the examination of the annual accounts, the management report and the other information enclosed with the report. The Audit Committee also prepares for the Supervisory Board’s discussion of the half-yearly management report and the halfyearly accounts. The Audit Committee is also entrusted with the task of monitoring: a. the external reporting process; b. the efficiency of the internal control system; c. the internal audit system; d. the statutory audit of the annual accounts and the consolidated annual accounts, as well as the assessment of the half-year accounts. The Audit Committee will report on the issues referred to paragraphs 1, 2 and 3 of this Article to the Supervisory Board, which will take account of these reports and recommendations in its decisions. The Audit Committee will submit recommendations to the Supervisory Board on the issues referred to in paragraphs 1, 2 and 3 of this Article either on request or on its own initiative. The Audit Committee will determine how it carries out its duties and activities. Decisions by the Audit Committee which set out how it will carry out its activities will be attached to these rules of procedure.

Duty relating to the internal audit function Article 4. 4.1. The Audit Committee will approve the Audit Charter, discuss the mission, positioning, powers and responsibilities of the internal audit function annually as included in the Audit Charter and will assess whether the 4.2.

provisions of the Audit Charter are being adequately implemented. The Audit Committee will advise the Supervisory Board on the proposed appointment, suspension or dismissal of the director and the deputy director of the internal audit function. Should the director of the internal audit function be suspended or dismissed then the Audit Committee will monitor the discussion of the

4

4.3.

4.4.

4.5.

4.6.

4.7.

reasons with the supervisory authority. Should the director of the internal audit function be suspended or dismissed then the Audit Committee will monitor the public disclosure of the situation. The Chairman of the Audit Committee: a. will establish that the performance criteria for the remuneration of the director and deputy director of the internal audit function do not contain any elements that could pose a threat to their independence and objectivity; and b. will provide the Chairman of the Executive Board with annual input on the performance of the director of the internal audit function. The Chairman of the Audit Committee will be informed annually about the outcome of the appraisal of the director of the internal audit function. The Audit Committee will take note of the annual remuneration of the director of the internal audit function and establishes that this corresponds to the importance of the function. The Audit Committee will approve the internal audit function’s audit plan and significant changes to this audit plan. The Audit Committee establishes that the audit plan takes account of a periodic assessment of the entire risk governance framework, including: (i) the effectiveness of the risk management and compliance functions; (ii) the quality of the risk reports to the Executive Board and Supervisory Board; and (iii) the effectiveness of the internal control system. The Audit Committee will examine whether the internal audit function has sufficient knowledge, skills and resources to implement its plan. The Audit Committee will also take note of the findings of the internal audit function arising from its activities. The Audit Committee will monitor the audit plan and will discuss the periodic reports from the internal audit function (including the identification or observation of potential major fraud and breaches of regulations revealed during its work or its risk analysis). The Audit Committee will verify that the internal audit reports are issued without management filtering. The Audit Committee will verify that the management deals with the findings of the internal audit function effectively and in good time.

5

4.8.

4.9.

4.10.

4.11.

The Audit Committee will verify that there is good coordination with other sources of assurance, such as risk management, compliance and external auditors. The Audit Committee will evaluate the quality management system adopted by the internal audit function and the results from the (external) review of the system’s working. The Audit Committee will obtain an insight into (the effectiveness of) the performance of the internal audit function and will inform the Supervisory Board of its findings annually. The Audit Committee will ensure that the internal audit function maintains open lines of communication with the Executive Board, external auditors, supervising authorities and the Audit Committee itself.

Duties relating to the external auditor. Article 5. 5.1. The remuneration of and terms of assignment for the (annual accounts) audit by the external auditor will be approved by the Supervisory Board at the proposal of the Audit Committee and following consultation with the Executive Board. 5.2. The Audit Committee will adopt the policy for the performance of nonaudit work by the external auditor. The award of assignments to and the remuneration of the external auditor for non-audit work will be approved by the Supervisory Board on the proposal of the Audit Committee and following consultation with the Executive Board. 5.3. The Audit Committee will take note of the total remuneration for the work performed by the external auditor worldwide with companies within the group for audits of the annual accounts and non-audit work. 5.4. The Audit Committee will assess how the external auditor is involved in the contents and publication of financial reports concerning Rabobank other than the annual accounts. 5.5.

The Audit Committee and the Executive Board shall report annually to the Supervisory Board on developments in the relationship with the external auditor. These reports will, in particular, address the auditor's independence, including the desirability of rotation between the responsible partners at the offices of the external auditor entrusted with conducting the audits and of the performance of non-audit work for

6

5.6.

5.7. 5.8. 5.9.

5.10.

5.11.

5.12. 5.13.

Rabobank by the same offices of the external auditor. The Supervisory Board will take this report into account when submitting its proposal for the (re)appointment of an external auditor to the General Meeting. At least once every four years, the Audit Committee and the Executive Board will carry out a comprehensive appraisal of the performance of the external auditor in the various capacities in which the external auditor acts. The most importance conclusions from these appraisals are reported to the General Members' Council for the purposes of the assessment of the proposal for the appointment of the external auditor. The Audit Committee will approve the objective criteria which are applied when selecting the external auditor. The Audit Committee will monitor that the external auditor remains objective and carries out the auditing process effectively. The Audit Committee will verify that the external auditor is involved in the preparation of the work schedule for the internal audit function and is informed of the findings of the internal audit function. The Audit Committee will submit a proposal to the Supervisory Board concerning the policy relating to the independence of the external auditor and any (potential) conflicts of interest between the external auditor and Rabobank. The Audit Committee will have discussions with the external auditor on (i) the letters of representation received from the Executive Board, (ii) the most important findings from the audit of the annual accounts and (iii) any material shortcomings in the internal control of the financial reporting process. The external auditor can contact the Audit Committee directly. The Audit Committee will be the first point of contact for the external auditor when the auditor identifies irregularities in the contents of the external reporting. 'Irregularities' does not refer to findings which are compatible with the standard assessment and audit activities. Regular contact persons within the half-year/year-end process are the first point of contact for such findings.

Duties relating to the compliance function. Article 6. 6.1. The Audit Committee will discuss the mission, positioning, powers and responsibilities of the compliance function annually and will assess

7

6.2.

6.3.

6.4.

6.5. 6.6. 6.7.

6.8.

6.9.

whether the provisions of the Rabobank Group Compliance Statute are being implemented in an adequate manner. The Audit Committee will advise the Supervisory Board on the proposed appointment, suspension or dismissal of the director and the deputy director of the compliance function. The Chairman of the Audit Committee will establish that the performance criteria for the remuneration of the director and deputy director of the compliance function do not contain any elements that could pose a threat to their independence and objectivity. The Chairman of the Audit Committee will be informed annually about the outcome of the appraisal of the director of the compliance function. The Audit Committee will carry out an annual assessment of the extent to which the compliance programme results in the effective management of compliance risks. The Audit Committee will also take cognizance of the findings of the compliance function arising from its activities. The Audit Committee will monitor the compliance programme and will discuss the periodic reports of the compliance function. The Audit Committee will verify that the management deals with the findings of the compliance function in good time. The Audit Committee will verify that there is good coordination with other sources of assurance, such as risk management and the internal and external auditors. The Audit Committee will take note of all significant breaches of laws and regulations and (internal) compliance standards and will discuss the results of investigations carried out by external supervising authorities. The Audit Committee will obtain an annual insight into (the effectiveness of) the performance of the compliance function and will inform the Supervisory Board of its findings.

Information. Article 7. The provisions of articles 28 and 29 of the Supervisory Board’s rules of procedure apply correspondingly to the members of the Audit Committee. Meetings. Article 8.

8

8.1.

8.2.

8.3.

8.4. 8.5.

8.6.

8.7.

The meetings of the Audit Committee are convened by the Chairman of the Audit Committee or, in the Chairman’s absence, by the Deputy Chairman of the Audit Committee. A request for the convention of a meeting can be submitted by a member of the Audit Committee, the Executive Board or the Supervisory Board. The agenda for the meeting is adopted by the Chairman of the Audit Committee (or by the Deputy Chairman in the Chairman’s absence) after consultations with the Chairman of the Supervisory Board. The members of the Audit Committee will receive the agenda and the accompanying documents for the relevant meeting no less than seven working days before the meeting. In urgent situations the Chairman (or the Deputy Chairman in the Chairman’s absence) can decide that the agenda and/or the accompanying documents will be issued closer to the meeting, although at least one day before the meeting. The Audit Committee will determine whether and when the Chairman of the Executive Board and/or other members of the Executive Board with a substantive involvement should attend its meetings. Following prior consultation with the Executive Board, the Chairman of the Audit Committee (or in the Chairman’s absence, the Deputy Chairman) can invite other persons to attend a meeting of the Audit Committee. Should one or more members of the Audit Committee object to the presence of the persons referred to in the first or second sentence then the Audit Committee will decide. The director of the internal audit function and the external auditor will receive the full agenda and associated documents prior to each meeting and will generally attend the meetings. The Audit Committee will meet at least once a year with the director of the internal audit function and in the absence of the Executive Board. The Chairman of the Audit Committee will meet with the director of the internal audit function at least once a quarter, and with the director of the compliance function at least once every six months. The Audit Committee will meet at least once a year with the external auditor in the absence of the Executive Board and (representatives of) the internal audit function. The Audit Committee meets at least four times a year, of which at least once (i) to discuss the annual figures, the audit report and the management

9

8.8.

8.9.

8.10.

letter, (ii) once to discuss the half-year figures and (iii) twice to discuss the report from the compliance function. The meetings at which the half-year figures, the annual figures, the audit report and the management letter are discussed will also be attended by the director of the internal audit function and the external auditor. The meetings that discuss the report on the compliance function are attended by the director of the compliance function. The Audit Committee will evaluate its own performance at least once a year. The results from these evaluations are reported to the Supervisory Board. Without prejudice to the provisions of the previous paragraph, the director of the internal audit function and the director of the compliance function may contact the Audit Committee directly. Minutes are taken of the Audit Committee's meetings. A copy of these minutes is submitted to the Supervisory Board.

Conflicts of interest. Article 9. The provisions of Article 19 of the Supervisory Board's rules of procedure are applicable mutatis mutandis to the members of the Audit Committee. Application mutatis mutandis of the Supervisory Board's rules of procedure. Article 10. Any relevant issues which are not covered by these rules of procedure are governed by the Supervisory Board’s rules of procedure.

10