Exhibit
14.2  RULES OF PROCEDURE AND PRE-APPROVAL POLICY   AUDIT COMMITTEE OF THE SUPERVISORY BOARD   MATÁV LTD.   December 8, 2004


Rules of Procedure and pre-approval policy of Matáv Ltd.s Audit
Committee of the Supervisory Board   I.             General Provisions  1.The Audit Committee (hereinafter the Committee) of the Supervisory
Board of Matáv Ltd. (hereinafter the Company) is a permanent committee,
composed of the members of the Supervisory Board of Matáv Hungarian
Telecommunications Company Ltd. pursuant to the authorisation set out in
Article 35 of Act CXLIV of 1997 regarding Business Associations and Section
3.12. of the Rules of Procedure of the Supervisory Board (the SB).  2.  The Committee is comprised of three (3)
members who are elected by the SB with simple majority of the votes,
immediately after the annual General Meeting, for the same duration as the
members of the SB are elected. Its members shall elect the Chairman of the
Committee. After April 30, 2005 only those persons who comply with the
requirements of independence applicable to the Company pursuant to the rules of
the US Securities and Exchange Commission (the SEC) can be elected as members
of the Committee. At least one member of the Committee must be a financial
expert as defined in the SEC regulations.  3.The
Committee shall constitute a quorum if at least two (2) members are present.
The Committee passes its resolutions by simple majority with the condition that
if two members are present resolutions shall only be made with unanimous votes.
The Committee may make resolutions through fax voting. In this case the voting
shall only be valid and resolutions shall only be regarded as adopted if at
least two members with unanimous votes have returned their signed voting card
to the Secretariat of the Chairman-CEO. In the event of fax voting the Chairman of the Committee, until
his election one member of the Committee initiates the fax voting and the
Secretariat of the Chairman-CEO shall inform the members and the Supervisory
Board about the fact of passing the resolution and about the date of its
entering into force.  4.The Chief Financial Officer of the
Company or a person he nominates shall be permanently invited to the meetings
of the Committee, with consultancy right. The Head of Internal Audit and one of
the delegated employee representatives of the Supervisory Board shall be a
permanent invitee on the Committee meetings. The Companys independent external
auditor participates in the meetings of the Committee as required, at the invitation
of the Committee. Other experts may also participate at the meetings of the
Committee as invitees. The Chairman shall be entitled to select the invitees,
upon the proposal of the members.  5.The Committee, within the scope of
authorities of the Supervisory Board as provided for in the Act on Business
Associations and the Articles of Association, shall have the power to act as
designated by the Supervisory Board and in compliance with the requirements of
the Budapest Stock Exchange and the New York Stock Exchange, as well as the
SEC.  2


6.Duties of the Committee acting within the scope of
authority designated by the Supervisory Board:  The Committee shall pay increased
attention to the activity of the Companys independent external auditor.  The Committee shall, in
particular:  Be directly responsible for the oversight of
the work of the independent external auditor engaged for the purpose of
preparing or issuing an audit report or performing other audit, review or
attest services for the Company;  Evaluate the proposal of the Board of Directors
on the election, recall and determining the remuneration of the independent
external auditor;  Examine the proposals on the acceptance of the financial
statements according to the Act on Accounting and on the distribution of
profits, prior to submission of these to the Supervisory Board;  Examine the audited financial statements
prepared in accordance  with  IFRS and US GAAP, the independent external
auditors report prior to their submission to the SB, in particular, from the
aspect of changes in the accounting principles or practice of the International
Financial Reporting Standards (IFRS) and the US Generally Accepted Accounting
Principles (US GAAP), corrections identified by the audit, the preconditions
of profitability, etc.;  Review the Management Letter;  Review the reports to be submitted to the stock
exchanges and financial authorities;  Review the Annual Report on Matávs Internal
control system;   Establish procedures for the receipt,
retention and treatment of complaints received by the Company regarding
accounting, internal accounting controls or auditing matters and the
confidential, anonymous submission by employees of the Company of concerns
regarding questionable accounting or auditing matters;  Complete all those tasks that the SB assigns to
the scope of authority of the Committee.  7The Committee shall have at least two (2)
meetings each year. One of the meetings shall be held prior to the auditing
procedure according to IFRS and US GAAP at the end of the year and the second
shortly after completing the audit according to IFRS and US GAAP. Upon specific
motions submitted by any of the members regarding a proposed agenda a meeting  3


must be convoked. In justified cases the independent external auditor
is entitled to request the convocation of a meeting from the Chairman.  8.The meetings of the Committee shall be
convoked and chaired by the Chairman.  9.The administrative services for the
Committee are provided by the Secretariat of the Chairman-CEO. The Secretariat
must distribute the minutes taken at the meetings to all members of the
Committee and the Supervisory Board.  10. The Committee
shall inform the Supervisory Board and the Board of Directors in writing    about possible deficiencies found during
its investigations.  11.The Committee is entitled to hire
external advisors  through the Supervisory Board - if it deems it necessary in
order to carry out its tasks.  12.The Company shall provide for appropriate
funding for (a) payment of compensation to any independent external auditor of
the Company engaged for the purpose of preparing or issuing an audit report or
performing other audit, review or attest services for the Company, (b) payment
of compensation to any external advisors retained by the Committee and (c)
ordinary administrative expenses of the Committee. Payment and expenses under
(b) and (c) will be determined by the Committee in its sole discretion.  13.The Rules of Procedure regulating the
operation of the Committee are determined by the Committee, taking into account
the internal regulations of the Company, and are submitted to the Supervisory
Board for approval.  II.            Audit
and Non-Audit Services Pre-Approval Policy  1. Statement of Principles  Under the Sarbanes-Oxley Act of 2002 (the Act), the
Audit Committee of the Supervisory Board of the Company is responsible for the
oversight of the work of the Companys independent external auditor. By
approving this Policy,  in order to
permit efficient operation of the Audit Committee, the Supervisory Board vests
the Committee with the authority specified in the Policy, with which it helps
to carry out this task.  On the basis of SEC rules, types of services can be
defined that an independent external auditor may no longer provide in the
futureand thus cannot be
approved. Examples are given in Appendix E. The following principles shall
apply:      An independent
external auditor may not take on any management functions.     An independent
external auditor may not review his/her own work.     An independent
external auditor may not serve in an advocacy role for the auditing client.  4


All other audit-relevant and non-audit-relevant services
to be performed by the independent external auditor for the Company are subject
to the Audit Committees pre-approval in order to ensure that the independent
external auditor does not impair his independence from the Company.
Audit-relevant services are services that are directly connected to the
preparation of the individual or consolidated financial statements of the
Company.  The SECs rules establish two different approaches to
pre-approving audit and non-audit services, which the SEC considers to be
equally valid. Proposed audit and non-audit services either:  may be pre-approved without consideration of specific
case-by-case services by the Audit Committee (general
pre-approval)or require the specific pre-approval of the Audit
Committee (specific pre-approval).  The Audit Committee assumes that the combination of
these two approaches will result in an effective and efficient procedure to
pre-approve the respective services.  Appendices A, B, C and D to this Policy describe
audit, audit-related, tax and all other services that are subject to the Audit
Committees general pre-approval. The term of any general pre-approval is 12
months from the date of pre-approval, provided that the Audit Committee does
not consider it necessary to determine a different period.  The Committee is entitled to, as necessary,
review and with the authorization of the Supervisory Board, modify the
Appendices attached to the present Policy.  The Audit Committee may determine, from time to time,
the preliminary approval fee levels for all services to be provided by the
independent external auditor. The Audit Committee may determine, for each
fiscal year, an appropriate ratio between the total fees for audit,
audit-related and tax services and the total amount of fees for certain,
permissible non-audit services classified as all other services.  Unless a service provided by the independent external
auditor has received general pre-approval by the Audit Committee, it will
require specific pre-approval by the Audit Committee. The commissioning of any
such  service that would exceed the
pre-determined cost levels or proportions 
will also require specific pre-approval by the Audit Committee. The
specific case-by-case pre-approval of the Audit Committee is required whenever
the independent external auditor is commissioned in connection with such
services that affect internal controls and are not auditing services (SOX
404-related services).  The independent external auditor shall certify to the
Committee that he has complied with all applicable external auditor
independence rules (including those of the SEC), and whether or not he is aware
of any breaches of this Policy.   2. Audit services  Audit services include audits of financial statements,
audits or reviews of the annual and quarterly statements and services provided
in connection with statutory duties and submissions  5


required for regulatory authorities, including the
preparation of audit reports and certificates, approvals, domestic and
international statutory audits, tax consulting, to the extent necessary for
compliance with generally approved auditing standards, as well as support for
the issuance and auditing of the documents to be supplied. Audit services also
include information systems and procedural reviews and testing in order to
understand and place reliance on the systems of internal control, and
consulting for the management if there are any questions relating to invoicing,
the preparation of the balance sheets and reporting in connection with the
audits.  Regarding the annual audit service fees in connection
with the audit of the stand alone financial statements of the parent company
prepared according to the Hungarian Accounting 
Rules (HAR), as well as of the consolidated group-level financial
statements of the Company prepared according to HAR and International Financial
Reporting Standards (IFRS) final approval falls within the authority of the
Annual General Meeting, which relies on the preliminary opinion of the Audit
Committee and the Supervisory Board.  All
further audit services to be provided for the Company or its subsidiaries are
subject to the general or specific pre-approval of the Audit Committee.  The Audit Committee has granted general pre-approval
with respect to the audit services in Appendix A. All audit services not
listed in Appendix A are subject to specific pre-approval by the Audit
Committee.  3. Audit-related services  Audit-related services are mainly services that are
usually performed by the external auditors in connection with the audit of the
annual financial statements. Audit-related services also include due diligence
services pertaining to potential business acquisitions/disposals, consultations
related to accounting, financial reporting or disclosure matters not classified
as audit-relevant services; assistance with understanding and implementing
new accounting and financial reporting standards; financial audits of employee
benefit plans and assistance with internal control reporting requirements.  The Audit Committee has granted general pre-approval
with respect to the audit-related services listed in Appendix B. All
audit-related services not listed in Appendix B are subject to specific
pre-approval by the Audit Committee.  4. Tax consulting  The Audit Committee assumes that the independent
external auditor can provide the Company with advice on tax issues, such as
compliance with tax law, tax planning and tax advice in a narrower sense,
without this impairing the external auditors independence.  The Audit Committee will not permit the commissioning of
the independent external auditor in connection with the provision of tax
services, if the only purpose of such services is to avoid taxes or tax
treatment that is not supported by tax law and related regulations.  6


The Audit Committee has granted general pre-approval
with respect to the tax services listed in Appendix C. All tax services not
listed in Appendix C are subject to specific pre-approval by the Audit
Committee.  5. All other services  A general pre-approval has been granted by the Audit
Committee for other services according to Appendix D that, by their very
nature, consist of routine and repetitive tasks and will not impair the
independence of the external auditor. All other permitted services not listed
in Appendix D are subject to specific pre-approval by the Audit Committee.  A list of services banned by the SEC that may no longer
be provided by the independent external auditor is attached to this Policy as
Appendix E; this list is not intended to be exhaustive. The SECs rules and
relevant implementing instructions should be consulted to rule out the
possibility of the commissioning of prohibited services.  6. Other provisions  According to the law and the SECs requirements, the
Audit Committee has stipulated conditions for the rotation of the audit
partners responsible, as well as exclusion criteria for the engagement of
former audit partners or the engagement of the independent external auditor, in
Appendix F.   7. Procedures  Quarterly, all consolidated companies belonging to the
Matáv Group report to the Head of the Group Internal Audit (BLI) on the
orders for the services provided by the independent external auditor and the
fees of these services, including the services generally pre-approved to be
performed by the independent external auditor and a detailed description of
services. The Head of the Group Internal Audit will check whether such services
are conforming to the list. In case of doubt the Head of the Group Internal
Audit will inform the Audit Committee. The Audit Committee will be informed at
least twice a year about the services provided by the independent external
auditor.  The rules of procedure of commissioning the independent
external auditor are contained in Appendix G. Services that can be provided
by the independent external auditor may be commissioned exclusively after
having completed Appendix I (Clearance Certificate). Requests or applications
to provide services that require specific
pre-approval by the Audit Committee will be submitted to the Audit
Committee, through the Head of the Group Internal Audit in Hungarian and in
English with the content described in Appendix H, by the independent external
auditor providing such services and the management of the Company or subsidiary
requesting such services, and must include a joint statement as to whether, in
the view of the independent external auditor and the management of the Company
or subsidiary concerned, the request or application is consistent with this
Policy and the SECs rules on external auditor independence.  7


The Audit Committee has designated the Head of the Group
Internal Audit with the task of monitoring all services provided by the
independent external auditor and determining whether such services comply with
this Policy. The Head of  the Group
Internal Audit  will report to the Audit
Committee twice a year in writing about the results of such monitoring.  The Head of the Group Internal Audit will immediately
report to the Chairman of the Audit Committee any breach of this Policy that
comes to the attention of the Head of the Group Internal Audit.  8. Additional requirements  The Audit Committee takes additional steps on an annual
basis to meet its responsibility to monitor the work of the external auditor
and his independence. This includes reviewing a formal written statement from
the external auditor delineating his relationships with the Company, in line
with Standard No. 1 of the Independence Standards Board, and discussing with
the external auditor his methods and procedures for ensuring independence.  9. Entry into force  These Rules of Procedure and Policy enter into force on
December 8, 2004, and replace the  Rules
of Procedure and Policy  approved by the
Supervisory Board on December 11, 2003.  These Rules of Procedure and Policy were approved by the
Supervisory Board at its meeting held as of December 8, 2004.  8


Appendix A Pre-Approved Audit
Services  December 8, 2004  1.Annual
audits and other audits for Matáv Ltd. (Company), and for its subsidiaries
and associated companies based on the statutory requirements of each country.
In addition, audits that the independent external auditor is required to
perform to be able to render an opinion on the audit of the Companys
consolidated financial statements. Above all, this includes:  a.Audit of the annual financial statement
prepared in compliance with the statutory requirements of the given country and
the International Financial Reporting Standards (IFRS) b.Review of the quarterly
statements/statement packages prepared in compliance with the IFRS and German
commercial law principles c.Auditing procedures in
order to confirm compliance with regulations under the dual system, the  German 
standard setting or comparable institutions d.Auditing procedures in
order to confirm that the figures submitted to apply for public grants are in
conformity with the figures of the annual or interim financial statements e.Auditing procedures to
confirm that the figures submitted for participation in an invitation to tender
or an official contract already awarded are in conformity with the figures of
the annual or interim financial statements f.Auditing procedures to
verify the completeness of a split of a company code or similar organizational
or technical IT changes in Accounting g.Expanded auditing
procedures if the amount of liabilities exceed that of the assets and
assistance in ensuring compliance with regulations of insolvency law or similar
statutory regulations h.Auditing procedures to
determine whether the underlying processes are suitable for ensuring the
complete determination of other financial obligations i.Monitoring changes in
software releases to determine whether old data stock is transferred properly j.Monitoring the
introduction of new software to check whether the software has a negative
impact on system procedures for the preparation of financial statements, and
thus to ensure that the proper preparation of financial statements by the
system is not jeopardized k.Implementation of branch
office audits to ensure compliance with the generally accepted principles for
accounting and preparation of a balance sheet l.Auditing procedures to
submit a certificate for evidence of use for capital investment projects
subject to government subsidies  2.Services in
connection with the submission of reports to the SEC. Above all, this includes: a.Checking US GAAP
reconciliation b.Checking the registration
statements (e.g. F3, F4 or 144As) c.Checking reports to be
submitted to the SEC on a regular basis (e.g. Form 20F, Form 6-K, proxy
statements etc.)  9


d.Checking other documents
to be submitted to the SEC and documents published in connection with
subscription offers for securities (e.g. comfort letters) e.Assistance provided by
the independent external auditor in replying to SEC statements, but without
serving in an advocacy role and making managerial decisions  3.Auditing
procedures in order to confirm management reports on the Companys internal
control system. Above all, this includes: a.All auditing procedures
in connection with the provisions under Section 404 of the Sarbanes-Oxley Act  4.Consultation
services for the Companys management in the course of the audit of the annual
financial statements as to the proper accounting or disclosure of transactions
and events and/or the actual or potential impact of final or proposed
accounting rules, standards or interpretations by the SEC, FASB or other
standard-setting bodies. Above all, this includes the following cases: a.Checking the financial
handling of complex and difficult transactions that result in additional costs
requiring separate accounting, either due to the level of difficulty or the
scope b.Granting access to the
accounting research databases and other databases of an auditing company for a
fee, the sale of appropriate licenses and the sale of specialized literature  5.Deliberations
of the independent external auditors accounting
technical department or other specialist departments in order to reach a final
assessment of a situation. These activities are always defined as being
audit-relevant services, irrespective of whether they are charged separately,
since they are required to form a final opinion on the Companys annual
financial statements.  6.Review
activities at companies in which the Company holds a participating interest
(less than majority interest) in order to achieve the level of auditing
certainty required for granting an audit report for the consolidated financial
statements.  7.Auditing
procedures carried out in connection with the annual financial statements on
the Companys information systems and internal controls. In this connection,
sufficient auditing certainty must be achieved as to whether information
systems and integrated internal controls are suitable for confirming the
statements made in the report by the Board of Management on the Companys
internal control system.  8.Auditing
procedures in connection with the audit of the annual financial statements that
are required for granting an audit certificate for the consolidated financial
statements. Above all, this includes: a.The auditing of
impairment tests b.The correct
implementation of a change in the presentation of the income statement (e.g.
the change from total-cost accounting to cost-of-sales accounting) c.Correct presentation of a
reclassification/recategorization (e.g. new key to allocate expenses within the
divisional structure)  10


The general pre-approval of the Audit Committee applies
to the audit-type services listed in this Appendix, provided that the amount of
the fee payable at group level for the independent external auditor for these
services in the given financial year does not exceed the total annual fee
already paid and still payable for him at group level for audit-type services
performed in the previous year, plus 5 per cent.  11


Appendix B Pre-Approved Audit-Related Services  December 8, 2004  9.Implementation of due diligence and similar services
pertaining to potential business acquisitions and disposals. This also
includes: a.Auditing procedures in
connection with the prepared interim financial statements of a company that is
to be acquired or disposed of or other organizational units of a sub-unit b.Review of working
documents of another auditing company that has already audited the annual or
interim financial statements of a company to be acquired  10.Audits of
significant acquiree companies under Rule 3-05  11.Audit
services in connection with employee benefit plans  12.Auditing
procedures going beyond the originally agreed scope that are required for
meeting reporting requirements under public law or internal company
regulations. This also includes: a.Auditing procedures in
connection with the preparation of facultative statements in compliance with
IFRS b.Auditing procedures on
the proper functioning of software applications that have been installed to
transfer the figures from the Companys systems to an IFRS statement c.Review of the product
cost calculation and IT systems supporting this to check conformity with
requirements of the regulatory authority or other supervisory bodies  13.Consultations
and recommendations in connection with internal control system requirements.
Above all, this includes: a.Monitoring process
optimization measures b.Auditing procedures
regarding rights of access to various software applications  14.Consultation
services for the Companys management as to the proper accounting or disclosure
of transactions and events and/or the actual or potential impact of final or
proposed rules, standards or interpretations by the SEC, FASB or other
standard-setting bodies. Above all, this includes: a.Consultations and
recommendations in connection with the clarification of requirements resulting
from a change to existing or the introduction of new accounting requirements,
recommendations and notes by national and international standard-setting
bodies, such as DRSC, SEC, FASB and IASB. b.The independent external
auditor shall examine a complex and difficult transaction proposed by the
Company and shall notify the Company of the consequences that the
implementation of this transaction may have on the balance sheet prior to
carrying out the transaction. The service billed for this assessment and
consultation is an audit-related service.  12


15.Auditing
procedures that are carried out in connection with the audit of the annual
financial statements and concern the Companys information systems. Above all,
this includes: a.Auditing procedures in
connection with the computing centers operated by the Company regarding the
proper functioning and security of the infrastructure, systems and networks as
well as applications and files installed at such centers (e.g. power supply,
fire protection, contingency plans, safety concept etc.) b.Consulting and
recommendations in connection with IT security requirements as part of the
internal control system  16.Auditing of
closing balance sheets of companies that have been sold  17.Audits and
reviews of carve-out financial statements relating to acquisitions or disposals
in connection with the audit of the consolidated financial statements of the
Company  18.General
assistance regarding the interpretation of SEC requirements and rules pursuant
to the Sarbanes-Oxley Act  19.Auditing
procedures enabling an assessment of risk management controls  20.Expert
support in the periodic submission of annual and interim financial statements
to foreign authorities, the translation of annual financial statements into
foreign languages and the conversion of reported amounts into foreign
currencies after completion of the year-end audit or inspection of the
financial statements   The general pre-approval of the Audit Committee applies
to the audit-related, tax and all other services listed in Appendices B, C
and D, provided that the amount of the fee payable at group level for the
independent external auditor for these services in the given financial year
does not exceed the 15 per cent of the annual fee already paid and still
payable for him at group level for audit-type services performed in the
previous year.  13


Appendix C Pre-Approved Tax Services  December 8, 2004  21.National
tax planning and advice but not advocacy  22.Advice on
national tax compliance without serving in an advocacy role for the company  23.International
tax planning and advice without serving in an advocacy role for the company
Above all, this includes: a.Review of the basic
features of a business model from a tax perspective b.Review of the imminent
double taxation risks entailed in a specific case c.Providing opinions on how
a double taxation avoidance strategy could be designed in existing cases  24.Advice on
international tax compliance without serving in an advocacy role for the
company. Above all, this includes: a.Research work on the
different ways of handling VAT issues in various countries  25.Inspection
of and assistance in tax returns required to be submitted by the Company both
on a national and international basis without serving in an advocacy role for
the company  26.Advice on
the Companys national and international tax planning and compliance with
national tax regulations without serving in an advocacy role for the company
Above all, this includes: a.Providing tax opinions as
to whether certain transaction formats are suitable for reaching the aspired
goal or whether possible adjustments can be recommended that are more likely to
meet tax requirements b.Support and assistance in
achieving actual agreement as well as drafting advanced pricing agreements or
similar agreements that are concluded between the Company and the relevant tax
authorities,  without direct
representation of the Company in interactions with the authorities c.Assistance concerning
possible tax amendments in EU accession countries after their joining the EU  27.Assistance
with tax audits, out-of-court administrative appeals etc. without serving in an
advocacy role for the company vis-à-vis the authorities in charge. Above all,
this includes: a.Providing opinions on tax
issues arising in the course of the tax audit b.Providing second
opinions to support existing lines of argumentation of the Company during a
tax audit  14


28.Assistance
regarding the determination of transfer prices and cost allocation studies
without serving in an advocacy role for the company. Above all, this includes: a.Analysis of existing
issues regarding the problems in permanent establishments resulting from such
issues and, if appropriate, definition of suitable prevention strategies b.Review as to whether the
Companys transfer pricing guideline complies with national tax regulations c.Analysis of whether
amendments to national tax law on transfer pricing might entail problems
regarding the Companys existing transfer pricing guideline d.Analysis of existing
transfer prices to determine whether these will stand up to a review by tax
authorities e.Assistance in documenting
the calculated transfer prices to ensure that documentation requirements are
met for future tax audits f.Checking whether given
model situations comply with national tax law from the perspective of transfer
prices  29.Tax advice
on new statutory developments without serving in an advocacy role for the
company. This also includes: a.Assistance in compliance
with principles on data access and on the ability to check digital documents.
In particular, the analysis as to how cases relevant for taxation are filed in
the Companys systems to which access must be ensured for the tax authorities,
and assistance in stipulating the basic features of access rights for tax
authority employees  30.Assistance
in the introduction of performance-related compensation schemes (particularly
stock options) and their tax implications. Above all, this includes: a.The provision of data on
the compensation programs of similar companies b.Assistance to weigh the
pros and cons of each compensation program c.Analysis of the current
pay structure d.Analysis of market trends
in the application of performance-related compensation schemes e.Analysis and
recommendations concerning performance measurement f.Analysis and market
studies on the use of performance measurements at comparable companies  31.Tax
assistance and compliance with tax regulations by the Companys foreign employees
and employees sent on international assignments, without serving in an advocacy
role for the company. Above all, this includes: a.Assistance for the
employees concerned in their correspondence with local tax authorities b.Advice on tax obligations
that employees on international assignments are required to observe under local
tax regulations c.Assistance for employees
on international assignments who are subject to a local tax authority audit d.Assistance in the
calculation of tax liabilities originating in the international assignment of
employees  15


32.Training
and seminars that serve to teach general tax basics.  The general pre-approval of the Audit Committee applies
to the audit-related, tax and all other services listed in Appendices B, C
and D, provided that the amount of the fee payable at group level for the
independent external auditor for these services in the given financial year
does not exceed the 15 per cent of the annual fee already paid and still
payable for him at group level for audit-type services performed in the
previous year.  16


Appendix D Pre-Approved All Other Services  December 8, 2004  33.Internal
risk management consulting services that are unrelated to the audit. Above all,
this includes: a.Assessments and tests
regarding existing security infrastructure controls  34.Treasury
consulting services that are unrelated to the audit. Above all, this includes: a.Review of check-clearing
and float-management practices and recommendations regarding potential areas of
improvement b.Analysis of the working
capital management process to identify weak points and show areas of
improvement  35.Consulting
and recommendations in connection with evaluation models and methods prior to
an actual evaluation by a third party or the Company, without influencing the
actual assessment  36.Review of
an evaluation, unrelated to the audit, performed by the Company itself or a
third-party expert engaged by the Company to decide how the results of the
evaluation can be used in the Companys annual financial statements  37.Business
plan analysis and/or review, provided that the independent external auditor has
not prepared or implemented these business plans himself  38.Real
estate management services without serving in an advocacy role for the company
and without making managerial decisions. Above all, this includes: a.Implementation and
organization of architectural competitions b.Experts consulting
services in the problematic areas of building costs, contract awarding
procedures, invoicing the sequence of construction, drafting of agreements c.Consulting services
regarding the planning, utilization, optimization and implementation of space
and workstation requirements d.Consulting services in
matters concerning portfolio management and real estate-related IT systems e.Assistance in location
advice  39.Project
steering tasks within the framework of carve-outs, spin-offs and other intra-Group
restructuring measures, initial public offerings, company acquisitions and
disposals and other transactions, without serving in an advocacy role for the
company and without making managerial decisions  40.Analysis
and review of planning procedures, provided that the independent external auditor did
not prepare or implement these independently  17


41.Training
courses and seminars serving to teach general accounting or employment-law
basics (e.g. according to IFRS, U.S. GAAP, generally accepted accounting
standards, etc.)  42.Consulting
services and assistance in connection with the Companys compliance with
requirements stipulated by the National Communications Authority and other
authorities.  43.Human
resources consulting services without influencing the decision-making process
of the Companys management. Above all, this includes: a.Provision and processing
of information and external comparing data on national and international
developments and trends in the field of personnel development and compensation
schemes b.Provision and processing
of information and external comparing data on developments and trends in IT
systems that support the work of Human Resources c.Training and seminars
that serve to teach general basics in human resources   The general pre-approval of the Audit Committee applies
to the audit-related, tax and all other services listed in Appendices B, C
and D, provided that the amount of the fee payable at group level for the
independent external auditor for these services in the given financial year
does not exceed the 15 per cent of the annual fee already paid and still
payable for him at group level for audit-type services performed in the
previous year. However, the general pre-approval for all other services shall
only be considered as granted for up to 75% of the collective amount of
remuneration determined for the services listed in Appendices A, B and
C in the given financial year. The other type of services whose remuneration
exceeds the above measure require the specific pre-approval of the Audit
Committee.  18


Appendix E Prohibited services for the independent external
auditor   Bookkeeping
or other similar services related to the accounting records or financial
statements of the audit client  Financial
information systems design and implementation  Appraisal or
valuation services, fairness opinions or contribution-in-kind reports; in
particular fair market value opinions, certificates on valuableness, purchase
price allocation, real estate valuations  Actuarial
services  Internal
audit outsourcing services   These services listed above are not prohibited if it can
legitimately assumed that the results of these services will not be the subject
matter of auditing procedures in the course of the audit of the financial
statements of the audit client. However, in this case it is necessary to obtain specific
pre-approval before the provision of these services.    Management
functions  Human
resources (staff selection or development)  Broker-dealer,
investment adviser or investment banking services  Legal
services  Expert
services unrelated to the audit (providing an expert opinion or other expert
advice for the Company or the Companys legal representative for the purpose of
advocating an audit clients interest in litigation or in a regulatory or
administrative proceeding or investigation)  Tax services
relating to a transaction initially recommended by the independent external
auditor, the sole business purpose of which may be tax avoidance and the tax
treatment of which may not be supported in the tax law and related regulations.  19


Appendix F Audit Partner Rotation  According to the law and
the requirements of the SEC, the independent external auditor  is prohibited from providing any
audit-relevant services for the Company if any leading or coordinating audit
partner(1) (or a concurring partner) has performed audit-relevant services
for the Company in each of the five previous fiscal years (and has not rotated
off the Companys account for a period of five years thereafter); or if any
other audit partner(2) has provided the services set forth in footnote 2 below
in each of the seven previous fiscal years (and has not rotated off the Companys
account for a period of two years thereafter). Specialized partners(3) and
partners assigned to national office duties, including technical partners at
a local or national level and those assigned to a centralized quality control
function, all of whom do not have significant interaction with management on an
ongoing basis, shall not be subject to the rotation requirements. Any
discrepancy between this paragraph and the SEC rules shall be resolved in favor
of such SEC rules. In determining when audit partners are subject to rotation,
the period prior to May 6, 2003 shall be used as a basis with respect to  U.S. accounting firms audit partners and
other audit partners.  For non U.S.
accounting firms audit partners and other audit partners, the period prior to
May 6, 2003 shall not be used as a basis.   Employment contracts and similar agreements According to the
law and the requirements of the SEC, the Audit Committee has resolved that a
former partner, principal, shareholder, or professional employee of the
independent external auditor cannot accept employment with the Company if he or
she has a continuing financial interest in the independent external auditor or is
in a position to influence the operations or financial policies of the
independent external auditor. Further, the independent external auditor cannot
perform an audit for the Company if a chief executive officer, controlling
director, chief financial officer, 
accounting  director, or any
person serving in an equivalent position for the Company, was employed by that
independent external auditor and participated in any capacity in the audit of
the Company during the one-year period preceding the date of the initiation of
the audit.  
 (1) The term leading
or coordinating audit partner is defined to mean a partner or a person in an
equivalent position who is a member of the audit team and has responsibility
for decision-making on significant auditing, accounting and reporting matters
that affect the financial statements; or maintains regular contact with
management of the Company and the Audit Committee. (2) The term other
audit partner is defined to mean audit team partners who: (a) provide more
than 10 hours of audit, review or attest services in connection with the annual
or interim consolidated financial statements of the Company; or (b) serve as
the lead audit partner in connection with any audit or review related to the
annual or interim financial statements of a  20


subsidiary whose
assets or revenues constitute 20% or more of the Companys consolidated assets
or revenues. (3) Specialized
partners are defined as partners who consult other members of the audit team
during the audit, review or attestation engagement regarding technical or
industry-specific issues, transactions or events.  21


AppendixG  Procedure for the commissioning of the independent external auditor                  Responsible


Appendix
H  Application
for approval for services that require specific pre-approval by the Audit
Committee  Submitter
  of the applicationReason
  for submission of the applicationDescription
  and type of the serviceStart
  and end of service provisionAgreed
  total feePreliminaries
  (if relevant)Annexes
  (Draft Contract)Statement
  required by the PolicyDraft
  Resolution   Independent externalaudior
  
  Management of client(Place/Date/Signature)
  
  (Place/Date/Signature)  Position
  of the Head ofthe
  Group Internal Audit  23


Appendix I  On the
commissioning of the independent external auditor with the provision of
services  Clearance
certificate  CompanyName, type and number of
  service (according to Appendices A, B, C and D of the Policy)Start and end of service
  provisionAgreed total feeAnnexes (Engagement Letter)  We
hereby declare that the performance of the service named above does not impair
the required independence of the external auditor that is commissioned with
auditing the annual financial statements. We also declare that no services
exceeding the tenor of the engagement letter will be rendered.  Independent external auditor
  
  Management of client(Place/Date/Signature)
  
  (Place/Date/Signature)  Position
  of the Head ofthe
  Group Internal Audit  24