Exhibit 14.2.

RULES OF PROCEDURE AND PRE-APPROVAL POLICY

AUDIT COMMITTEE
OF THE SUPERVISORY BOARD

MATÁV RT.

11
December 2003

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Rules of Procedure and pre-approval policy of Matáv Rt.'s Audit Committee of the
Supervisory Board

I.     General Provisions

1.     The
Audit Committee (hereinafter the "Committee") of the Supervisory Board of Matáv Rt. (hereinafter the "Company") is a permanent committee, established
pursuant to the authorisation set out in Article 35 of Act CXLIV of 1997 regarding Business Associations and Article 3.12. of the Rules of Procedure of the Supervisory Board (the "SB"),
the members of which are elected by the SB from its own members.

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 durance as the members of the SB are elected. Its members shall elect the Chairman of the Committee. Only those persons can be elected to the Committee who comply with the US Securities Exchange
Commission (the "SEC") independence rules regulating the Company. The Committee shall constitute a quorum if at least two of its members are present.. The Committee passes its resolutions by simple
majority, provided, that if only two members vote on a motion, a resolution may only be passed if both members vote in favour of the motion. The Committee may make resolutions through fax voting, in
this case the relevant resolution enters into force when it is signed by at least two members. In the event of fax voting the Chairman of the Committee informs the members about the approval of the
resolution and the date thereof. At least one member of the Committee must be a financial expert as required by the SEC regulations.

3.     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 Leader of
Internal Audit Branch and one of the delegated employee representatives of the Supervisory Board shall be a permanent invitee on the Committee meetings. If it is deemed necessary the auditor preparing
reports according to IFRS and US Generally Accepted Accounting Principles ("US GAAP") shall also be invited by 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.

4.     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 "New York Stock Exchange" and the SEC.

5.     Duties
of the Committee:

The
Committee shall supervise the activity of the independent Auditor of the Company.

The
Committee shall:



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6.     The
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 must be
convoked. In justified cases external auditors are entitled to request the convocation of a meeting from the Chairman.

7.     The
meetings of the Committee shall be convoked and chaired by the Chairman.

8.     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.

9.     The
Committee shall inform the Supervisory Board and the Board of Directors in writing about possible deficiencies found during its investigations.

10.   The
Committee is entitled to hire external advisors if it deems it necessary in order to carry out its tasks. The Company shall cover the related costs.

11.   The
Rules of Procedure regulating the activity of the Committee is established by the Committee with taking into account the internal regulations of the Company and is
endorsed by the Supervisory Board with the exception of the appendices which are approved by the Committee in its sole discretion from time to time.

II.    Audit and Non-Audit Services Pre-Approval Policy

II/1. General

12.   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 auditors. As part of this responsibility, the Audit Committee is required to pre-approve the audit and non-audit services to be performed by the Company's
independent auditors in order to assure that they do not impair their independence from the Company. This Audit and Non-Audit Services Pre-Approval Policy (the "Policy") sets
forth the procedures and the conditions pursuant to which audit and non-audit services proposed to be performed by the Company's independent auditors may be pre-approved. The
Committee may establish two different approaches to pre-approving these types of services:



13.   For
both methods of pre-approval, the Audit Committee will consider whether such audit and non-audit services are consistent with the SEC's rules
on auditor independence.

14.   The
appendices to this Policy describe the Audit, Audit-related, Tax and All Other services that have the general pre-approval of the Audit Committee. The
term of any general pre-approval is 12 months from the date of pre-approval, unless the Audit Committee considers a different period and states otherwise. The Audit
Committee will annually review and pre-approve the services that may be provided by the Company's independent auditors without obtaining specific pre-approval from the Audit
Committee.

15.   Each
of the independent auditors shall review this Policy prior to his first assignment and state, that he has complied with all applicable auditor independence rules
(including those of the SEC) and is aware of the consequences of any breaches of this Policy.

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II/2  Services regulated by this Policy

A.    Audit Services

16.   The
terms and conditions regarding the annual audit services to examine Matáv Rt.'s financial and consolidated reports are approved by a general, prior
approval procedure by the Committee. The Committee has granted its general pre-approval for the audit services listed in Annex "A".

B.    Audit-Related Services

17.   Audit-related
services are assurance and related services that are reasonably related to the performance of the audit or review of the Company's financial statements or
that are traditionally performed by the independent auditors in connection with their audit of the Company's financial statements. The Audit Committee may grant general pre-approval to
Audit-related services. Audit-related services include, among others, due diligence services pertaining to potential business acquisitions/dispositions; accounting consultations related to accounting,
financial reporting; assistance with understanding and implementing new accounting and financial reporting guidance from rulemaking authorities; financial audits of employee benefit plans and
assistance with internal control reporting requirements.

18.   The
Audit Committee has granted general pre-approval with respect to the Audit-related services in Annex "B". All other Audit-related services not
listed in Annex "B" must be specifically pre-approved.

C.    Tax Services

19.   The
Audit Committee believes that the independent auditors can provide Tax services to the Companytax planning and tax advicewithout impairing
the auditor's independence, and the Committee has stated, that the general pre-approval can be granted for such services.

20.   The
Audit Committee has granted general pre-approval with respect to Tax-related services in Annex "C". All other Tax-related
services not listed in Annex "C" must be specifically pre-approved.

D.    All Other Services

21.   The
Audit Committee has granted general pre-approval with respect to All Other services in Annex "D". All other services not listed in
Annex "D" must be specifically pre-approved.

22.   A
list of the SEC's prohibited services is attached to this policy as Annex "E", which list is not intended to be exhaustive.

II/3  Pre-Approval Fee Levels or Budgeted Amounts

Pre-approval fee levels or budgeted amounts for all services to be provided by the independent auditors may be established from time to time by the
Audit Committee. Any proposed services exceeding these levels or amounts will require specific pre-approval by the Audit Committee. The Audit Committee is mindful of overall relationship
of fees for audit and non-audit services in determining whether to pre-approve any such services.

For
each fiscal year, the Committee may determine the appropriate ratio between the total amount of fees for Audit, Audit-related and Tax services and the total amount of fees for
services classified as All Other services.

II/4  Audit Partner Rotation

The independent auditors shall be prohibited from providing any audit services to the Company if any Audit Partner (or concurring partner) has performed audit
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). The term Audit Partner is defined to mean the external
auditor of the Company who has responsibility for decision-making on significant auditing, accounting and reporting matters that affect the financial

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statements;
or maintains regular contact with management of the Company and the Audit Committee. The requirements of the rotation system shall not effect those auditor partners who do not have
continuous and significant relationship with the management. This section is intended to comply with the requirements of the SEC relating to audit partner rotation and will be modified in conformity
with such SEC rules. Any discrepancy between this Paragraph VIII and such SEC rules shall be resolved in favour of such SEC rules, as such SEC rules may be modified from time to time.

II/5  Procedures

Services to be provided by the independent auditors that do not require specific pre-approval (specified in Annexes A, B, C and D) will
be reported quarterly to the Group Accounting Director.

Requests
or applications to provide services that require specific pre-approval by the Audit Committee will be submitted to the Audit Committee through the Group Accounting
Branch, and must include a statement as to whether the request or application is consistent with this Policy and the SEC's rules on auditor independence.

The
Audit Committee has designated the Group Accounting Director to monitor the performance of all audit and non-audit services provided by the independent auditors and to
determine whether such services are in compliance with this Policy. The Group Accounting Director will report to the Audit Committee on a periodic basis on the results of such monitoring. The Group
Accounting Director will immediately report to the Chairman of the Audit Committee any breach of this Policy that comes to his attention.

On
an annual basis all consolidated companies within Matáv Group will be required to report to the Group Accounting Director all engagements for services provided by the
independent auditors and all fees with respect those services provided.

II/6  Employment Relationship

The Audit Committee has determined that a former partner, principal, shareholder, or professional employee of the independent auditors cannot accept employment
with the Company if he or she has a continuing financial interest in the independent auditor or is in a position to influence the operations or financial policies of the independent auditor. Further,
the independent auditors cannot perform an audit for the Company if a chief executive officer, controller, chief financial officer, chief accounting officer, or any person serving in an equivalent
position for the Company, was employed by that independent 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.

This
Policy is issued on 11 December, 2003.

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Annex "A"

Pre-Approved
Audit Services for Fiscal Year 2004
Dated: 11 December, 2003



The
Audit Committee has pre-approved the Audit services listed above.

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Annex "B"

Pre-Approved
Audit-Related Services for Fiscal Year 2004
Dated: 11 December, 2003



The
Audit Committee has pre-approved the Audit-related services listed above.

All
other services not listed among the above Audit Related Services must be specifically pre-approved by the Audit Committee or the Chairman of the Audit Committee as
appropriate.

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Annex "C"

Pre-Approved
Tax Services for Fiscal Year 2004
Dated: 11 December, 2003



The
Audit Committee has pre-approved the Tax services listed above.

All
other services not listed among the above Tax Services must be specifically pre-approved by the Audit Committee or the Chairman of the Audit Committee as appropriate.

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Annex "D"

Pre-Approved
All Other Services for Fiscal Year 2004
Dated: 11 December, 2003



The
Audit Committee has pre-approved the other non-audit related services listed above.

For
All Other services the Audit Committee has pre-approved a level of fees up to 75% of the total fees paid to the respective audit firms for Audit, Audit-related and Tax
services that are listed in Appendix A, B and C. Any proposed All Other services exceeding these levels or amounts will require specific pre-approval by the Audit Committee.

All
other services not listed among the above All Other Services must be specifically pre-approved by the Audit Committee or the Chairman of the Audit Committee as
appropriate.

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Annex "E"Prohibited Services for independent auditors



If
the independent auditors of the Company currently perform any of the above listed services, those services must be terminated no later than May 5th, 2004 and the
Director of Matáv Group Accounting must receive immediate notification of the existence and details with respect to such prohibited services.

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