Investor Releases
Matáv's declaration of its corporate governance practices based on the Corporate Governance Recommendations published by the Budapest Stock Exchange
BUDAPEST, April 28, 2005
DECLARATION
in connection with the Corporate Governance Recommendations (dated
December 8, 2003) published by the Budapest Stock Exchange Company Limited by Shares regarding corporate governance practices
Matáv Hungarian Telecommunications Company Ltd. (the "Company") declares as set forth below and provides the following information:
1. to Section 1.1.2 of the Recommendations
The mission of the Board of Directors covers matters set forth in this Section.
Yes (Complies)
No (Please explain)
The Board of Directors established its Charter.
Yes (Complies)
No (Please explain)
2. to Section 1.2.2 of the Recommendations
The Supervisory Board established its Charter and work schedule.
Yes (Complies)
No (Please explain)
3. to Section 1.3.2 of the Recommendations
Minutes have been prepared on meetings of the Board of Directors and the Supervisory Board, respectively, and resolutions had been properly administered.
Yes (Complies)
No (Please explain)
4. to Section 1.6.1. and Section 2.1.6 of the Recommendations
The Board of Directors has prepared the guidelines regarding the evaluation and
remuneration of the management.
Yes (Complies)
No (Please explain)
The Board of Directors has published the guidelines regarding the evaluation and
remuneration of the management.
Yes (Complies)
No (Please explain)
(when, where:
Corporate website of Matáv, Investor Relations http://www.ir.matav.hu/english/vir/javadalmazas.html
June 25, 2004)
5. to Section 1.7. of the Recommendations
An independent internal audit department (independent internal control) functions at the Company.
Yes (Complies)
No (Please explain
:
Internal Audit Branch is the independent internal auditing organization of the Matáv Group. From the organizational viewpoint it reports directly to the Chief Executive Officer. The Director of Internal Audit reports directly to the Supervisory Board and the Chief Executive Officer. Internal Audit reports to the Supervisory Board and the Chief Executive Officer on its audit work performed.)
The independent audit department has an auditing plan approved by the Board of
Directors or the Supervisory Board.
Yes (Complies)
No (Please explain)
6. to Section 1.10. of the Recommendations
The shareholders' meeting and the Supervisory Board have been informed about the fact that the outside audit firm of the Company received a material assignment in addition to the audit.
Yes (Complies)
No (Please explain:
In view of the fact that Matáv is also listed on the New York Stock Exchange, in compliance with the extremely strict provisions of the Sarbanes-Oxley Act, the Audit Committee, which operates as a committee of the Supervisory Board is responsible for the oversight of the work of the independent external auditor of the Company. For this activity the "Rules of Procedure and Pre-Approval Policy of the Audit Committee of the Supervisory Board of Matáv Ltd." approved by the Supervisory Board in 2003 were applicable, since December 8, 2004 the "Rules of Procedure and Pre-Approval Policy of Matáv Ltd.'s Audit Committee of the Supervisory Board" approved by the Supervisory Board and superseding the earlier regulation are applicable. All Supervisory Board members receive the minutes of the Audit Committee meetings and of fax votes.)
7. to Section 2.1.1. of the Recommendations
The guidelines for disclosures have been prepared by the Company.
Yes (Complies)
No (Please explain)
8. to Section 2.1.4. of the Recommendations
The Board of Directors published its actual business strategy.
Yes (Complies)
No (Please explain)
(when, where:
Corporate website of Matáv, Investor Relations http://www.ir.matav.hu/english/vir/strategia.html
June 25, 2004
Annual Report
2004 http://www.ir.matav.hu/english/evesj/2004/AnnualReport2004.pdf April 27, 2005)
9. to Section 2.1.6. of the Recommendations
The Company published in accordance with Section 2.1.6 of the
Recommendations the information relating to the career of the members
of the Board of Directors, the
Supervisory Board and executive management.
Yes (Complies)
No (Please explain)
(when, where:
Board and Supervisory Board Members elected on the General Meeting held on April 28, 2004
Corporate website of Matáv, Investor Relations http://www.ir.matav.hu/english/vir/igazgatosag.html
http://www.ir.matav.hu/english/vir/felugyelobiz.html
June 25, 2004
Members of the Management Committee
Corporate website of Matáv, Investor Relations http://www.ir.matav.hu/english/vir/ugyvezetobiz.html
June 25, 2004
Members of the Board of Directors, Supervisory Board and management
Annual Report
2004 http://www.ir.matav.hu/english/evesj/2004/AnnualReport2004.pdf April 27, 2005)
10. to Section 2.1.7. of the Recommendations
The Company published in accordance with Section 2.1.7 of the Recommendations its risk management guidelines.
Yes (Complies)
No (Please explain)
(when, where:
Corporate website of Matáv, Investor Relations http://www.ir.matav.hu/english/vir/pdf/risk_management_eng.pdf
June 25, 2004)
11. to Section 2.1.9 of the Recommendations
The Company published its guidelines on insider dealings.
Yes (Complies)
No (Please explain)
(when, where:
Corporate website of Matáv, Investor Relations http://www.ir.matav.hu/english/vir/pdf/Insider_eng.pdf
June 25, 2004)
12. to Section 2.1.10. of the Recommendations
The Board of Directors published in accordance with Section 2.1.10 of the
Recommendations information regarding the relationships of the directors and members of the management with third parties.
Yes (Complies)
No (Please explain)
(when, where:
Corporate website of Matáv, Investor Relations http://www.ir.matav.hu/english/vir/igazgatosag.html
http://www.ir.matav.hu/english/vir/felugyelobiz.html
http://www.ir.matav.hu/ english/vir/ugyvezetobiz.html
June 25, 2004)
Information and other notes
1. to Section 1.3.1. of the Recommendations
The Board of Directors held with 82 % average participation ratio 5 meetings in the business year of 2004.
The Supervisory Board held with 85 % average participation ratio 3 meetings in the business year of 2004.
2. to Section 1.5.2. of the Recommendations
The
ratio of the independent directors qualifying as independent according
to the recommendation of the Budapest Stock Exchange compared to the
total number of directors: 77 % independent.
3. to Section 1.5.5. of the Recommendations
The
ratio of the independent Supervisory Board members qualifying as
independent according to the recommendation of the Budapest Stock
Exchange compared to the total number of Supervisory Board members was
66 % independent until September 29, 2004. Since Joachim Kregel
nominated by Deutsche Telekom to the Supervisory Board resigned from
his Supervisory Board membership as of September 30, 2004, from that
date the ratio of the independent Supervisory Board members qualifying
as independent according to the recommendation of the Budapest Stock
Exchange compared to the total number of Supervisory Board members
changed to 62 %. (When the ratio of the independent Supervisory Board
members is determined the employee representatives participating in the
Supervisory Board are not qualified as independent by Matáv Ltd. in
line with the recommendation of the Budapest Stock Exchange.)
4. to Section 1.8. of the Recommendations
At the Company the below board committees held the below number of meetings per
committee in the business year of 2004:
- Remuneration Committee: 3 meetings
- Audit Committee: 2 meetings
5. to Section 3.1.4. of the Recommendations
In preparing and holding the shareholders' meeting at the Company the relevant
recommendations on preparation and holding of shareholders' meeting had been taken into account in the business year of 2004.
Yes
No
6. The Company established a Corporate Governance Code .
Yes
No
(available at
Corporate website of Matáv, Investor Relations http://www.ir.matav.hu/english/kozgy/mtv030724or01e.pdf
http://www.ir.matav.hu/english/vir/pdf/BoDrules_eng.pdf
http://www.ir.matav.hu/english/vir/pdf/SBrules_angol.pdf
http://www.ir.matav.hu/english/vir/pdf/ACUGYREND1208A.pdf)
7. The Company established a Code of Ethics.
Yes
No
(available at
Corporate website of Matáv www.matav.hu/english/mtav/codeofethics.pdf)
8.
The function of the Chief Executive Officer and the Chairman of the Board of
Directors is fulfilled by the same person.
Yes
No
Date: April 28th, 2005
Elek Straub
Chairman-CEO
Dr. Klaus Hartmann
Member of the Board of Directors,
Chief Financial Officer