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In addition to retaining KPMG LLP to audit our consolidated financial statements
for 2002, GE and its affiliates retained KPMG and many other accounting
and consulting firms to provide advisory, auditing, and consulting services
in 2002. We understand the need for KPMG to maintain objectivity and independence
in its audit of our financial statements. To minimize relationships that
could appear to impair the objectivity of KPMG, our audit committee has
restricted the non-audit services that KPMG may provide to us primarily
to tax services and merger and acquisition due diligence and audit services,
and determined that we would obtain non-audit services from KPMG only when
the services offered by KPMG are more effective or economical than services
available from other service providers, and, to the extent possible, only
after competitive bidding. These determinations are among the key practices
adopted by the audit committee, effective January 1, 2003, which are set
forth in Appendix C at page 66 (Audit Committee Charter).
 The audit committee has also adopted policies and procedures for pre-approving
all non-audit work performed by KPMG after January 1, 2003. Specifically,
the committee pre-approved the use of KPMG for the following categories
of non-audit service: merger and acquisition due diligence and audit services;
tax services; internal control reviews; employee benefit plan audits; and
reviews and procedures that the company requests KPMG to undertake to provide
assurances on matters not required by laws or regulations. In each case,
the committee also set a specific annual limit on the amount of such services
which the company would obtain from KPMG, and required management to report
the specific engagements to the committee on a quarterly basis, and also
obtain specific pre-approval from the committee for any engagement over
$500,000.
In the above table, in accordance with new SEC definitions and rules which
GE elected to adopt for this year’s proxy statement, "audit fees"
are fees GE paid KPMG for professional services for the audit of GE’s
consolidated financial statements included in Form 10-K and review of financial
statements included in Form 10-Qs, or for services that are normally provided
by the accountant in connection with statutory and regulatory filings or
engagements; "audit-related fees" are fees billed by KPMG for
assurance and related services that are reasonably related to the performance
of the audit or review of GE’s financial statements; "tax fees"
are fees for tax compliance, tax advice, and tax planning; and "all
other fees" are fees billed by KPMG to GE for any services not included
in the first three categories.
Our audit committee has adopted restrictions on our hiring of any KPMG partner,
director, manager, staff, advising member of the department of professional
practice, reviewing actuary, reviewing tax professional and any other persons
having responsibility for providing audit assurance on any aspect of their
certification of the company’s financial statements. The committee
also requires key KPMG partners assigned to our audit to be rotated at least
every five years. These requirements, and other key practices adopted by
the audit committee are set forth in Appendix C at page 66 (Audit Committee Charter).
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