Business Context and Reporting Period
This Form 6-K filing is for NUR Macroprinters Ltd., a foreign private issuer based in Lod, Israel. The report covers the month of October 2004 and was signed on November 3, 2004. The filing addresses a specific matter regarding the independence of the company's independent auditor, Ernst & Young LLP (E&Y).
Key Financial Metrics
The filing does not provide standard financial performance metrics such as revenue, profit, cash flow, margins, debt, or liquidity for the reporting period. The only financial figure disclosed relates to non-audit fees paid to an E&Y affiliate in China during fiscal years 2001 and 2002, which totaled approximately $2,000.
Material Changes and Auditor Independence Issue
The primary subject of this filing is a notification from E&Y regarding potential independence concerns. During fiscal years 2001 and 2002, an E&Y affiliate in China performed non-audit services for a foreign subsidiary of NUR, including:
- Disbursement services for salaries and daily operations.
- Submission of individual and corporate tax returns.
- Custody of tax-related funds.
These services, which involved the custody of client assets, are generally prohibited under SEC Regulation S-X. However, the services were discontinued in 2002.
Management Commentary and Conclusion
The Audit Committee and E&Y reviewed the matter. E&Y concluded that the actions did not impair its independence. The Audit Committee concurred with this conclusion based on the following factors:
- The amount of funds involved was de minimis (approximately $2,000).
- The nature of the actions was ministerial.
- The revenue, operating profit, and total assets of the subsidiary involved were not material to the company's consolidated financial statements.
- No similar instances of fund custody raising independence questions were identified.
The filing states that the company is unaware of any other similar instances.
Investor Verification Checklist
- Verify the materiality of the foreign subsidiary involved in the 2001-2002 non-audit services against the company's total consolidated assets and revenue.
- Confirm that no further non-audit services involving custody of funds have occurred since 2002.
- Review the company's most recent Form 20-F for updated financial performance data, as this filing contains no operational results.
- Monitor future communications from the Audit Committee regarding auditor independence.