Nepal Reinsurance Company Delays FY 2080/81 Financial Report Amid Accounting Discrepancies
Kathmandu – Nepal Reinsurance Company has been unable to publish its fourth-quarter financial statement for fiscal year 2080/81 after inconsistencies were reportedly found across several accounting records. The delay has drawn the attention of the Insurance Authority, which has summoned the company’s CEO and departmental officials for further clarification.
According to officials, the company has not submitted its annual financial report within the mandated timeframe despite repeated reminders from the Authority. Nepal Re has cited a prolonged audit review process as the primary reason for the delay. However, the Authority is said to be dissatisfied with the explanations provided by CEO Surendra Thapa and has sought additional information to understand the underlying issues.
Sources familiar with the matter indicate that irregularities detected during the preparation of last fiscal year’s financial statement have caused delays in completing the audit. Discussions between the Authority and the company’s departmental heads are ongoing, though no final conclusion has been reached.
In recent weeks, the company has increased its visits to the Insurance Authority, similar to the trend seen among government-owned insurers facing regulatory scrutiny. The Authority has instructed Nepal Re to brief the Chairman on the matter and expedite the resolution process.
Questions have also surfaced regarding transparency in the company’s valuation process, including advance payments provided to insurance companies and overall management expenses. According to internal sources, the valuation has taken longer than expected. Concerns have also been raised about advance payments allegedly taken for employee gift distribution, although no official confirmation has been provided on whether such gifts were delivered.
The issue has contributed to internal tensions, with previous disagreements reported between the management team and the board. Earlier, CEO Surendra Poudel was absent from office for an extended period amid the dispute and later resumed duties after reporting a complaint to the police. Employees suggest that the ongoing issues could affect the timely preparation of financial statements for the current fiscal year as well.
Financial Position as of Chaitra 2081
Based on data published up to mid-Chaitra 2081, Nepal Reinsurance Company has total assets amounting to Rs. 34.64 billion. Out of this, Rs. 22.53 billion is invested, primarily in fixed deposits with various banks.
The company’s total equity stands at Rs. 20.19 billion, including Rs. 13.42 billion in share capital. The reserves amount to Rs. 4.67 billion, while the disaster fund holds Rs. 378.88 million. Retained earnings total Rs. 743.37 million, and other equity accounts for Rs. 796.98 million. These reserve funds are available for use when required. The company has set aside Rs. 1.85 billion in provisions, and its insurance liability as of Chaitra was Rs. 11.46 billion.
Nepal Re earned a net profit of Rs. 548.23 million by the end of Chaitra. During the first nine months of the previous fiscal year, the company generated Rs. 7.11 billion in net insurance premiums.