Northern Islami Insurance PLC received a qualified audit opinion for 2025 after its auditor failed to obtain confirmation for fixed deposit receipt balances worth Tk82.55 crore, raising questions over the independent verification of a large portion of the insurer’s bank deposits.
The auditor also included an “Emphasis of Matter” paragraph in the audit report for the year ended 31 December 2025.
According to the audit report, confirmations were not received for 747 fixed deposit receipts, commonly known as FDRs, amounting to Tk82.55 crore out of total FDR balances worth Tk95.93 crore.
Only 135 FDR confirmations amounting to Tk13.38 crore were received by the reporting date.
The auditor said relevant FDR statements and instruments were obtained during the audit process, though direct confirmations from banks remained unavailable for most deposits.
The report also flagged the absence of third-party confirmations for inter-insurance balances involving other insurers.
Northern Islami Insurance reported receivables of Tk53.13 crore from other insurance entities and payables of Tk15.10 crore to such entities.
However, balance confirmations from the respective counterparties had not been received as of the audit reporting date, according to the auditor.
The audit report further said the insurer failed to comply with the Bangladesh Securities and Exchange Commission’s Corporate Governance Code, 2018, which requires at least one-fifth of a listed company’s board members to be independent directors.
Northern Islami Insurance had only two independent directors on its 16-member board against the required minimum of four, the auditor said.
The report, however, noted that the board composition remained compliant with the Insurance Act, 2010.
The auditor also stated that the company did not make provisions for post-employment benefits required under the Bangladesh Labour Act, 2006.
As a result, employee benefit liabilities may have been understated and the financial statements did not comply with applicable legal requirements, according to the audit observations.
