Monno Fabrics financial analysis: finance cost 97% of operating profit, qualified audit (Oct 2026)

Investment considerations: FY2025 revenue BDT 1,714m, finance cost BDT 367m, profit after tax BDT 5m

Monno Fabrics Ltd. was incorporated on 07-Sep-1994 as a public limited company, went for a public issue of shares in 1996 and started commercial operation in 1998; its shares are listed on the Dhaka and Chittagong stock exchanges [1 p.61]. The company's stated business is 'to establish, set up, run and manage composite textile mills in Bangladesh' [1 p.61], and the directors describe it as 'engaged in manufacturing high-quality knit & woven fabrics that are consumed by the local & export-oriented readymade garments (RMG) industries in Bangladesh' [1 p.11]. The factory and registered office are at Monno City, Gilondo, Manikganj, with a head office at 9 Wyer Street, Wari, Dhaka [1 p.3]. The company has no subsidiaries, so every figure in this note is on the company basis. The financial year ends on 30 June.

Latest annual. The FY2025 annual report covers 'one year from 01 July 2024 to 30 June 2025' [1 p.62]; its auditor signed on 05-Nov-2025 [1 p.56]. The board approved the FY2026 audited statements at a meeting on 26-Oct-2026 and DSE posted the results on 27-Oct-2026 [11], but the FY2026 annual report is not yet in our corpus. FY2026 figures in this note are therefore the DSE-announced per-share figures and the un-audited nine-month statements to 31-Mar-2026 [2 p.5].

The record in one paragraph. From FY2013 to FY2018 the company reported a loss every year and negative shareholders' equity, reaching BDT -951.3m at 30-Jun-2018 [7 p.16]. Equity was BDT 3,127.3m at 30-Jun-2019 [5 p.7], and the balance sheet at 30-Jun-2025 carries a revaluation surplus of BDT 4,063.6m on 'Land & Land Development' from a valuation by Ahmed Zakir & Co. with a cut-off date of 31-Mar-2019 [1 p.68]. Revenue then grew in every year to BDT 1,713.9m in FY2025; finance cost grew to BDT 367.3m and profit after tax stayed between BDT 5.1m and BDT 14.1m from FY2019 to FY2025 [1 p.17] [5 p.7]. The chairman's statement says the company 'is back from the OTC market to the main market in both Stock Exchanges from June 13, 2021' and that its shares are in the 'B' category [1 p.9].

Business: yarn and fabric sold as local sales (BDT 1,598m) and deemed export (BDT 116m) in FY2025

What the company sells. Revenue is reported in two lines: 'Local Sales' and 'Deemed Export (Local L/C in Foreign Currency)' [1 p.73]. The chairman describes FY2025 revenue as coming 'by the sale of yarn and Fabrics' [1 p.9], and the inventory note splits finished goods into yarn and fabrics [1 p.64]. The directors' report states the company's market focus in these words: 'The company set its focus only on countries' export Market through inland back-to-back letter of credit' and 'The management is trying to sell through direct contact with the customers (RMG & Knitting industries)' [1 p.15]. In FY2025 local sales were BDT 1,597.8m and deemed export BDT 116.1m, 6.8% of revenue [1 p.73] [15]. The report does not name customers or give a customer concentration figure.

Capacity. The FY2021-FY2025 annual reports in our corpus do not print a production capacity, a production volume or a utilisation figure, and the notes give no spindle, loom or knitting count. Revenue per unit and capacity utilisation therefore cannot be computed from the filings. The company reported 834 employees 'working in the factory, as well as the Head Office' in FY2025 [1 p.20], which gives revenue of BDT 2.05m per employee (derived).

Plans as the company states them. The directors write: 'We have taken various initiatives to expand the business, put in advanced technology and using automated modern machinery in the production process of the company' [1 p.12], and 'Our current challenge is to import Raw Cotton rather than procuring from domestic traders' [1 p.13]. Note 37.10 states 'There was no capital expenditure commitment of the company as of 30 June 2025' [1 p.78]. Our sweep of DSE news from 11-Nov-2024 to 27-Oct-2026 found no board approval of capital expenditure or expansion [11]. Acquisition of property, plant and equipment was BDT 106.0m in FY2025 and BDT 0.6m in the nine months to 31-Mar-2026 [1 p.60] [2 p.1].

The MD&A risk text refers to ceramic and porcelain. The Management's Discussion and Analysis signed by the managing director contains a 'Risk & Concern' passage that reads 'The biggest risk factor for the ceramic sector is the scarcity of natural gas in Bangladesh. Uninterrupted gas supply is crucial for efficient production of tableware products' and 'Every single raw material for porcelain manufacturing needs to be imported' [1 p.24] [1 p.25]. Monno Fabrics does not report a ceramic or tableware business in its revenue note [1 p.73].

Line items: raw materials 56.3% of FY2025 revenue, electricity 12.3%, gas nil

Revenue. FY2025 revenue was BDT 1,713.9m, up 7.9% on FY2024; FY2024 was up 4.7% and FY2023 3.9% [15]. Deemed export fell from BDT 124.5m to BDT 116.1m in FY2025 and local sales rose from BDT 1,464.3m to BDT 1,597.8m [1 p.73]. The directors give the FY2025 split as 'Local sales was Tk.159.78 crore and Deemed Export was Tk. 11.61 crore' [1 p.13]. In the nine months to 31-Mar-2026 revenue was BDT 1,276.0m against BDT 1,246.1m a year earlier [2 p.5]. The auditor lists revenue recognition as a key audit matter because 'Revenue is derived from several business segments' [1 p.54]; the financial statements do not present segment figures.

Raw materials. Raw materials consumed were BDT 964.8m in FY2025, 56.3% of revenue, against 49.0% in FY2024 and 48.3% in FY2023 [1 p.73] [3 p.66] [15]. Raw cotton purchases were BDT 848.7m in FY2025 against BDT 642.6m in FY2024; gray yarn purchases were BDT 10.7m against BDT 31.4m, and dyes and chemicals BDT 27.5m against BDT 91.5m [1 p.73]. Note 37.11 shows no foreign-currency payment for plant, spare parts or dyes and chemicals in FY2025 [1 p.78]. The directors attribute the FY2025 EPS decline to 'rising costs driven by unfavorable currency exchange rates, a significant increase in energy expenses & overarching expenses' [1 p.13], and note 37.09 attributes it to 'incremental raw material and overhead cost' [1 p.78].

Energy. The electricity bill was BDT 210.5m in FY2025, BDT 220.6m in FY2024 and BDT 208.2m in FY2023, equal to 12.3%, 13.9% and 13.7% of revenue [1 p.73] [3 p.67] [15]. The gas bill was BDT 5.1m in FY2023, BDT 0.5m in FY2024 and nil in FY2025 [1 p.73] [3 p.67]. Accrued electricity bills rose from BDT 28.3m to BDT 64.5m over FY2025 [1 p.70]. The DSE post on the Q2 FY2026 results gives the company's reason for higher operating cash flow as a 'decrease of electricity bill during the period' [11].

Labour and overheads. Factory wages, allowances and salaries were BDT 121.7m in FY2025 against BDT 148.9m in FY2024 [1 p.73] [15]. Factory depreciation was BDT 65.3m (FY2025) and BDT 67.1m (FY2024), on the reducing-balance method [1 p.73] [1 p.62]. Administrative expenses were BDT 42.1m, including directors' remuneration of BDT 6.2m, and selling and distribution expenses BDT 3.3m [1 p.74]. Operating expenses fell from BDT 66.8m (FY2020) to BDT 45.5m (FY2025) [15].

Other income, WPPF and tax. Income from other sources was BDT 0.08m in FY2025 (bank interest BDT 0.15m less an exchange loss of BDT 0.08m) [1 p.75]. WPPF and WWF took BDT 0.57m, 5% of profit before the charge [1 p.58] [1 p.63]. Current tax was the minimum tax on gross receipts: note 21.02 compares regular tax at 15% (BDT 1.7m), advance income tax (BDT 2.3m) and 1% minimum tax (BDT 11.4m) and charges the highest; a BDT 2.6m short provision for years up to 2021-2022 was added, and deferred tax income was BDT 7.6m [1 p.72] [1 p.58]. Profit after tax was BDT 5.1m against profit before tax of BDT 11.6m. The directors' financial-results table on page 13 prints the same deferred tax income of 7,550,888 as the statement of profit or loss [1 p.13] [1 p.58].

Finance cost: BDT 367.3m in FY2025; note 13.01 adds BDT 367.2m of interest to long-term borrowing

Finance cost by year. Finance cost was BDT 76.2m in FY2019, BDT 166.7m in FY2020 and BDT 367.3m in FY2025, the highest in the FY2017-FY2025 series [5 p.7] [1 p.17] [15]. In FY2025 it equalled 21.4% of revenue, also the highest in the series (FY2017: 21.0%) [15]. Operating profit has exceeded finance cost in every year since FY2019, by between BDT 6.4m (FY2024) and BDT 15.8m (FY2020); in FY2025 the margin was BDT 12.1m [15]. Note 26 splits FY2025 financial expenses into interest on term loan BDT 367.2m and bank charges BDT 0.2m [1 p.75].

Interest is added to the loans. Note 13.01, 'Movement in Long Term Borrowings', starts from BDT 3,732.2m, adds 'Interest during the year' of BDT 367.2m and bank charges of BDT 0.03m, and closes at BDT 4,099.4m; its 'Less: Adjustment during the year' line is nil [1 p.68]. The cash flow statement prints 'Payment for Financial Expenses' of BDT 0.15m in FY2025 and BDT 0.67m in FY2024 [1 p.60]. Note 26.02 derives the FY2025 figure as total bank charges of BDT 171,842 less bank charges against loans of BDT 25,920 [1 p.75]. The current portion of long-term borrowing was BDT 489.5m at both 30-Jun-2024 and 30-Jun-2025 [1 p.70]. In the nine-month statements the cash flow reconciliation adds back BDT 273.0m as 'Increase/(Decrease) in Interest' and the long-term borrowing (non-current plus current) rose from BDT 4,099.4m at 30-Jun-2025 to BDT 4,372.4m at 31-Mar-2026 (derived) [2 p.2] [2 p.4]. The chairman writes that 'Finance costs increased due to the payment on interest of term loan made during the year' [1 p.9].

Lenders. At 30-Jun-2025 the long-term borrowing of BDT 4,099.4m was owed to Sonali Bank (seven accounts), Mercantile Bank (BDT 1,166.8m), Janata Bank (two accounts, BDT 528.4m) and Bangladesh Development Bank (BDT 153.4m); the current portion splits Sonali BDT 266.9m, Mercantile BDT 158.4m, Janata BDT 62.6m and BDT 1.6m Bangladesh Development Bank [1 p.68] [1 p.70]. FY2025 interest by lender was Sonali BDT 185.8m, Mercantile BDT 125.0m, Janata BDT 43.6m and Bangladesh Development Bank BDT 12.7m [1 p.75]. The company also carries 'Liabilities for Other Finance' to Uttara Finance and Investments Ltd. of BDT 260.0m at 30-Jun-2025, BDT 230.0m at 31-Mar-2026 [1 p.71] [2 p.4]. Note 26 shows no interest on this liability in FY2025 (BDT 0.56m in FY2024) [1 p.75].

What the FY2024 auditor found. The first basis of the FY2024 qualified opinion reads: 'As disclosed in note # 25.01, to the Financial Statements, the company has shown an amount of Tk. 306,676,289 as Interest on Long Term Borrowings as of June 30, 2024. Of this amount, Tk. 188,856,108 was recorded in the financial statements at an interest rate of 8% for Borrowings from Janata Bank PLC and Sonali Bank PLC. However, according to the sanction letters from both banks, the applicable interest rate is 9%, which amounts to Tk. 212,463,122. As a result, there is a shortfall of Tk. 23,607,014, resulting to an overstatement of net profit in the financial statements.' [3 p.46]. The FY2025 auditor's report does not contain this item [1 p.52]. Interest charged by Janata and Sonali rose from BDT 188.9m in FY2024 to BDT 229.5m in FY2025 (derived) [1 p.75] [15].

Ratios: interest cover 1.02x-1.09x in FY2019-FY2025; return on equity 0.17%-0.48%

Margins. Gross margin moved from 13.4% (FY2017) to 23.3% (FY2020) and 24.8% (FY2025), with a dip to 22.6% in FY2023 [15]. The printed operating margin followed: 0.2%, 17.0% and 22.1% in the same years. Net margin has been between 0.3% and 1.1% since FY2019 [15]. FY2019 gross profit is printed as BDT 149.6m in two reports; turnover less cost of goods sold gives BDT 149.3m; the model uses the printed figure [5 p.7] [6 p.7].

Returns and leverage. Return on closing equity was between 0.17% and 0.48% in FY2019-FY2025 [15]. Equity includes the BDT 4,063.6m revaluation surplus; retained earnings were BDT -2,663.7m at 30-Jun-2025 [1 p.57]. The printed 'Total bank borrowings' line rose from BDT 2,976.4m (FY2023) to BDT 3,609.9m (FY2025), 1.24x equity at 30-Jun-2025 [1 p.17] [15]; the FY2025 figure equals the long-term borrowing net of its current portion, and the full long-term borrowing including the current portion was BDT 4,099.4m [1 p.68].

Efficiency and cash. Asset turnover rose from 0.14x (FY2019) to 0.20x (FY2025) [15]. The current ratio was 1.61x at 30-Jun-2025, the highest in the series [1 p.17]. Operating cash flow, from the printed NOCFPS, was negative in FY2021, FY2022 and FY2023 (BDT -203.6m, -285.2m and -209.3m, derived from NOCFPS) and positive in FY2024 and FY2025 (printed BDT 19.2m and BDT 156.4m) [1 p.17] [1 p.60] [15]. Over FY2019-FY2025 cumulative operating cash flow was BDT -392.5m against cumulative profit after tax of BDT 66.4m (derived) [15]. Receivable days on year-end trade and other receivables were 236 (30-Jun-2024), 252 (30-Jun-2025) and 290 (31-Mar-2026, on annualised nine-month revenue) [15].

Balance sheet: receivables BDT 1,182.5m and advances BDT 1,177.8m at 30-Jun-2025, no credit-loss allowance

Assets. At 30-Jun-2025 property, plant and equipment was BDT 5,688.1m, which the auditor puts at 67.45% of total assets [1 p.53]. Current assets of BDT 2,744.3m comprised trade and other receivables of BDT 1,182.5m, advances, deposits and pre-payments of BDT 1,177.8m, inventories of BDT 286.7m, an inter-company receivable from Monno Attire Ltd. of BDT 26.6m, advance income tax of BDT 56.1m and cash of BDT 14.6m [1 p.57]. At 31-Mar-2026 receivables were BDT 1,352.6m and advances BDT 1,196.3m [2 p.4].

Receivables. Receivable against sales was BDT 1,039.4m at 30-Jun-2025 (BDT 865.8m a year earlier) [1 p.64]. The ageing table shows BDT 234.6m at 6-12 months and BDT 254.6m over 12 months, so 47.1% of the balance was over six months old (30-Jun-2024: 48.1%) [1 p.64] [15]. No expected-credit-loss allowance is recorded, which is the second basis of the qualified opinion [1 p.52]. The cash incentive receivable was BDT 162.4m from at least 30-Jun-2022 to 30-Jun-2024; the company received BDT 19.3m in FY2025, leaving BDT 143.1m at 30-Jun-2025 and at 31-Mar-2026 [1 p.64] [5 p.50] [2 p.2].

Advances. 'Suppliers, Contractors & Others' advances rose from BDT 914.1m to BDT 1,158.3m during FY2025, with additions of BDT 811.1m and adjustments of BDT 566.8m [1 p.65], and were BDT 1,176.9m at 31-Mar-2026 [2 p.2]. At 30-Jun-2025 these advances were 0.68x FY2025 revenue (derived) [15]. Deposits include BDT 10.5m with Titas Gas Transmission & Distribution PLC and BDT 9.0m with Manikgonj Palli Bidyut Samity. Note 5.03 adjusts the full BDT 97,038,118 of pre-payments in FY2025, leaving nil at 30-Jun-2025, and note 5.01.02 adjusts the BDT 11,215,016 tax refundable to nil; advance income tax shows a 'Tax Refund Adjustment as per Certificate' of the same BDT 11,215,016 [1 p.65] [1 p.66]. The FY2022 and FY2024 auditors reported that no details or support were provided for the BDT 97.0m 'prepaid Lease Premium' [5 p.50] [3 p.46].

Liabilities. Accrued expenses of BDT 154.5m at 30-Jun-2025 include electricity bills of BDT 64.5m and gas bills of BDT 78.0m; the gas ageing shows BDT 44.2m from 2017, BDT 33.6m from 2018 and BDT 0.2m from 2024 [1 p.70]. The provision for income tax was BDT 52.1m, and assessments are 'finalized upto Financial year 2022-2023' [1 p.72]. The deferred tax liability of BDT 202.4m uses an effective rate of 15% under SRO No. 159 [1 p.69]. Equity per share was BDT 25.39 at 30-Jun-2025, BDT 25.42 at 30-Sep-2025, BDT 25.41 at 31-Dec-2025, BDT 25.39 at 31-Mar-2026 and BDT 25.39 at 30-Jun-2026 (announced) [1 p.57] [11].

Audit: FY2025 opinion qualified on four bases, with one emphasis of matter and three key audit matters

The FY2025 auditor is Aziz Halim Khair Choudhury, Chartered Accountants (PKF AHKC), signed by partner M. Mosharraf Hossain on 05-Nov-2025 [1 p.52] [1 p.56]. The report is headed 'Qualified Opinion'. The opinion paragraph, quoted from the page image, reads: 'In our opinion, except for the effects of the matters described in the Basis for Qualified Opinion section of our report, the accompanying financial statements present fairly, in all material respects, the financial position of the company as at 30 June 2025, and its financial performance and its cash flow year then ended in accordance with International Financial Reporting Standards (IFRSs), The Companies Act, 1994, The Securities and Exchange Rules, 1987 and other applicable laws and regulations.' [1 p.52]

Basis for Qualified Opinion, paragraph 1: 'As per paragraph 34 of IAS 16: Property, Plant and Equipment, it may be necessary to revalue items of property, plant and equipment at regular intervals, generally every three to five years, to ensure that the carrying amount does not differ materially from the fair value at the reporting date. The last revaluation of land was carried out by independent valuer Ahmed Zakir & Co., Chartered Accountants, with a cut-off date of 31 March 2019, and the report was submitted on 25 June 2019. Since then, no subsequent revaluation has been performed, resulting in a significant lapse of time. In the absence of a recent valuation, we were unable to verify whether the carrying value of land as presented in the financial statements reflects its current fair value. Consequently, we could not determine the extent of any adjustment, if required, to the carrying amount of Property, Plant and Equipment (PPE) and related revaluation reserve of the company.' [1 p.52]

Paragraph 2: 'As referred to Note 4.01 Receivable Against Sales, an amount of Tk. 103.94 crore has been recognized as receivables in the financial statements as at 30 June 2025. However, no allowance for expected credit losses has been recognized in accordance with the requirements of IFRS 9: Financial Instruments. Under IFRS 9, entities are required to assess the collectability of receivables and recognize an allowance for expected credit losses based on past events, current conditions, and forward-looking information. In the absence of such an assessment and corresponding provision, the carrying amount of receivables may be materially overstated, and consequently, the reported profit for the year may have been significantly overstated.' [1 p.52]

Paragraph 3: 'As disclosed in Note 4.02 Cash Incentive Receivable, an amount of Tk. 14.31 crore has been recognized as receivable in the financial statements. The amount has been carried forward for a long period and the company did not provide any detailed schedule, year-wise breakup, or supporting documentation for our verification. However, no allowance for expected credit losses has been recognized in accordance with the requirements of IFRS 9: Financial Instruments. Under IFRS 9, entities are required to assess the collectability of receivables and recognize an allowance for expected credit losses based on past events, current conditions, and forward-looking information. In the absence of such an assessment and corresponding provision, the carrying amount of receivables may be materially overstated, and consequently, the reported profit for the year may have been significantly overstated.' [1 p.52]

Paragraph 4: 'As disclosed in Note 5.01 Suppliers, Contractors & Others (Advances), an amount of Tk. 115.83 crore has been recognized under current assets in the financial statements. In accordance with IFRS 9: Financial Instruments, if there is objective evidence of impairment at the reporting date, lifetime expected credit losses should be recognized for such financial assets. However, the company has not assessed or recognized any allowance for expected credit losses despite the apparent uncertainty regarding recoverability of certain balances. In the absence of such adjustment, the assets of the company may be materially overstated. Consequently, the reported liquidity ratio may also be misstated, as the stated current assets may not be sufficient to meet the company's current liabilities.' [1 p.52]

Emphasis of Matter, as printed: 'In forming our opinion on the Financial Statements, we considered the matters and the facts that: 1. The management of the Company did not adhere to its Standard Operating Procedures for the procurement of goods and services. Required supporting documents such as Work Orders, Purchase Orders, Quotations, Money Receipts, and Payment Requests from prospective vendors were not made available for our verification. As a result, we were unable to ascertain whether the costs incurred were reasonable. Our audit procedures were therefore limited to the extent of examining the available documents related to the Company's procurement process. Furthermore, although separate ledgers are maintained for receipt and payment from various customers and vendors, we noted that a significant portion of these transactions was settled in cash. Our opinion is not modified in respect of these above matters.' [1 p.53] The report contains no other-matter paragraph [1 p.52] [1 p.53] [1 p.54] [1 p.55] [1 p.56].

Key audit matters. The report lists three, quoted in full in the exhibit below from the page images: property, plant and equipment; valuation of inventory; and revenue recognition [1 p.53] [1 p.54]. DSE posted the qualified opinion and emphasis of matter for FY2025 on 24-Nov-2025 and for FY2024 on 05-Dec-2024 [11].

Management's response, in the company's words. On land: 'We will carry out the land valuation in the financial year 2025-22026' (sic). On receivables and advances, the company says an expected-credit-loss allowance 'will be recognized in the financial statements for the year ending 30 June 2026'. On the cash incentive: 'We received Tk. 1.93 crore during the financial year 2024-2025. We are hopeful to recover the amount from the government.' [1 p.21]

Earlier years. The FY2024 report by A. Wahab & Co. is headed 'Qualified Opinion' and lists five bases: the interest-rate shortfall quoted in the finance section, and four balances for which no details or support were provided (cash incentive receivable Tk. 162,444,947; tax refundable Tk. 11,215,016; prepaid lease premium Tk. 97,038,118; liabilities for other finance with Uttara Finance Tk. 260,000,000) [3 p.46]. The FY2022 report by the same firm is headed 'Qualified and Disclaimer of Opinion', with one basis for qualification (WPPF) and four bases for disclaimer, and an emphasis of matter on an interim dividend of Tk. 0.10 per share paid to shareholders other than sponsors and directors, and states that 'up to 30-06-2021 the company has accumulated loss of Tk. 2,436,978,983' [5 p.50].

Related parties: BDT 711.7m owed to five Monno entities at 30-Jun-2025; BDT 585.8m at 31-Mar-2026

Inter-company payables. Note 20 lists five payees at 30-Jun-2025: Monno Ceramic Industries Ltd. BDT 104.3m (BDT 97.5m a year earlier, addition BDT 6.8m), Monno Welfare Foundation BDT 546.7m (BDT 587.9m; BDT 41.3m paid), Monno Medical College & Hospital BDT 55.8m (BDT 56.9m; BDT 1.2m paid), Monno Café & Resturant (sic) BDT 2.0m and Monno Nursing Institute BDT 3.0m, a total of BDT 711.7m [1 p.71]. The cash flow statement shows BDT 35.6m paid against inter-company payables in FY2025 [1 p.60]. At 31-Mar-2026 the inter-company payable was BDT 585.8m after a further BDT 126.0m was paid [2 p.4] [2 p.1].

How the related-party note presents them. Note 37.03 lists three parties: Monno Attire Ltd. ('Intercompany', BDT 26.6m opening and closing, remark 'Lender'), Monno Ceramic Industries Ltd. ('Intercompany', BDT 97.5m opening, addition BDT 6.8m, closing BDT 104.3m, remark 'Borrower') and Monno Welfare Foundation ('Corporate Director', BDT 649.8m opening, adjustment BDT 42.4m, closing BDT 607.4m, remark 'Borrower') [1 p.78]. The Monno Welfare Foundation figure in note 37.03 equals the sum of note 20's Monno Welfare Foundation, Monno Medical College & Hospital, Monno Café and Monno Nursing Institute lines (BDT 546.7m + 55.8m + 2.0m + 3.0m = BDT 607.4m), and its BDT 42.4m adjustment equals the BDT 41.3m and BDT 1.2m paid to the first two (derived) [1 p.71] [1 p.78]. The balance sheet shows the Monno Attire balance as a receivable (note 6) and the Monno Ceramic balance as a payable (note 20), the opposite of the 'Lender' and 'Borrower' remarks [1 p.57] [1 p.65]. The note does not state interest, terms or security for these balances.

Other related-party amounts. Directors' remuneration was BDT 6.2m in FY2025 and BDT 5.7m in FY2024 (note 37.04); board meeting fees of BDT 84,444 each went to Md. Nazmus Saadat, Md. Jakir Hossain and Md. Mohammad Thoufiqual Islam, BDT 253,332 in total (note 37.05) [1 p.78]. Monno Welfare Foundation is a corporate director: its nominee, Mr. Rasheed Rafiul Islam, sits on the board and holds 13,849,500 shares (12.04%) as 'Director (Nominated by Monno Welfare Foundation)' [1 p.18].

FY2026: EPS BDT 0.02 announced on 27-Oct-2026; Q3 financial expenses BDT 96.6m vs profit from operations BDT 94.8m

FY2026 announcement. The board met on 26-Oct-2026 (notified on 15-Oct-2026) and DSE posted on 27-Oct-2026: EPS BDT 0.02, NAV per share BDT 25.39 and NOCFPS BDT 1.71 for the year ended 30-Jun-2026, against BDT 0.04, BDT 25.39 and BDT 1.36 for FY2025 [11]. The board recommended a 0.10% cash dividend 'to Public Shareholders other than Sponsors and/or Directors', a gross payout of Tk 794,674.06, with record date 17-Nov-2026 and the AGM on 13-Dec-2026 [11]. The FY2026 EPS less the nine-month EPS of BDT 0.01 gives about BDT 0.01 for April-June 2026 (derived from rounded figures).

Quarter by quarter, as announced on DSE [11]: Q1 FY2026 (July-September 2025) EPS BDT 0.03, NOCFPS BDT 0.34, NAV BDT 25.42 at 30-Sep-2025 (posted 16-Nov-2025); Q2 (October-December 2025) EPS BDT 0.01, six-month EPS BDT 0.04, NOCFPS BDT 0.65, NAV BDT 25.41 at 31-Dec-2025 (posted 01-Feb-2026); Q3 (January-March 2026) EPS BDT (0.02), nine-month EPS BDT 0.01, NOCFPS BDT 1.38, NAV BDT 25.39 at 31-Mar-2026 (posted 28-Apr-2026). The DSE post for Q2 gives the company's reason 'EPS has decreased for increasing finance cost' [11], and the Q3 statements say EPS 'decreased during the period mainly due to the rise in income tax expenses and higher finance costs' [2 p.2].

Nine months to 31-Mar-2026. Revenue BDT 1,276.0m (+2.4%), gross profit BDT 304.1m, profit from operations BDT 277.2m, financial expenses BDT 273.0m, profit before tax BDT 4.1m and profit after tax BDT 1.4m, against BDT 9.9m a year earlier [2 p.5]. In Q3 alone (January-March 2026) financial expenses of BDT 96.6m exceeded profit from operations of BDT 94.8m and the loss before tax was BDT 1.8m [2 p.5]. The current portion of long-term borrowing fell from BDT 489.5m to BDT 163.2m and the non-current portion rose from BDT 3,609.9m to BDT 4,209.2m over the nine months [2 p.4]; the statements do not explain the reclassification.

Peers: FY2025 finance cost 21.4% of revenue at Monno; 1.9%-7.4% at Envoy, Argon and Square (not like-for-like)

Choice of peers. We compare Monno Fabrics with three DSE textile companies that have published AnalystBro notes and whose FY2025 annual reports are in our corpus: Envoy Textiles, Argon Denims and Square Textiles. None is like-for-like. Envoy states that it 'operates in the production of denim fabrics and yarns' with deemed exports to 'export-oriented local Ready-Made Garments (RMG)' as its core revenue stream [8 p.69]. Argon 'mainly produces medium and premium range denim fabrics' sold 'to different export oriented RMG factories through the nomination of ultimate foreign buyers' [9 p.12]. Square Textiles describes itself as a manufacturer 'that produces yarns for knitting and weaving' and has a subsidiary; we use its standalone statements [10 p.21] [10 p.96]. Monno Fabrics reports yarn and knit and woven fabric sold mainly as local sales, and its FY2025 revenue is 9% of Envoy's and 8% of Square's standalone revenue. Because scale, products and channels differ, the table shows each company's figures without a ranking of margins.

Basis. All four years end on 30-Jun-2025. Operating profit and finance cost are the lines as each company prints them: Monno's 'Profit from Operations' and 'Financial Expenses' [1 p.58]; Envoy's 'Profit/ (Loss) from Operation' and 'Financial Expenses' [8 p.143]; Argon's 'Operating Profit /(Loss)', which includes BDT 112.2m of 'Export Incentive', and 'Financial Expenses' [9 p.78]; Square's 'Profit from Operations' and 'Finance Cost' [10 p.97]. All four book WPPF below operating profit. We have not tested whether any finance income is netted inside these lines. Borrowings: Monno long-term borrowing including the current portion (excluding the BDT 260.0m NBFI liability and the inter-company payable); Envoy long-term loan, its current portion, bond and preferential share and short-term liabilities (excluding lease and LC accepted liabilities); Argon long-term loan, lease finance, short-term loan and current maturity; Square long-term borrowings and short-term bank loan (excluding BDT 326.3m liabilities for other finance) [1 p.57] [8 p.142] [9 p.77] [10 p.96].

Audit opinions, each from its own filing. Monno: qualified, with an emphasis of matter [1 p.52]. Envoy: the auditor's report by K. M. Hasan & Co. is headed 'Opinion' and states the statements 'give true and fair view'; its pages 136-139 contain no emphasis-of-matter section; the AGM explanatory statement in the same report describes 'an unqualified audit opinion with an emphasis on a particular matter' [8 p.136] [8 p.7]. Argon: unmodified opinion by Pinaki & Company [9 p.70]. Square: unmodified opinion on the consolidated and separate statements by K.M. Hasan & Co. [10 p.66].

Figures. FY2025 finance cost equalled 21.4% of revenue at Monno, 7.4% at Envoy, 1.9% at Argon and 5.6% at Square; finance cost was 0.97x, 0.45x, 0.29x and 0.47x printed operating profit [15]. Return on closing equity was 0.17%, 14.4%, 6.8% and 12.4% [15]. On 29-Oct-2026 closes, price to derived 30-Jun-2025 NAV was 0.65x, 1.21x, 0.79x and 0.96x [14] [15].

Governance: sponsors and directors 30.90%; FY2026 dividend 0.10% to public shareholders other than sponsors and directors

Board as printed in the FY2025 report: Mrs. Afroza Khanam (Chairman), Mr. Rasheed Samiul Islam (Managing Director), Mrs. Huron Nahar Rashid (Director), Mr. Rasheed Mymunul Islam (Director), Mr. Rasheed Rafiul Islam (Director), Mr. Md. Nazmus Saadat (Independent Director) and Dr. Mohammad Thoufiqul Islam (Independent Director); company secretary Benoy Paul FCS [1 p.3]. The board met five times in FY2025; attendance was 5 of 5 for Mrs. Afroza Khanam, Mr. Rasheed Samiul Islam, Mr. Rasheed Mymunul Islam, Mr. Md. Nazmus Saadat and Dr. Mohammad Thoufiqul Islam, 4 of 5 for Mr. Rasheed Rafiul Islam ('Nominated Director by Monno Welfare Foundation') and 3 of 5 for Mrs. Huron Nahar Rashid [1 p.18]. Key management named in the report: Md. Habibur Rahman FCMA (Chief Financial Officer), Benoy Paul FCS (Company Secretary, appointed per DSE post of 17-Nov-2024) and Md. Ahashan Habib (Head of Internal Audit & Compliance) [1 p.18] [11].

Committees. Audit committee: Mr. Md. Nazmus Saadat (Chairman, as printed in the attendance table), Mr. Rasheed Mymunul Islam and Mr. Rasheed Rafiul Islam (Members), Benoy Paul FCS (Member Secretary); four meetings, attended 4, 4 and 3 respectively [1 p.27] [1 p.28]. Nomination and remuneration committee: Dr. Mohammad Thoufiqul Islam (Chairperson, as printed in the attendance table), Mr. Rasheed Mymunul Islam and Mr. Rasheed Rafiul Islam (Members), Benoy Paul FCS (Member Secretary); three meetings, attended 3, 3 and 2 respectively [1 p.30] [1 p.31].

A conflict in the report. The nomination and remuneration committee says it recommended 're-appointment of Mr. Md. Zakir Hossain as an Independent Director for the next three years (i.e. from 25 January 2025 to 24 January 2028)' [1 p.32], and note 37.05 shows board meeting fees of BDT 84,444 to 'Md. Jakir Hossain', Independent Director [1 p.78]. Neither spelling appears in the board list on page 3 or the attendance table on page 18, which name two independent directors [1 p.3] [1 p.18].

Ownership and changes. At 30-Jun-2025 sponsors and directors held 35,532,594 shares (30.90%) and general shareholders 79,467,406 (69.10%); the named holdings were Mrs. Afroza Khanam 13,649,906 (11.87%), Mr. Rasheed Rafiul Islam (nominated by Monno Welfare Foundation) 13,849,500 (12.04%), Mr. Rasheed Samiul Islam 3,031,500 (2.64%), Mrs. Huron Nahar Rashid 2,691,688 (2.34%) and Mr. Rasheed Mymunul Islam 2,310,000 (2.01%) [1 p.18]. Note 9 gives institutions 9,141,767 shares and sponsors and directors 46,786,594 shares a year earlier [1 p.67]. Monno Ceramic Industries Ltd., a corporate sponsor, declared on 13-Jan-2025 its intention to sell its entire 11,254,000 shares and confirmed the sale on 15-Jan-2025 [11]. Mrs. Huron Nahar Rashid, a sponsor director, died on 01-Mar-2026, and her 2,691,688 shares were transmitted to her daughter Mrs. Afroza Khanam (posts of 09-Apr-2026 and 15-Apr-2026); the board elected Mr. Moynul Islam as chairman (post of 18-Feb-2026) [11]. The FY2026 dividend post of 27-Oct-2026 states sponsors and directors hold 35,532,594 of 115,000,000 shares [11].

Dividends. Printed rates: 2% cash including 1% interim (FY2022), 1% cash (FY2023), 1% cash (FY2024) and 0.25% cash (FY2025), with no dividend for FY2017-FY2021 [1 p.7] [6 p.7]. The FY2025 report prints '0.25% cash' for FY2025 in its five-year highlights (page 7) and '1% cash' in its key operating data (page 17); the board's recommendation and the DSE post are 0.25% [1 p.7] [1 p.17] [1 p.18] [11]. The FY2025 dividend went 'to General Shareholders other than Sponsors and Directors' (Tk 1,986,685.15) and was disbursed per DSE post of 19-Jan-2026; FY2026's 0.10% also excludes sponsors and directors [11].

Other DSE items, 11-Nov-2024 to 27-Oct-2026 [11]: National Credit Ratings assigned a surveillance rating of 'A' long term and 'ST-2' short term with a developing outlook on the June-2024 accounts (13-Mar-2025); on 04-Sep-2025 the company replied to a DSE query that there was 'no undisclosed price sensitive information' behind an unusual price rise and volume. The archive contains three board-meeting reschedules (09-Oct-2025, 11-Nov-2025, 26-Jan-2026) and no post titled as a correction.

What's next: record date 17-Nov-2026, AGM 13-Dec-2026, Q1 FY2027 board meeting around 14-Nov-2026 (inferred)

Passed. The FY2026 results, dividend and AGM date were announced on 27-Oct-2026 [11]; the audited FY2026 statements and auditor's report are not yet in our corpus.

Inferred dates, with the precedents used. First-quarter board meetings: 14-Nov-2024 and 14-Nov-2025 (DSE; two years), so around 14-Nov-2026 (inferred); the older quarterly statements in our corpus print no approval date; no Q1 FY2027 board date was notified on DSE at 01-Nov-2026. Second-quarter meetings: 26-Jan-2025 and 29-Jan-2026, so 26-29 Jan 2027 (inferred, two years). Third-quarter meetings: 30-Apr-2025 and 27-Apr-2026, so 27-30 Apr 2027 (inferred, two years) [11]. Annual accounts: the MD and CFO declarations on the FY2020 and FY2022 statements are dated 28-Oct-2020 and 26-Oct-2022, the FY2023 statements print board approval on 30-Oct-2023, and the FY2025 and FY2026 boards met on 23-Oct-2025 and 26-Oct-2026, so 23-30 Oct 2027 for FY2027 (inferred, five years; no FY2021 or FY2024 date in our sources) [6 p.25] [5 p.25] [4 p.61] [1 p.78] [11].

Trade. Bangladesh's LDC graduation date is 24-Nov-2029 [12] [13].

Risks: finance cost, receivables and advances without credit-loss allowance, electricity and minimum tax

Each row ties a risk to the line it moves, with the evidence in the filings. The directors' own list covers industry, interest-rate, exchange-rate, market and technology, economic and political, energy-cost and operational risks [1 p.14] [1 p.15].

Key questions: FY2026 audit opinion, credit-loss allowance, land valuation, interest paid

Market facts. The close on 29-Oct-2026 was BDT 16.4, giving a market value of BDT 1,886m on 115.0m shares [14]. On the announced 30-Jun-2026 NAV of BDT 25.39 the price-to-book multiple was 0.65x, and on the announced FY2026 EPS of BDT 0.02 the price-earnings multiple was 820x (both from rounded announced figures) [11]. The 52-week range on DSE daily closes from 30-Oct-2025 to 29-Oct-2026 was BDT 15.3 (13-Nov-2025) to BDT 25.4 (18-Feb-2026) [14]. The annual report gives a DSE price of Tk 17.10 on 30-Jun-2025 [1 p.67]. Of the BDT 25.39 NAV per share at 30-Jun-2025, the revaluation surplus is BDT 35.34 a share and retained earnings BDT -23.16 a share (derived) [1 p.57].

FAQ

What does Monno Fabrics make?

The company describes itself as a composite textile mill making knit and woven fabrics and yarn for local and export-oriented garment makers, with its factory at Gilondo, Manikganj [1 p.11] [1 p.61].

When does Monno Fabrics' financial year end?

30 June. The FY2025 annual report (to 30-Jun-2025) is the latest in our corpus; FY2026 results were posted on DSE on 27-Oct-2026 [1 p.62] [11].

What was Monno Fabrics' finance cost?

BDT 367.3m in FY2025 against operating profit of BDT 379.4m, and BDT 273.0m in the nine months to 31-Mar-2026 against BDT 277.2m [1 p.58] [2 p.5].

Is Monno Fabrics' audit opinion qualified?

Yes. The FY2025 opinion is qualified on land revaluation and on the absence of credit-loss allowances on receivables, cash incentive receivable and supplier advances, with an emphasis of matter on procurement documents and cash settlement [1 p.52] [1 p.53].

What dividend did Monno Fabrics declare for FY2026?

0.10% cash to public shareholders other than sponsors and directors; record date 17-Nov-2026, AGM 13-Dec-2026 [11].

Who owns Monno Fabrics?

Sponsors and directors held 35,532,594 shares (30.90%) at 30-Jun-2025 and general shareholders 69.10% [1 p.18].

How much does Monno Fabrics owe to group entities?

BDT 711.7m at 30-Jun-2025 to Monno Ceramic Industries, Monno Welfare Foundation, Monno Medical College & Hospital, Monno Café & Resturant and Monno Nursing Institute; BDT 585.8m at 31-Mar-2026 [1 p.71] [2 p.4].

Sources

1. Monno Fabrics Ltd. Annual Report 2024-2025 (year to 30-Jun-2025) · link · accessed 2026-11-01
2. Monno Fabrics Ltd. un-audited financial statements, nine months to 31-Mar-2026 · link · accessed 2026-11-01
3. Monno Fabrics Ltd. Annual Report 2023-2024 (year to 30-Jun-2024) · link · accessed 2026-11-01
4. Monno Fabrics Ltd. Annual Report 2022-2023 (year to 30-Jun-2023) · link · accessed 2026-11-01
5. Monno Fabrics Ltd. Annual Report 2021-2022 (five-year data FY2018-FY2022) · link · accessed 2026-11-01
6. Monno Fabrics Ltd. Annual Report 2019-2020 (five-year data 2015-FY2020) · link · accessed 2026-11-01
7. Monno Fabrics Ltd. Annual Report 2017-2018 (five-year data 2013-FY2018) · link · accessed 2026-11-01
8. Envoy Textiles Ltd. Annual Report 2025 (year to 30-Jun-2025) · link · accessed 2026-11-01
9. Argon Denims Ltd. Annual Report 2024-25 (year to 30-Jun-2025) · link · accessed 2026-11-01
10. Square Textiles PLC Annual Report 2024-25 (year to 30-Jun-2025; standalone statements used) · link · accessed 2026-11-01
11. Dhaka Stock Exchange news archive for MONNOFABR, posts of 11-Nov-2024 to 27-Oct-2026 (results, dividends, board meetings, sponsors, rating) · link · accessed 2026-11-01
12. The Daily Star, 'Bangladesh gets 3 more years for LDC graduation' (30-Oct-2026) · link · accessed 2026-11-01
13. The Business Standard, 'Bangladesh gets 3 more years for LDC graduation' (30-Oct-2026) · link · accessed 2026-11-01
14. AnalystBro price data (TradingView feed): DSE daily bars, 15-Sep-2025 to 01-Nov-2026 · link · accessed 2026-11-01
15. AnalystBro model for this report (workbook tabs below) · link · accessed 2026-11-01