Salvo Organic Industries financial analysis: gross margin 9.6%, qualified FY2026 audit (Oct 2026)

Investment considerations: revenue up in 6 of 7 years and positive operating cash flow; gross margin of 9.6% and a qualified audit

Salvo Organic Industries PLC. (DSE: SALVO; formerly Salvo Chemical Industry Limited) makes sulphuric acid, liquid glucose and maize starch with by-products at South Dhonua, Sripur, Gazipur [1 p.14] [1 p.15]. The year to 30-Jun-2026 is the latest audited year in the corpus; the stored document holds the auditors' report and the statements (44 pages) and no directors' report or governance annexures, so board, committee and compliance details below come from the FY2025 annual report [1 p.3] [2 p.85].

Revenue was BDT 468.1m in FY2019 and BDT 3,113.6m in FY2026, 6.7 times the FY2019 figure [42]. Gross profit was BDT 138.5m and BDT 298.3m in the same years. Profit after tax was BDT 48.8m in FY2026, BDT 37.9m in FY2025 and BDT 129.0m in FY2022, the highest of the eight years [1 p.11] [4 p.76].

Business: Starch & By-Product was 74.8% of FY2026 revenue; starch plant used at 29.96% of capacity

The notes describe the company as established "with a view to producing and supply of different chemicals for local consumption". It lists Sulphuric Acid, Liquid Glucose and Starch as "Main Product" and Battery Grade Water, Gluten, Germ and Fiber as "By-product" [1 p.15]. Commercial production of Sulphuric Acid started on 25 April 2003, Liquid Glucose on 09 August 2018 and Starch on 24 May 2021 [1 p.15]. The company was incorporated on 29 January 2002, converted to a public company on 04 August 2008 and listed on DSE on 18.04.2011 [1 p.14].

DSE approved the name change to 'Salvo Organic Industries PLC.' with effect from 24-Nov-2025 and the trading code change from SALVOCHEM to SALVO with effect from 3-Dec-2025 [34]. The special resolution for the name change was placed before the 23rd AGM on 29-Sep-2025 [34].

Annexure-F splits FY2026 results into three columns. Starch & By-Product revenue was BDT 2,328.1m (74.8%), Liquid Glucose BDT 548.4m (17.6%) and Sulphuric Acid & Batter Grade Water BDT 237.2m (7.6%) [1 p.43]. Each column shows a gross margin of 9.6% and financial charges of 3.1% of revenue (derived) [42].

Note 37 gives installed capacity of 25,550,000 kg of Sulphuric Acid, 10,950,000 kg of Liquid Glucose and 18,250,000 kg of Starch for both 2024-25 and 2025-26 [1 p.32]. Production in 2025-26 was 12,741,366 kg, 6,639,249 kg and 5,468,100 kg, printed as 49.87%, 60.63% and 29.96% of capacity. In 2024-25 the printed figures were 48.87%, 52.76% and 27.99% [1 p.32]. By-product sales in 2025-26 were 10,762,940 kg of Fiber, 10,460,650 kg of Germ and 10,418,354 kg of Gluten [1 p.32].

The raw-material table shows 54,946,269 kg of maize purchased and 54,026,278 kg used in 2025-26, and 4,680,000 kg of sulphur purchased and 4,250,249 kg used [1 p.32]. The FY2026 trade-payable note names each creditor; the five largest of its listed balances at 30-Jun-2026 were R. S. Trading (BDT 87.9m), R S Enterprise (BDT 86.1m), J R Poultry (BDT 74.9m), Alpha Trading (BDT 74.2m) and Jaminur Enterprise (BDT 63.4m) [1 p.25].

Eight-year record: revenue BDT 468.1m to BDT 3,113.6m; profit after tax BDT 39.9m to BDT 48.8m

Revenue was BDT 468.1m in FY2019, BDT 462.7m in FY2020, BDT 655.4m in FY2021 and BDT 1,284.3m in FY2022 [6 p.49] [4 p.76]. It was BDT 1,609.0m in FY2023, BDT 2,231.3m in FY2024, BDT 2,715.1m in FY2025 and BDT 3,113.6m in FY2026 [3 p.86] [2 p.108] [1 p.11]. Growth was 14.7% in FY2026 and 21.7% in FY2025 (derived) [42].

Profit after tax was BDT 39.9m in FY2019, BDT 19.7m in FY2020, BDT 22.0m in FY2021, BDT 129.0m in FY2022, BDT 96.6m in FY2023, BDT 107.9m in FY2024, BDT 37.9m in FY2025 and BDT 48.8m in FY2026 [42]. EPS was printed as 0.61, 0.30, 0.34, 1.98, 1.49, 1.66, 0.58 and 0.75 for the same years [6 p.49] [4 p.76] [3 p.86] [2 p.108] [1 p.11].

For FY2025 the company's note 34 printed this explanation: "Financial expenses increased by 26.20% compared to previous year due to bank interest rate changed from 9% to 15.5%." It also printed: "the Company recognized a realized loss of Tk. 39,243,845 on disposal of equity investments during 2024-25" [2 p.129]. Non-operating income was a loss of BDT 26.2m in FY2025 and income of BDT 1.9m in FY2026 [1 p.11].

Line items: gross margin 29.6% in FY2019 and 9.6% in FY2026; financial charges BDT 96.6m

Gross margin was 29.6% in FY2019, 29.8% in FY2020, 17.4% in FY2021, 26.6% in FY2022, 22.1% in FY2023, 12.9% in FY2024, 11.4% in FY2025 and 9.6% in FY2026 (derived) [42]. Cost of goods sold was BDT 2,815.3m in FY2026 [1 p.11].

The company's FY2025 explanation in note 34 reads: "the cost of goods sold increased by 23.72% primarily due to higher prices of raw materials, currency devaluation, inflation and an increase in production-related variable costs in the head of electricity expenses, wages & allowance & fuel expenses." [2 p.129]

Administrative and selling & distribution expenses together were 8.2% of revenue in FY2019 and 3.8% in FY2026 (derived) [42]. Administrative expenses were BDT 95.0m in FY2026 [1 p.11]. Key management personnel short-term benefits were BDT 13.4m in 2025-26 and BDT 18.0m in 2024-25 [1 p.33].

Financial charges were BDT 60.4m in FY2019 and BDT 122.1m in FY2025, the highest of the eight years, and BDT 96.6m in FY2026 [42]. They rose in 5 of the 7 years FY2020-FY2026. Financial charges over average bank borrowings were 12.9% in FY2025 and 13.1% in FY2026 (derived) [42]. Note 14 shows interest of BDT 60.3m charged on the Social Islami Bank Ltd. long-term loan in FY2026 and BDT 73.6m in FY2025 [1 p.24].

Income tax expense was BDT 33.6m in FY2026, current tax BDT 43.0m and deferred tax income BDT 9.4m [1 p.11]. The effective rate was 40.8% (derived) [42]. Note 17 applies a tax rate of 22.50% to the deferred-tax balances [1 p.24]. WPPF was BDT 4.1m in FY2026 [1 p.11].

Ratios: ROE 4.5% in FY2026; operating cash flow above profit after tax in 8 of 8 years

ROE on average equity was 14.6% in FY2022, 3.6% in FY2025 and 4.5% in FY2026 (derived) [42]. ROA was 1.7% in FY2026. Asset turnover was 0.27x in FY2020 and 1.06x in FY2026 (derived) [42].

Interest cover, profit from operation over financial charges, was 1.66x in FY2019, 3.60x in FY2022, 1.72x in FY2025 and 1.88x in FY2026 (derived) [42]. Bank borrowings were 3.41x FY2026 profit from operation [42].

Year-end inventories were 52.7 days of FY2026 cost of goods sold and 34.0 days in FY2025 (derived) [42]. Inventories were BDT 406.2m at 30-Jun-2026 and BDT 223.9m a year earlier [1 p.10].

Operating cash flow over profit after tax was 7.53x in FY2026 and 9.75x in FY2025 [42]. Over FY2019-FY2026 operating cash flow totalled BDT 1,975.5m, fixed-asset payments BDT 1,936.9m and profit after tax BDT 501.9m (derived) [42]. The FY2025 annual report printed its own ratio table: "Gross Margin Ratio (%)" 11.45 for 2024-25, "Return on Equity Ratio (%)" 5.83 and "Current Ratio" 0.48 [2 p.19]. Note 34 prints "the gross profit margin standing at 7.93% during the period" [2 p.129]; 7.93% equals the FY2025 increase in gross profit over FY2024 (derived) [42]; the statement gross margin is 11.45%, as printed on p.19 [2 p.19].

The peer table uses each company's own FY2025 statements on the company basis, with the line labels as printed. WATA Chemicals printed revenue of BDT 813.5m and finance expenses of BDT 187.9m [32 p.12]. Kohinoor printed revenue of BDT 6,469.7m and finance costs of BDT 4.9m [33 p.10]. Both peers have published AnalystBro notes [37] [38].

Balance sheet: bank borrowings BDT 618.8m and capital work in progress BDT 758.6m at 30-Jun-2026

Total assets were BDT 3,009.7m at 30-Jun-2026: property, plant and equipment BDT 1,505.5m, capital work in progress BDT 758.6m, inventories BDT 406.2m and cash BDT 88.1m [1 p.10]. Capital work in progress was 25.2% of total assets (derived) [42]. Equity was BDT 1,106.6m and NAV per share BDT 17.02 [1 p.10].

Bank borrowings were BDT 647.0m at 30-Jun-2019, BDT 1,136.3m at 30-Jun-2023 and BDT 618.8m at 30-Jun-2026 [42]. At 30-Jun-2026 the Social Islami Bank Ltd. long-term loan was BDT 391.7m, of which BDT 154.3m was current; short-term facilities were loan trust receipts of BDT 107.4m, cash credit of BDT 100.8m and a margin loan of BDT 18.8m [1 p.24] [1 p.25]. The FY2026 auditor's key audit matter put loans at "Tk. 618,751,447 (Long-term loan Tk. 237,434,662 and short-term loan Tk. 381,316,785)" [1 p.7].

Trade payable was BDT 573.5m at 30-Jun-2026 and BDT 454.6m a year earlier; advance from customers was BDT 174.4m and BDT 50.0m [1 p.10]. Note 15 shows new consumer security deposits of BDT 80.0m: Friends Chemical BDT 50.0m and Farid & Co. BDT 30.0m [1 p.24]. Note 20 lists advances from customers including Farid & Co. (BDT 34.4m) and Friends Chemical & Phramaciticals (BDT 14.7m) [1 p.25].

Note 42 reports loans from the managing director: "opening balance of loan from the directors was Tk. 17,254,285, loan received 47,549,404 and paid Tk. 14,850,556 for loan refund", closing at Tk. 49,953,133. The note states the loan "will be repayable on demand and shall not bear any interest" [1 p.34]. The table names Md. Salam Obaidul Karim, Managing Director, as the related party [1 p.34].

The FY2025 statements present the June 2025 balances differently from the FY2026 comparatives. Accounts payable of BDT 555.6m in the FY2025 report equals trade payable BDT 454.6m, advance from customers BDT 50.0m and payable against service & work BDT 50.9m in the FY2026 comparatives [2 p.107] [1 p.10]. These are presentation changes and no figure differs in total.

Cash and capital allocation: FY2026 operating cash flow BDT 367.5m, debt repayments of BDT 239.0m and a 2.50% dividend

In FY2026 the company received BDT 3,112.4m in cash from customers; revenue was BDT 3,113.6m. It paid BDT 2,607.1m to suppliers and for expenses [1 p.13]. It paid finance charges of BDT 96.6m and income tax of BDT 43.0m, leaving operating cash flow of BDT 367.5m [1 p.13]. Payments for property, plant and equipment were BDT 84.1m and for capital work in progress BDT 42.6m; the sale of shares brought in BDT 6.0m [1 p.13].

Financing in FY2026 comprised repayment of BDT 145.1m on the long-term loan and BDT 93.9m on short-term loans, a BDT 80.0m inflow of consumer security deposits and dividends of BDT 15.5m [1 p.13]. Cash rose by BDT 72.3m to BDT 88.1m at 30-Jun-2026 [1 p.13]. In FY2025 operating cash flow was BDT 369.5m, payments for property, plant and equipment BDT 176.0m and for capital work in progress BDT 99.2m, and the investment-in-shares line brought in BDT 73.6m [2 p.110].

Fixed-asset payments exceeded operating cash flow in FY2019, FY2020, FY2021 and FY2023, and operating cash flow exceeded fixed-asset payments in FY2022, FY2024, FY2025 and FY2026 (derived) [42]. The cash-flow line for capital work in progress was printed as an inflow of BDT 452.2m in FY2021, the year property, plant and equipment payments were BDT 658.2m [4 p.78].

Cash dividends on DSE were 10% for 2022 (EPS BDT 1.98), 5% for 2023 (EPS BDT 1.49), 2.50% for 2024 (EPS BDT 1.66) and 2.50% for 2025 (EPS BDT 0.58) [36] [42]. Share capital was BDT 650.2m at each year end from 30-Jun-2019 to 30-Jun-2026; DSE lists stock dividends for earlier years, the last of 5% for 2018 [6 p.48] [1 p.10] [36].

Other balances at 30-Jun-2026: advance, deposits & pre-payments BDT 118.0m (BDT 221.7m a year earlier), investment in shares BDT 6.0m (BDT 15.4m), provision for income tax BDT 162.1m (BDT 147.0m) and deferred tax liabilities BDT 127.2m (BDT 136.6m) [1 p.10]. Retained earnings were BDT 460.2m and the FVOCI reserve was negative BDT 3.8m [1 p.10]. The company had 416 employees: 357 manufacturing workers, 16 sales & distribution officers and staff and 43 management and administrative officers and staff [1 p.33].

Audit: a qualified FY2026 opinion on the PF, gratuity and WPPF arrangements and seven key audit matters

Basu Banerjee Nath & Co. (partner Dipok Kumar Roy, FCA) signed the FY2026 report on 15 October 2026 under the heading "Qualified Opinion" [1 p.4] [1 p.9]. The opinion paragraph, quoted in full: "In our opinion, except for the effects of the matter described in the basis for qualified opinion section of our report, the accompanying financial statements give true and fair view, in all material respects, of the financial position of the Company as at June 30, 2026 and of its financial performance and its cash flows for the year ended in accordance with International Financial Reporting Standards (IFRSs) as issued by the International Accounting Standard Board (IASB) and adopted by Financial Reporting Council (FRC) of Bangladesh." [1 p.4]

Basis for Qualified Opinion, paragraph I, quoted in full: "According to Bangladesh Labour Act 2006, Bangladesh Labour Act (Amended) 2018, and Bangladesh Labour Rules 2015, the company introduced employees benefit scheme i.e. Employees Provident Fund (PF), Gratuity Fund (GF), Worker's Profit Participation Fund (WPPF) but yet to obtain the approval of National Board of Revenue (NBR) under the second schedule of Income Tax Act, 2023 for PF & GF. WPPF is to be managed in accordance with the labour law. Moreover, the entity does not maintain separate bank account and separate books of account for the above-mentioned employees benefit schemes." [1 p.4] The FY2026 report has no emphasis-of-matter or other-matter paragraph [1 p.4] [1 p.7]. The provident fund was BDT 19.7m and the gratuity fund BDT 19.8m at 30-Jun-2026 [1 p.24].

The FY2026 report sets out seven key audit matters. Each risk description is quoted in full below, with the page [1 p.5] [1 p.6] [1 p.7].

Capital Work-in-progress: "Capital work-in-progress is pre-stage of capitalization of Property, Plant & Equipment (PPE). Capitalization of expenses and cost of goods are in some extend judgmental in nature." [1 p.5]

Property, Plant and Equipment: "The company has represented total Property Plant and Equipment (WDV) BDT 1,505,480,554 during the financial year 30 June 2026, which recovers 66.49% of total Non-Current Assets. The company represents addition for property, plant and equipment BDT 84,072,280. This was an area of focus for our audit and significant audit effort." [1 p.5]

Recoverability assessment of Trade receivables "The company has a net trade receivable of Tk. 96,835,412 as at 30 June 2026. Trade receivables of the company comprise mainly receivables in relation to the trading business regarding the Sales of finished goods. The recoverable amount was estimated by management based on their specific recoverability assessment on debtor with reference to the aging profile, historical payment pattern and the past record of default of the customer." [1 p.5]

Advance, Deposit and Prepayments: "Advance, deposit and prepayments Tk. 118,047,252 for advance income Tax, Advance against rent, LC Margin, construction, salary, Telephone, Electric connection, Titas Gas, security deposit and Advance for expenses." [1 p.6]

Tax provisioning and recognition of deferred tax asset "The Company reported total income tax expense of BDT 33,645,011 with current tax provision Tk. 43,047,475 and deferred tax income Tk. (9,402,464) in note no-33.00. The Company has recognized deferred Tax Liability for deductible temporary differences that it believes are payable. The recoverability of recognized deferred tax liability is in part dependent on the company's ability to generate future taxable profits sufficient to utilize deductible temporary differences." [1 p.6]

Revenue Recognition: "At the end of year, the entity reported total revenue (net sales) of BDT 3,113,603,720. Revenue is recognized when the performance obligation is satisfied by transferring goods or services to a customer, at a point either in time or over time. Goods or services are "transferred" when the customer obtains control of it. It is a matter of consideration whether revenue may be misstated due to recognition of sales transaction before performance obligation being satisfied. This was an area of focus for our audit and significant audit effort to rectify the export income." [1 p.6]

Loans: "The company presented Loans totalling Tk. 618,751,447 (Long-term loan Tk. 237,434,662 and short-term loan Tk. 381,316,785) in the financial position as at 30 June 2026." [1 p.7]

The auditor's responses, quoted in full for the two balance-sheet matters: for loans, "We have tested the maintaining effectiveness of the Long-term loan and short-term loan held by the Company. Additionally, we performed the following: Reviewed the board of directors meeting minutes to ensure whether any loan agreements or bond issuances are authorized or not; Checked out the terms and condition of loan sanction letter to make sure they reconcile with information described in the financial statements and board meeting minutes. Examined cash transaction any large cash amount received by the entity or not; Sent balance confirmation letter to the respective branch of the certain bank to check the loan amount. Finally assessed the appropriateness and presentation of disclosures against long-term loan and short-term loan." [1 p.7] For trade receivables: "Tested the accuracy of aging of trade receivables at year end on a sample basis; Obtained a list of outstanding receivables and identified any debtors with financial difficulty through discussion with management; Assessed the recoverability of the unsettled receivables on a sample basis through our evaluation of management's assessment with reference to the credit profile of the customers, historical payment pattern of customers, publicly available information and latest correspondence with customers and to consider if any additional provision should be made; and Tested subsequent settlement of trade receivables after the balance sheet date on a sample basis, if any." [1 p.5]

For capital work-in-progress the response reads: "We have tested the maintaining effectiveness of the entity's control around the recording and re-assessment of the amount of Capitalization and transfer to PPE. Additionally, we performed the following: Obtaining supporting documents of capitalization transaction recorded either side of the year and debit notes issued after the year end to determine whether the amount recorded in correct period; Test the transfer from CWIP to PPE and costing, date etc. thereof; and We have also critically analysed journal entries posted during the year to identify unusual items." [1 p.5] For property, plant and equipment: "We tested the design and operating effectiveness of key control focusing on the following: We verified the existence and legal ownership of Property, Plant and Equipment. Calculated and verified the depreciation of property, plant and equipment. Evaluating the adequacy of disclosure to financial statements. Finally assessed the appropriateness and presentation of disclosures against property, plant and equipment." [1 p.5]

For advances: "We have tested the maintaining effectiveness of the advance, deposit and assets position held by the Company. Additionally, we performed the following: Obtain Office Rent agreement, went through the terms and conditions of the agreement, and verify the amount of advances. Obtain salary statements and pay slips. Obtain vendor list to ascertain the advance against purchase." [1 p.6] For tax: "Use of our own tax specialists to assess the company's tax computation. Our tax specialists were also used to evaluate tax strategies that the company expects will hardly enable the successful recovery of the recognized deferred tax liability taking into account the Company's tax position and our knowledge and experience of the application of relevant tax legislation; To analyses and challenge the assumptions used to determine tax provisions based on our knowledge and experiences of the application of the local legislation; Evaluating the adequacy of the financial statement disclosures, including disclosures of key assumptions, judgments and sensitivities related to tax and deferred tax." [1 p.6]

For revenue: "We tested the design and operating effectiveness of key control focusing on the following: We have taken into consideration the complexity of the situation and gained an understanding of the company's disclosures of the volume of sales incurred during the period by obtaining sufficient audit work, audit evidence and resource is required. Verified sales transactions for compliance with the Company accounting principles. Evaluated the Company's work to implement IFRS 15 and assessed whether accounting principles comply with the new accounting standard. In addition, we performed substantive analytical to understand how the revenue has trended over the year among other parameters, we performed a detailed testing on transactions around the year end, ensuring revenues were recognised in the correct accounting period. Tested the internal controls over financial reporting, we also assessed the existence and accuracy of the sales recorded, based among other things on inspection of sales contracts, final acceptances, and the allocation of variable consideration to the various elements in the contracts. Obtain and confirm pro-forma invoice and other related documents and calculate sales balances." [1 p.6] [1 p.7]

The FY2025 report, signed on 28 August 2025 by the same firm, carries the heading "Opinion" and a paragraph headed "Basis for Opinion" with the same PF, GF and WPPF wording; the opinion text begins "In our opinion, except for the effects of the matter described in the basis for qualified opinion section of our report" [2 p.100] [2 p.106]. DSE's post of 10-Sep-2025 described it as "Qualified Opinion" and "Emphasis of Matter" [34]. Emphasis of Matter I, quoted in full: "The requirement of minimum shareholding jointly by the sponsor(s) and Director(s) is 30% as per notification no. BSEC/CMRRCD/2009-193/217/Admin/90 dated 21 May 2019 issued by the Bangladesh Securities Exchange Commission whereas, in case of Salvo Chemical Industry Limited the percentage is 25.18%. BSEC issued letter ref no. BSEC/ICAD/SRIC/2023/257/62 dated 07 march 2024 instructed to ensure the requirement of 30% by buying or acquiring remaining shares from the market or in some cases issuing new shares subject to submitting a strategic plan and compliance of relevant provisions of Securities Laws and Companies Act, 1994 within 1 (one) year. Consequently, the company submitted Application vide no SCIL/ BSEC/ 2024/ 301 dated 31 July 2024 for raising capital of BDT 64 million through issuance of 6.4 million new shares to existing sponsor-directors through private placement to comply with 30% holding of shares of paid-up capital of the company by its sponsors and directors. Subsequently BSEC declined in doing so with a letter ref no. BSEC/CI/CPLC (Public)-1118/2024/Part-I/261 dated 07 October 2024. The Board of Directors of the Company in its meeting held on 05-12-2024 has decided to re-apply to the Bangladesh Securities and Exchange Commission with a new price of BDT 16 per share (includes a premium of BDT 6 per share) which was already approved by General Shareholders in the Annual General Meeting (AGM) held on 29 December 2024 by using hybrid system. Accordingly, the company has re-applied and submitted Application vide no SCIL/ BSEC/ 2025/ 23 dated 15 January 2025 for raising capital of BDT 102.4 million through issuance of 6.4 million new shares (with a new price of BDT 16 per share including premium of BDT 6 per share) to existing sponsor-directors through private placement to meet regulatory compliance, which was declined again by BSEC dated 13 April 2025." [2 p.100] [2 p.101]

Emphasis of Matter II, quoted in full: "In accordance with para 31 of IAS 16, the Company has not revalued any of its assets including land and the fixed assets under Property, Plant & Equipment (PPE). Moreover, during our audit tenure, we did not obtain any fixed asset register with the list of assets including recognition of specific plant or machinery. Most of the machineries are own made comprising the cost of different materials which are not accumulated as capital work in progress and transferred to specific machinery with the recognised cost. Thus, the proper classification of machineries with cost details is required before valuation of Property, Plant & Equipment (PPE)." The paragraph ends: "Our opinion is not modified in respect of these matters." [2 p.101]

The FY2025 opinion paragraph, quoted in full: "In our opinion, except for the effects of the matter 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 flows for the year then ended in accordance with International Financial Reporting Standards (IFRSs), the Companies Act.1994 and other applicable laws and regulations." [2 p.100] Zoha Zaman Kabir Rashid & Co. signed the FY2021-FY2023 reports and Rahman Mostafa Alam & Co. the FY2020 statements [5 p.56] [3 p.84] [6 p.48]. DSE posted an "Emphasis of Matter" notice for the FY2024 report on 19-Nov-2024 [34].

Basu Banerjee Nath & Co. (Dipok Kumar Roy, FCA) signed the FY2024 report on 3 November, 2024 under the heading "Opinion" [17 p.98] [17 p.104]. The opinion paragraph, quoted in full: "In our opinion, the accompanying financial statements give true and fair view, in all material respects, of the financial position of the Company as at 30 June, 2024 and of its financial performance and its cash flows for the year ended in accordance with International Financial Reporting Standards (IFRSs)." [17 p.98] Emphasis of Matter I: "According to Bangladesh Labour Act 2006, Bangladesh Labour Act (Amended) 2018, and Bangladesh Labour Rules 2015, the company introduced employees benefit scheme i.e. Employees Provident Fund, Gratuity Fund, Worker's Profit Participation Fund (WPPF) but yet to obtain the approval of National Board of Revenue (NBR) under the second schedule of Income Tax Act, 2023. Moreover, the entity does not maintain separate bank account and separate books of account for the above-mentioned employees benefit scheme." [17 p.98]

FY2024 Emphasis of Matter II: "The requirement of minimum shareholding jointly by the sponsor(s) and Director(s) is 30% as per notification no. BSEC/CMRRCD/2009-193/217/Admin/90 dated 21 May 2019 issued by the Bangladesh Securities Exchange Commission whereas in Salvo Chemical Industry Limited the percentage is 25.18%. BSEC issued letter ref no. BSEC/ICAD/SRIC/2023/257/62 dated 07 march 2024 instructed to ensure the requirement of 30% by buying or acquiring remaining shares from the market or in some cases issuing new shares subject to submitting a strategic plan and compliance of relevant provisions of Securities Laws and Companies Act, 1994 within 1 (one) year. Consequently the company held EGM dated 18 July 2024 to increase paid up capital Tk. 64,000,000 through issuance of 6,400,000 no of ordinary shares of Tk. 10 each from the existing sponsors and directors through private placement against cash consideration duly approved by shareholders. Subsequently BSEC declined in doing so with a letter ref no. BSEC/CI/CPLC (Public)-1118/2024/Part-I/261 dated 07 October 2024." [17 p.98] [17 p.99] Emphasis of Matter III: "In accordance with para 31 of IAS 16, “after recognition as an asset, an item of property, plant and equipment whose fair value can be measured reliably shall be carried at a revalued amount, being its fair value at the date of the revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses”. However, the Company has not revalued any of its assets including land and as such the fixed assets under Property, Plant & Equipment may be overstated or understated as on 30 June 2024." [17 p.99] As printed, the PF, GF and WPPF matter was an emphasis of matter in FY2024 and a basis for qualified opinion in FY2026 [17 p.98] [1 p.4].

Governance: sponsors/directors 30.15% at 30-Sep-2026; one 'Not Complied' condition in the FY2025 annexure

The FY2025 annual report lists five directors at 30-Jun-2025: Mrs. Khondoker Afia Sultana (Sponsor Director, Chairman; 10,653,031 shares, 16.38%), Md. Salam Obaidul Karim (Sponsor Director, Managing Director; 4,415,697 shares, 6.79%), A. S. M Shariar Ansari (Director, Non-Executive; 1,306,500 shares, 2.01%) and two independent directors, Md. Mujibur Rahman and Md. Zaidul Hoque, with no shares; the total is 16,375,228 shares, 25.18% [2 p.22]. The FY2026 statements are signed by Khondoker Afia Sultana as Chairman [1 p.10].

Director profiles: Khondoker Afia Sultana has been a director since 2002 and Chairman from 2021; the profile says "she has established this industry together with Mr. Salam Obaidul Karim" [2 p.33]. Md. Salam Obaidul Karim has been a director since 2002 and Managing Director from 2022 [2 p.33]. Note 42 states he "also serves as an Independent Director of Mercantile Islami Insurance PLC, proprietor of Gazipur Dairy Farm, proprietor of Shatabdi Builders" [1 p.34]. A. S. M. Shariar Ansari joined on March 31, 2022 and is "Chairman of Vinci Construction Private Limited, Managing Director of Reddeer PLC and Proprietor of Vinci Corporation" [2 p.34]. Md. Mujibur Rahman is FCMA since 1985 and FCS since 1997 [2 p.34]; Md. Zaidul Hoque is a retired government official [2 p.35].

The board met 8 times in 2024-25, from the 200th meeting on 26-09-2024 to the 207th on 16-06-2025, with 5 of 5 directors attending each meeting [2 p.85]. The FY2026 statements were approved at the 219th meeting on 15 October 2026 [1 p.34]. The audit committee, appointed by the board on 13 November 2024, is chaired by Md. Mujibur Rahman with A. S. M. Shariar Ansari and Md. Zaidul Hoque as members and Liton Kumar Roy, Company Secretary, as secretary; it met on 27.10.2024, 13.11.2024, 30.01.2025 and 28.04.2025 with attendance of 04 each time [2 p.77] [2 p.78].

The Nomination & Remuneration Committee has Md. Zaidul Hoque as Chairman, Md. Mujibur Rahman and A. S. M. Shariar Ansari as members and Liton Kumar Roy as secretary [2 p.82]. Key management named in the FY2025 report: Md. Salam Obaidul Karim (Managing Director), Md. Saiful Alam (Chief Finance Officer), Liton Kumar Roy (Company Secretary) and Mrs. Sayeeda Karim (Executive Director- Administration) [2 p.76] [2 p.86]. The audit committee report says the "Head of Internal Audit and Compliance attended the meetings on invitation"; no name for the Head of Internal Audit and Compliance is printed in the FY2025 annual report (all 142 pages searched) or the FY2024 audit committee report [2 p.77]. No family relationship between Mrs. Sayeeda Karim and the directors is printed in the FY2025 report (searched p.1-142) [2 p.76].

The corporate-governance annexure (Annexure-C, 11 pages) ticks one condition as "Not Complied": 1(4)(c), "The Chairperson of the Board shall be elected from among the non-executive directors of the company", with the remark "Paid compensation under Article 134" [2 p.90]. Condition 1(2)(a) is ticked complied with the remark "There are 02 Independent Directors (ID) in the Board. To obtain approval from the commission to appoint or reappoint of the Independent Director is in under process." [2 p.88] Jasmin & Associates' certificate of September 01, 2025 states the company complied "except condition no 1(4)(C)" [2 p.87].

Sponsors/directors held 25.18% at 30-Jun-2025, 30.15% at 31-Aug-2026 and 30.15% at 30-Sep-2026 on the DSE company page [36]. The Q1 FY2026 statements printed: "We are now taken initiative & committed to procure shortfall shares from public market within December 2025 to fulfilling regulatory compliance." [7 p.15] DSE posted 8 buy confirmations by the managing director from 16-Nov-2025 to 2-Feb-2026 totalling 4,536,000 shares [34] [35]. On 8-Feb-2026 DSE posted that he had transferred 1,350,000 shares to his son, Md. Atteul Karim Rafee, by way of gift [35].

BSEC declined the private-placement applications on 07 October 2024 and 13 April 2025, as quoted in the audit section [2 p.101]. CRISL rated the company "BBB+" long term and "ST-3" short term with a Stable outlook, posted on 28-Jul-2026; the 31-Jul-2025 post gave "BBB" and "ST-3" [35] [34]. The 24-month DSE sweep (old_news.php, criteria=3) returned 63 distinct posts, with no correction notices and no board approval for capital expenditure or expansion [34] [35].

FY2026: quarterly EPS of BDT 0.14, 0.11 and 0.19, full year BDT 0.75 and a 2.50% cash dividend

DSE posts give the FY2026 quarters: EPS of BDT 0.14 for July-September 2025, BDT 0.11 for October-December 2025 and BDT 0.19 for January-March 2026, with nine-month EPS of BDT 0.44 [34] [35]. Full-year EPS was BDT 0.75 [1 p.11]; the April-June 2026 quarter is BDT 0.31 by subtraction (derived) [42]. NOCFPS was BDT 1.55 for the first quarter, BDT 1.74 for six months, BDT 2.22 for nine months and BDT 5.65 for the year [34] [35] [1 p.13].

The board recommended a 2.50% cash dividend for FY2026, to be placed before the 24th AGM [1 p.34]. DSE lists cash dividends of 1% for 2020, 2% for 2021, 10% for 2022, 5% for 2023, 2.50% for 2024 and 2.50% for 2025 [36]. Cash dividend paid was BDT 15.5m in FY2026 and BDT 65.0m in FY2023 [42]. The FY2026 recommendation is 33.3% of FY2026 EPS (derived) [42].

Printed conflicts: two NRC meeting counts in the FY2025 report and four one-taka reprints

Where two printed statements disagree like for like, both are stated. The FY2025 report says the Nomination & Remuneration Committee "meets once (01) time during 2024-25" with one meeting on 13-11-2024 [2 p.75] [2 p.82]; its NRC report says "In 2024-2025, the Committee met twice." [2 p.84]

Smaller reprints of the same figure: FY2021 profit after tax is printed 22,002,984 in the FY2021 report and 22,002,983 in the FY2022 report [5 p.80] [4 p.76]. FY2023 profit after tax is 96,608,997 in the statement of profit or loss and 96,608,998 in the statement of changes in equity [3 p.86] [3 p.87]. FY2022 deferred tax is 58,885,672 in the FY2022 report and 58,885,673 in the FY2023 report; equity at 30-Jun-2022 is 947,930,021 and 947,930,022 [4 p.76] [4 p.77] [3 p.85] [3 p.86].

What's next: record date 16-Nov-2026, Q1 FY2027 accounts 5-Nov-2026 to 17-Nov-2026 (inferred), the AGM on 26-Dec-2026 and Q2-Q3 FY2027 ranges

The record date for the FY2026 dividend is 16.11.2026 and the AGM is on 26.12.2026, both as posted by DSE on 17-Oct-2026 [35]. No board date for the Q1 FY2027 accounts (quarter to 30-Sep-2026) had been notified on DSE at 2-Nov-2026 [35]. Q1 statements have been signed on 14-Nov-2016, 15-Nov-2017, 14-Nov-2018, 14-Nov-2019, 14-Nov-2020, 15-Nov-2021, 17-Nov-2022, 15-Nov-2023, 13-Nov-2024 and 05-Nov-2025 [16 p.4] [15 p.4] [14 p.3] [13 p.3] [12 p.3] [11 p.3] [10 p.3] [9 p.5] [8 p.3] [7 p.4]. The inferred range covering all ten is 5-Nov-2026 to 17-Nov-2026 (inferred, 10 years); 05-Nov-2025 is the outlier, and without it the range is 12-Nov-2026 to 17-Nov-2026. Both ends of each range are DSE business days (Sunday to Thursday); Fridays and Saturdays are excluded. No precedent date in the range has passed at 2-Nov-2026.

Q2 statements were signed on 30-Jan-2020, 28-Jan-2021, 23-Feb-2022, 23-Mar-2023, 31-Jan-2024, 30-Jan-2025 and 29-Jan-2026 [24 p.2] [23 p.3] [22 p.4] [21 p.3] [20 p.2] [19 p.4] [18 p.4]; the inferred Q2 FY2027 range is 28-Jan-2027 to 23-Mar-2027 (inferred, 7 years), with 23-Mar-2023 and 23-Feb-2022 the outliers and 28-Jan-2027 to 31-Jan-2027 without them. Q3 statements were signed on 29-Jun-2020, 24-May-2021, 16-May-2022, 29-May-2023, 30-Apr-2024, 28-Apr-2025 and 26-Apr-2026 [31 p.2] [30 p.2] [29 p.3] [28 p.4] [27 p.4] [26 p.4] [25 p.3]; the inferred Q3 FY2027 range is 26-Apr-2027 to 29-Jun-2027 (inferred, 7 years), with 29-Jun-2020 the outlier and 26-Apr-2027 to 27-May-2027 without it; 29-May-2027 is a Saturday. These are statement signing dates; three earlier statements (Q2 FY2017, Q3 FY2017 and Q3 FY2018) carry no date.

Bangladesh's LDC graduation date is 24-Nov-2029 [39] [40]. The FY2026 annual report with the directors' report and governance annexures is not in the corpus at 1-Nov-2026.

Risks: a qualified audit, financial charges at 53.3% of profit from operation and a starch plant at 29.96% of capacity

The risk table lists each item with the filing that prints it. The "line it moves" column reads "None disclosed" unless a filing quote links the item to a line.

Key questions: the FY2026 annual report's governance pages, Q1 FY2027 margins and the next audit opinion

At 30-Jun-2026 equity was BDT 1,106.6m, bank borrowings BDT 618.8m and cash BDT 88.1m [1 p.10] [42]. At the 29-Oct-2026 close of BDT 28.20, the stock traded at 37.6x FY2026 EPS and 1.66x NAV at 30-Jun-2026 [41] [42].

FAQ

What does Salvo Organic Industries make?

Sulphuric Acid, Liquid Glucose and Starch as main products, with Battery Grade Water, Gluten, Germ and Fiber as by-products [1 p.15].

What was the FY2026 result?

Revenue BDT 3,113.6m, gross profit BDT 298.3m, financial charges BDT 96.6m, profit after tax BDT 48.8m and EPS BDT 0.75 [1 p.11].

What did the auditor say about FY2026?

A qualified opinion on the provident fund, gratuity fund and WPPF arrangements, and seven key audit matters [1 p.4] [1 p.5].

Who lends to the company?

Social Islami Bank Ltd. holds the long-term loan; short-term facilities are loan trust receipts, cash credit and a margin loan; the managing director lent Tk. 49,953,133 interest-free at 30-Jun-2026 [1 p.24] [1 p.25] [1 p.34].

Why did the trading code change?

DSE approved the name change to Salvo Organic Industries PLC. from 24-Nov-2025 and the code change to SALVO from 3-Dec-2025 [34].

Who owns the company?

Sponsors/directors 30.15%, institutes 4.79% and the public 65.06% at 30-Sep-2026 [36].

What is the 52-week range?

BDT 25.0 (13-Nov-2025) to BDT 39.5 (4-Jun-2026) on unadjusted DSE trading-day closes, 30-Oct-2025 to 29-Oct-2026 [41].

Sources

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