Financial Policy

Company has been striving for many years to get out of conventional interest-based financial arrangements. In active consultation with Financial Advisors and Sharia Scholars, a model of MUSHARKA Term finance Certificates (MTFCs) was developed. The MTFCs, were issued at the end of 1999, and the proceeds were used to repay the single interest-based long term facility then out standing, which was otherwise repayable in installments by the end of year 2007.

In view of the non-availability of any precedence, it took more then two years to finalize this model and the first arrangement was made with two banks on private placement basis. During the year 2002 company embarked upon an expansion project of Rs. 650 million which was financed to the extent of Rs.360 million through listed TFCs, again based on similar model of sharing on profits & losses. This issue was partially offered for public subscription. Raw material purchases are financed on short-term MURABAHA basis.

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