Saturday, November 26, 2011

Soap Business plan Example

Genesis Soaps Inc., located in Montreal, Quebec, is a start-up wholesaling business specialized in importing natural soaps and repackaging them for sale in specialist helath shops and specialized drugstores chains across Quebec. The business would be established to offer hand-made natural soaps to a growing clientele looking for chemical free personal care products for either daily usage or skin treatment. The firm would specialize in the following products:
  1. Extra virgin olive oil soaps (solid, liquid, several fragrances)
  2. Glycerin soaps (solid, liquid)
  3. Black seed soaps (solid, liquid)
  4. Black seed oil and cream

Genesis Soaps Inc. has its warehouse and office in West Montreal and plans to rent another warehouse in the same area.

This business plan is for demo purpose only. It does not really reflect the reality of this business.

For more information, contact me.

My story with

There was a little nice test on that site back in 2006. I did not need the job back then but I wanted to prove my net worth for the sake of coding. 

I spent few hours on this test but the result was really good. The guy emailed me back for an interview and mentioned in the email that this was one of the neatest code that they have got out of few thousands. 

I did not continue to the interview as I did not need the job back then and I was moving from programming into Finance.

It is another nice memory and I would like to share my code with those old PHP nerds who would like to read some // 2cents.

// Script name: prove_your_worth_code.php                   *
// Version: 1.0                                             *
// Coder: Bilal Abdul Kader                                 *
// Date: October 29th, 2006                                 *
//                                                          *
// This script automate the submission of a mixed form      *
// (strings + files) to the ProveYourWorth website.         *
//                                                          *
// It emulates the browser using CURL library for PHP, the  *
// same task can be done using fsockopen and Snoopy.        *
//                                                          *
// The first task is to open the form in order to get the   *
// PHPSESSID and any other cookies. Then the code emulates  *
// the form submission and send it to the server again.     *
//                                                          *
// I kept the code to a minimum as it is a PROOF OF CONCEPT *
// only.                                                    *
// Get the cookie of the site first
// The script should fetch the index page
// in order to get the cookie(s)
// Apparently the site sets the PHPSESSID cookie only
// Define the curl handler
$my_curl_handler = curl_init();
// The web site to fetch
$url = "";
// Add the URL operator
curl_setopt($my_curl_handler, CURLOPT_URL, $url);
// Handle the cookies of the site in order to send it later on
// the tmp folder is used on Nix machines or temp on Windows
// Add an agent header line
// Add a referer header line
curl_setopt($my_curl_handler, CURLOPT_COOKIEFILE, "c:\\temp\\cookie.txt");
curl_setopt($my_curl_handler, CURLOPT_COOKIEJAR, "c:\\temp\\cookie.txt");
curl_setopt($my_curl_handler, CURLOPT_USERAGENT, "Mozilla/5.0 (Windows; U; Windows NT 5.1; en-AU; rv:1.8.1) Gecko/20061010 Firefox/2.0");

// Follow any location HTTP command if any
// It seems that redirection is not used on this page
// However, this is kept for portability
curl_setopt($my_curl_handler, CURLOPT_FOLLOWLOCATION, 1);
// Return the trasnfer as part of the return value in curl_exec()
curl_setopt($my_curl_handler, CURLOPT_RETURNTRANSFER, 1);
// Execute the command and get the html page that has the forum
$htmlPage=curl_exec ($my_curl_handler);
// Parse the page in order to get the new hash key
preg_match("/\bhash\b\" value=\"(.*)\"/i",$htmlPage, $matches);
$myHashKey = $matches[1];
// echo "Hash Key is: $myHashKey

// Other action can be added here to check if the curl has
// got the correct page. This can be done using the
// $headers variable (For example $headers['url'])
// Now start the actual work to automate the form
// submission and to send the fields and the files
// fsock or Snoopy is not that hard to implement
// However, I prefered to use curl this time
// The other two implementations are as hard.
// Change the URL that the form should be submitted to
curl_setopt($my_curl_handler, CURLOPT_URL, $url);
// Now change the CURL operating model to POST (not GET)
// Regular HTTP POST (application/x-www-form-urlencoded)
// Add the new URL to send the form to
curl_setopt($my_curl_handler, CURLOPT_POST, 1);
// In case the form action need a valid referer to work
curl_setopt($my_curl_handler, CURLOPT_REFERER, "");
// Build the data for the form
// I am using hard coded data in here for simplicity
// However, dynamic data can be easily incorporated
// Select the files to attach
$cvFile = "cv";
$myFormData = array(
"name"=>"Bilal Abdul Kader",
"about"=>"Simple, I have a love affair with PHP and Programming in general. The puzzle was nice and tricky. I have emulated other more complex forms in real time.",
// Build the form data now
curl_setopt ($my_curl_handler, CURLOPT_POSTFIELDS, $myFormData);
// Send the POST request and store the resuts in myResults
// In case of error during the submission
// Show the error.
echo curl_error($my_curl_handler);
// Otherwise, show the return of the form
echo $myResult;

Crazy parking tickets in Montreal

You think that the parking service in Montreal got better with automation?
I am not sure but I know for sure that the parko-meter guy wants to finish his book of tickets no matter how.

Last June, I was parking in downtown Montreal and I have paid my parko-meter fees at 12.54 pm. However, the smart guy gave me a parking ticket three minutes after 12.57 pm?

What is the value of the machine he is using then?
Why did they invest all of this money into the parko-meters then?

I have complained about that but no-one answered so far.

Why I stared Concordia Classifieds (

I joined Concordia University in January 2004. I could not book an apartment before leaving Lebanon because Concordia did not have a well developed medium for online classifieds. Thousands of International students suffered from this fact. The idea of  emerged from the need of Concordia students for a classifieds ads system similar to other universities in Montreal, namely McGill and UQAM. The majority of university students need to rent an apartment, buy or sell used gadgets, look for a part-time job, offer his/her tutoring services or have a peer’s advice.

Why Muslims should give to Muslims and Non-Muslims?

Thus Islam teaches total trust in believers, whose faith assures them that giving generously will not decrease their Rizq (provisions and properties) in any way, but rather increase them. Giving not only satisfies the needs of the poor and disadvantaged but also benefits the giver, whose righteous generosity returns invaluable riches of peace and satisfaction; his/her heart is protected from the earth-quakes of rancor and jealousy, and he/she is saved from the adverse consequences of selfishness and narrow-mindedness. It’s a simple but profound spiritual equation: By giving we are helping ourselves.
Islam considers greedy and avaricious mentality at this level as very cheap and mean, for it is a faith that seeks to nourish charity and generosity all the time. Almighty Allah says in the Qur’an: “So be aware of Him as much as you can; listen and obey; and spend charity for the benefit of your own soul. And whoever is saved from his own greediness, then they are successful ones.” {At Tagabun 16}
It was also reported that the Messenger of Allah said: “Protect yourself against the fire [of judgment against you], even if it be only by (giving) a piece of date; and if one cannot even fulfill this, then by saying a good word.” {Muslim}

Monday, November 21, 2011

Home Ownership with Options in Islamic Finance

11/21/2011 12:07:17 PM
Islamic Finance

Salman Ahmed Shaikh

Current Home Financing Structure in Islamic Finance

In home financing using declining equity ownership structure, the customer approaches the bank for joint purchase of an asset/property. The seller of the property is paid by the bank and the bank and the customer enter into a Joint Property Purchase Agreement.

In this arrangement, the ownership stake of the tenant increases and that of the bank decreases or diminishes with the passage of time. The rent decreases as the ownership stake of tenant increases.

The share of the bank in asset/property is divided into units. These units are purchased by the customer periodically until he/she has purchased all units and become the sole owner of the asset/property. Rent is not charged immediately and is charged at the end of the month for the use of asset/property. Rent for at least one period is fixed. Unit price fixed for a period is not changed during that period. The rent is calculated based on 1 year LIBOR. The floor rate (minimum rate) and the ceiling rate (maximum rate) are stated based on which the rentals rate can vary. In agreement, it is stated that if payment is made on time, the transfer of ownership will take place accordingly.

The risk of damage to the property is borne by the bank and the customer, according to the stake in the property at the time of loss due to accident. Just like in conventional mortgage, a penalty is charged if a customer withdraws from the contract that is paid to charity. The logical argument presented for such a penalty is that the contract involves a promise/undertaking to pay rent and purchase units of the asset/property and if a customer withdraws from the promise/undertaking, he/she can be asked to pay a penalty for maintaining financial discipline. The penalty can’t be taken as income by the bank because change in price after the execution of sale can’t be made as per Islamic scholars. That is why; the penalty collected from customers is paid to charity.

Critical Analysis of Current Islamic Home Financing

In home financing using equity ownership concept in Islamic finance, two contracts i.e. tenancy and sale are included as two separate components of a contract. Both these contracts are separated by way of a unilateral undertaking in place of the actual simultaneous sale/purchase of units of the asset/property. Upon close inquiry, one can notice that unilateral undertaking or promise makes the contract conditional. This argument is further substantiated by the fact that if the client refuses to undertake or promise to buy the asset (in units), the bank will not make contract with him/her. Furthermore, the promise gives the legal cover to the bank and is acceptable in a court of law.

Following table compares the conventional mortgage and ‘Diminishing Musharakah'.

Islamic Finance

OIC Fiqh Academy rendered ‘Organized Tawarruq’ impermissible, but the ‘unilateral undertaking’ in almost all prevalent Islamic finance contracts - including Murabaha, Ijarah, Diminishing Musharakah, Salam, Istisna, Musawamah etc - is an ‘organized’ way of avoiding price and market risk (the only relevant risks and the only dividing line between trade and lending for interest). Hence, with the same logic, OIC Fiqh Academy should have rendered ‘unilateral undertaking’ an ‘organized’ tool for avoiding price and market risk and the Fiqh ruling of ‘no return without taking risk’.

Options in Islamic finance are not allowed due to the ruling that transactions should be Gharar free i.e. free from ambiguity and uncertainty. In the opinion of this author, the concept of “Gharar” (uncertainty) should not be used as a shield to avoid price/market risk. 1400 years ago, the economy was agricultural and the agricultural yield was not predictable and homogenous. In Options contract, the obligation rests on one party and the other has an option. Therefore, it does not have any element of Gharar (uncertainty). Call premium is also charged to create financial discipline. If there is no call premium, then one will buy an unlimited number of options contract to hedge for each date for a same or similar price.

Hence, options could be used in fixed asset/property financing to separate sale and tenancy contracts.
In the practiced Islamic banking, taking an undertaking from the financee is just like buying a put option from the financee who is acting as a put option writer. If this is reversed, the financee would buy the call option and the bank will sell the call option i.e. acts as a call option writer.

The alternative is as follows:

a) The bank buys the asset/property paying the asset owner the full amount of the asset. The Bank is now the owner of the asset.

b) It gives the asset/property on rent to the financee and the bank also enters into an option contract as the call option writer. In a European option contract (exercisable only at expiration date), the financee buys that call option which gives him/her the right to buy the asset at call expiration. He/She has the right but not the obligation to buy. The option writer however, is obliged to sell the asset if the call buyer (financee) decides to exercise the contract. For short term options contracts, American style call options contracts (exercisable on or before expiration date) could also be used.

c) If the call buyer does not exercise, the option contract expires and the bank is in a position to give the asset/property on rent again.

d) If the call buyer exercises the contract, the bank gets the asset price plus the rental income for the period before the expiration of the contract.

The rent could be benchmarked using House Rent Index. The issue arises whether a fixed premium could be added or not. Due to the fixed premium, even if the property for any reason reaches a value equal or close to zero, there is some rent charged greater than or at least equal to the fixed premium. However, since the contract itself does not have any connection with interest or interest rate benchmark and the rent is charged as long as the asset is in usable condition, it does not contradict with any of the Islamic principles.

This is not a new proposed avenue for investment to the investors. Hence, it is neutral to the issue that whether it should have a secondary market or not. We have lived without securitization of mortgages and in a much better way than in Great Recession.

Second, the proposal meets following specific objectives:

a) To allow people to break free from conventional mortgage if they feel they are not able to keep paying installments. It is done by making them Call option buyers i.e. take a long position.

b) To achieve separation of tenancy and sale contract. It is a requirement in Islamic jurisprudence. This is achieved in Islamic finance currently through a unilateral undertaking which is legally enforceable. Hence, current mechanism to separate tenancy and sale are not ideal and are just legal solutions to the problem.

c) To propose a mechanism that still allows the bank to have reasonable returns even when future prices are low and when they are high. Future prices will influence the client’s decision to exercise or not exercise the call option contract.

d) To propose a mechanism that still allows the client to have a place for living and an option to purchase the house at a fixed price rather than paying fixed installments until maturity.

e) To propose a mechanism for setting rentals which reflects true market rent than linking it with an interest based benchmark. Hence, an alternative to LIBOR as a benchmark/pricing rule has also been provided by linking the rentals with House Rent Index.

Wednesday, November 16, 2011

Why Benetton wants to spread such feelings: UNHATE was Hated

Benetton had to remove its ads after ample critics from the Vatican. What about Al-Azhar?

Monday, November 14, 2011

Inside Search: Ten recent algorithm changes

Inside Search: Ten recent algorithm changes: Some interesting disclosure from Google about the modifications of their search and ranking algorithm. This move might be competitive or under the government pressure. Either way, it will be a great addition to the knowledge about the web search business.

Wednesday, November 09, 2011

Building a house out of bottles: the best reusing strategy I have seen

Ever dreamed to get rid of all these trillions of bottles around us in the upper hemisphere?
This is a new strategy from Nigeria this time.

The idea undoubtedly seemed strange at first: take the plastic water bottles that litter Nigeria's roads, canals and gutters and allow people to live inside them.
Not literally, but almost.
What a group of activists did was come up with a plan to build a house using those bottles, providing what they say is an environmentally smart strategy of chipping away at a housing shortage in Africa's most populous nation.
With the prototype near the northern Nigerian city of Kaduna now well underway, the group wants to extend its efforts and build more, aiming to unleash what they say is some long bottled-up potential.