But what is the attraction of "ethical business" that Shah and her group are pursuing? "Because it is the future", she says. To be linked with FC has now become an assurance of steady orders, that too at a very good price. The buyers in western countries prefer to buy things that are produced with an ethical process.

Explaining what she means by ‘ethical business’, Shah says, it has two aspects: The employee also should benefit sufficiently while benefiting the employer, and the production process should neither damage the environment nor cause health hazards to the workers. All of these seemingly conflicting objectives can be achieved together if the model of implementing the program is right, she points out. One additional objective of LH is to generate employment preferably ‘at source’ without the people having to migrate to bigger cities.

An experienced weaver drawing only around Rs. 3000 per month, Shah’s employees are not getting what can be termed as a ‘handsome salary’, a fact she reveals honestly. Making the salary or wages too high would make the cost of the product prohibitive and in the long run both employee and employer would not be able to continue deriving the same benefit from the enterprise. Therefore, LH group companies have a rule to set aside between one and two percent of their sales for employee welfare program. The money is handed over to Hoste Hainse, which finances for schooling of the workers’ children, provides medical insurance to the workers and carries out other necessary welfare programs. Newly affiliated units are however granted a grace period of one or two years before they start making such contributions.

In environmental matters, LH units have a problem. Being small, none of the carpet units have in-house facilities for washing or dying. "But we make it a point that wherever we take our goods for such purposes, the process there must be totally environment-friendly", says Shah.

Another objective of LH is to help turn around sick units through management support and that is what all the associates are receiving. The producers have to produce and LH markets the production through its trading company - Trading for Development. LH also invests in other companies, if the need be. As for the present, the highest share of LH investment is in the Internet company - Everest Net. In going to Internet service, LH’s logic is to serve the students of schools and colleges and remote areas. In Internet, it has teamed up with Galaxy Public School and Technoland (a computer Hardware and Software business company) among others.

Ethical is, however, not limited only to environmental concerns and employee welfare. Accounts also have to be ethical. But CEO Rajiv Pradhan says: "It is difficult to convince authorities that LH cannot make profit for the next few years". Since the company is not likely to earn accounting profit for some more years as this is going to be a development period for the company, how to address this problem is a challenge to the company right now.

And such problems are unlimited. For example, because of the uniqueness of the model that the company is following, Europeans too, mostly the retired ones, are showing interest to work with LH and its associates. One such retired German national is ready to work for a nominal monthly salary of Rs. 5000, but there are problems in getting work permit. The authorities have raised question on one of the objectives of the company, which is to achieve "economic and social development". In fact, it was included in the Memorandum of Association of the company to emphasize on ‘ethical business’. But the words in Nepali turned out to mean more than that. Authorities now say, these are two mutually exclusive objectives - you cannot have both in the Memorandum. Shah wonders ‘how was then the memorandum approved by the authorities in the first place?"