Shariah Methodology - Al Meezan Investment Management Limited
Al Meezan Investments

Shariah Methodology

At Al Meezan, we are dedicated to providing Shariah compliant investment solutions. In this regard we adhere to the Shariah guidelines as advised by the Shariah Board. The investments are limited to asset classes approved by the Shariah Advisor and all companies under investment consideration are regularly screened for Shariah compliance.

Shariah Screening Criteria (for equity securities)

Shariah compliance of stocks is done under the guidance of qualified and reputed Shariah experts. For stocks to be “Shariah compliant”, it must meet ALL the six key tests given below.

Business of the Investee Company

Core business of the company must be halal and in line with the dictates of Shariah. Hence, investment in securities of any company dealing in conventional banking, conventional insurance, alcoholic drinks, tobacco, pork production, arms manufacturing, pornography or related activities is not permissible.

Debt to Total Assets

Debt to Asset ratio should be less than 37%. Debt, in this case, is classified as any interest bearing debts. Zero coupon bonds and preference shares are, both, by definition, part of debt.

Non-Compliant Investments to Total Assets

The ratio of non compliant investments to total assets should be less than 33%. Investment in any non-compliant security shall be included for the calculation of this ratio.

Non-Compliant Income to Total revenue – Purification of Non-compliant income

The ratio of non compliant income to total revenue should be less than 5%. Total revenue includes Gross revenue plus any other income earned by the company. This amount is cleansed out as charity as a pro rata ratio of dividends issued by the company.

Illiquid Assets to Total Assets

The ratio of illiquid assets to total assets should be at least 25%. Illiquid asset, here, is defined as any asset that that Shariah permits to be traded at value other than the par.

Net Liquid Assets to Share Price

The market price per share should be greater than the net liquid assets per share calculated as: (Total Assets – Illiquid Assets – Total Liabilities) divided by number of shares.

COMPANIES FOR KMI 30 INDEX RECOMPOSITION BASED ON ACCOUNTS FOR December 2021

No. Ticker Company Name Charity Rate Final Shariah Status
1 AABS Al-Abbas Sugar Mills Ltd 0.76% Compliant1
2 ABOT Abbott Lab (Pakistan) Ltd 1.19% Compliant
3 ACPL Attock Cement Pakistan Ltd * 0.15% Compliant
4 AGL Agritech Limited 0.20% Non-Compliant
5 AGP AGP Limited  0.42% Compliant
6 AGSML Abdullah Shah Ghazi Sugar Mills  100.00% Non-Compliant1
7 AGTL Al-Ghazi Tractors Ltd 0.41% Compliant
8 AHCL Arif Habib Corporation Ltd 17.37% Non-Compliant
9 ANL Azgard Nine Ltd * 0.38% Compliant
10 APL Attock Petroleum Ltd * 0.39% Compliant
11 ARPL Archroma Pakistan Ltd 0.06% Compliant1
12 ASC Al Shaheer Corporation Ltd * 0.48% Compliant
13 ASL Aisha Steel Ltd * 0.01% Non-Compliant
14 ASTL Amreli Steels Ltd * 0.00% Non-Compliant
15 ATBA Atlas Battery Ltd * 0.08% Non-Compliant
16 PREMA At-Tahur Limited * 0.00% Compliant
17 ATLH Atlas Honda Ltd * 1.18% Compliant1
18 ATRL Attock Refinery Ltd * 0.54% Compliant
19 AVN Avanceon Limited # 0.08% Compliant
20 BAPL Bawany Air Product Ltd * 0.00% Non-Compliant
21 BCL Bolan Castings Ltd * 0.71% Compliant
22 BGL Balochistan Glass Ltd * 0.00% Compliant
23 BIFO Biafo Industries Ltd * 1.99% Compliant
24 BIPL BankIslami Pakistan Ltd. ** N/A Compliant 
25 BWCL Bestway Cement Ltd * 2.12% Compliant
26 CNERGY Cnergyico PK Limited (Byco Petroleum) * 0.42% Compliant
27 CEPB Century Paper & Board Mills * 0.05% Compliant
28 CHCC Cherat Cement Co. Ltd * 0.25% Compliant
29 CLOV Clover Pakistan Ltd * 0.02% Compliant
30 CPPL Cherat Packaging Ltd * 0.00% Compliant
31 CRTM Crescent Textile Mills Ltd * 0.91% Non-Compliant
32 CSAP Crescent Steel & Allied Products 1.72% Compliant
33 CTM Colony Textile Mills Ltd * 0.31% Compliant
34 DAWH Dawood Hercules Corporation 3.44% Compliant
35 DCL Dewan Cement Ltd * 0.01% Compliant
36 DCR Dolmen City REIT * 0.00% Compliant
37 DFML Dewan Farooque Motors Ltd * 0.00% Non-Compliant
38 DFSM Dewan Farooq Spinning Mills Ltd * 0.00% Compliant
39 DGKC D.G. Khan Cement Co. Ltd * 2.63% Compliant
40 DOL Descon Oxychem Ltd * 0.20% Compliant
41 DSIL DS Industries Ltd * 3.41% Compliant
42 DSL Dost Steel Ltd * 0.00% Non-Compliant
43 DYNO Dynea Pakistan Ltd * 0.11% Compliant
44 ECOP EcoPack Ltd * 0.00% Non-Compliant
45 EFERT Engro Fertilizers Ltd 1.19% Compliant
46 FCEPL Frieslandcampins Engro Foods Limited 0.14% Compliant
47 EMCO EMCO Industries Ltd * 0.00% Compliant
48 ENGRO Engro Corporation Ltd 3.32% Compliant
49 EPCL Engro Polymer & Chemicals 1.55% Compliant
50 EPQL Engro Powergen Qadirpur Ltd 8.61% Non-Compliant
51 EXIDE Exide Pakistan Ltd * 0.03% Compliant1
52 FATIMA Fatima Fertilizer Co. Ltd 1.01% Compliant
53 FCCL Fauji Cement Co. Ltd * 0.84% Compliant
54 FECM First Elite Capital Modaraba ** N/A Compliant
55 FECTC Fecto Cement Ltd * 0.59% Compliant
56 FEROZ Ferozsons Laboratories Ltd * 1.17% Compliant
57 FFBL Fauji Fertilizer Bin Qasim Ltd 4.89% Compliant
58 FFC Fauji Fertilizer Company Ltd 10.55% Non-Compliant
59 FFL Fauji Foods Ltd 0.13% Non-Compliant
60 FLYNG Flying Cement Co. Ltd * 0.00% Compliant
61 FML Feroze1888 Mills Ltd * 0.55% Compliant
62 GATM Gul Ahmed Textile Mills Ltd * 0.01% Non-Compliant
63 GGGL Ghani Global Glass Ltd * 0.31% Compliant
64 GGL Ghani Global Holdings Limited  * 0.46% Compliant
65 GHGL Ghani Glass Ltd * 0.00% Compliant
66 GHNI Ghandhara Industries Ltd * 0.39% Compliant
67 GHNL Ghandhara Nissan Ltd * 0.75% Compliant
68 GLAXO GlaxoSmithKline Pakistan  0.92% Compliant
69 GSKCH Glaxo SmithKline Consumer Healthcare 0.75% Compliant
70 GTYR General Tyre & Rubber Co. * 0.08% Non-Compliant
71 GVGL Ghani Value Glass Ltd * 0.36% Compliant
72 GWLC Gharibwal Cement Ltd * 1.56% Compliant
73 HABSM Habib Sugar Mills Ltd 3.39% Non-Compliant
74 HCAR Honda Atlas Cars (Pakistan) Ltd * 0.98% Compliant1
75 HINO Hinopak Motors Ltd * 0.76% Compliant1
76 HINOON Highnoon Laboratories Ltd  0.92% Compliant
77 HSM Husein Sugar Mills Ltd 0.01% Compliant1
78 HTL Hi-Tech Lubricants Ltd 0.12% Compliant
79 HUBC Hub Power Company Ltd * ## 4.50% Compliant
80 IBLHL IBL HealthCare Ltd * 0.03% Compliant
81 ICI ICI Pakistan Ltd * 0.03% Compliant
82 ICL Ittehad Chemicals Ltd * 0.08% Compliant
83 INDU Indus Motor Company Ltd * 2.67% Non-Compliant
84 INIL International Industries Ltd * 0.14% Compliant
85 ISL International Steels Ltd * 0.10% Compliant
86 ITTEFAQ Ittefaq Iron Industries * 0.00% Compliant
87 KAPCO Kot Addu Power Company * 8.44% Non-Compliant
88 KEL K-Electric Ltd * 0.39% Compliant
89 KOHC Kohat Cement Co. Ltd * 0.08% Compliant
90 KOHP Kohinoor Power Company * 0.41% Compliant
91 KOIL Kohinoor Industries Ltd * 0.43% Compliant
92 KOSM Kohinoor Spinning Mills Ltd * 0.00% Non-Compliant
93 KTML Kohinoor Textile Mills Ltd * 0.32% Compliant
94 LOADS Loads Limited * 0.35% Non-Compliant
95 LOTCHEM Lotte Chemical Pakistan Ltd  1.43% Non-Compliant
96 LPL Lalpir Power Ltd 5.41% Non-Compliant
97 LUCK Lucky Cement Ltd * 3.05% Compliant
98 MARI Mari Petroleum Co. Ltd * 2.86% Compliant
99 MDTL Media Times Ltd N/A NC by Nature
100 MEBL Meezan Bank Ltd ** N/A Compliant 
101 MERIT Merit Packaging Ltd * 0.20% Non-Compliant
102 MFL Matco Foods Ltd * 0.04% Non-Compliant
103 MLCF Maple Leaf Cement Factory * 0.02% Compliant
104 MTL Millat Tractors Ltd * 0.67% Compliant
105 MUGHAL Mughal Iron & Steel Industries * 0.27% Compliant
106 NATF National Foods Ltd * 0.45% Compliant
107 NCL Nishat (Chunian) Ltd * 0.01% Non-Compliant
108 NCPL Nishat Chunian Power Ltd * 27.09% Non-Compliant
109 NETSOL NetSol Technologies Ltd * 10.51% Non-Compliant
110 NML Nishat Mills Ltd * 1.51% Compliant
111 NPL Nishat Power Limited * 13.17% Non-Compliant
112 NRL National Refinery Ltd * 0.01% Compliant
113 NRSL Nimir Resins Ltd * 0.00% Non-Compliant
114 OGDC Oil & Gas Development Co. Ltd * 4.22% Compliant ****
115 PACE Pace (Pakistan) Ltd * 4.07% Non-Compliant
116 PAEL Pak Elektron Ltd * 0.00% Compliant
117 PAKOXY Pakistan Oxygen Limited 0.22% Compliant
118 PIBTL Pakistan International Bulk Terminal Ltd * 1.95% Compliant
119 PICT Pakistan International Container Terminal 1.61% Non-Compliant
120 PIOC Pioneer Cement Ltd * 0.03% Compliant
121 PKGP Pakgen Power Ltd 5.40% Non-Compliant
122 PKGS Packages Limited 0.41% Compliant
123 PMI  First Prudential Modaraba ** N/A Compliant
124 PNSC Pakistan National Shipping Corporation * 1.37% Compliant
125 POL Pakistan Oilfields Ltd * 3.42% Compliant
126 POWER Power Cement Ltd * 0.08% Compliant
127 PPL Pakistan Petroleum Limited * 2.53% Compliant ****
128 PRL Pakistan Refinery Ltd * 0.01% Non-Compliant
129 PSMC Pak Suzuki Motor Co. Ltd 0.96% Compliant
130 PSO Pakistan State Oil Co. Ltd * 0.63% Compliant
131 PSX Pakistan Stock Exchange Ltd. * 28.51% Non-Compliant
132 PTC Pakistan Telecommunication (PTCL) 3.52% Non-Compliant
133 QUICE Quice Food Industries Ltd * 0.14% Compliant
134 BECO Beco Steel Limited (Ravi Textile) * 0.00% Compliant
135 REDCO Redco Textiles Ltd * 0.00% Compliant
136 RPL Roshan Packages Ltd * 0.58% Compliant
137 SAIF Saif Textile Mills Ltd * 0.25% Non-Compliant
138 SAZEW Sazgar Engineering Works * 0.00% Compliant
139 SEARL The Searle Company Ltd * 0.14% Compliant
140 SEPL Security Papers Ltd * 4.19% Non-Compliant
141 GTECH G3 Technologies Limited(Service Fabrics) * 71.59% Non-Compliant
142 SGF Service Global Footwear Limited 4.29% Compliant
143 SGPL * SG Power Ltd. *** 0.00% No Opinion
144 SHEL Shell (Pakistan) Ltd  0.06% Compliant
145 SHSML Shahmurad Sugar Mills Ltd 0.43% Compliant1
146 SKRS Sakrand Sugar Mills Ltd 0.00% Compliant3
147 SMCPL Safe Mix Concrete Ltd * 0.15% Compliant
148 SNGP Sui Northern Gas Pipelines Ltd 1.48% Compliant3
149 SPEL Synthetic Products Ltd 0.11% Compliant
150 SPL Sitara Peroxide Ltd * 0.02% Compliant
151 SPWL Saif Power Ltd *** 0.01% No Opinion
152 SRVI Service Industries Ltd 1.39% Non-Compliant
153 SSGC Sui Southern Gas Co. Ltd 0.81% Compliant3
154 STCL Shabbir Tiles & Ceramics Ltd * 0.37% Compliant
155 STPL Siddiqsons Tin Plate Ltd * 0.14% Compliant
156 SYS Systems Limited  0.79% Compliant
157 TELE Telecard Limited * # 0.17% Compliant
158 TGL Tariq Glass Industries Ltd * 0.06% Compliant
159 THALL Thal Limited * 3.04% Compliant
160 THCCL Thatta Cement Company * 0.32% Compliant
161 TPL TPL Corporation 13.79% Non-Compliant
162 TREET Treet Corporation Ltd * 0.42% Compliant
163 TRG TRG Pakistan Ltd 100.00% Non-Compliant
164 TRIPF Tri-Pack Films Ltd * 0.06% Non-Compliant
165 TSPL Tri-Star Power Ltd. * 12.80% Non-Compliant
166 UBDL United Brands Limited * 0.15% Compliant
167 UNITY Unity Foods Ltd * 0.66% Compliant
168 WAVES WAVES Singer Pakistan Ltd 0.00% Compliant3
169 WTL WorldCall Telecom Ltd 1.97% Compliant3
170 WYETH Wyeth Pakistan Ltd 4.44% Compliant2
171 YOUW Yousaf Weaving Mills Ltd * 0.00% Compliant
172 HUMNL Hum Network Ltd N/A NC by Nature
173 786 786 Investments Ltd N/A NC by Nature
174 AHL Arif Habib Ltd N/A NC by Nature
175 BOK Bank of Khyber N/A NC by Nature
176 ESBL Escorts Investment Bank Ltd N/A NC by Nature
177 FABL Faysal Bank Ltd. N/A NC by Nature
178 FCSC First Capital Securities Corp. Ltd N/A NC by Nature
179 FDIBL First Dawood Investment Bank Ltd N/A NC by Nature
180 HGFA HBL Growth Fund – (A) N/A NC by Nature
181 HIFA HBL Investment  Fund (A) N/A NC by Nature
182 ICIBL Invest Capital Investment Bank N/A NC by Nature
183 JSCL Jahangir Siddiqui & Co. Ltd N/A NC by Nature
184 PASL Pervez Ahmed Securities Ltd N/A NC by Nature
185 TSMF Tri-Star Mutual Fund N/A NC by Nature
186 ADAMS Adam Sugar Mills Ltd 0.13% Compliant
187 ADMM Artistic Denim Mills Ltd * 0.00% Non-Compliant
188 ADOS Ados Pakistan Ltd * 0.02% Non-Compliant
189 ARM Allied Rental Modaraba ** N/A Compliant
190 BERG Berger Paints Pakistan Ltd * 0.72% Compliant
191 BNWM Bannu Woollen Mills Ltd * 0.00% Compliant
192 BRR B.R.R. Guardian Modaraba ** N/A Compliant
193 BUXL Buxly Paints Ltd * 0.00% Compliant
194 COLG Colgate Palmolive (Pakistan) * 1.13% Compliant
195 DNCC Dandot Cement Co. Ltd * 97.80% Non-Compliant
196 FEM  First Equity Modaraba ** N/A Compliant
197 FHAM First Habib Modaraba ** N/A Compliant
198 FPJM First Punjab Modaraba ** N/A Compliant
199 FPRM First Paramount Modaraba ** N/A Compliant
200 FRSM Faran Sugar Mills Ltd  0.25% Compliant1
201 FUDLM First UDL Modaraba ** N/A Compliant
202 GADT Gadoon Textile Mills Ltd * 0.01% Compliant
203 GFIL Ghazi Fabrics International Ltd * 0.00% Compliant
204 GLPL Gillette Pakistan Ltd * 0.26% Compliant
205 HRPL Habib Rice Products Ltd. * 0.58% Compliant
206 HSPI Huffaz Seamless Pipe Ind. 0.00% Compliant3
207 IDYM Indus Dyeing & Mfg Co. Ltd. * 0.18% Non-Compliant
208 ILP Interloop Limited * 0.02% Non-Compliant
209 JATM J. A. Textile Mills Ltd. * 0.14% Compliant
210 JSML Jauharabad Sugar Mills Ltd. 0.08% Compliant1
211 JVDC Javedan Corporation Ltd * 9.31% Non-Compliant
212 KASBM KASB Modaraba ** N/A Compliant
213 KOHE Kohinoor Energy Ltd * 0.00% Compliant
214 LEUL Leather-Up Limited * 0.04% Compliant
215 MACFL MACPAC Films Ltd * 0.00% Compliant
216 MFFL Mitchell’s Fruit Farms Ltd * 0.15% Compliant
217 MODAM Modaraba al Mali ** N/A Non-Compliant
218 MRNS Mehran Sugar Mills Ltd 0.94% Non-Compliant1
219 NESTLE Nestle Pakistan Ltd 0.01% Compliant
220 NICL Nimir Industrial Chemicals Ltd * 0.00% Non-Compliant
221 ORIXM Orix Modaraba ** N/A Compliant
222 PAKD Pak DataCom Ltd. # 1.30% Compliant
223 PAKMI First Pak Modaraba ** N/A Compliant
224 PCAL Pakistan Cables Ltd * 0.37% Compliant
225 PHDL Pakistan Hotels Developers Ltd * 0.18% Compliant
226 PIM Popular Islamic Modaraba ** N/A Compliant
227 PRWM Prosperity Weaving Mills Ltd. * 0.24% Non-Compliant
228 PSYL Pakistan Synthetics Ltd. * 0.18% Compliant
229 REWM Reliance Weaving Mills  * 0.26% Non-Compliant
230 SERT Service Textiles industries Ltd. * 0.00% Compliant
231 SHDT Shadab Textile Mills Ltd. * 0.05% Compliant
232 SHEZ Shezan International Ltd. * 0.04% Compliant
233 SHFA Shifa International Hospitals * 1.57% Compliant
234 SIEM Siemens (Pakistan) Engineering 0.44% Non-Compliant1
235 SITC Sitara Chemical Industries Ltd * 0.00% Compliant
236 SSML Saritow Spinning Mills Ltd. * 0.00% Compliant
237 SSOM S.S. Oil Mills Ltd * 0.03% Compliant
238 SUTM Sunrays Textile Mills Ltd. * 0.14% Compliant
239 TATM TATA Textile Mills Ltd. * 0.03% Non-Compliant
240 TOWL Towellers Limited * 0.21% Compliant
241 TPLP TPL Properties Ltd  * 76.45% Non-Compliant
242 ZTL Zephyr Textiles Ltd. * 0.18% Compliant
243 AKDHL AKD Hospitality Limited (AKD Capital) N/A NC by Nature
244 AMBL Apna Microfinance Bank Ltd. N/A NC by Nature
245 BIPLS BIPL Securities Limited N/A NC by Nature
246 DEL Dawood Equities Ltd N/A NC by Nature
247 EFGH EFG Hermes Pakistan N/A NC by Nature
248 FNEL First National Equities Ltd N/A NC by Nature
249 MCBAH MCB-Arif Habib Savings & investment N/A NC by Nature
250 NEXT Next Capital Limited N/A NC by Nature
251 PIAA Pakistan International Airlines Corporation Limited 0.07% Non-Compliant
252 UCAPM Unicap Modaraba ** N/A Compliant
253 BNL Bunnys Limited * 0.09% Compliant
254 EPCLPS Engro Poly & Che Pre  N/A NC by Nature
255 AGHA Agha Steel Industries Limited * 0.21% Non-Compliant
256 TOMCL The Organic Meat Company Limited * 0.00% Compliant
257 IML Imperial Limited N/A NC by Nature
258 IMAGE Image Pakistan * 0.00% Compliant
259 TPLT TPL Trakker Limited * 6.40% Non-Compliant
260 PTL Panther Tyres Limited * 0.19% Compliant
261 PABC Pakistan Aluminium Beverage Cans Limited 0.33% Compliant
262 CPHL Citi Pharma Limited 1.81% Non-Compliant
263 CLVL Cordoba Logistics & Ventures Limited * 3.69% Compliant

NOTE: The above criteria of KMI Index is approved by Sharia’h Supervisory Board of KMI Index Partner, MBL.

NC= Non – Compliant

N/A = Not Applicable

* These are provisional rates for dividend purification, which are subject to final adjustment upon announcement of respective companies’ annual accounts for the year 2021/2022.

** Only illiquid Assets to Total Assets and Net Liquid Asset ratios calculated of all Islamic Financial Institutions.

*** Status of ‘No Opinion’ is ascertained due to non-disclosure of the required information as per last available financial statement i.e breakup of sales revenue including interest element. Therefore, such companies will not be included in KMI Islamic Index.

**** Shares are considered ‘Compliant’ based on the reasoning mentioned in clause 8 of Shariah Standard 59.

# As AVN, PAKD & TELE are from IT sector, therefore their fixed assets are not significant in value therefore, these are considered as Compliant and relaxation provided over Illiquid assets to Total Assets ratio.

## While calculating HUBC’s Income ratio, China Power Hub Generation Company (CPHGC) which is an associated investee company of HUBC whose revenues are consolidated with HUBC’s revenues upto the the extent of HUBC’s investment.

  1. Based on September-2021 accounts
  2. Based on November-2021 accounts
  3. As per last available annual / half-yearly accounts