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 2020

No. Ticker Company Name Charity Rate Final Shariah Status
1 ABOT Abbott Lab (Pakistan) Ltd 0.93% Compliant
2 ACPL Attock Cement Pakistan Ltd * 0.04% Compliant
3 AGIL Agriauto Industries Ltd * 0.52% Compliant
4 AGP AGP Limited 0.18% Compliant
5 APL Attock Petroleum Ltd * 0.65% Compliant
6 ASC Al Shaheer Corporation Ltd * 0.02% Compliant
7 ASTM Asim Textile Mills Ltd * 0.50% Compliant
8 ATBA Atlas Battery Ltd * 0.13% Compliant
9 PREMA At-Tahur Limited * 0.06% Compliant
10 ATRL Attock Refinery Ltd * 0.72% Compliant
11 BATA Bata (Pakistan) Ltd 0.39% Compliant
12 BGL Balochistan Glass Ltd * 0.01% Compliant
13 BIFO Biafo Industries Ltd * 0.86% Compliant
14 BWCL Bestway Cement Ltd * 1.73% Compliant
15 CEPB Century Paper & Board Mills * 0.14% Compliant
16 CHCC Cherat Cement Co. Ltd * 0.08% Compliant
17 CLOV Clover Pakistan Ltd * 0.21% Compliant
18 CPPL Cherat Packaging Ltd * 0.00% Compliant
19 DCL Dewan Cement Ltd * 0.71% Compliant
20 DCR Dolmen City REIT * 0.00% Compliant
21 DGKC D.G. Khan Cement Co. Ltd * 0.86% Compliant
22 DOL Descon Oxychem Ltd * 0.18% Compliant
23 DSIL DS Industries Ltd * 0.03% Compliant
24 DYNO Dynea Pakistan Ltd * 0.22% Compliant
25 EFERT Engro Fertilizers Ltd 1.30% Compliant
26 FCEPL Frieslandcampina Engro Pakistan Limited 0.03% Compliant
27 ENGRO Engro Corporation Ltd 4.80% Compliant
28 EPCL Engro Polymer & Chemicals 2.53% Compliant
29 FATIMA Fatima Fertilizer Co. Ltd 1.83% Compliant
30 FCCL Fauji Cement Co. Ltd * 0.16% Compliant
31 FECTC Fecto Cement Ltd 0.58% Compliant
32 FEROZ Ferozsons Laboratories Ltd * 1.31% Compliant
33 FLYNG Flying Cement Co. Ltd * 0.00% Compliant
34 FML Feroze1888 Mills Ltd * 0.17% Compliant
35 GAIL Ghani Automobile Industries Ltd * 0.60% Compliant
36 GGL Ghani Global Holdings Limited  * 0.08% Compliant
37 GHGL Ghani Glass Ltd * 0.00% Compliant
38 GHNI Ghandhara Industries Ltd * 0.12% Compliant
39 GHNL Ghandhara Nissan Ltd * 1.02% Compliant
40 GLAXO GlaxoSmithKline Pakistan 0.61% Compliant
41 GSKCH Glaxo SmithKline Consumer Healthcare 0.15% Compliant
42 GVGL Ghani Value Glass Ltd * 0.25% Compliant
43 GWLC Gharibwal Cement Ltd * 1.28% Compliant
44 HINOON Highnoon Laboratories Ltd 0.56% Compliant
45 HTL Hi-Tech Lubricants Ltd * 0.56% Compliant
46 IBLHL IBL HealthCare Ltd * 0.60% Compliant
47 ICI ICI Pakistan Ltd * 0.06% Compliant
48 ICL Ittehad Chemicals Ltd * 0.02% Compliant
49 INIL International Industries Ltd * 0.03% Compliant
50 ISL International Steels Ltd * 0.12% Compliant
51 ITTEFAQ Ittefaq Iron Industries * 0.05% Compliant
52 KOHC Kohat Cement Co. Ltd * 0.02% Compliant
53 KOIL Kohinoor Industries Ltd * 1.07% Compliant
54 KTML Kohinoor Textile Mills Ltd * 2.77% Compliant
55 LUCK Lucky Cement Ltd * 2.46% Compliant
56 MLCF Maple Leaf Cement Factory * 0.08% Compliant
57 MTL Millat Tractors Ltd * 0.31% Compliant
58 MUGHAL Mughal Iron & Steel Industries * 0.25% Compliant
59 NATF National Foods Ltd * 0.01% Compliant
60 NETSOL NetSol Technologies Ltd * 2.55% Compliant
61 NML Nishat Mills Ltd * 2.80% Compliant
62 NRL National Refinery Ltd * 0.03% Compliant
63 PAEL Pak Elektron Ltd 0.00% Compliant
64 PAKOXY Pakistan Oxygen Limited 0.82% Compliant
65 PIBTL Pakistan International Bulk Terminal Ltd * 0.17% Compliant
66 PICT Pakistan International Container Terminal 1.43% Compliant
67 PKGS Packages Limited 0.93% Compliant
68 PNSC Pakistan National Shipping Corporation * 3.65% Compliant
69 POL Pakistan Oilfields Ltd * 2.34% Compliant
70 POWER Power Cement Ltd * 0.06% Compliant
71 PPL Pakistan Petroleum Limited * 2.01% Compliant
72 PSMC Pak Suzuki Motor Co. Ltd 0.45% Compliant
73 PSO Pakistan State Oil Co. Ltd * 0.46% Compliant
74 QUICE Quice Food Industries Ltd * 4.39% Compliant
75 REDCO Redco Textiles Ltd * 0.29% Compliant
76 RPL Roshan Packages Ltd * 0.83% Compliant
77 SAZEW Sazgar Engineering Works * 0.00% Compliant
78 SEARL The Searle Company Ltd * 0.11% Compliant
79 TOMCL The Organic Meat Company Ltd * 0.33% Compliant
80 SEPL Security Papers Ltd * 4.80% Compliant
81 SHEL Shell (Pakistan) Ltd 0.01% Compliant
82 SMCPL Safe Mix Concrete Ltd * 0.05% Compliant
83 SPEL Synthetic Products Ltd * 0.00% Compliant
84 SPL Sitara Peroxide Ltd * 0.00% Compliant
85 STCL Shabbir Tiles & Ceramics Ltd * 0.79% Compliant
86 TGL Tariq Glass Industries Ltd * 0.00% Compliant
87 THALL Thal Limited * 4.24% Compliant
88 THCCL Thatta Cement Company * 0.93% Compliant
89 TRIPF Tri-Pack Films Ltd 0.01% Compliant
90 TRPOL Tri-Star Polyester Ltd * 0.00% Compliant
91 UBDL United Brands Limited * 0.42% Compliant
92 UNITY Unity Foods Ltd * 0.01% Compliant
93 WAVES WAVES Singer Pakistan Ltd 0.00% Compliant
94 ADMM Artistic Denim Mills Ltd * 0.46% Compliant
95 AEL Arshad Energy Ltd  * 0.00% Compliant
96 ASHT Ashfaq Textile Mills Ltd * 0.00% Compliant
97 BERG Berger Paints Pakistan Ltd * 0.29% Compliant
98 BNWM Bannu Woollen Mills Ltd * 0.09% Compliant
99 BUXL Buxly Paints Ltd * 0.13% Compliant
100 FRCL Frontier Ceramics Ltd * 0.01% Compliant
101 HRPL Habib Rice Products Ltd. * 2.04% Compliant
102 ILP Interloop Limited * 0.18% Compliant
103 JATM J. A. Textile Mills Ltd. * 0.04% Compliant
104 JVDC Javedan Corporation Ltd * 0.90% Compliant
105 KSBP K.S.B.Pumps Company Ltd 0.17% Compliant
106 MACFL MACPAC Films Ltd * 0.00% Compliant
107 PCAL Pakistan Cables Ltd * 0.06% Compliant
108 POML Punjab Oil Mills Ltd. * 0.39% Compliant
109 PSYL Pakistan Synthetics Ltd. * 0.11% Compliant
110 RUBY Ruby Textile Mills Ltd * 0.00% Compliant
111 RUPL Rupali Polyester Ltd. * 0.06% Compliant
112 SAPL Sanofi-aventis Pakistan Ltd 0.08% Compliant
113 SHFA Shifa International Hospitals * 0.06% Compliant
114 SITC Sitara Chemical Industries Ltd * 0.00% Compliant
115 UDPL United Distributors (Pakistan) Ltd * 0.00% Compliant
116 ZIL ZIL Limited 0.01% Compliant
117 BIPL BankIslami Pakistan Ltd ** N/A Compliant
118 MEBL Meezan Bank Ltd ** N/A Compliant
119 AGTL Al-Ghazi Tractors Ltd 0.32% Compliant
120 ARPL Archroma Pakistan Ltd 0.00% Compliant
121 AVN Avanceon Limited # 0.11% Compliant
122 FECM First Elite Capital Modaraba ** N/A Compliant
123 KEL K-Electric Ltd * 0.74% Compliant
124 BRR B.R.R. Guardian Modaraba ** N/A Compliant
125 FHAM First Habib Modaraba ** N/A Compliant
126 FUDLM First UDL Modaraba ** N/A Compliant
127 ORIXM Orix Modaraba ** N/A Compliant
128 SINDM Sindh Modaraba ** N/A Compliant
129 MSCL Metropolitan Steel Corporation * 3.17% Compliant
130 ASL Aisha Steel Ltd 0.05% Compliant
131 HUBC Hub Power Company Ltd * ## 4.66% Compliant
132 MARI Mari Petroleum Co. Ltd * 3.79% Compliant
133 OGDC Oil & Gas Development Co. Ltd **** 4.74% Compliant
134 SYS Systems Limited # 1.38% Compliant
135 AABS Al-Abbas Sugar Mills Ltd 1.51% Compliant1
136 AGSML Abdullah Shah Ghazi Sugar Mills 0.00% Compliant1
137 ATLH Atlas Honda Ltd * 1.41% Compliant1
138 EXIDE Exide Pakistan Ltd * 0.00% Compliant1
139 HABSM Habib Sugar Mills Ltd 3.83% Compliant1
140 HCAR Honda Atlas Cars (Pakistan) Ltd * 0.19% Compliant1
141 HSM Husein Sugar Mills Ltd 0.01% Compliant1
142 SHSML Shahmurad Sugar Mills Ltd 0.43% Compliant1
143 SKRS Sakrand Sugar Mills Ltd 0.00% Compliant1
144 ADAMS Adam Sugar Mills Ltd 0.10% Compliant1
145 CHAS Chashma Sugar Mills Ltd 0.04% Compliant1
146 FRSM Faran Sugar Mills Ltd 0.09% Compliant1
147 JSML Jauharabad Sugar Mills Ltd. 0.00% Compliant1
148 MRNS Mehran Sugar Mills Ltd 0.40% Compliant1
149 SNGP Sui Northern Gas Pipelines Ltd * 1.41% Compliant3
150 SSGC Sui Southern Gas Co. Ltd 2.30% Compliant3
151 WTL WorldCall Telecom Ltd * 3.73% Compliant3
152 BPL Burshane LPG (Pakistan) Ltd 0.33% Compliant3
153 EPQL Engro Powergen Qadirpur Ltd *** 0.88% No Opinion
154 SPWL Saif Power Ltd *** 0.01% No Opinion
155 KOHP Kohinoor Power Company *** 0.01% No Opinion
156 MDTL Media Times Ltd N/A NC by Nature
157 HUMNL Hum Network Ltd N/A NC by Nature
158 BOK Bank of Khyber N/A NC by Nature
159 FABL Faysal Bank Ltd. N/A NC by Nature
160 HGFA HBL Growth Fund – (A) N/A NC by Nature
161 HIFA HBL Investment  Fund (A) N/A NC by Nature
162 IML Imperial Limited N/A NC by Nature
163 GATM Gul Ahmed Textile Mills Ltd * 0.05% Non-Compliant
164 KAPCO Kot Addu Power Company * 9.37% Non-Compliant
165 PMI First Prudential Modaraba ** N/A Non-Compliant
166 SERF Service Fabrics Ltd * 0.00% Non-Compliant
167 SRVI Service Industries Ltd 0.26% Non-Compliant
168 PAKMI First Pak Modaraba ** N/A Non-Compliant
169 SSML Saritow Spinning Mills Ltd. 0.00% Non-Compliant
170 ZTL Zephyr Textiles Ltd. * 0.01% Non-Compliant
171 AGL Agritech Limited 0.51% Non-Compliant
172 AHCL Arif Habib Corporation Ltd * 21.39% Non-Compliant
173 ANL Azgard Nine Ltd * 0.53% Non-Compliant
174 ASTL Amreli Steels Ltd * 0.00% Non-Compliant
175 BAPL Bawany Air Product Ltd * 100.00% Non-Compliant
176 BCL Bolan Castings Ltd * 0.04% Non-Compliant
177 BILF Bilal Fibres Ltd * 0.00% Non-Compliant
178 BYCO Byco Petroleum Pakistan Ltd * 0.48% Non-Compliant
179 CRTM Crescent Textile Mills Ltd * 0.48% Non-Compliant
180 CSAP Crescent Steel & Allied Products * 10.20% Non-Compliant
181 CTM Colony Textile Mills Ltd * 1.53% Non-Compliant
182 DFML Dewan Farooque Motors Ltd * 0.00% Non-Compliant
183 DFSM Dewan Farooq Spinning Mills Ltd * 0.00% Non-Compliant
184 DSL Dost Steel Ltd * 0.39% Non-Compliant
185 ECOP EcoPack Ltd * 0.00% Non-Compliant
186 FFBL Fauji Fertilizer Bin Qasim Ltd 1.37% Non-Compliant
187 FFC Fauji Fertilizer Company Ltd 9.51% Non-Compliant
188 FFL Fauji Foods Ltd 0.52% Non-Compliant
189 GGGL Ghani Global Glass Ltd * 0.35% Non-Compliant
190 GTYR General Tyre & Rubber Co. * 0.02% Non-Compliant
191 HIRAT Hira Textile Mills Ltd * 2.99% Non-Compliant
192 INDU Indus Motor Company Ltd * 1.94% Non-Compliant
193 KOSM Kohinoor Spinning Mills Ltd * 0.02% Non-Compliant
194 LOADS Loads Limited * 3.97% Non-Compliant
195 LOTCHEM Lotte Chemical Pakistan Ltd 2.37% Non-Compliant
196 LPL Lalpir Power Ltd 12.61% Non-Compliant
197 MERIT Merit Packaging Ltd * 0.26% Non-Compliant
198 MFL Matco Foods Ltd * 0.15% Non-Compliant
199 MTIL Mian Textile Industries Ltd * 0.00% Non-Compliant
200 NCL Nishat (Chunian) Ltd * 0.49% Non-Compliant
201 NCPL Nishat Chunian Power Ltd * 17.43% Non-Compliant
202 NPL Nishat Power Limited 24.33% Non-Compliant
203 NRSL Nimir Resins Ltd * 0.00% Non-Compliant
204 PACE Pace (Pakistan) Ltd * 0.13% Non-Compliant
205 PIOC Pioneer Cement Ltd * 0.50% Non-Compliant
206 PKGP Pakgen Power Ltd 16.94% Non-Compliant
207 PRL Pakistan Refinery Ltd * 0.22% Non-Compliant
208 PTC Pakistan Telecommunication (PTCL) 1.21% Non-Compliant
209 RAVT Ravi textile Mills Ltd. * 5.10% Non-Compliant
210 SAIF Saif Textile Mills Ltd * 0.01% Non-Compliant
211 STPL Siddiqsons Tin Plate Ltd * 0.15% Non-Compliant
212 TELE Telecard Limited * 1.45% Non-Compliant
213 TPL TPL Corporation * 3.91% Non-Compliant
214 TPLT TPL Trakker Ltd. * 4.65% Non-Compliant
215 TREET Treet Corporation Ltd * 0.15% Non-Compliant
216 TRG TRG Pakistan Ltd * 100.00% Non-Compliant
217 TSPL Tri-Star Power Ltd. * 12.22% Non-Compliant
218 YOUW Yousaf Weaving Mills Ltd * 0.26% Non-Compliant
219 ALTN Altern Energy Ltd * 10.53% Non-Compliant
220 FZCM Fazal Cloth Mills Ltd * 1.37% Non-Compliant
221 GADT Gadoon Textile Mills Ltd * 0.34% Non-Compliant
222 GFIL Ghazi Fabrics International Ltd * 0.00% Non-Compliant
223 IDYM Indus Dyeing & Mfg Co. Ltd. * 0.53% Non-Compliant
224 KML Kohinoor Mills Ltd. * 0.71% Non-Compliant
225 NESTLE Nestle Pakistan Ltd 0.02% Non-Compliant
226 NICL Nimir Industrial Chemicals Ltd * 0.01% Non-Compliant
227 PAKD Pak DataCom Ltd. * 2.28% Non-Compliant
228 REWM Reliance Weaving Mills * 0.00% Non-Compliant
229 SAPT Sapphire Textile Mills * 0.45% Non-Compliant
230 SHDT Shadab Textile Mills Ltd. * 0.36% Non-Compliant
231 SHEZ Shezan International Ltd. * 0.08% Non-Compliant
232 SMTM Samin Textiles Ltd. * 0.02% Non-Compliant
233 SSOM S.S. Oil Mills Ltd * 0.02% Non-Compliant
234 TPLP TPL Properties Ltd  * 17.68% Non-Compliant
235 PIAA Pakistan International Airlines Corporation Limited (PIACL) 0.05% Non-Compliant
236 DWSM Dewan Sugar Mills Ltd 0.00% Non-Compliant1
237 HINO Hinopak Motors Ltd * 0.05% Non-Compliant1
238 MFFL Mitchell’s Fruit Farms Ltd 0.00% Non-Compliant1
239 SIEM Siemens (Pakistan) Engineering 0.05% Non-Compliant1
240 WYETH Wyeth Pakistan Ltd 6.05% Non-Compliant2
241 CWSM Chakwal Spinning Mills Ltd 0.00% Non-Compliant3
242 HASCOL Hascol Petroleum Ltd * 0.15% Non-Compliant3

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

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 2020/2021.

** Only illiquid Assets to Total Assets and Net Liquid Asset ratios calculated of all Islamaic 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.

**** Total Assets of OGDC are adjusted with non-cash items arising due to the adoption of IFRS 16 ‘Leases’ in respect of sale agreements with HUPL and UCH-II.

***** As AVN and SYS 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 Genereation 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-2020 accounts
  2. Based on November-2020 accounts
  3. As per last available annual / half-yearly accounts