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 JUNE 2022

No. Ticker Company Name Charity Rate Final Shariah Status
1 ABOT Abbott Lab (Pakistan) Ltd * 1.44% Compliant
2 AGSML Abdullah Shah Ghazi Sugar Mills * 0.00% Compliant1
3 ADAMS Adam Sugar Mills Ltd 0.08% Compliant1
4 ADOS Ados Pakistan Ltd 0.06% Non-Compliant
5 AGHA Agha Steel Ind 0.21% Non-Compliant
6 AGP AGP Limited * 0.38% Compliant
7 AGIL Agriauto Industries Ltd 0.08% Compliant
8 AGL Agritech Limited 0.09% Non-Compliant
9 AIRLINK Air Link Communication Limited ^ 0.18% Compliant
10 ASL Aisha Steel Ltd 0.03% Non-Compliant
11 ASC Al Shaheer Corporation Ltd 0.00% Compliant
12 AABS Al-Abbas Sugar Mills Ltd* 1.96% Non-Compliant1
13 AGTL Al-Ghazi Tractors Ltd 0.13% Compliant
14 ALTN Altern Energy Ltd 6.87% Non-Compliant
15 ASTL Amreli Steels Ltd 0.00% Compliant
16 ARPL Archroma Pakistan Ltd * 0.05% Compliant
17 AHCL Arif Habib Corporation Ltd 15.55% Non-Compliant
18 ADMM Artistic Denim Mills Ltd 0.05% Non-Compliant
19 ASTM Asim Textile Mills Ltd 0.55% Compliant
20 ATBA Atlas Battery Ltd 0.06% Compliant
21 ATLH Atlas Honda Ltd 1.20% Compliant
22 PREMA At-Tahur Limited 0.07% Compliant
23 ACPL Attock Cement Pakistan Ltd 0.14% Compliant
24 APL Attock Petroleum Ltd 0.40% Compliant
25 ATRL Attock Refinery Ltd 0.56% Compliant
26 AVN Avanceon Limited * # 0.18% Compliant
27 ANL Azgard Nine Ltd 0.18% Compliant
28 BGL Balochistan Glass Ltd 5.10% Non-Compliant
29 BIPL BankIslami Pakistan Ltd. ** N/A Compliant
30 BECO Beco Steel Limited (Ravi Textile) 0.00% Compliant
31 BERG Berger Paints Pakistan Ltd 0.06% Compliant
32 BWCL Bestway Cement Ltd 2.03% Compliant
33 BIFO Biafo Industries Ltd 1.05% Compliant
34 BCL Bolan Castings Ltd 0.02% Compliant
35 BNL Bunnys Limited 0.00% Compliant
36 BUXL Buxly Paints Ltd 0.00% Compliant
37 CEPB Century Paper & Board Mills 0.00% Compliant
38 CHCC Cherat Cement Co. Ltd 0.08% Compliant
39 CPPL Cherat Packaging Ltd 0.01% Compliant
40 CPHL Citi Pharma Limited 1.63% Compliant
41 CLOV Clover Pakistan Ltd 0.05% Compliant
42 CNERGY Cnergyico PK Limited (Byco Petroleum) 0.52% Compliant
43 CTM Colony Textile Mills Ltd 0.02% Compliant
44 CLVL Cordoba Logistics 2.72% Compliant
45 CSAP Crescent Steel & Allied Products 1.08% Compliant
46 CRTM Crescent Textile Mills Ltd 0.04% Non-Compliant
47 DGKC D.G. Khan Cement Co. Ltd 2.60% Compliant
48 DAWH Dawood Hercules Corporation 3.72% Compliant
49 DOL Descon Oxychem Ltd 0.16% Compliant
50 DCL Dewan Cement Ltd 0.02% Compliant
51 DFSM Dewan Farooq Spinning Mills Ltd 0.00% Compliant
52 DCR Dolmen City REIT 0.00% Compliant
53 DSIL DS Industries Ltd 0.59% Non-Compliant
54 DYNO Dynea Pakistan Ltd 0.07% Compliant
55 ECOP EcoPack Ltd 0.01% Non-Compliant
56 EMCO EMCO Industries Ltd 0.00% Compliant
57 ENGRO Engro Corporation Ltd 4.01% Compliant
58 EFERT Engro Fertilizers Ltd * 1.33% Compliant
59 EPCL Engro Polymer & Chemicals * 1.53% Compliant
60 EPQL Engro Powergen Qadirpur Ltd * 3.10% Compliant
61 EXIDE Exide Pakistan Ltd 0.02% Compliant1
62 FRSM Faran Sugar Mills Ltd 0.90% Compliant1
63 FATIMA Fatima Fertilizer Co. Ltd * 1.35% Compliant
64 FCCL Fauji Cement Co. Ltd 0.74% Compliant
65 FFBL Fauji Fertilizer Bin Qasim Ltd 2.63% Compliant
66 FFC Fauji Fertilizer Company Ltd 13.08% Non-Compliant
67 FFL Fauji Foods Ltd 0.26% Non-Compliant
68 FECTC Fecto Cement Ltd 0.17% Compliant
69 FML Feroze1888 Mills Ltd 3.50% Compliant
70 FEROZ Ferozsons Laboratories Ltd 2.28% Compliant
71 FECM First Elite Capital Modaraba ** N/A Compliant
72 FHAM First Habib Modaraba ** N/A Compliant
73 PAKMI First Pak Modaraba  ** N/A Compliant
74 PMI First Prudential Modaraba  ** N/A Compliant
75 FUDLM First UDL Modaraba ** N/A Compliant
76 FLYNG Flying Cement Co. Ltd 0.00% Compliant
77 FCEPL Frieslandcampins Engro Foods Limited * 0.15% Compliant
78 GTECH G3 Technologies Limited (Service Fabrics) 48.82% Non-Compliant
79 GTYR General Tyre & Rubber Co. 0.00% Compliant
80 GHNI Ghandhara Industries Ltd 0.31% Compliant
81 GHNL Ghandhara Nissan Ltd 1.17% Compliant
82 GHGL Ghani Glass Ltd 0.00% Compliant
83 GGGL Ghani Global Glass Ltd 0.27% Compliant
84 GGL Ghani Global Holdings Limited  0.50% Compliant
85 GVGL Ghani Value Glass Ltd 0.28% Compliant
86 GWLC Gharibwal Cement Ltd 0.56% Compliant
87 GFIL Ghazi Fabrics International Ltd 0.00% Compliant
88 GLPL Gillette Pakistan Ltd 0.26% Compliant
89 GSKCH Glaxo SmithKline Consumer Healthcare 0.80% Compliant
90 GLAXO GlaxoSmithKline Pakistan 1.96% Compliant
91 GATM Gul Ahmed Textile Mills Ltd 0.02% Non-Compliant
92 HABSM Habib Sugar Mills Ltd * 4.99% Compliant1
93 HINOON Highnoon Laboratories Ltd 1.47% Compliant
94 HINO Hinopak Motors Ltd 1.03% Compliant1
95 HTL Hi-Tech Lubricants Ltd 0.18% Compliant
96 HCAR Honda Atlas Cars (Pakistan) Ltd 1.25% Compliant1
97 HUBC Hub Power Company Ltd ## 5.94% Non-Compliant
98 IBLHL IBL HealthCare Ltd 0.00% Compliant
99 ICI ICI Pakistan Ltd 0.02% Compliant
100 IMAGE Image Pakistan 0.00% Compliant
101 IDYM Indus Dyeing & Mfg Co. Ltd. 0.18% Non-Compliant3
102 INDU Indus Motor Company Ltd 3.17% Non-Compliant
103 ILP Interloop Limited 0.06% Compliant
104 INIL International Industries Ltd 0.02% Compliant
105 ISL International Steels Ltd 0.03% Compliant
106 ITTEFAQ Ittefaq Iron Industries 0.08% Compliant
107 ICL Ittehad Chemicals Ltd 0.06% Compliant
108 JDMT Janana De Malucho Textile 0.00% Compliant
109 JVDC Javedan Corporation Ltd 2.55% Compliant
110 KSBP K.S.B.Pumps Company Ltd 0.25% Compliant
111 KASBM KASB Modaraba ** N/A Compliant
112 KEL K-Electric Ltd 0.43% Compliant
113 KOHC Kohat Cement Co. Ltd 1.44% Compliant
114 KOHE Kohinoor Energy Ltd 1.09% Compliant
115 KOIL Kohinoor Industries Ltd 5.38% Non-Compliant
116 KOSM Kohinoor Spinning Mills Ltd 0.00% Non-Compliant
117 KTML Kohinoor Textile Mills Ltd 0.10% Compliant
118 KAPCO Kot Addu Power Company 5.16% Non-Compliant
119 LPL Lalpir Power Ltd * 10.29% Non-Compliant
120 LOADS Loads Limited 0.14% Non-Compliant
121 LOTCHEM Lotte Chemical Pakistan Ltd 1.35% Non-Compliant
122 LUCK Lucky Cement Ltd 0.45% Compliant
123 MACFL MACPAC Films Ltd 0.00% Compliant
124 MLCF Maple Leaf Cement Factory 0.04% Compliant
125 MARI Mari Petroleum Co. Ltd 2.24% Compliant
126 MFL Matco Foods Ltd 0.06% Non-Compliant
127 MEBL Meezan Bank Ltd ** N/A Compliant
128 MRNS Mehran Sugar Mills Ltd 0.94% Non-Compliant3
129 MERIT Merit Packaging Ltd 0.00% Non-Compliant
130 MTL Millat Tractors Ltd 0.48% Compliant
131 MFFL Mitchell’s Fruit Farms Ltd* 0.02% Compliant
132 MODAM Modaraba al Mali ** N/A Compliant
133 MUGHAL Mughal Iron & Steel Industries 0.10% Compliant
134 NATF National Foods Ltd 0.16% Compliant
135 NRL National Refinery Ltd 0.02% Compliant
136 NETSOL NetSol Technologies Ltd # 0.30% Compliant
137 NICL Nimir Industrial Chemicals Ltd 0.00% Non-Compliant
138 NRSL Nimir Resins Ltd 0.00% Non-Compliant
139 NCL Nishat (Chunian) Ltd 0.06% Compliant
140 NCPL Nishat Chunian Power Ltd 5.86% Non-Compliant
141 NML Nishat Mills Ltd 1.58% Compliant
142 NPL Nishat Power Limited 5.96% Non-Compliant
143 OCTOPUS Octopus Digital Limited * 6.91% Non-Compliant
144 OGDC Oil & Gas Development Co. Ltd ^^ 4.28% Compliant
145 OBOY Oilboy Energy Limited (Drekkar Kingsway Ltd) 0.00% Non-Compliant
146 OLPM OLP Modaraba (Orix Modaraba) ** N/A Compliant
147 PACE Pace (Pakistan) Ltd 0.74% Non-Compliant
148 PKGS Packages Limited * 0.27% Compliant
149 PAKD Pak DataCom Ltd.# 1.21% Non-Compliant
150 PAEL Pak Elektron Ltd 0.00% Compliant
151 PSMC Pak Suzuki Motor Co. Ltd 0.83% Compliant
152 PKGP Pakgen Power Ltd 9.05% Non-Compliant
153 PABC Pakistan Aluminium Beverages 0.97% Compliant
154 PCAL Pakistan Cables Ltd 0.00% Compliant
155 PIAA Pakistan International Airlines Corporation Limited 0.06% Non-Compliant
156 PIBTL Pakistan International Bulk Terminal Ltd 0.27% Compliant
157 PICT Pakistan International Container Terminal # 2.47% Compliant
158 PNSC Pakistan National Shipping Corporation ^^ 2.08% Compliant
159 POL Pakistan Oilfields Ltd 4.33% Compliant
160 PAKOXY Pakistan Oxygen Limited 0.30% Compliant
161 PPL Pakistan Petroleum Limited ^^ 4.82% Compliant
162 PRL Pakistan Refinery Ltd 0.01% Compliant
163 PSO Pakistan State Oil Co. Ltd 0.72% Compliant
164 PSX Pakistan Stock Exchange Ltd. 30.79% Non-Compliant
165 PTC Pakistan Telecommunication (PTCL) 6.18% Non-Compliant
166 PTL Panther Tyre Limited 0.13% Compliant
167 PIOC Pioneer Cement Ltd 0.05% Compliant
168 POWER Power Cement Ltd 1.11% Compliant
169 REWM Reliance Weaving Mills  0.19% Non-Compliant
170 RPL Roshan Packages Ltd 0.48% Compliant
171 RUPL Rupali Polyester Ltd. 0.06% Compliant
172 SPWL Saif Power Ltd *** 0.03% No Opinion
173 SAIF Saif Textile Mills Ltd 0.00% Non-Compliant
174 SMTM Samin Textiles Ltd. 0.01% Non-Compliant3
175 SAPL Sanofi-aventis Pakistan Ltd 0.23% Compliant
176 SSML Saritow Spinning Mills Ltd. 0.00% Compliant
177 SAZEW Sazgar Engineering Works 0.00% Compliant
178 SEPL Security Papers Ltd 5.75% Non-Compliant
179 SGF Service Global Footwear Limited 4.70% Compliant
180 SRVI Service Industries Ltd 0.61% Non-Compliant
181 SGPL SG Power Ltd. 0.00% Compliant
182 STCL Shabbir Tiles & Ceramics Ltd 0.86% Compliant
183 STJT Shahtaj Textile Ltd. 0.00% Compliant
184 STML Shams Textile Mills Ltd. 0.01% Compliant
185 SHEL Shell (Pakistan) Ltd 0.27% Compliant
186 SHEZ Shezan International Ltd. 0.05% Compliant
187 SCL Shield Corporation Ltd 0.00% Compliant
188 SHFA Shifa International Hospitals 0.61% Compliant
189 STPL Siddiqsons Tin Plate Ltd 0.21% Non-Compliant
190 SITC Sitara Chemical Industries Ltd 0.00% Compliant
191 SPL Sitara Peroxide Ltd 0.01% Compliant
192 SNGP Sui Northern Gas Pipelines Ltd ^^ 0.89% Compliant3
193 SSGC Sui Southern Gas Co. Ltd ^^ 1.10% Compliant3
194 SPEL Synthetic Products Ltd 0.02% Compliant
195 SYS Systems Limited 0.17% Compliant
196 TGL Tariq Glass Industries Ltd 0.05% Compliant
197 TATM TATA Textile Mills Ltd. 0.52% Compliant
198 TELE Telecard Limited # 3.68% Compliant
199 THALL Thal Limited 3.56% Compliant
200 THCCL Thatta Cement Company 0.33% Compliant
201 TOMCL The Organic Meat Company Limited 0.00% Compliant
202 SEARL The Searle Company Ltd 0.04% Compliant
203 TPL TPL Corporation 3.04% Compliant
204 TPLP TPL Properties Ltd  3.75% Compliant
205 TPLT TPL Trakker Limited 4.54% Compliant
206 TREET Treet Corporation Ltd 0.13% Compliant
207 TRG TRG Pakistan Ltd 27.01% Non-Compliant
208 TRIPF Tri-Pack Films Ltd * 0.10% Non-Compliant
209 TSPL Tri-Star Power Ltd. 14.98% Non-Compliant
210 UCAPM Unicap Modaraba ** N/A Compliant3
211 UNITY Unity Foods Ltd 0.66% Compliant3
212 GEMUNSL Universal Network Systems Limited 0.73% Compliant
213 WAVES WAVES Singer Pakistan Ltd 0.83% Compliant
214 WTL WorldCall Telecom Ltd 2.48% Compliant3
215 YOUW Yousaf Weaving Mills Ltd 0.00% Non-Compliant
216 786 786 Investments Ltd N/A NC by nature
217 AKDHL AKD Hospitality Limited (AKD Capital) N/A NC by nature
218 AHL Arif Habib Ltd N/A NC by nature
219 BIPLS BIPL Securities Limited N/A NC by nature
220 DEL Dawood Equities Ltd N/A NC by nature
221 ESBL Escorts Investment Bank Ltd N/A NC by nature
222 FCSC First Capital Securities Corp. Ltd N/A NC by nature
223 FDIBL First Dawood Investment Bank Ltd N/A NC by nature
224 FNEL First National Equities Ltd N/A NC by nature
225 HUMNL Hum Network Ltd N/A NC by nature
226 ICIBL Invest Capital Investment Bank N/A NC by nature
227 JSCL Jahangir Siddiqui & Co. Ltd N/A NC by nature
228 MDTL Media Times Ltd N/A NC by nature
229 NEXT Next Capital Limited N/A NC by nature
230 OLPL Orix Leasing Pakistan Ltd N/A NC by nature
231 PAKT Pak Tobacco Company Ltd. N/A NC by nature

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.

^ As debt ratio is marginally exceeding the set threshold therefore, considered as Compliant.

^^ These are considered compliant because these companies mainly includes circular debt or due to current economic situation their receivables are significantly increased/ share price reduces below the net liquid asset per share.

# As these are from service based 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 March-2022 accounts
  2. Based on May-2022 accounts
  3. As per last available annual / half-yearly accounts