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 2022

No. Ticker Company Name Charity Rate Final Shariah Status
1 ABOT Abbott Lab (Pakistan) Ltd 1.56% Compliant
2 ACPL Attock Cement Pakistan Ltd * 0.06% Compliant
3 ADMM Artistic Denim Mills Ltd * 0.01% Non-Compliant
4 AGHA Agha Steel Ind * 0.50% Compliant
5 AGIL Agriauto Industries Ltd * 0.19% Compliant
6 AGL Agritech Limited  0.43% Non-Compliant
7 AGP AGP Limited  0.29% Compliant
8 AGSML Abdullah Shah Ghazi Sugar Mills  100.00% Non-Compliant1
9 AGTL Al-Ghazi Tractors Ltd  0.36% Compliant
10 AIRLINK Air Link Communication Limited * 0.17% Compliant
11 ALTN Altern Energy Ltd * 14.75% Non-Compliant
12 ANL Azgard Nine Ltd * 0.63% Compliant
13 APL Attock Petroleum Ltd * 0.86% Compliant
14 ARPL Archroma Pakistan Ltd 0.00% Compliant1
15 ASC Al Shaheer Corporation Ltd * 0.00% Compliant
16 ASL Aisha Steel Ltd * 0.08% Non-Compliant
17 ASTL Amreli Steels Ltd * 0.00% Non-Compliant
18 ATBA Atlas Battery Ltd * 0.09% Compliant
19 ATLH Atlas Honda Ltd 2.15% Compliant1
20 ATRL Attock Refinery Ltd * 1.33% Compliant
21 AVN Avanceon Limited # 0.07% Compliant
22 BCL Bolan Castings Ltd * 0.02% Compliant
23 BECO Beco Steel Limited (Ravi Textile) * 0.00% Compliant3
24 BERG Berger Paints Pakistan Ltd * 0.08% Compliant
25 BGL Balochistan Glass Ltd * 0.18% Compliant
26 BIFO Biafo Industries Ltd * 0.82% Compliant
27 BIPL BankIslami Pakistan Ltd. ** N/A Compliant
28 BNL Bunnys Limited * 0.00% Compliant
29 BRR B.R.R. Guardian Modaraba ** N/A Compliant
30 BUXL Buxly Paints Ltd * 0.00% Compliant
31 BWCL Bestway Cement Ltd * 2.60% Compliant
32 BWHL Baluchistan Wheels Ltd * 3.85% Compliant
33 CEPB Century Paper & Board Mills * 0.02% Compliant
34 CHCC Cherat Cement Co. Ltd * 0.04% Compliant
35 CLOV Clover Pakistan Ltd * 0.14% Compliant
36 CLVL Cordoba Logistics * 2.93% Compliant
37 CNERGY Cnergyico PK Limited (Byco Petroleum) * 0.75% Non-Compliant
38 COLG Colgate Palmolive (Pakistan) * 1.25% Compliant
39 CPHL Citi Pharma Limited * 0.68% Compliant
40 CPPL Cherat Packaging Ltd * 0.01% Non-Compliant
41 CRTM Crescent Textile Mills Ltd *** 0.05% Compliant
42 CSAP Crescent Steel & Allied Products * 1.57% Compliant
43 CTM Colony Textile Mills Ltd * 0.05% Compliant
44 DAWH Dawood Hercules Corporation  4.52% Compliant
45 DCL Dewan Cement Ltd * 0.00% Compliant
46 DCR Dolmen City REIT * 0.00% Compliant
47 DFML Dewan Farooque Motors Ltd * 0.00% Non-Compliant
48 DFSM Dewan Farooq Spinning Mills Ltd * 0.00% Compliant
49 DGKC D.G. Khan Cement Co. Ltd * 2.54% Compliant
50 DOL Descon Oxychem Ltd * 0.28% Compliant
51 DSIL DS Industries Ltd *  0.48% Non-Compliant
52 ECOP EcoPack Ltd * 0.01% Non-Compliant
53 EFERT Engro Fertilizers Ltd 1.14% Compliant
54 ENGRO Engro Corporation Ltd 4.77% Compliant
55 EPCL Engro Polymer & Chemicals 1.34% Compliant
56 EPQL Engro Powergen Qadirpur Ltd 9.06% Non-Compliant
57 EXIDE Exide Pakistan Ltd 0.02% Compliant1
58 FABL Faysal Bank Ltd. ** N/A Compliant
59 FATIMA Fatima Fertilizer Co. Ltd 1.14% Compliant
60 FCCL Fauji Cement Co. Ltd * 0.53% Compliant
61 FCEPL Frieslandcampins Engro Foods Limited (Engro Foods Ltd.) 0.25% Compliant
62 FECM First Elite Capital Modaraba N/A Compliant
63 FECTC Fecto Cement Ltd * 0.22% Compliant
64 FEROZ Ferozsons Laboratories Ltd * 1.67% Compliant
65 FFBL Fauji Fertilizer Bin Qasim Ltd  3.32% Compliant
66 FFC Fauji Fertilizer Company Ltd 12.74% Non-Compliant
67 FFL Fauji Foods Ltd 1.37% Non-Compliant
68 FHAM First Habib Modaraba ** N/A Compliant
69 FLYNG Flying Cement Co. Ltd * 0.00% Compliant
70 FPJM First Punjab Modaraba  ** N/A Compliant3
71 FUDLM First UDL Modaraba  ** N/A Compliant
72 FZCM Fazal Cloth Mills Ltd * 0.02% Compliant
73 GATM Gul Ahmed Textile Mills Ltd * 0.05% Non-Compliant
74 GEMUNSL Universal Network Systems Limited* 2.00% Compliant
75 GGGL Ghani Global Glass Ltd * 0.05% Compliant
76 GGL Ghani Global Holdings Limited * 0.43% Compliant
77 GHGL Ghani Glass Ltd * 0.00% Compliant
78 GHNI Ghandhara Industries Ltd * 0.51% Compliant
79 GHNL Ghandhara Nissan Ltd * 1.17% Compliant
80 GLAXO GlaxoSmithKline Pakistan 1.71% Compliant
81 GTYR General Tyre & Rubber Co. * 0.00% Non-Compliant
82 GVGL Ghani Value Glass Ltd * 0.33% Compliant
83 GWLC Gharibwal Cement Ltd * 1.39% Compliant
84 HABSM Habib Sugar Mills Ltd 2.07% Non-Compliant1
85 HALEON Haleon Pakistan Limited (Glaxo SmithKline Consumer Healthcare) 0.93% Compliant
86 HCAR Honda Atlas Cars (Pakistan) Ltd 1.88% Compliant1
87 HINOON Highnoon Laboratories Ltd * 1.32% Compliant
88 HTL Hi-Tech Lubricants Ltd *** 0.25% Compliant
89 HUBC Hub Power Company Ltd * ## 4.50% Compliant
90 ICL Ittehad Chemicals Ltd * 0.10% Compliant
91 IDYM Indus Dyeing & Mfg Co. Ltd. * 0.22% Non-Compliant
92 ILP Interloop Limited * 0.03% Compliant
93 SEARL The Searle Company Limited 0.05% Compliant
94 IMAGE Image Pakistan Limited * 0.00% Compliant
95 INDU Indus Motor Company Ltd * 6.44% Non-Compliant
96 INIL International Industries Ltd * 0.05% Compliant
97 ISL International Steels Ltd * 0.03% Compliant
98 ITTEFAQ Ittefaq Iron Industries 0.12% Compliant
99 JSML Jauharabad Sugar Mills Ltd. 0.00% Compliant1
100 KAPCO Kot Addu Power Company * 15.02% Non-Compliant
101 KASBM KASB Modaraba ** N/A Compliant
102 KEL K-Electric Ltd * 0.49% Compliant
103 KOHC Kohat Cement Co. Ltd * 2.15% Compliant
104 KOHE Kohinoor Energy Ltd 0.81% Compliant
105 KOHP Kohinoor Power Company * 3.84% Compliant
106 KOIL Kohinoor Industries Ltd * 52.88% Non-Compliant
107 KOSM Kohinoor Spinning Mills Ltd * 0.00% Non-Compliant
108 KSBP K.S.B.Pumps Company Ltd 0.47% Compliant
109 KTML Kohinoor Textile Mills Ltd * 0.45% Compliant
110 LCI Lucky Core Industries Limited (ICI Pakistan) * 0.02% Compliant
111 LOADS Loads Limited * 0.07% Non-Compliant
112 LOTCHEM Lotte Chemical Pakistan Ltd  1.46% Compliant
113 LPL Lalpir Power Ltd  ^^ 2.10% Compliant
114 LUCK Lucky Cement Ltd * 0.50% Compliant
115 MACFL MACPAC Films Ltd * 0.00% Compliant
116 MARI Mari Petroleum Co. Ltd * 3.14% Compliant
117 MEBL Meezan Bank Ltd ** N/A Compliant
118 MERIT Merit Packaging Ltd * 0.00% Compliant
119 META Meta Tech Health Limited * 0.00% Compliant
120 MFFL Mitchell’s Fruit Farms Ltd 0.01% Compliant
121 MFL Matco Foods Ltd * 0.12% Non-Compliant
122 MLCF Maple Leaf Cement Factory * 0.06% Compliant
123 MODAM Modaraba al Mali ** N/A Compliant
124 MRNS Mehran Sugar Mills Ltd 0.13% Non-Compliant1
125 MTL Millat Tractors Ltd * 0.41% Compliant
126 MUGHAL Mughal Iron & Steel Industries * 0.09% Compliant
127 NAGC Nagina Cotton Mills Ltd. * 1.05% Non-Compliant
128 NATF National Foods Ltd * 0.10% Non-Compliant
129 NCL Nishat (Chunian) Ltd * 0.05% Non-Compliant
130 NCPL Nishat Chunian Power Ltd * ^^ 4.55% Compliant
131 NETSOL NetSol Technologies Ltd * # 0.30% Compliant
132 NML Nishat Mills Ltd * 1.86% Compliant
133 NPL Nishat Power Limited * 5.52% Non-Compliant
134 NRL National Refinery Ltd * 0.01% Compliant
135 NRSL Nimir Resins Ltd * 0.00% Non-Compliant
136 OBOY Oilboy Energy Limited (Drekkar Kingsway Ltd) * 0.00% Compliant
137 OCTOPUS Octopus Digital Limited 9.24% Non-Compliant
138 OGDC Oil & Gas Development Co. Ltd *  ^^^ 6.44% Compliant
139 OLPM OLP Modaraba (Orix Modaraba) ** N/A Compliant
140 OTSU Otsuka Pakistan Ltd. * 0.11% Non-Compliant
141 PABC Pakistan Aluminium Beverages 1.38% Compliant
142 PACE Pace (Pakistan) Ltd * 1.21% Non-Compliant
143 PAEL Pak Elektron Ltd * 0.00% Compliant
144 PAKD Pak DataCom Ltd. * # 1.73% Compliant
145 PAKOXY Pakistan Oxygen Limited * 0.02% Non-Compliant
146 PCAL Pakistan Cables Ltd * 0.00% Non-Compliant
147 PHDL Pakistan Hotels Developers Ltd * 0.32% Compliant
148 PIAA Pakistan International Airlines Corporation Limited (PIACL) 0.37% Non-Compliant
149 PIBTL Pakistan International Bulk Terminal Ltd * 0.19% Compliant
150 PICT Pakistan International Container Terminal *  # 0.73% Compliant
151 PIOC Pioneer Cement Ltd * 0.03% Compliant
152 PKGP Pakgen Power Ltd  ^^ 2.85% Compliant
153 PKGS Packages Limited  0.52% Compliant
154 PMI First Prudential Modaraba  ** N/A Compliant
155 PNSC Pakistan National Shipping Corporation * 2.42% Compliant
156 POL Pakistan Oilfields Ltd * 10.06% Non-Compliant
157 POWER Power Cement Ltd * 0.86% Compliant
158 PPL Pakistan Petroleum Limited * ^^ 3.40% Compliant
159 PREMA At-Tahur Limited * 0.03% Compliant
160 PRET Premium Textile Mills Ltd. * 0.00% Non-Compliant
161 PRL Pakistan Refinery Ltd * 0.05% Compliant
162 PSMC Pak Suzuki Motor Co. Ltd * 1.15% Compliant
163 PSO Pakistan State Oil Co. Ltd * 0.47% Compliant
164 PSX Pakistan Stock Exchange Ltd. * 17.79% Non-Compliant
165 PTC Pakistan Telecommunication (PTCL)  3.99% Non-Compliant
166 PTL Panther Tyres Limited * 0.07% Compliant
167 QUICE Quice Food Industries Ltd * 0.18% Compliant
168 REWM Reliance Weaving Mills  * 0.02% Non-Compliant
169 RPL Roshan Packages Ltd * 0.36% Compliant
170 RUPL Rupali Polyester Ltd. * 0.07% Compliant
171 SAZEW Sazgar Engineering Works * 0.00% Compliant
172 SEPL Security Papers Ltd * 9.50% Non-Compliant
173 SGABL S.G. Allied Businesses Ltd. * 0.00% Compliant
174 SGF Service Global Footwear Limited 4.54% Compliant
175 SGPL SG Power Ltd. * 0.00% Compliant
176 SHEL Shell (Pakistan) Ltd 0.09% Compliant
177 SHEZ Shezan International Ltd. * 0.05% Compliant
178 SHFA Shifa International Hospitals * 0.49% Compliant
179 SIEM Siemens (Pakistan) Engineering 0.15% Non-Compliant1
180 SITC Sitara Chemical Industries Ltd * 0.00% Compliant
181 IBLHL IBL HealthCare Limited 0.00% Compliant
182 SMCPL Safe Mix Concrete Ltd * 0.04% Compliant
183 SNGP Sui Northern Gas Pipelines Ltd ^ 0.89% Compliant3
184 SPEL Synthetic Products Ltd * 0.02% Compliant
185 SPL Sitara Peroxide Ltd * 0.20% Compliant
186 SPWL Saif Power Ltd 0.05% Non-Compliant
187 SRVI Service Industries Ltd 0.24% Non-Compliant
188 SSGC Sui Southern Gas Co. Ltd ^ 1.04% Compliant3
189 SSML Saritow Spinning Mills Ltd. * 0.00% Non-Compliant
190 STCL Shabbir Tiles & Ceramics Ltd * 0.50% Compliant
191 STJT Shahtaj Textile Ltd. * 0.01% Compliant
192 STML Shams Textile Mills Ltd. * 0.22% Compliant
193 STPL Siddiqsons Tin Plate Ltd * 0.52% Compliant
194 SYS Systems Limited 0.25% Compliant
195 TELE Telecard Limited * # 0.64% Compliant 
196 TGL Tariq Glass Industries Ltd * 0.06% Compliant
197 THALL Thal Limited * 4.46% Compliant
198 THCCL Thatta Cement Company * 1.04% Compliant
199 TOMCL The Organic Meat Company * 0.01% Compliant
200 TOWL Towellers Limited * 1.97% Compliant
201 TPL TPL Corporation * 3.53% Compliant
202 TPLP TPL Properties Ltd  * 1.47% Compliant
203 TPLT TPL Trakker Ltd  * 5.43% Non-Compliant
204 TREET Treet Corporation Ltd * 0.01% Compliant
205 TRG TRG Pakistan Ltd * 100.00% Non-Compliant
206 TSPL Tri-Star Power Ltd. * 11.57% Non-Compliant
207 UCAPM Unicap Modaraba ** N/A Compliant
208 UNITY Unity Foods Ltd * 0.57% Compliant
209 WAVES WAVES Singer Pakistan Ltd 0.31% Compliant
210 WHALE Waves Home Appliances Limited (Samin Textiles) 0.01% Non-Compliant
211 WTL WorldCall Telecom Ltd 3.75% Compliant
212 YOUW Yousaf Weaving Mills Ltd * 0.00% Non-Compliant
213 AHL Arif Habib Ltd N/A NC by nature
214 BOK Bank of Khyber N/A NC by nature
215 DEL Dawood Equities Ltd N/A NC by nature
216 ESBL Escorts Investment Bank Ltd N/A NC by nature
217 FCSC First Capital Securities Corp. Ltd N/A NC by nature
218 FDIBL First Dawood Investment Bank Ltd N/A NC by nature
219 FNEL First National Equities Ltd N/A NC by nature
220 HIFA HBL Investment  Fund (A) N/A NC by nature
221 HUMNL Hum Network Ltd N/A NC by nature
222 ICIBL Invest Capital Investment Bank N/A NC by nature
223 JSCL Jahangir Siddiqui & Co. Ltd N/A NC by nature
224 MDTL Media Times Ltd N/A NC by nature
225 NEXT Next Capital Limited N/A NC by nature
226 OLPL Orix Leasing Pakistan 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.

***As debt ratio exceeding slightly the appoved threshold, therefore considered as Compliant.

## 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.

# 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 and Net Liquid Asset per share.

^ As fixed asset ratio is marginally below the threshold therefore considered as Compliant.

^^ These are considered compliant due to significant inrcease in circular debt & current economic situation, their receivables are significantly increased & share price reduces below the net liquid asset per share.

^^^ Due to current economic situation, circular debt and interest rate significantly increased therefore, it is considered as Compliant till next shariah screening period. However dividend purification rate will be same as actual.

  1. Based on September-2022 accounts
  2. As per last available annual / half-yearly accounts