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 2021

No. Ticker Company Name Charity Rate Final Shariah Status
1 ABOT Abbott Lab (Pakistan) Ltd* 1.22% Compliant
2 ADOS Ados Pakistan Ltd 0.03% Compliant
3 AGHA Agha Steel Ind Ltd 0.24% Compliant
4 AGP AGP Limited* 0.33% Compliant
5 AGIL Agriauto Industries Ltd 0.34% Compliant
6 ASL Aisha Steel Ltd 0.04% Compliant
7 ASC Al Shaheer Corporation Ltd 0.00% Compliant
8 AGTL Al-Ghazi Tractors Ltd 0.45% Compliant
9 ARPL Archroma Pakistan Ltd 0.00% Compliant
10 ASTM Asim Textile Mills Ltd 0.52% Compliant
11 ATBA Atlas Battery Ltd 0.12% Compliant
12 PREMA At-Tahur Limited 0.00% Compliant
13 ACPL Attock Cement Pakistan Ltd 0.08% Compliant
14 APL Attock Petroleum Ltd 0.59% Compliant
15 ATRL Attock Refinery Ltd 0.55% Compliant
16 AVN Avanceon Limited* #  0.02% Compliant
17 ANL Azgard Nine Ltd 0.50% Compliant
18 BGL Balochistan Glass Ltd 0.01% Compliant
19 BNWM Bannu Woollen Mills Ltd 0.05% Compliant
20 BATA Bata (Pakistan) Ltd 0.27% Compliant
21 BERG Berger Paints Pakistan Ltd 1.61% Compliant
22 BWCL Bestway Cement Ltd 2.20% Compliant
23 BIFO Biafo Industries Ltd 0.80% Compliant
24 BNL Bunnys Limited 0.24% Compliant
25 BPL Burshane LPG (Pakistan) Ltd 0.08% Compliant
26 BYCO Byco Petroleum Pakistan Ltd 0.49% Compliant
27 CEPB Century Paper & Board Mills 0.07% Compliant
28 CHCC Cherat Cement Co. Ltd 0.05% Compliant
29 CPPL Cherat Packaging Ltd 0.01% Compliant
30 DGKC D.G. Khan Cement Co. Ltd 3.11% Compliant
31 DAAG Data Agro Limited 0.00% Compliant
32 DAWH Dawood Hercules Corporation 4.77% Compliant
33 DOL Descon Oxychem Ltd 0.46% Compliant
34 DCL Dewan Cement Ltd 0.01% Compliant
35 DFSM Dewan Farooq Spinning Mills Ltd 0.00% Compliant
36 DCR Dolmen City REIT 0.00% Compliant
37 DSIL DS Industries Ltd 3.69% Compliant
38 DYNO Dynea Pakistan Ltd 0.24% Compliant
39 EMCO EMCO Industries Ltd 0.00% Compliant
40 ENGRO Engro Corporation Ltd 3.73% Compliant
41 EFERT Engro Fertilizers Ltd 1.59% Compliant
42 EPCL Engro Polymer & Chemicals 1.52% Compliant
43 FATIMA Fatima Fertilizer Co. Ltd* 0.96% Compliant
44 FCCL Fauji Cement Co. Ltd 0.45% Compliant
45 FZCM Fazal Cloth Mills Ltd 0.55% Compliant
46 FECTC Fecto Cement Ltd 0.27% Compliant
47 FML Feroze1888 Mills Ltd ^^^ 0.11% Compliant
48 FEROZ Ferozsons Laboratories Ltd 0.86% Compliant
49 FLYNG Flying Cement Co. Ltd 0.00% Compliant
50 FCEPL Frieslandcampins Engro Foods Limited 0.05% Compliant
51 GAMON Gammon Pakistan Ltd 0.04% Compliant
52 GHNI Ghandhara Industries Ltd 0.34% Compliant
53 GHNL Ghandhara Nissan Ltd 0.72% Compliant
54 GHGL Ghani Glass Ltd 0.00% Compliant
55 GGGL Ghani Global Glass Ltd 0.20% Compliant
56 GGL Ghani Global Holdings Limited  0.14% Compliant
57 GVGL Ghani Value Glass Ltd 0.50% Compliant
58 GWLC Gharibwal Cement Ltd 0.80% Compliant
59 GFIL Ghazi Fabrics International Ltd 0.00% Compliant
60 GLPL Gillette Pakistan Ltd 0.83% Compliant
61 GSKCH Glaxo SmithKline Consumer Healthcare* 0.64% Compliant
62 GLAXO GlaxoSmithKline Pakistan* 0.91% Compliant
63 HRPL Habib Rice Products Ltd 2.11% Compliant
64 HINOON Highnoon Laboratories Ltd* 0.90% Compliant
65 HTL Hi-Tech Lubricants Ltd 0.22% Compliant
66 HCAR Honda Atlas Cars (Pakistan) Ltd 0.75% Compliant
67 HUBC Hub Power Company Ltd ## 4.77% Compliant
68 IBLHL IBL HealthCare Ltd 0.32% Compliant
69 ICI ICI Pakistan Ltd 0.10% Compliant
70 IMAGE Image Pakistan Limited 0.01% Compliant
71 ILP Interloop Limited ^^^ 0.10% Compliant
72 INIL International Industries Ltd 0.05% Compliant
73 ISL International Steels Ltd 0.05% Compliant
74 ITTEFAQ Ittefaq Iron Industries 0.06% Compliant
75 ICL Ittehad Chemicals Ltd 0.28% Compliant
76 JATM J. A. Textile Mills Ltd 0.19% Compliant
77 JVDC Javedan Corporation Ltd 1.27% Compliant
78 KEL K-Electric Ltd 0.60% Compliant
79 KHSM Khurshid Spinning  0.02% Compliant
80 KOHC Kohat Cement Co. Ltd 0.04% Compliant
81 KOHE Kohinoor Energy Ltd 4.87% Compliant
82 KOIL Kohinoor Industries Ltd 2.36% Compliant
83 KTML Kohinoor Textile Mills Ltd 1.56% Compliant
84 LEUL Leather-Up Limited 1.49% Compliant
85 LUCK Lucky Cement Ltd 0.83% Compliant
86 MACFL MACPAC Films Ltd 0.00% Compliant
87 MLCF Maple Leaf Cement Factory 0.04% Compliant
88 MARI Mari Petroleum Co. Ltd 4.53% Compliant
89 MTIL Mian Textile Industries Ltd 0.00% Compliant
90 MTL Millat Tractors Ltd 0.54% Compliant
91 MUGHAL Mughal Iron & Steel Industries 0.07% Compliant
92 NATF National Foods Ltd 0.23% Compliant
93 NRL National Refinery Ltd 0.03% Compliant
94 NCML Nazir Cotton Mills Ltd 0.29% Compliant
95 NETSOL NetSol Technologies Ltd # 2.95% Compliant
96 NRSL Nimir Resins Ltd 0.00% Compliant
97 NML Nishat Mills Ltd 2.91% Compliant
98 OGDC Oil & Gas Development Co. Ltd **** ^ 3.84% Compliant
99 PKGS Packages Limited* 0.31% Compliant
100 PAEL Pak Elektron Ltd 0.00% Compliant
101 PSMC Pak Suzuki Motor Co. Ltd* 0.78% Compliant
102 PCAL Pakistan Cables Ltd 0.63% Compliant
103 PHDL Pakistan Hotels Developers Ltd 0.09% Compliant
104 PIBTL Pakistan International Bulk Terminal Ltd 0.55% Compliant
105 PICT Pakistan International Container Terminal 1.43% Compliant
106 PNSC Pakistan National Shipping Corporation 3.18% Compliant
107 POL Pakistan Oilfields Ltd 4.66% Compliant
108 PAKOXY Pakistan Oxygen Limited 0.46% Compliant
109 PPL Pakistan Petroleum Limited ^ 2.19% Compliant
110 PSO Pakistan State Oil Co. Ltd 0.88% Compliant
111 PSYL Pakistan Synthetics Ltd 0.15% Compliant
112 PTC Pakistan Telecommunication (PTCL) 1.36% Compliant
113 PIOC Pioneer Cement Ltd ^^ 0.06% Compliant
114 POWER Power Cement Ltd 0.01% Compliant
115 QUICE Quice Food Industries Ltd 0.32% Compliant
116 REDCO Redco Textiles Ltd 0.08% Compliant
117 RPL Roshan Packages Ltd 0.82% Compliant
118 RUPL Rupali Polyester Ltd 0.04% Compliant
119 SMCPL Safe Mix Concrete Ltd 0.03% Compliant
120 SNAI Sana Industries Ltd 0.18% Compliant
121 SAPL Sanofi-aventis Pakistan Ltd* 0.34% Compliant
122 SSML Saritow Spinning Mills Ltd 0.00% Compliant
123 SAZEW Sazgar Engineering Works 0.00% Compliant
124 SERT Service Textiles industries Ltd 0.46% Compliant
125 STCL Shabbir Tiles & Ceramics Ltd 0.66% Compliant
126 SHDT Shadab Textile Mills Ltd 0.21% Compliant
127 STJT Shahtaj Textile Ltd 0.00% Compliant
128 SHEL Shell (Pakistan) Ltd 0.04% Compliant
129 SHEZ Shezan International Ltd 0.02% Compliant
130 SHFA Shifa International Hospitals 0.48% Compliant
131 STPL Siddiqsons Tin Plate Ltd 0.16% Compliant
132 SITC Sitara Chemical Industries Ltd 0.00% Compliant
133 SPL Sitara Peroxide Ltd 0.01% Compliant
134 SUTM Sunrays Textile Mills Ltd 0.31% Compliant
135 SPEL Synthetic Products Ltd 0.13% Compliant
136 SYS Systems Limited* 0.58% Compliant
137 TGL Tariq Glass Industries Ltd 0.01% Compliant
138 TELE Telecard Limited #  0.19% Compliant
139 THALL Thal Limited 3.87% Compliant
140 THCCL Thatta Cement Company 0.80% Compliant
141 TOMCL The Organic Meat Company Ltd 0.15% Compliant
142 SEARL The Searle Company Ltd 0.10% Compliant
143 TREET Treet Corporation Ltd 1.14% Compliant
144 UBDL United Brands Limited 0.03% Compliant
145 UDPL United Distributors (Pakistan) Ltd 0.25% Compliant
146 UNITY Unity Foods Ltd 0.33% Compliant
147 WAHN Wah-Noble Chemicals Ltd 0.11% Compliant
148 WAVES WAVES Singer Pakistan Ltd 0.00% Compliant
149 WTL WorldCall Telecom Ltd* 0.44% Compliant
150 ZTL Zephyr Textiles Ltd 0.03% Compliant
151 ZIL ZIL Limited 0.02% Compliant
152 BRR B.R.R. Guardian Modaraba N/A Compliant **
153 BIPL BankIslami Pakistan Ltd* N/A Compliant **
154 FECM First Elite Capital Modaraba N/A Compliant **
155 FEM First Equity Modaraba N/A Compliant **
156 FHAM First Habib Modaraba N/A Compliant **
157 PAKMI First Pak Modaraba N/A Compliant **
158 PMI First Prudential Modaraba N/A Compliant **
159 FPJM First Punjab Modaraba N/A Compliant **
160 FUDLM First UDL Modaraba N/A Compliant **
161 KASBM KASB Modaraba N/A Compliant **
162 MEBL Meezan Bank Ltd* N/A Compliant **
163 MODAM Modaraba al Mali N/A Compliant **
164 ORIXM Orix Modaraba N/A Compliant **
165 AGSML Abdullah Shah Ghazi Sugar Mills* 0.00% Compliant1
166 ADAMS Adam Sugar Mills Ltd* 0.08% Compliant1
167 ATLH Atlas Honda Ltd 1.11% Compliant1
168 EXIDE Exide Pakistan Ltd 0.06% Compliant1
169 FRSM Faran Sugar Mills Ltd* 0.32% Compliant1
170 HABSM Habib Sugar Mills Ltd* 4.24% Compliant1
171 HINO Hinopak Motors Ltd 0.15% Compliant1
172 HSM Husein Sugar Mills Ltd* 0.00% Compliant1
173 JSML Jauharabad Sugar Mills Ltd* 0.00% Compliant1
174 MFFL Mitchell’s Fruit Farms Ltd* 0.00% Compliant1
175 SKRS Sakrand Sugar Mills Ltd* 0.00% Compliant1
176 SML Shakarganj Limited* 0.00% Compliant1
177 TRIPF Tri-Pack Films Ltd* 0.01% Compliant1
178 WYETH Wyeth Pakistan Ltd* 3.62% Compliant2
179 CLOV Clover Pakistan Ltd 0.21% Compliant3
180 GAIL Ghani Automobile Industries Ltd 0.61% Compliant3
181 SNGP Sui Northern Gas Pipelines Ltd 1.48% Compliant3
182 SSGC Sui Southern Gas Co. Ltd 0.81% Compliant3
183 UCAPM Unicap Modaraba N/A Compliant3 **
184 CWSM Chakwal Spinning Mills Ltd 0.00% Non-Compliant3
185 DNCC Dandot Cement Co. Ltd 0.00% Non-Compliant3
186 HASCOL Hascol Petroleum Ltd 0.15% Non-Compliant3
187 RAVT Ravi textile Mills Ltd 5.10% Non-Compliant3
188 AABS Al-Abbas Sugar Mills Ltd* 1.93% Non-Compliant1
189 CHAS Chashma Sugar Mills Ltd* 0.05% Non-Compliant1
190 DWSM Dewan Sugar Mills Ltd* 0.01% Non-Compliant1
191 MRNS Mehran Sugar Mills Ltd* 0.83% Non-Compliant1
192 SHSML Shahmurad Sugar Mills Ltd* 3.80% Non-Compliant1
193 SIEM Siemens (Pakistan) Engineering* 0.22% Non-Compliant1
194 TSML Tandlianwala Sugar Mills Ltd* 0.04% Non-Compliant1
195 AGL Agritech Limited 0.08% Non-Compliant
196 ASTL Amreli Steels Ltd 0.00% Non-Compliant
197 AHCL Arif Habib Corporation Ltd 20.31% Non-Compliant
198 ADMM Artistic Denim Mills Ltd 0.00% Non-Compliant
199 BAPL Bawany Air Product Ltd 0.00% Non-Compliant
200 BILF Bilal Fibres Ltd 0.00% Non-Compliant
201 BCL Bolan Castings Ltd 2.44% Non-Compliant
202 CTM Colony Textile Mills Ltd 0.87% Non-Compliant
203 CSAP Crescent Steel & Allied Products 6.41% Non-Compliant
204 CRTM Crescent Textile Mills Ltd 0.30% Non-Compliant
205 DFML Dewan Farooque Motors Ltd 0.00% Non-Compliant
206 DSL Dost Steel Ltd 0.18% Non-Compliant
207 ECOP EcoPack Ltd 0.01% Non-Compliant
208 FFBL Fauji Fertilizer Bin Qasim Ltd* 3.91% Non-Compliant
209 FFC Fauji Fertilizer Company Ltd* 9.83% Non-Compliant
210 FFL Fauji Foods Ltd* 0.55% Non-Compliant
211 GTYR General Tyre & Rubber Co. 0.11% Non-Compliant
212 GATM Gul Ahmed Textile Mills Ltd 0.01% Non-Compliant
213 HAEL Hala Enterprises Ltd 0.17% Non-Compliant
214 HIRAT Hira Textile Mills Ltd 0.00% Non-Compliant
215 IDYM Indus Dyeing & Mfg Co. Ltd 0.42% Non-Compliant
216 INDU Indus Motor Company Ltd 2.38% Non-Compliant
217 KML Kohinoor Mills Ltd 0.51% Non-Compliant
218 KOSM Kohinoor Spinning Mills Ltd 0.00% Non-Compliant
219 KAPCO Kot Addu Power Company 10.13% Non-Compliant
220 LPL Lalpir Power Ltd* 18.55% Non-Compliant
221 LOADS Loads Limited 0.27% Non-Compliant
222 LOTCHEM Lotte Chemical Pakistan Ltd 1.54% Non-Compliant
223 MFL Matco Foods Ltd 0.06% Non-Compliant
224 MERIT Merit Packaging Ltd 0.23% Non-Compliant
225 NESTLE Nestle Pakistan Ltd 0.02% Non-Compliant
226 NICL Nimir Industrial Chemicals Ltd 0.00% Non-Compliant
227 NCL Nishat (Chunian) Ltd 0.02% Non-Compliant
228 NCPL Nishat Chunian Power Ltd 13.21% Non-Compliant
229 NPL Nishat Power Limited 11.94% Non-Compliant
230 PACE Pace (Pakistan) Ltd 2.53% Non-Compliant
231 PAKD Pak DataCom Ltd 1.52% Non-Compliant
232 PKGP Pakgen Power Ltd* 18.24% Non-Compliant
233 PIAA Pakistan Intl Airlines Corporation Limited* 0.02% Non-Compliant
234 PRL Pakistan Refinery Ltd 0.04% Non-Compliant
235 PSX Pakistan Stock Exchange Ltd 32.69% Non-Compliant
236 REWM Reliance Weaving Mills  0.21% Non-Compliant
237 SAIF Saif Textile Mills Ltd 0.01% Non-Compliant
238 SLYT Sally Textile Mills 0.00% Non-Compliant
239 SMTM Samin Textiles Ltd 0.01% Non-Compliant
240 SAPT Sapphire Textile Mills 0.88% Non-Compliant
241 SEPL Security Papers Ltd 3.97% Non-Compliant
242 SERF Service Fabrics Ltd 0.00% Non-Compliant
243 SRVI Service Industries Ltd 0.32% Non-Compliant
244 TPL TPL Corporation 3.63% Non-Compliant
245 TPLP TPL Properties Ltd  9.40% Non-Compliant
246 TPLT TPL Trakker Limited 9.43% Non-Compliant
247 TRG TRG Pakistan Ltd 100.00% Non-Compliant
248 TSPL Tri-Star Power Ltd 12.85% Non-Compliant
249 YOUW Yousaf Weaving Mills Ltd 0.00% Non-Compliant
250 AKDCL AKD Capital Ltd N/A NC by Nature
251 AHL Arif Habib Ltd N/A NC by Nature
252 BOK Bank of Khyber N/A NC by Nature
253 DEL Dawood Equities Ltd N/A NC by Nature
254 EFGH EFG Hermes Pakistan N/A NC by Nature
255 EPCLPS Engro Polymer & Chemical Ltd Prefrence Shares N/A NC by Nature
256 ESBL Escorts Investment Bank Ltd N/A NC by Nature
257 FABL Faysal Bank Ltd N/A NC by Nature
258 FCSC First Capital Securities Corp. Ltd N/A NC by Nature
259 FDIBL First Dawood Investment Bank Ltd N/A NC by Nature
260 FNEL First National Equities Ltd N/A NC by Nature
261 HUMNL Hum Network Ltd N/A NC by Nature
262 IML Imperial Limited N/A NC by Nature
263 ICIBL Invest Capital Investment Bank N/A NC by Nature
264 JSCL Jahangir Siddiqui & Co. Ltd N/A NC by Nature
265 MDTL Media Times Ltd N/A NC by Nature
266 NEXT Next Capital Limited N/A NC by Nature
267 PASL Pervez Ahmed Securities Ltd N/A NC by Nature
268 786 786 Investments Ltd N/A NC by Nature
269 EPQL Engro Powergen Qadirpur Ltd *** 4.35% No Opinion
270 KOHP Kohinoor Power Company *** 3.01% No Opinion
271 SPWL Saif Power Ltd *** 0.01% No Opinion

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 2020/2021.

** 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.

**** 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.

^ While calculating Net Liquid Asset ratio, Average Net Liquit Asset and Average market price per share of last four quarters considered.

^^ As Debt to Asset ratio is marginally exceeded from the given threshold, therefore, PIOC is considered as Compliant.

^^^ FML and ILP is compliant after considering additional disclosures provided by Management of both companies regarding compliant portion of debt.

# As AVN, NETSOL & 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 March-2021 accounts
  2. Based on May-2021 accounts
  3. As per last available annual / half-yearly accounts