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.

FINAL LIST OF COMPANIES FOR KMI-30 INDEX RECOMPOSITION JUNE 2018

S.NO TICKER COMPANY STATUS CHARITY RATE
1 AABS Al-Abbas Sugar Mills Ltd (Pakistan) Ltd Compliant1 0.03% *
2 ABOT Abbott Lab (Pakistan) Ltd Compliant 1.37% *
3 ACPL Attock Cement Pakistan Ltd Compliant 0.06%
4 ADAMS Adam Sugar Mills Ltd Compliant1 0.00% *
5 AGIL Agriauto Industries Ltd Compliant 0.60%
6 AGP AGP Limited  Compliant 0.15% *
7 AGTL Al-Ghazi Tractors Ltd Compliant 0.16% *
8 AKZO Akzo Nobel Pakistan Compliant 0.71% *
9 APL Attock Petroleum Ltd Compliant 0.48%
10 ARPL Archroma Pakistan Ltd Compliant1 0.00%
11 ASC Al Shaheer Corporation Ltd Compliant 0.00%
12 ASTL Amreli Steels Ltd Compliant 0.00%
13 ATBA Atlas Battery Ltd Compliant 0.06%
14 ATLH Atlas Honda Ltd Compliant1 0.73%
15 ATRL Attock Refinery Ltd Compliant 0.93%
16 BATA Bata (Pakistan) Ltd Compliant 0.17% *
17 BCL Bolan Castings Ltd Compliant 0.02%
18 BERG Berger Paints Pakistan Ltd Compliant 0.12%
19 BGL Balochistan Glass Ltd Compliant 2.23%
20 BIFO Biafo Industries Ltd Compliant 0.06%
21 BNWM Bannu Woollen Mills Ltd Compliant 0.27%
22 BPL Burshane LPG (Pakistan) Ltd Compliant 0.10%
23 BWCL Bestway Cement Ltd Compliant 1.71%
24 BWHL Baluchistan Wheels Ltd Compliant 0.16%
25 BYCO Byco Petroleum Pakistan Ltd Compliant 0.30%
26 CHCC Cherat Cement Co. Ltd Compliant 0.00%
27 CPPL Cherat Packaging Ltd Compliant 0.00%
28 CSAP Crescent Steel & Allied Products Compliant 0.05%
29 DAAG Data Agro Limited Compliant 0.00%
30 DAWH Dawood Hercules Corporation Compliant 2.45% *
31 DCL Dewan Cement Ltd Compliant 0.01%
32 DCR Dolmen City REIT Compliant 3.35%
33 DFSM Dewan Farooq Spinning Mills Ltd Compliant 0.00%
34 DGKC D.G. Khan Cement Co. Ltd Compliant 3.68%
35 DNCC Dandot Cement Co. Ltd Compliant 0.01%
36 DSIL DS Industries Ltd Compliant 0.00%
37 DWSM Dewan Sugar Mills Ltd Compliant1 0.00% *
38 DYNO Dynea Pakistan Ltd Compliant 0.03%
39 EFERT Engro Fertilizers Ltd Compliant 0.70% *
40 EFOODS Engro Foods Ltd Compliant 0.03% *
41 ENGRO Engro Corporation Ltd Compliant 2.30% *
42 EPCL Engro Polymer & Chemicals Compliant 2.05% *
43 EPQL Engro Powergen Qadirpur Ltd Compliant 0.01%
44 EXIDE Exide Pakistan Ltd Compliant1 0.01%
45 FATIMA Fatima Fertilizer Co. Ltd Compliant 0.78% *
46 FCCL Fauji Cement Co. Ltd Compliant 0.05%
47 FECM First Elite Capital Modaraba Compliant 0.05%
48 FECTC Fecto Cement Ltd Compliant 0.50%
49 FEROZ Ferozsons Laboratories Ltd Compliant 0.19%
50 FHAM First Habib Modaraba Compliant 0.02%
51 FLYNG Flying Cement Co. Ltd Compliant 0.00%
52 FML Feroze1888 Mills Ltd Compliant 0.00%
53 FRCL Frontier Ceramics Ltd Compliant3 0.00%
54 FUDLM First UDL Modaraba  Compliant 0.00%
55 GAMON Gammon Pakistan Ltd Compliant 0.01%
56 GAIL Ghani Automobile Industries Ltd Compliant 0.02%
57 GGGL Ghani Global Glass Ltd Compliant 0.24%
58 GGL Ghani Gases Ltd Compliant 0.09%
59 GHGL Ghani Glass Ltd Compliant 0.00%
60 GHNI Ghandhara Industries Ltd Compliant 0.01%
61 GHNL Ghandhara Nissan Ltd Compliant 0.23%
62 GLAXO GlaxoSmithKline Pakistan Compliant 0.98% *
63 GSKCH GlaxoSmithKline Consumer Healthcare Compliant 2.79% *
64 GVGL Ghani Value Glass Ltd Compliant 0.13%
65 GWLC Gharibwal Cement Ltd Compliant 0.16%
66 HABSM Habib Sugar Mills Ltd Compliant1 2.64% *
67 HAL Habib-ADM Ltd Compliant 0.85%
68 HASCOL Hascol Petroleum Ltd Compliant 0.10% *
69 HINO Hinopak Motors Ltd Compliant1 0.54%
70 HINOON Highnoon Laboratories Ltd Compliant 0.22% *
71 HMM Habib Metro Modaraba Compliant 0.00%
72 HSM Husein Sugar Mills Ltd Compliant1 0.06% *
73 HTL Hi-Tech Lubricants Ltd Compliant 0.51%
74 HUBC Hub Power Company Ltd Compliant 0.13%
75 IBLHL IBL HealthCare Ltd Compliant 1.36%
76 ICI ICI Pakistan Ltd Compliant 0.13%
77 ICL Ittehad Chemicals Ltd Compliant 0.00%
78 INIL International Industries Ltd Compliant 0.01%
79 ISL International Steels Ltd Compliant 0.00%
80 ITTEFAQ Ittefaq Iron Industries Compliant 0.11%
81 JUBS Jubilee Spinning & Weaving Mills Ltd Compliant 0.25%
82 JVDC Javedan Corporation Ltd Compliant 0.19%
83 KOHC Kohat Cement Co. Ltd Compliant 0.76%
84 KOHE Kohinoor Energy Ltd Compliant 0.01%
85 KEL K-Electric Ltd Compliant3 1.35% *
86 KOIL Kohinoor Industries Ltd Compliant 0.00%
87 KSBP K.S.B.Pumps Company Ltd Compliant 0.12% *
88 LEUL Leather-Up Limited Compliant 0.00%
89 LOADS Loads Limited Compliant 0.88%
90 LOTCHEM Lotte Chemical Pakistan Ltd Compliant 0.68% *
91 LUCK Lucky Cement Ltd Compliant 1.62%
92 BIPL BankIslami Pakistan Ltd. Compliant 0.00%
93 MEBL Meezan Bank Ltd Compliant 0.00%
94 MACFL MACPAC Films Ltd Compliant 0.00%
95 MUBT Mubarak Textile Mills Ltd Compliant3 0.00%
96 MARI Mari Petroleum Co. Ltd Compliant 0.78%
97 MLCF Maple Leaf Cement Factory Compliant 0.07%
98 MRNS Mehran Sugar Mills Ltd Compliant1 1.33% *
99 NATF National Foods Ltd Compliant 0.02%
100 NETSOL NetSol Technologies Ltd Compliant 0.51%
101 NML Nishat Mills Ltd Compliant 2.31%
102 NPL Nishat Power Limited Compliant 0.24%
103 NRL National Refinery Ltd Compliant 0.10%
104 OGDC Oil & Gas Development Co. Ltd Compliant 4.31%
105 ORIXM Orix Modaraba Compliant 0.00%
106 PAEL Pak Elektron Ltd Compliant 0.00% *
107 PAKMI First Pak Modaraba  Compliant 0.00%
108 PAKOXY Pakistan Oxygen Limited Compliant 0.00% *
109 PCAL Pakistan Cables Ltd Compliant 0.00%
110 PHDL Pakistan Hotels Developers Ltd Compliant 0.08%
111 PIBTL Pakistan International Bulk Terminal Ltd Compliant 2.09%
112 PIOC Pioneer Cement Ltd Compliant 0.09%
113 PKGS Packages Limited Compliant 0.34% *
114 PMI First Prudential Modaraba  Compliant 0.00%
115 PNSC Pakistan National Shipping Corporation Compliant 3.72%
116 POL Pakistan Oilfields Ltd Compliant 1.97%
117 POWER Power Cement Ltd Compliant 1.77%
118 PPL Pakistan Petroleum Limited Compliant 1.94%
119 PRL Pakistan Refinery Ltd Compliant 0.05%
120 PSMC Pak Suzuki Motor Co. Ltd Compliant 0.42% *
121 PSO Pakistan State Oil Co. Ltd Compliant 0.29%
122 PTC Pakistan Telecommunication (PTCL) Compliant 0.66% *
123 QUICE Quice Food Industries Ltd Compliant 0.28%
124 REDCO Redco Textiles Ltd Compliant 0.00%
125 RPL Roshan Packages Ltd Compliant 2.12%
126 RUBY Ruby Textile Mills Ltd Compliant 0.00%
127 SAPL Sanofi-aventis Pakistan Ltd Compliant 0.05% *
128 SAZEW Sazgar Engineering Works Compliant 0.00%
129 SSGC Sui Southern Gas Co. Ltd Compliant3 1.73%
130 SCL Shield Corporation Ltd Compliant 0.00%
131 SEARL The Searle Company Ltd Compliant 0.12%
132 SEPL Security Papers Ltd Compliant 2.95%
133 SHEL Shell (Pakistan) Ltd Compliant 0.06% *
134 SITC Sitara Chemical Industries Ltd Compliant 0.06%
135 SKRS Sakrand Sugar Mills Ltd Compliant1 0.57% *
136 SMCPL Safe Mix Concrete Ltd Compliant 0.02%
137 SML Shakarganj Ltd. Compliant1 0.26% *
138 SNGP Sui Northern Gas Pipelines Ltd Compliant3 1.01%
139 SPEL Synthetic Products Ltd Compliant 0.00%
140 SPL Sitara Peroxide Ltd Compliant 0.03%
141 STCL Shabbir Tiles & Ceramics Ltd Compliant 0.00%
142 TGL Tariq Glass Industries Ltd Compliant 0.01%
143 THCCL Thatta Cement Company Compliant 0.44%
144 TPL TPL Corporation Compliant 1.48%
145 TREET Treet Corporation Ltd Compliant 0.19%
146 TRPOL Tri-Star Polyester Ltd Compliant 0.00%
147 UBDL United Brands Limited Compliant 0.00%
148 UDPL United Distributors (Pakistan) Ltd Compliant 0.00%
149 UNITY Unity Foods Ltd Compliant 0.27%
150 UCAPM Unicap Modaraba Compliant3 0.00%
151 WAHN Wah-Noble Chemicals Ltd Compliant 0.04%
152 WAVES WAVES Singer Pakistan Ltd Compliant 1.38%
153 WYETH Wyeth Pakistan Ltd Compliant2  3.80% *
154 ZIL ZIL Limited Compliant 0.02% *
155 AGL Agritech Limited Non-Compliant3  
156 AHCL Arif Habib Corporation Ltd Non-Compliant  
157 AMTEX Amtex Limited Non-Compliant  
158 ANL Azgard Nine Ltd Non-Compliant  
159 ANSM Ansari Sugar Mills Ltd Non-Compliant1  
160 ASL Aisha Steel Ltd Non-Compliant  
161 AVN Avanceon limited Non-Compliant  
162 BILF Bilal Fibres Ltd Non-Compliant  
163 BPBL Balochistan Particle Board Non-Compliant  
164 CEPB Century Paper & Board Mills Non-Compliant  
165 CHAS Chashma Sugar Mills Ltd Non-Compliant1  
166 CLOV Clover Pakistan Ltd Non-Compliant  
167 CRTM Crescent Textile Mills Ltd Non-Compliant  
168 CTM Colony Textile Mills Ltd Non-Compliant  
169 CWSM Chakwal Spinning Mills Ltd Non-Compliant  
170 DFML Dewan Farooque Motors Ltd Non-Compliant  
171 DKL Drekkar Kingsway Ltd Non-Compliant  
172 DOL Descon Oxychem Ltd Non-Compliant  
173 DSL Dost Steels Ltd Non-Compliant  
174 ECOP EcoPack Ltd Non-Compliant  
175 FFBL Fauji Fertilizer Bin Qasim Ltd Non-Compliant  
176 FFC Fauji Fertilizer Company Ltd Non-Compliant  
177 FFL Fauji Foods Ltd Non-Compliant  
178 GADT Gadoon Textile Mills Ltd Non-Compliant  
179 GATM Gul Ahmed Textile Mills Ltd Non-Compliant  
180 GFIL Ghazi Fabrics International Ltd Non-Compliant  
181 GTYR General Tyre & Rubber Co. Non-Compliant  
182 HCAR Honda Atlas Cars (Pakistan) Ltd Non-Compliant1  
183 HIRAT Hira Textile Mills Ltd Non-Compliant  
184 HWQS Haseeb Waqas Sugar Mills Ltd Non-Compliant1  
185 IMSL Imperial Sugar Ltd Non-Compliant1  
186 INDU Indus Motor Company Ltd Non-Compliant  
187 JOPP Johnson & Phillips (Pakistan) Ltd Non-Compliant  
188 KAPCO Kot Addu Power Company Non-Compliant  
189 KOSM Kohinoor Spinning Mills Ltd Non-Compliant  
190 LPL Lalpir Power Ltd Non-Compliant  
191 MERIT Merit Packaging Ltd Non-Compliant  
192 MFFL Mitchell’s Fruit Farms Ltd Non-Compliant1  
193 MFL Matco Foods Ltd Non-Compliant  
194 MTL Millat Tractors Ltd Non-Compliant  
195 MUGHAL Mughal Iron & Steel Industries Non-Compliant  
196 NCL Nishat (Chunian) Ltd Non-Compliant  
197 NCPL Nishat Chunian Power Ltd Non-Compliant  
198 NICL Nimir Industrial Chemicals Ltd Non-Compliant  
199 NONS Noon Sugar Mills Ltd Non-Compliant1  
200 NRSL Nimir Resins Ltd Non-Compliant  
201 OML Olympia Mills Ltd  Non-Compliant  
202 PACE Pace (Pakistan) Ltd Non-Compliant  
203 PKGP Pakgen Power Ltd Non-Compliant  
204 PIAA Pakistan International Airlines (PIACL) Non-Compliant3  
205 PPVC Pakistan PVC Ltd Non-Compliant  
206 SAIF Saif Textile Mills Ltd Non-Compliant  
207 SERF Service Fabrics Ltd Non-Compliant  
208 SHJS Shahtaj Sugar Mills Ltd Non-Compliant1  
209 SHSML Shahmurad Sugar Mills Ltd Non-Compliant1  
210 SIEM Siemens (Pakistan) Engineering Non-Compliant1  
211 SPWL Saif Power Ltd Non-Compliant  
212 SRVI Service Industries Ltd Non-Compliant  
213 SSOM S.S. Oil Mills Ltd Non-Compliant  
214 STPL Siddiqsons Tin Plate Ltd Non-Compliant  
215 SYS Systems Limited Non-Compliant  
216 TELE Telecard Limited Non-Compliant  
217 THALL Thal Limited Non-Compliant  
218 TRG TRG Pakistan Ltd Non-Compliant  
219 TRIPF Tri-Pack Films Ltd Non-Compliant  
220 TSPL Tri-Star Power Ltd Non-Compliant  
221 WTL WorldCall Telecom Ltd Non-Compliant  
222 YOUW Yousaf Weaving Mills Ltd Non-Compliant  
223 MDTL Media Times Ltd NC by nature  
224 HUMNL Hum Network Ltd NC by nature  

Charity rate means the investors of respective companies should purify dividend income using the following formula:

Dividend income received x Charity rate

NC = Non-Compliant

*These are provisional rates for dividend purification which are subject to final adjustment upon announcement of respective companies’ annual accounts for the year 2018.

  1. Based on March-2018 accounts
  2. Based on May-2018 accounts
  3. As per last available accounts