2. NISHAT MILL LIMITED: SHARIAH SCREENING
CRITERIA (2012)
1) Debt to total asset:
Total asset: 56,626,383
Long term financing: 3,289,538
Accrued markup : 269,579
Short term borrowing: 9,665,849
Current portion of non-current: 1,106,902
Total debt: 14,331,868
debt to total asset = Total debt
total asset
= 14,331,868
56,626,383
= 25.3%
Here its meeting the criteria that is in shariah compliance Debt to total asset ratio should be less
than 37%
2) Non-compliant investment to total asset:
Short term investments: 1,589,093
Long term investment : 21,192,790
Total non-compliant investment: 22,781,883
Total asset: 56,626,383
3. Non-compliant investment to total asset = Investment
total asset
= 22,781,883
56,626,383
= 40.2%
A/c to shariah compliance non-compliant investment to total asset ratio should be less than 33%, so it’s
not meeting that criterion.
3) Non-compliant income to total revenue( purification of non-compliant income):
Cash & bank balance: 2,358,556
Accrued interest: 30,062
Total non-compliant income: 2,388,618
Net sale: 44,924,101
Other income: 2,683,685
Total revenue: 47,607,786
Non-compliant income to total revenue = Non-compliant income
total revenue
= 2,388,618
47,607,786
= 5.01%
In this ratio according to shariah it should be less than 5%, therefore it’s not meeting the
criteria as it is 5.01%
4. 4) Illiquid asset to total asset:
Total illiquid asset = (non-current asset + Stores, spare parts and loose tools +
Stock in trade)
Total illiquid asset = (36,778,712 +1,019,041 + 9,695,133)
Total illiquid asset = 47,492886
Total asset = 56,626,383
Illiquid asset to total asset = illiquid asset
total asset
= 47,492,886
56,626,383
= 83.8%
In shariah this ratio should be more that 20%, now it is 83.8% that means its meeting that
criteria.
5) Net liquid asset to share price:
Net liquid asset = (total asset – non-current asset - total liabilities)
= (56,626,383 – 36,778,712 – 18,863,634)
Net liquid asset = 984,037
No. of shares = 1,100,000
Net liquid asset to share price = net liquid asset
no. of shares
= 984,037
1,100,000
= 0.89per share
Current market price per share is 81.56
Here according to shariah compliance current market price should be equal to or
greater than net liquid asset, so again that criterion is meeting so far.
