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‘Amana White List’ is the list of Shari’ah compliant companies listed on the Colombo Stock Exchange. To determine their eligibility for the ‘White List’, the stocks are screened to ensure that each meets the Shari'ah requirements for acceptable products, business activities, debt levels, and interest and other non-Shari’ah compliant income.

 

Methodology

Amana White List screening process begins with identifying whether the company’s core business is Halal. This process excludes any companies involved in grey areas in the perspective of Sharia’h. Such disqualifying businesses may include, but are not limited to

        i. Alcohol

        ii Tobacco

        iii Pork and other Non-Halal meat products

        iv Defence/weapons

        v Conventional financial services (banking, insurance, etc)

       vi Entertainment (hotels, casinos/gambling, cinema, pornography, music etc)

 

If a Company’s core business is Halal, but also includes a segment of income coming from Non-Halal activities, this income should not exceed 5% of total revenue for the group for it to be considered in the White List:

 

After screening for Company’s core business activity Secondly, we ensure that the company adheres to permissible financial ratios under the Sharia’h ruling. These ratios are evaluated on a monthly basis and the company’s financials are updated as per their quarterly financial reports.

 

According to the prescribed financial ratios, each of the following criteria must be fulfilled.

·         Interest bearing debt must be less than 33.33% of the Company’s equity.

·         Current Assets/Equity must not exceed 49%.

·         Interest received and Non-Shariah compliant Income for the Company must not exceed 5% of total revenue.

·         Equity constitutes of Share capital, Reserves, Minority Interest, Accumulated Profits/Losses

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This Information is published by Amana Securities Limited (ASL) for exclusive use of their clients. All information has been compiled from the available documentation and ASL's own research material. Whilst all reasonable care has been taken to ensure the accuracy of the contents of this issue, neither ASL nor any director, Officer or Employee. shall in anyway be responsible for clients.