# Amanah Shariah Screening Guide

Source human page: https://amanah.finance/how-screening-works

This machine-readable page is derived from Amanah's existing public screening guide. It is provided so AI agents and crawlers can read the same core information without executing the JavaScript application.

## What Amanah Screens

Amanah explains Shariah screening as a step-by-step process:

1. Data collection from official company filings, stock exchanges, and verified financial databases. This includes financial statements, revenue breakdown, debt composition, investment holdings, and market valuation.
2. Business activity screening before financial metrics are analyzed.
3. Financial ratio screening across eight methodologies.
4. Multi-methodology comparison and an overall verdict.
5. Transparent reporting with methodology, criteria assessment, calculations, source documentation, and assessment date.

## Business Activity Screening

Before financial ratios are assessed, Amanah reviews whether a company's primary business and main revenue source are permissible under Islamic principles.

Companies are excluded if their core business involves:

- Conventional banking and financial institutions relying on interest.
- Conventional insurance.
- Alcohol and alcoholic beverages.
- Gambling and casino operations.
- Pork and non-halal food products.
- Tobacco-related products.
- Weapons manufacturing.
- Adult entertainment and pornography.
- Other business activities explicitly prohibited under Shariah.

The public screening guide describes a 5% incidental income threshold. Compliant companies may earn minor income from non-permissible sources, such as interest earned on bank deposits, as long as non-compliant income does not exceed 5% of total revenue.

If non-halal income, including interest, revenue from prohibited products, or gains from impermissible financial instruments, exceeds 5% of total revenue, the company fails the business activity screen.

## Eight Methodologies

Amanah compares stocks across eight major screening methodologies:

- AAOIFI.
- DJIM.
- MSCI.
- FTSE Yasaar.
- S&P Shariah.
- Malaysia SAC-SC.
- Meezan Bank.
- Indonesia OJK / DSN-MUI.

The public guide states that the methods share core principles but use different thresholds and denominators. Amanah shows results across multiple methodologies so users can understand which standards a stock passes or fails and choose the methodology aligned with their preferences.

## Overall Verdict

The public guide explains an overall verdict based on how many methodologies pass:

- Halal - High Confidence: 7-8 methodologies passed.
- Halal - Caution Advised: 6 methodologies passed.
- Doubtful / Mashbooh: 5 methodologies passed or business activity data insufficient.
- Failed - Not Compliant: 4 or fewer methodologies passed.

For consistency and clarity, the guide recommends selecting a single methodology and applying it across the portfolio, or relying on the overall verdict that aggregates multiple perspectives to provide a cautious, comprehensive assessment.

## Ratio Calculations

The public guide states that financial ratios are calculated using deterministic, rules-based methods implemented in Python. Calculations are derived directly from official SEC company filings, including 10-K and 10-Q filings, and verified financial databases.

The guide states that no artificial intelligence or machine learning models are used to calculate financial ratios. The calculations use transparent, auditable mathematical formulas based on established accounting principles.

## Human Rights Risk Score Is Separate

The guide describes Human Rights Risk Score as a separate, independent evaluation from Shariah screening.

Shariah compliance focuses on Islamic financial principles, including avoiding interest, prohibited business sectors, and financial ratio thresholds.

Human rights screening evaluates labor practices, supply chain ethics, environmental impact, treatment of workers and communities, and involvement in conflicts or wars.

A company may pass all Shariah screening criteria but still receive a high Human Rights Risk Score if documented issues exist. A company with strong human rights practices can still fail Shariah screening if its core business is non-compliant.

## Important Limitations

Amanah provides educational screening tools. The screening guide and results do not constitute investment advice, a Shariah ruling, or a binding certification for any user's personal circumstances. Users should verify information independently and consult qualified advisors.