Legal standards applied for investments of Securities House Co.
As approved by Authority of Fatwa and Legal Censorship of the Company.

Securities House Co., when managing its funds and its customers' money applies a group of legal standards, which were approved by the Authority of Fatwa and Legal Censorship of the Company, which include:

Stage of Primary Test: related to the activity which the Company practices :
In this stage, the subject matter companies will be garbled, in order to exclude the companies whose basic activity is related to any of fields known to be semi- unlawful, such as:

Traditional financial establishments, Animal Production companies which could trade in products of pig, Hotels and Restaurants, Cinema and suspicious recreation places, Tobacco and Alcohols Companies, weapons Companies.

The Second Stage of Test is related to applying a group of Financial Indicators:

In this stage, the financial data of the companies, which passed the First Test Stage, will be reviewed; the following standards will be applied:

•  Total Debts which bear interests/ Total company's Assets < = 33%.

Exceptionally, standard of total Debts which bear interests/ market value of the company's shares < = 33% will be used in specific activities such as technology, communications and information companies which have a big market value and their activity nature doesn't need huge assets. The cases, which will be accepted, will be presented to the legal authority for ratifying them.

The legal standards applied on the investments of the Securities as approved by its fatwa and Legal censorship Authority

Interests + other illegal revenues/ Total revenues 75%

Definition of other illegal revenues

The following is considered illegal revenue:

•  Everything clearly expressed in the in come list as of illegal source of activity.

•  If the income list does not include an independent item showing interest revenues, any other revenue will be considered an ill gotten, as its source is not clear in the income list.

•  If the income list includes' an independent item for interest revenue, this revenue will be considered as ill-gotten 50% of each other revenue unless its source is made clear in the income list.

The authority stressed the necessity that the administration should do her best to recognize the other sources of revenues when selecting the Companies qualified for in vestment.

•  When the original activity is dealing in the material assets and utilities (services) even if they lead to debts and not granting financial facilities utilities and materials should not be less then 10% of the company total assets.

The legal standards applied on the investments of the Securities House as approved by its Fatwa and Legal Censorship Authority.

Dr. Abdul Sattar Abu Gheida

Dr. Essa Zaki