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BNP PARIBAS ISLAMIC FUND FCP

SEMI-ANNUAL REPORT at 30/06/2018R.C.S. Luxembourg K642

The asset manager for a changing worldThe asset manager for a changing world

BNP PARIBAS ISLAMIC FUND

Table of contents

Page

Page 1

Organisation 2 Information 3 Financial statements at 30/06/2018 4 Key figures relating to the last 3 years 5 Securities portfolio at 30/06/2018

BNP PARIBAS ISLAMIC FUND - Equity Optimiser 6 BNP PARIBAS ISLAMIC FUND - Hilal Income 9

Notes to the financial statements 10

No subscription can be received on the basis of the financial statements alone. Subscriptions are only valid if made on the basis of the current prospectus, accompanied by the latest annual report and the most recent semi-annual report, if published thereafter.


Organisation

Page 2

Management Company BNP PARIBAS ASSET MANAGEMENT Luxembourg, 10 Rue Edward Steichen, L-2540 Luxembourg, Grand Duchy of Luxembourg

Board of Directors of BNP PARIBAS ASSET MANAGEMENT Luxembourg Chairman

Mr Fabrice SILBERZAN, Deputy Chief Executive Officer, BNP PARIBAS ASSET MANAGEMENT France, Paris (since 11 January 2018)

Members

Ms. Sylvie BAIJOT, Deputy Chief Executive Officer, BNP PARIBAS ASSET MANAGEMENT Luxembourg, Luxembourg

Mr. Stéphane BRUNET, Chief Executive Officer, BNP PARIBAS ASSET MANAGEMENT Luxembourg, Luxembourg

Mr. Georges ENGEL, Independent Director, Vincennes, France

Net Asset Value Calculation

BNP Paribas Securities Services, Luxembourg Branch, 60 Avenue J.F. Kennedy, L-1855 Luxembourg, Grand Duchy of Luxembourg

Depositary, Transfer and Registrar Agent

BNP Paribas Securities Services, Luxembourg Branch, 60 Avenue J.F. Kennedy, L-1855 Luxembourg, Grand Duchy of Luxembourg

Auditor

PricewaterhouseCoopers, Société coopérative, 2 Rue Gerhard Mercator, B.P. 1443, L-1014 Luxembourg, Grand Duchy of Luxembourg

Effective Investment Managers

• BNP PARIBAS ASSET MANAGEMENT France, 1, Boulevard Haussmann, F-75009 Paris, France • BNP PARIBAS ASSET MANAGEMENT Najmah Malaysia Sdn Bhd, Suite 1005, 10th Floor, Wisma Hamzah-Kwong

Hing, No. 1 Leboh Ampang, 50100 Kuala Lumpur, Malaysia

Fund’s Sharia Supervisory Committee

Sheikh Nizam Yaquby

Dr. Abdulsattar Abu Ghuddah

Dr. Mohamed Daud Bakar


Information

Page 3

BNP PARIBAS ISLAMIC FUND (the "Fund") is a Sharia-compliant Mutual Investment Fund (fonds commun de placement – abbreviated to “FCP”), created under Luxembourg law on 10 February 2006 for an indefinite period.

The Fund is currently governed by the provisions of Part I of the law of 17 December 2010, as amended, governing undertakings for collective investment as well as by the Directive 2009/65/EC as amended by the Directive 2014/91.

The Management Regulations of the Fund initially signed on 1 February 2006, was filed at the “Greffe du Tribunal d’Arrondissement” and its publication in the “Mémorial, Recueil Spécial des Sociétés et Associations” (The “Mémorial”) was made by a notice of the deposit at the “Greffe”.

The current version of the Management Regulations was signed on 29 December 2017, and not yet filed with the Trade and Companies Registrar of Luxembourg, where any interested party may consult it and obtain a copy (website www.rcsl.lu).

As to net asset values and dividends, the Management Company publishes the Fund's legally required information in the Grand Duchy of Luxembourg and in all other countries where the units are publicly offered. The information is also available on the website: www.bnpparibas-am.com.

The Management Regulations, the Prospectus, the KIID and the periodic reports may be consulted at the Fund's registered office and at the establishments responsible for the Fund's financial services. Copies of the Management Regulations and the annual and interim reports are available upon request.

Except for the newspaper publications required by Law, the official media to obtain any notice to unitholders from will be the website www.bnpparibas-am.com.

The documents and information are also available on the website: www.bnpparibas-am.com.


Financial statements at 30/06/2018

The accompanying notes form an integral part of these financial statements Page 4

BNP PARIBAS

ISLAMIC FUND - Equity Optimiser

BNP PARIBAS ISLAMIC FUND - Hilal

Income Consolidated

Expressed in USD USD USD Notes

Statement of net assets Assets 57 058 524 23 605 603 80 664 127

Securities portfolio at cost price 51 564 540 23 725 206 75 289 746 Unrealised gain/(loss) on securities portfolio 4 953 993 (824 198) 4 129 795

Securities portfolio at market value 4 56 518 533 22 901 008 79 419 541 Cash at banks and time deposits 302 886 530 663 833 549 Other assets 237 105 173 932 411 037

Liabilities 97 645 24 277 121 922 Other liabilities 97 645 24 277 121 922

Net asset value 56 960 879 23 581 326 80 542 205 Statement of operations and changes in net assets Income on investments and assets 476 131 389 745 865 876

Management fees 6 362 934 52 514 415 448 Extraordinary expenses 7 4 439 4 500 8 939 Other fees 8 99 851 21 862 121 713 Taxes 9 23 726 4 547 28 273 Transaction fees 12 11 509 0 11 509

Total expenses 502 459 83 423 585 882

Net result from investments (26 328) 306 322 279 994 Net realised result on:

Investments securities 4 2 727 613 (26 885) 2 700 728 Financial instruments 4 (11 304) (1) (11 305)

Net realised result 2 689 981 279 436 2 969 417 Movement on net unrealised gain/(loss) on:

Investments securities 4 (1 967 673) (627 543) (2 595 216)Financial instruments 4 (402) 0 (402)

Change in net assets due to operations 721 906 (348 107) 373 799 Net subscriptions/(redemptions) (1 634 948) 2 416 335 781 387 Increase/(Decrease) in net assets during the year/period

(913 042) 2 068 228 1 155 186

Net assets at the beginning of the financial year/period

57 873 921 21 513 098 79 387 019

Net assets at the end of the financial year/period

56 960 879 23 581 326 80 542 205


Key figures relating to the last 3 years


BNP PARIBAS ISLAMIC FUND - Equity Optimiser USD USD USD Number of units 31/12/2016 31/12/2017 30/06/2018 30/06/2018

Net assets 40 184 016 57 873 921 56 960 879

Net asset value per unit Units “Classic - Capitalisation” 1 591.65 1 954.54 1 974.29 21 367.722 Units “Classic - Distribution” 95.57 115.13 116.30 69.000 Units “I - Capitalisation” 176 016.00 218 412.47 221 919.28 44.632 Units “I - Distribution” 97 319.33 118 471.21 120 372.76 5.000 Units “Privilege - Capitalisation” 16 928.68 20 945.35 21 251.14 200.468

BNP PARIBAS ISLAMIC FUND - Hilal Income USD USD USD Number of units 31/12/2016 31/12/2017 30/06/2018 30/06/2018

Net assets 11 105 152 21 513 098 23 581 326

Net asset value per unit Units “Classic - Capitalisation” 1 405.847 1 440.721 1 413.796 3 839.836 Units “I - Capitalisation” 146 611.855 151 283.075 149 021.604 97.061 Units “Privilege - Capitalisation” 14 439.584 14 868.855 14 629.994 252.112

BNP PARIBAS ISLAMIC FUND - Equity Optimiser

Securities portfolio at 30/06/2018 Expressed in USD


Quantity Denomination Quotation currency Market value % of netassets

Transferable securities admitted to an official stock exchange listing and/or traded on another regulated market

56 518 533 99.22

Shares 56 518 533 99.22 United States of America 32 058 679 56.26

2 601 3M CO USD 511 669 0.90 1 303 ABBVIE INC USD 120 723 0.21 3 325 ACTIVISION BLIZZARD INC USD 253 764 0.45 2 741 AIR PRODUCTS AND CHEMICALS INC USD 426 856 0.75 4 126 ALASKA AIR GROUP INC USD 249 169 0.44 1 951 ALIGN TECHNOLOGY INC USD 667 515 1.17 3 826 AMGEN INC USD 706 241 1.24 8 453 AMPHENOL CORP - A USD 736 679 1.29 4 637 APPLE INC USD 858 354 1.51

12 619 APPLIED MATERIALS INC USD 582 872 1.02 915 ARISTA NETWORKS INC USD 235 603 0.41

6 236 AUTOMATIC DATA PROCESSING USD 836 497 1.47 10 964 BEST BUY CO INC USD 817 695 1.44

979 BIOGEN INC USD 284 145 0.50 18 350 BORGWARNER INC USD 791 986 1.39 1 076 BROADCOM INC USD 261 081 0.46 3 347 BROADRIDGE FINANCIAL SOLUTIONS USD 385 240 0.68 6 410 CADENCE DESIGN SYS INC USD 277 617 0.49 9 059 CELGENE CORP USD 719 466 1.26

11 975 CHURCH & DWIGHT CO INC USD 636 591 1.12 4 557 CINTAS CORP USD 843 363 1.48 2 210 CITRIX SYSTEMS INC USD 231 696 0.41 3 248 CLOROX COMPANY USD 439 292 0.77 9 235 COGNIZANT TECH SOLUTIONS - A USD 729 473 1.28 2 649 COLGATE-PALMOLIVE CO USD 171 682 0.30

13 794 DELTA AIR LINES INC USD 683 355 1.20 3 402 ELECTRONIC ARTS INC USD 479 750 0.84 5 492 ESTEE LAUDER COMPANIES - A USD 783 653 1.38 3 183 EXPEDITORS INTL WASH INC USD 232 677 0.41 5 266 FASTENAL CO USD 253 453 0.44 5 454 FISERV INC USD 404 087 0.71 2 017 FORTUNE BRANDS HOME SECURITY USD 108 293 0.19

26 765 GAP INC / THE USD 866 917 1.52 12 246 GILEAD SCIENCES INC USD 867 506 1.51 5 495 HERSHEY CO/THE USD 511 365 0.90

36 723 HP INC USD 833 245 1.46 1 336 HUNT (JB) TRANSPRT SVCS INC USD 162 391 0.29 4 678 ILLINOIS TOOL WORKS USD 648 090 1.14

15 381 INTEL CORP USD 764 590 1.34 4 105 INTUIT INC USD 838 671 1.47 5 560 JOHNSON & JOHNSON USD 674 650 1.18 4 891 KIMBERLY-CLARK CORP USD 515 218 0.90 1 653 LAM RESEARCH CORP USD 285 721 0.50

10 123 MICRON TECHNOLOGY INC USD 530 850 0.93 8 559 MICROSOFT CORP USD 844 002 1.48

118 000 NEXTEER AUTOMOTIVE GROUP LTD HKD 174 471 0.31 966 NVIDIA CORP USD 228 845 0.40

42 NVR INC USD 124 755 0.22 12 142 PAYCHEX INC USD 829 906 1.46 6 088 PEPSICO INC USD 662 801 1.16 2 135 RED HAT INC USD 286 880 0.50 4 305 ROSS STORES INC USD 364 849 0.64

911 S&P GLOBAL INC USD 185 744 0.33 8 371 SPIRIT AEROSYSTEMS HOLD - A USD 719 153 1.26 2 586 SYNOPSYS INC USD 221 284 0.39 7 102 SYSCO CORP USD 484 996 0.85




Quantity Denomination Quotation currency Market value % of netassets7 947 TARGET CORP USD 604 926 1.06 7 462 TEXAS INSTRUMENTS INC USD 822 686 1.44 6 923 TJX COMPANIES INC USD 658 931 1.16 1 291 UNITED PARCEL SERVICE- B USD 137 143 0.24 1 533 VERTEX PHARMACEUTICALS INC USD 260 549 0.46 7 180 VF CORP USD 585 314 1.03 2 979 WALGREENS BOOTS ALLIANCE INC USD 178 785 0.31 1 501 WW GRAINGER INC USD 462 908 0.81

Japan 6 993 112 12.28 18 200 COCA-COLA BOTTLERS JAPAN INC JPY 727 080 1.28 4 700 DAITO TRUST CONSTRUCTION CO LTD JPY 764 203 1.34

66 600 GUNGHO ONLINE ENTERTAINMENT JPY 169 559 0.30 9 300 HOYA CORP JPY 528 874 0.93

21 100 ISUZU MOTORS LTD JPY 280 311 0.49 16 800 JAPAN AIRLINES CO LTD JPY 595 769 1.05 5 500 KOITO MANUFACTURING CO LTD JPY 363 472 0.64

600 KOSE CORP JPY 129 301 0.23 9 700 MCDONALDS HOLDINGS CO JAPAN JPY 494 786 0.87 7 500 NIHON M+A CENTER INC JPY 217 691 0.38 2 400 NOEVIR HOLDING CO JPY 173 123 0.30 4 800 ORACLE CORP JAPAN JPY 392 182 0.69 6 900 POLA ORBIS HOLDINGS INC JPY 303 683 0.53

10 900 SHISEIDO CO LTD JPY 865 780 1.52 17 400 STANLEY ELECTRIC CO LTD JPY 593 798 1.04 7 400 WELCIA HOLDINGS CO LTD JPY 393 500 0.69

Germany 2 737 911 4.83 2 366 ADIDAS AG EUR 516 435 0.91 2 407 BAYER AG - REG EUR 265 151 0.47 3 104 FIELMANN AG EUR 214 908 0.38 9 652 SYMRISE AG EUR 846 315 1.49

22 709 TUI AG - DI GBP 498 438 0.88 6 925 UNITED INTERNET AG - REG EUR 396 664 0.70

Canada 2 096 343 3.69 4 260 CANADIAN NATL RAILWAY CO CAD 348 230 0.61 1 070 CONSTELLATION SOFTWARE INC CAD 829 314 1.46 2 726 LULULEMON ATHLETICA INC USD 340 341 0.60 8 409 WEST FRASER TIMBER CO LTD CAD 578 458 1.02

United Kingdom 1 847 778 3.25 12 379 BERKELEY GROUP HOLDINGS/THE GBP 618 590 1.09 7 251 CRODA INTERNATIONAL PLC GBP 459 697 0.81 5 378 NEXT PLC GBP 429 564 0.75

15 869 RELX PLC GBP 339 927 0.60

Australia 1 664 774 2.91 13 124 CALTEX AUSTRALIA LTD AUD 315 535 0.55 8 595 FLIGHT CENTRE TRAVEL GROUP AUD 404 211 0.71

58 898 ILUKA RESOURCES LTD AUD 486 526 0.85 6 829 REA GROUP LTD AUD 458 502 0.80

Sweden 1 181 175 2.07 11 462 BOLIDEN AB SEK 372 329 0.65 74 352 SVENSKA CELLULOSA AB SCA - B SEK 808 846 1.42

Finland 1 112 454 1.95 14 936 ELISA OYJ EUR 691 786 1.21 6 479 KONE OYJ - B EUR 330 269 0.58 2 288 NOKIAN RENKAAT OYJ EUR 90 399 0.16

British Virgin Islands 863 734 1.52 12 969 MICHAEL KORS HOLDINGS LTD USD 863 734 1.52





France 852 481 1.50 805 KERING EUR 454 525 0.80

4 965 SANOFI AVENTIS EUR 397 956 0.70

Ireland 846 904 1.49 5 177 ACCENTURE PLC - A USD 846 904 1.49

Switzerland 844 658 1.48 3 718 COCA-COLA HBC AG-DI GBP 124 238 0.22

855 EMS-CHEMIE HOLDING AG - REG CHF 548 057 0.96 76 GIVAUDAN - REG CHF 172 363 0.30

Belgium 774 922 1.36 8 070 COLRUYT SA EUR 460 459 0.81

13 948 PROXIMUS EUR 314 463 0.55

Denmark 730 957 1.28 3 187 DSV A/S DKK 257 498 0.45 2 445 NOVO NORDISK A/S - B DKK 113 409 0.20 5 154 PANDORA A/S DKK 360 050 0.63

Hong Kong 689 078 1.21 74 500 CK INFRASTRUCTURE HOLDINGS HKD 552 190 0.97 47 000 JOHNSON ELECTRIC HOLDINGS HKD 136 888 0.24

Singapore 514 202 0.90 39 300 VENTURE CORP LTD SGD 514 202 0.90

Spain 509 256 0.89 3 137 AMADEUS IT GROUP SA EUR 247 592 0.43

11 861 ENDESA SA EUR 261 664 0.46

The Netherlands 200 115 0.35 1 010 ASML HOLDING NV EUR 200 115 0.35

Total securities portfolio 56 518 533 99.22

BNP PARIBAS ISLAMIC FUND - Hilal Income




Transferable securities admitted to an official stock exchange listing and/or traded on another regulated market

22 901 008 97.12

Bonds 22 901 008 97.12 Cayman Islands 12 500 634 53.00

820 000 DIB SUKUK LTD 2.921% 15-03/06/2020 USD 805 650 3.42 200 000 DIB SUKUK LTD 3.600% 16-30/03/2021 USD 197 000 0.84 230 000 DIB SUKUK LTD 3.664% 17-14/02/2022 USD 224 250 0.95

1 170 000 DP WORLD CRESCEN 3.908% 16-31/05/2023 USD 1 156 838 4.91 800 000 DUBAI DOF SUKUK 3.875% 13-30/01/2023 USD 798 000 3.38 300 000 DUBAI DOF SUKUK 6.450% 12-02/05/2022 USD 325 875 1.38 750 000 EIB SUKUK LTD 3.542% 16-31/05/2021 USD 745 560 3.16 260 000 EMAAR SUKUK LTD 6.400% 12-18/07/2019 USD 267 475 1.13 990 000 EMG SUKUK LTD 4.564% 14-18/06/2024 USD 983 813 4.17 500 000 FAB SUKUK CO LTD 3.625% 18-05/03/2023 USD 493 750 2.09 200 000 KSA SUKUK LTD 2.894% 17-20/04/2022 USD 194 500 0.82 200 000 KSA SUKUK LTD 3.628% 17-20/04/2027 USD 193 000 0.82

1 000 000 MAF SUKUK LTD 4.500% 15-03/11/2025 USD 1 007 500 4.27 300 000 OOREDOO TAMWEEL 3.039% 13-03/12/2018 USD 300 000 1.27 350 000 QIB SUKUK LTD 2.754% 15-27/10/2020 USD 340 071 1.44 250 000 QIB SUKUK LTD 3.251% 17-23/05/2022 USD 239 533 1.02 500 000 RAK CAPITAL 3.094% 15-31/03/2025 USD 466 875 1.98 450 000 SAUDI ELECTRICITY 4.211% 12-03/04/2022 USD 456 188 1.93 300 000 SAUDI ELECTRICITY GLO 5.060% 13-08/04/2043 USD 291 750 1.24 500 000 SHARJAH SUKUK 3.764% 14-17/09/2024 USD 491 875 2.09 200 000 SHARJAH SUKUK 3.839% 16-27/01/2021 USD 200 458 0.85 450 000 SIB SUKUK CO III 2.843% 15-17/03/2020 USD 442 548 1.88 400 000 SIB SUKUK CO III 3.084% 16-08/09/2021 USD 389 500 1.65 700 000 SIB SUKUK CO III 4.231% 18-18/04/2023 USD 695 625 2.95 800 000 UNITY 1 SUKUK LT 3.860% 16-30/11/2021 USD 793 000 3.36

United Arab Emirates 3 457 468 14.65 1 030 000 DIFC SUKUK 4.325% 14-12/11/2024 USD 1 040 300 4.41

300 000 DUBAI ISLAMIC BANK 3.625% 18-06/02/2023 USD 288 750 1.22 600 000 EQUATE SUKUK 3.944% 17-21/02/2024 USD 585 750 2.48 542 000 JAFZ SUKUK 7.000% 12-19/06/2019 USD 560 293 2.38 700 000 NOOR SUKUK 2.788% 15-28/04/2020 USD 684 250 2.90 300 000 NOOR SUKUK 4.471% 18-24/04/2023 USD 298 125 1.26

Malaysia 2 268 302 9.62 200 000 AXIATA SPV2 3.466% 15-19/11/2020 USD 199 208 0.84 300 000 EXPORT-IMPORT 2.874% 14-19/02/2019 USD 299 261 1.27 200 000 MALAYSIA SOVEREI 3.043% 15-22/04/2025 USD 191 181 0.81 250 000 MY SUKUK GLOBAL 3.179% 16-27/04/2026 USD 237 400 1.01 750 000 MY SUKUK GLOBAL 4.080% 16-27/04/2046 USD 718 685 3.05 350 000 PETRONAS SUKUK 2.707% 15-18/03/2020 USD 346 340 1.47 300 000 TNB GLOBAL VC 3.244% 16-19/10/2026 USD 276 227 1.17

Indonesia 2 052 766 8.71 900 000 SBSN INDO III 3.750% 18-01/03/2023 USD 878 652 3.73 500 000 SBSN INDO III 4.150% 17-29/03/2027 USD 481 415 2.04 700 000 SBSN INDO III 4.325% 15-28/05/2025 USD 692 699 2.94

Hong Kong 1 353 733 5.74 1 000 000 HONG KONG SUKUK 1 3.132% 17-28/02/2027 USD 962 284 4.08

400 000 HONG KONG SUKUK 1.894% 15-03/06/2020 USD 391 449 1.66

Saudi Arabia 780 605 3.33 500 000 APICORP SUKUK 2.383% 15-28/10/2020 USD 488 949 2.08 300 000 APICORP SUKUK 3.141% 17-01/11/2022 USD 291 656 1.25

Qatar 487 500 2.07 500 000 SOQ SUKUK A Q.S. 3.241% 12-18/01/2023 USD 487 500 2.07

Total securities portfolio 22 901 008 97.12

Notes to the financial statements


Notes to the financial statements at 30/06/2018

Page 11

Note 1 - General

BNP PARIBAS ISLAMIC FUND (“the Fund”) has been established for an undetermined period. The Fund may be dissolved at any time by agreement between the Management Company and the Depositary. The Fund may further be dissolved in any circumstances imposed by Luxembourg law. The liquidation of the Fund may not be requested by its Unitholders or by their heirs and beneficiaries.

The net asset values are expressed in US Dollar (USD).

The Fund is open to Islamic and non-Islamic investors alike.

The Fund is an Umbrella Fund containing two Sub-Funds, open for subscriptions:

- BNP PARIBAS ISLAMIC FUND – Equity Optimiser

- BNP PARIBAS ISLAMIC FUND – Hilal Income

The business of the Fund shall at all times be conducted in a manner that complies with written guidelines relating to Islamic Sharia criteria.

The Fund will observe the following guidelines in its investment activities:

- it will not invest in equity securities where the issuer’s core activity or activities relate to any of the following sectors:

a) conventional banking or any other interest-related activity b) alcohol c) tobacco d) gaming e) gambling f) leisure g) biotechnology companies involved in human/animal genetic engineering h) arms manufacturing i) life insurance j) pork production, packaging and processing or any other activity relating to pork k) sectors/companies significantly affected by the above l) hotels and hospitality (unless no alcohol served) m) music n) films o) entertainment.

- it will not invest in any issuer that is unacceptable under Islamic Sharia principles due to excessive debt.

The current criteria exclude issuers whose gross interest-bearing debt to gross assets ratio exceeds the percentage permitted under Islamic Sharia from time to time (which currently is 33 per cent).

In addition, it is not permissible for the Fund to pay or receive interest, although the receipt and payment of dividends from equity securities is acceptable. However, dividends received by the Fund from its investments may comprise an amount which is attributable, for Islamic Sharia purposes, to interest income earned or received by the underlying investee companies as well as to the interest-bearing debt. Where this is the case, the amount of any dividend that is so attributed will be calculated in accordance with Islamic Sharia criteria (dividend cleansing procedure). In accordance with the Islamic Sharia, the amount of dividend income so attributed will be donated once a year by the Fund to the Arab World Institute (“Institut du Monde Arabe” or IMA), Paris, or any other charities with no direct or indirect benefit accruing to the Fund or any of its advisers, as decided from time to time, at the absolute discretion of the Management Company. Since that dividend income received by the Fund will be capitalised and rolled up outside the capital of the Fund, a donation of dividend income to charities will have no effect on the net asset value of the Fund.



Page 12

Note 2 - General Information BNP PARIBAS ISLAMIC FUND may be officially subscribed and may solicit public savings in the countries in which it has obtained a commercial distribution licence:

- Luxembourg (10 February 2006)

- Austria (2 September 2007)

- France (7 July 2009)

- Switzerland (30 July 2009)

- Singapore (21 September 2010)

- United Kingdom (11 December 2013)

- Ireland (15 May 2015)

- Germany (11 November 2015)

In addition, BNP PARIBAS ISLAMIC FUND is a restricted recognized scheme in Singapore (since 5 April 2006).

Before making any subscription in a country in which BNP PARIBAS ISLAMIC FUND is registered, it is necessary to verify the unit categories and classes that are authorized for commercial distribution.

Note 3 - The Fund’s Units The Fund's capital is represented by the assets of its various Sub-Funds. Subscriptions are invested in the assets of the relevant Sub-Fund.

In each Sub-Fund, the Management Company may issue Units of the following categories, their main difference being the various commissions and fees charged:

- “Classic”: offered to all types of investors.

- “Privilege”: offered to all types of investors. This category differs from the “Classic” category in that a specific management fee is charged and a minimum holding amount may be applied.

- “I”: reserved to institutional investors and undertakings for collective investment and a minimum holding amount may be applied.

- “I Plus”: reserved to authorized investors and a minimum holding amount may be applied.

- “X”: reserved to authorized investors.

The categories “Classic”, “Privilege”, “I” and “I Plus” may offer two classes of Units: Capitalisation units and Distribution units. The category “X” offers only Capitalisation units.

Note 4 - Principal accounting methods The financial statements of the Fund are prepared in accordance with the regulatory requirements applicable in the Grand Duchy of Luxembourg.

• Valuation of the securities portfolio

a) The value of non-interest bearing cash in hand, non-remunerated deposits, bills and drafts payable at sight and accounts receivable, prepaid expenses, and dividends due but not yet received, shall comprise the nominal value of these assets, unless it is unlikely that this value could be received; in that event, the value will be determined by deducting an amount which the Management Company deems adequate to reflect the actual value of these assets;

b) The value of shares or units in undertakings for collective investment shall be determined on the basis of the last net

asset value available on the Valuation Day. If this price is not a true reflection, the valuation shall be based on the probable sale price estimated by the Management Company in a prudent and bona fide manner;



Page 13

c) The valuation of all securities listed on a stock exchange or any other regulated market, which functions regularly, is recognised and accessible to the public, is based on the last known closing price on the Valuation Day, and, if the securities concerned are traded on several markets, on the basis of the last known closing price on the major market on which they are traded. If this price is not a true reflection, the valuation shall be based on the probable sale price estimated by the Management Company in a prudent and bona fide manner;

d) Unlisted securities or securities not traded on a stock exchange or another regulated market which functions in a

regular manner, is recognised and accessible to the public, shall be valued on the basis of the probable sale price estimated in a prudent and bona fide manner by a qualified professional appointed for this purpose by the Management Company;

e) Securities denominated in a currency other than the currency in which the sub-fund concerned is denominated shall

be converted at the exchange rate prevailing on the Valuation Day; f) All liquid instruments may be valued at their nominal value; g) At its sole discretion, the Management Company's Board of Directors may permit the use of another valuation method

if it believes that this valuation reflects the fair value of one of the Fund's assets more accurately. Security transactions are accounted for on the date the securities are purchased or sold. Realized gains or losses on investments sold are computed on a weighted average cost basis.

• Income on investment assets

Dividends are recorded as income on the ex-dividend date.

The caption "Income on investments and assets" in the "Statement of operations and changes in net assets" only includes dividends net of witholding tax.

• Presentation of the financial statements

This semi-annual report is prepared on the basis of the last net asset value calculated as at 29 June 2018. In accordance with the prospectus, the net assets were calculated using the latest exchange rates known at the time of calculation.

The stock market prices and exchange rates used to value the securities portfolio at the date of the report are those of 29 June 2018.

• Valuation of forward foreign exchange contracts

Forward foreign exchange contracts remaining open at the closing date are valued by reference to the forward foreign exchange rate corresponding to the remaining life of the contract. Any unrealised gains and losses are included when determining the result of the transactions.

To calculate the net positions per currency, the positions are converted at the forward exchange rates corresponding to the remaining life of the contract.

Note 5 - Exchange rates

As at 29 June 2018, all sub-funds and unit classes were denominated in USD.



Page 14

Note 6 - Management fees

The management fee is defined for each unit class as mentioned below:

Sub-fund Category Management fee


Classic Max. 1.50% Privilege Max. 0.75%

I Max. 0.60% X -



I Max. 0.35% X -

Management fees are calculated and deducted monthly from the average net assets of a sub-fund, unit category, or unit class, are paid to the Management Company and serve to cover remuneration of the asset managers and also distributors in connection with the marketing of the Fund's units.

Note 7 - Extraordinary expenses

Expenses other than management, performance, distribution and other fees described below borne by each sub-fund. These expenses include but are not limited to Sharia supervisory committee fees, legal fees, taxes, assessments or miscellaneous fees levied on sub-funds and not considered as ordinary expenses.

Note 8 - Other fees

Other fees are calculated and deducted monthly from the average net assets of a sub-fund, unit category, or unit class and serve to cover general custody assets expenses (remuneration of the depositary) and daily administration expenses (NAV calculation, record and book keeping, notices to the unitholders, providing and printing the documents legally required for the unitholders, domiciliation, auditors cost and fees…), except for brokerage fees, commissions for transactions not related to the deposit, Fund’s Sharia Supervisory Committee fees, interest and bank fees, extraordinary expenses, and the “taxe d’abonnement” in force in Luxembourg, as well as any other specific foreign tax and other regulators levy.

Maximum other fees payable by the sub-fund

Sub-fund Category Other fees



I Max. 0.35% X Max. 0.50%



I Max. 0.40% X Max. 0.40%



Page 15

Note 9 - Taxes

The Fund is not liable to any Luxembourg income tax or capital gains tax.

The Fund is liable to an annual “taxe d’abonnement” in Luxembourg representing 0.05% of the net asset value. This rate is reduced to 0.01% for: a) Sub-funds with the exclusive objective of collective investments in money market instruments and deposits with

institutions; b) Sub-funds with the exclusive objective of collective investments with credit institutions; c) Sub-funds, categories, or classes reserved for Institutional Investors, Managers, and UCIs.

The following are exempt from this “taxe d’abonnement”: a) The value of assets represented by units, or shares in other UCIs, provided that these units or shares have already been

subject to the “taxe d’abonnement”; b) Sub-funds, categories and/or classes:

(i) whose securities are reserved to Institutional Investors, Managers, or UCIs and (ii) whose sole object is the collective investment in money market instruments and the placing of deposits with

institutions, and (iii) whose weighted residual portfolio maturity does not exceed 90 days, and (iv) that have obtained the highest possible rating from a recognized rating agency;

c) Sub-funds, categories and/or classes reserved to: (i) institutions for occupational retirement pension or similar investment vehicles, set up at the initiative of one or

more employers for the benefit of their employees, and (ii) companies having one or more employers investing funds to provide pension benefits to their employees;

d) Sub-funds whose main objective is investment in microfinance institutions; e) Sub-funds, categories and/or classes:

(i) whose securities are listed or traded on at least one stock exchange or another regulated market operating regularly that is recognized and open to the public, and

(ii) whose exclusive object is to replicate the performance of one or several indices. When due, the “taxe d’abonnement” is payable quarterly based on the relevant net assets and calculated at the end of the quarter for which it is applicable.

In addition, the Fund may be subject to foreign UCI’s tax, and/or other regulators levy, in the country where the sub-fund is registered for distribution.

Note 10 - Changes in the composition of the securities portfolio

The list of changes in the composition of the securities portfolio during the period is available free of charge at the Management Company’s registered office and from local agents.

Note 11 - List of Investment managers

• BNP PARIBAS ASSET MANAGEMENT Najmah Malaysia Sdn Bhd • BNP PARIBAS ASSET MANAGEMENT France

Sub-fund Investment managers

BNP PARIBAS ISLAMIC FUND - Equity Optimiser BNP PARIBAS ASSET MANAGEMENT France

BNP PARIBAS ISLAMIC FUND - Hilal Income BNP PARIBAS ASSET MANAGEMENT Najmah Malaysia Sdn Bhd



Page 16

Note 12 - Transaction fees

Transaction fees incurred by the Fund relating to purchase or sale of transferable securities, money market instruments, derivatives or other eligible assets are mainly composed of standard fees, sundry fees on transaction, stamp fees, brokerage fees, Depositary fees, VAT fees, stock exchange fees and RTO fees (Reception and Transmission of Orders).

In line with bond market practice, a bid-offer spread is applied when buying and selling securities. Consequently, in any given transaction, there will be a difference between the purchase and sale prices quoted by the broker, which represents the broker’s fee.

Note 13 - Tax reclaims as part of the Aberdeen/Fokus Bank Project

In several European Union member states, community law grants undertakings for collective investments (UCIs) the right to file claims with a view to recovering taxes they have been unjustly forced to pay. When one member state imposes a greater tax burden on a foreign UCI than on a resident UCI, this constitutes discrimination under community law.

This principle was confirmed by the ruling of the Court of Justice of the European Union (CJEU) in the “Aberdeen” case (18 June 2009). This ruling acknowledges that a non-resident UCI can be subject to discriminatory taxation, which constitutes an obstacle to freedom of establishment and/or the free movement of capital. Other CJEU rulings have subsequently confirmed this jurisprudence. Key examples are the rulings in the Santander (10 May 2010) and Emerging Markets (10 April 2014) cases regarding French and Polish tax legislation, respectively.

In light of this jurisprudence and in order to safeguard the right of UCIs to receive tax rebates, the management company has decided to file claims with the tax authorities in several member states whose discriminatory legislation fails to comply with community law. Preliminary studies will be carried out to determine whether or not the claims are viable, i.e. for which funds, in which member states and over what period of time it is necessary to request a rebate.

To date, there is no European legislation establishing a uniform framework for this type of claim. As a result, the time taken to receive a rebate and the complexity of the procedure vary depending on the member state in question. This means that it is necessary to constantly monitor developments in this regard.

Due to the uncertainty of the recoverability of the amounts, no accrual is recorded and it is booked under the caption “Income on investments and assets” when received.

Note 14 - Information according to regulation on transparency of securities financing transactions

The FCP is not affected by SFTR instruments during the period ending 30 June 2018.

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