Final Results

27 February 2015

THE OTTOMAN FUND LIMITED (the "Company")

Final results for the year ended 31 August 2014

The Company is pleased to announce as follows its final results for the year ended 31 August 2014, a full copy of which will shortly be available on the Company's website: www.theottomanfund.com.

Enquiries:

Chairman's Statement

Dear Shareholders,

Over the last financial year, we have sold the remainder of our Riva asset and our Bodrum asset, both for approximately book value, as well as nineteen Alanya units. Net of broker commissions our Turkish subsidiaries received a total of $94.33m for Riva (approximately £58.44m), $27.93m for Bodrum (approximately £17.31m), and €1.95m for the Alanya units (approximately £1.54m). Of the approximately £58.44m received for Riva, £8.58m was distributed on 7 February 2014, £27m was distributed on 27 May 2014, £12.84m was distributed on 26 September 2014 and £18.92m was distributed on 16 January, 2015. The January distribution comprised proceeds from both the Riva and Bodrum sales.

As of mid-December, 2014, one of our Turkish subsidiaries continued to hold eleven Alanya holiday units with an appraised value of approximately £950k. We are exploring various ways of monetizing the remaining Alanya units so we can close the Turkish subsidiary that owns those units. Given various constraints affecting the sale of those units, shareholders should consider that the Company may not receive the appraised value of those units. In calculating the amounts ultimately distributable, shareholder should also take into consideration that the Company will likely incur costs, that may include legal and accounting fees, taxes and legal claims, which are not now quantifiable.

In addition to the Alanya assets, the Company and its Turkish subsidiaries hold cash currently worth approximately £8.4m. In calculating the amounts ultimately distributable, shareholders should take into consideration that the Company will incur costs and that shareholders may only receive a portion of the Company's net asset value. These costs will include legal and accounting fees, and taxes. The costs may also include currency translation losses and payments for legal claims. The net amount that shareholders may receive is not now quantifiable.

The process of up streaming sale proceeds from our Turkish subsidiaries to their corporate parent also involves legal and accounting complexities and pursuant to Turkish law takes time. We are conscious that our shareholders look forward to receiving sale proceeds expeditiously in accordance with the Company's stated policy of returning excess capital to shareholders. I can assure you we will continue to return excess cash to our shareholders as quickly as practicable in accordance with governing law.

Very truly yours,

John D. Chapman

Chairman

The Ottoman Fund Limited

27 February 2015

Directors' Report

The Directors submit their Report and the audited consolidated financial statements (the "Financial Statements") of The Ottoman Fund Limited (the "Company") and its subsidiaries (together, the "Group") for the year ended 31 August 2014. The Company was formed on 9 December 2005 and commenced trading on its admission to the AIM market on 28 December 2005. The Company is quoted on the AIM market of the London Stock Exchange.

Principal Activity

The Company is a closed-ended, Jersey registered, investment company formed to access the Turkish property market and in particular new build residential developments in major cities and coastal destinations.

Investment Policy

Upon Admission, the Company's strategy was to develop new-build residential developments in major cities and coastal locations in Turkey, aimed at both the local and tourist markets with an emphasis on off-plan sales. The Company now intends to make no new investments, to make additional investments in existing assets only if those investments are accretive to shareholder value, and to opportunistically dispose of assets at appropriate times as and when market conditions permit.

Results and Dividends

It is not intended in normal circumstances that the Company will pay dividends on the shares.

The Directors do not recommend the payment of a dividend for the year ended 31 August 2014 (2013: nil). The consolidated statement of comprehensive income is set out on page 8 of this Annual Report and consolidated Financial Statements.

During the period a lawsuit was lodged against the Group in relation to a claim for commission payable relating to the sale of the Riva land. The Directors have made an appropriate assessment of this claim and believe that the Group will be successful in defending this litigation and therefore no provision has been made in these consolidated Financial Statements. Please refer to note 23 for further details.Subsequent to the year end the Directors became aware that funds had been removed from the Group's Turkish entities (and entities affiliated with the Group) without authorisation. The Directors have provided information to the market in relation to this matter via various RNS announcements since 24 December 2014. The Directors, in consultation with their legal advisors, are still in the process of assessing this matter from a legal perspective and the next steps that may or may not be taken in respect of any legal proceedings. The Directors have assessed this matter and its implications for the financial statements and the Directors are content that the financial statements can be approved for release to shareholders. As a result of this financial assessment, no adjustments have been made to these consolidated Financial Statements as it would not be appropriate to book any contingent asset or associated liabilities when no final decisions have as yet been taken on any course of legal proceedings. The Directors will continue to update the shareholders once a decision has been taken in consultation with their lawyers and advisors. Please refer to note 24 for further details.

Life

The Company has a life of 10 years from the date of its admission to trading on the AIM market on 28 December 2005, plus up to 2 further years for the planned realisation of the portfolio. The life may be extended by special resolution of shareholders (requiring a two-thirds majority of those voting). The Directors intend to recommend to shareholders to extend the life of the Company to enable the conclusion of the ongoing matters discussed in note 24.

Manager & Custodian

Subsequent to the removal of Development Capital Management (Jersey) Limited as manager of the Company in 2010, management has been internalised at the Board level and the Board relies on Civitas Property Partners S.A. to manage and sell the Company's Turkish assets.

Subsequent to the termination of the custody agreement with BNP Paribas (Jersey branch) in 2010, the Company has not appointed a replacement.

Board of Directors

The Directors of the Company are listed on page 29. John D Chapman (Executive Chairman), Antony Gardner-Hillman, Andrew Wignall and Eitan Milgram all served as Directors throughout the year.

Shareholders' Interests (as at 31 August 2014)

At 31 August 2014 the Company was aware of the following interests of 3% or more in the ordinary share capital of the Company:

The Directors are not aware of interests of 3% or more in the Company's issued share capital.

Directors' Interests

The maximum aggregate amount of ordinary remuneration payable to the Directors permitted under the Articles is £150,000 per annum. The Directors received in aggregate £150,000 for the year ended 31 August 2014 (2013:£150,000). Commencing 13 March 2009 John D. Chapman has been employed under an executive service contract that provides for an annual fee of £75,000 and a discretionary performance fee.

None of the directors have any interests in the Company's share capital. Eitan Milgram is an Executive Vice President of Weiss Asset Management LLC, which owns a shareholding of 29.78% in the Company at the end of this financial period.

Andrew Wignall

Director

The Ottoman Fund Limited

27 February 2015

Statement of Directors' Responsibilities

The Directors are responsible for preparing the consolidated financial statements in accordance with applicable law and International Financial Reporting Standards.

The Companies (Jersey) Law 1991 requires the Directors to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the Group and of the gain or loss of the Group for that year. In preparing those financial statements, the Directors are required to:

· select suitable accounting policies and apply them consistently;

· make judgments and estimates that are reasonable and prudent;

· prepare the financial statements on a going concern basis unless it is inappropriate to presume that the Group will continue in business; and

· state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements.

The Directors confirm that they have complied with the above requirements in preparing the financial statements.

The Directors are responsible for keeping proper accounting records that disclose with reasonable accuracy, at any time, the financial position of the Group and to enable them to ensure that the financial statements comply with the Companies (Jersey) Law 1991. They have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and hence for taking reasonable steps to prevent and detect fraud and other irregularities.

So far as the Directors are aware, there is no relevant audit information of which the Group's auditors are unaware, and each Director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the Group's auditors are aware of that information.

By Order of the Board

Vistra Secretaries Limited

Secretary

27 February 2015

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF THE OTTOMAN FUND LIMITED

Report on the financial statements

We have audited the accompanying consolidated financial statements (the "financial statements") of The Ottoman Fund Limited (the "Group") which comprise the consolidated statement of financial position as of 31 August 2014 and the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended and a summary of significant accounting policies and other explanatory information.

Directors' responsibility for the financial statements

The directors are responsible for the preparation of financial statements that give a true and fair view in accordance with International Financial Reporting Standards and with the requirements of Jersey law. The Directors are also responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors' responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors' judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements give a true and fair view of the financial position of the Group as of 31 August 2014, and of the financial performance and cash flows of the Group for the year then ended in accordance with International Financial Reporting Standards and have been properly prepared in accordance with the requirements of the Companies (Jersey) Law 1991.

Report on other legal and regulatory requirements

We read the other information contained in the Annual Report and consider the implications for our report if we become aware of any apparent misstatements or material inconsistencies with the financial statements. The other information comprises only the directory, the chairman's statement, the directors' report, the statement of directors' responsibilities and corporate information.

In our opinion the information given in the directors' report is consistent with the financial statements.

This report, including the opinion, has been prepared for and only for the Company's members as a body in accordance with Article 113A of the Companies (Jersey) Law 1991 and for no other purpose. We do not, in giving this opinion, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

Lisa McClure

For and on behalf of PricewaterhouseCoopers CI LLP

Chartered Accountants

Jersey, Channel Islands

27 February 2015

Notes

The maintenance and integrity of The Ottoman Fund Limited website is the responsibility of the Directors; the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the financial statements since they were initially presented on the website.

Legislation in Jersey governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

All items in the above statement derive from continuing operations.

The accompanying notes on pages 12 to 28 are an integral part of the financial statements.

The accompanying notes on pages 12 to 28 are an integral part of the financial statements.

These financial statements were approved by the Board on 27 February 2015.

Antony Gardner-Hillman Andrew Wignall

Director Director

The accompanying notes on pages 12 to 28 are an integral part of the financial statements.

The accompanying notes on pages 12 to 28 are an integral part of the financial statements.

Notes to the consolidated financial statements

1. General information

The Ottoman Fund Limited had invested in Turkish land and new-build residential property in Riva, Bodrum and Alanya. The Group has sold its investments in Turkish land and now only holds a loan receivable related to new-build residential property in Alanya. The Company is a limited liability company incorporated and domiciled in Jersey, Channel Islands since 9 December 2005. The Company is quoted on the AIM market of the London Stock Exchange plc. These consolidated financial statements have been approved by the Board on 27 February 2015.

2. Accounting policies

The consolidated financial statements of the Group for the year ended 31 August 2014 comprise the Company and its subsidiaries, listed in note 13, (together, the "Group") and have been prepared in accordance with International Financial Reporting Standards ("IFRS") issued by the International Accounting Standards Board ("IASB") and interpretations issued by the International Financial Reporting Committee of the IASB ("IFRIC").

These policies have been consistently applied in all years presented, unless otherwise stated.

No new standards or amendments to standards were issued which were relevant to the Group and applicable for the year under review.

(a) Basis of preparation

The Group has cash and cash equivalents in excess of £37.9m at the statement of financial position date and around £88k of liabilities. The Directors have reviewed this information and are comfortable that the Company will continue as a financially viable entity for the foreseeable future until such time the Group may have realised all of its assets, the timing of which is difficult to estimate at this time. Based on that the financial statements have been prepared on a going concern basis.

The consolidated financial statements have been prepared on a historical cost basis.

(b) Basis of consolidation

Subsidiaries

The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries) made up to 31 August each year. The consolidated financial statements are prepared using uniform accounting policies for like transactions. Control exists when the Company is exposed to, or has the right to, variable returns from its involvement with the entity. The financial statements of the subsidiaries are included in the consolidated financial statements from the date that control commences up to the date that control ceases.

Intercompany transactions, balances and unrealised gains on transactions between group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

The Group applies a policy of treating transactions with minority interests as transactions with parties external to the Group. Minority interests represent the portion of profit and net assets not held by the Group. They are presented separately in the consolidated statement of comprehensive income and in the consolidated statement of financial position separately from the amounts attributable to the owners of the parent.

(c) Revenue recognition

Interest receivable on fixed interest securities is recognised using the effective interest method. Interest on short term deposits, expenses and interest payable are treated on an accruals basis. Revenue from sales of inventory is recognised when the significant risks and rewards of an asset have been transferred. The gains or losses from sale of inventory are recognised at the book gain or loss amount with any foreign exchange gains or losses being reflected separately in the statement of comprehensive income.

(d) Expenses

All expenses are charged through the statement of comprehensive income in the period in which the services or goods are provided to the Group except for expenses which are incidental to the disposal of an investment which are deducted from the disposal proceeds of the investment.

(e) Non current assets

General

Assets are recognised and derecognised at the trade date on acquisition and disposal respectively. Proceeds will be measured at fair value which will be regarded as the proceeds of sale less any transaction costs.

Intangible assets

Intangible assets are stated at historical cost less any provisions for amortisation and impairments. They are amortised over their useful life of 6 years. The amortisation is based on the straight-line basis. At each balance sheet date, the Group reviews the carrying amount of its intangible assets to determine whether there is any indication that those assets have suffered an impairment loss.

Plant & equipment

Plant and equipment is stated at historical cost less accumulated depreciation and any recognised impairment loss. Depreciation is charged so as to write off the cost of assets over their estimated useful lives, using the straight line method on the following basis:

The gain or loss on the disposal or retirement of an asset is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in the statement of comprehensive income.

Inventories

Inventories are stated at the lower of cost and net realisable value. Land inventory is recognised at the time a liability is recognised - generally after the exchange of unconditional contracts.

Net realisable value will be determined by the Board as the estimated selling price in the ordinary course of business less costs to complete the sale and selling costs. In determining the net realisable value, the directors take into account the valuations received from the independent appraisers, market conditions at and (where relevant and appropriate) after the balance sheet date, and offers received from third parties by the Group.

The valuations of the properties, performed by the independent appraisers, are based on estimates and subjective judgements that may vary from the actual values and sales prices realised by the Group upon ultimate disposal.

Impairment is recognised through the statement of comprehensive income at the time that the Board believes the net realisable value is lower than cost and will remain so for the foreseeable future. Write backs on impairment are recognised through the statement of comprehensive income when the Board believes the foreseeable net realisable value of the inventory is greater than the impairment value. Write backs on impairment are also recorded at the time of sale when the net realised value of the disposal is greater than the previously impaired recorded value of the inventory.

At the time of disposal, the profit on sale is recognised in the statement of comprehensive income along with any recognised foreign exchange gains or losses on disposal.

Loans and receivables

Loans and receivables are recognised on an amortised cost basis. Where they are denominated in a foreign currency they are translated at the prevailing balance sheet exchange rate. Any foreign exchange difference is recognised through the statement of comprehensive income.

Loans are reviewed for impairment by the Board on a semi-annual basis; any impairment is recognised through the statement of comprehensive income.

(f) Cash and cash equivalents

Cash and cash equivalents are classified as loans and receivables and comprise deposits held at call with banks and other short-term highly liquid investments with original maturities of three months or less.

(g) Taxation

Profits arising in the Company for the 2014 year of assessment and future periods will be subject to tax at the rate of 0% (2013: 0%). However, withholding tax may be payable on repatriation of assets and income to the Company in Jersey. The Company pays an International Services Entity fee and neither charges nor pays Goods and Services Tax. This fee is currently £200 (2013: £200) per annum for each Jersey registered company within the Group.

The subsidiaries will be liable for Turkish corporation tax at a rate of 20%. Additionally, a land sale and purchase fee may arise when land is sold or purchased.

Deferred tax is recognised in respect of all temporary differences that have originated but not reversed at the balance sheet date, where transactions or events that result in an obligation to pay more tax in the future or right to pay less tax in the future have occurred at the balance sheet date. This is subject to deferred tax assets only being recognised if it is considered more likely than not that there will be suitable profits from which the future reversal of the temporary differences can be deducted.

(h) Foreign currency

In these financial statements, the results and financial position of the Group are expressed in Pound Sterling, which is the Group's presentational currency. The functional currency of the Company and Jersey subsidiaries is Pound Sterling; the functional currency for the Turkish subsidiaries is Turkish Lira.

The results and financial position of the entities based in Jersey are recorded in Pound Sterling, which is the functional currency of these entities. In these entities, transactions in currencies other than sterling are recorded at the rates of exchange prevailing on the dates of the transactions. Monetary balances (including loans) and non-monetary balances that are denominated in foreign currencies are retranslated at the rates prevailing on the balance sheet date.

The results and financial position of the entities based in Turkey are recorded in Turkish Lira, which is the functional currency of these entities. In order to translate the results and financial position of these entities into the presentation currency (Pounds Sterling):

- non-monetary assets (including inventory) are translated at the rates of exchange prevailing on the dates of the transactions ("historical translated cost");

- monetary balances (including loans) are translated at the rates prevailing on the balance sheet date; and

- items to be included in the statement of comprehensive income are translated at the average exchange rates for the year unless the average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the rate on the dates of the transactions.

Foreign exchange gains or losses are recorded in either the statement of comprehensive income or in the statement of changes in equity depending on their nature and how they have been derived. Exchange gains/losses on the translation of subsidiaries are accounted for in the translation reserve.

(i) Share capital

Ordinary shares are classified as equity. External costs directly attributable to the issue of new shares are shown as a deduction to reserves. Any redemption in shares is deducted from ordinary share capital with any transaction costs taken to the statement of comprehensive income.

(j) Critical accounting estimates and assumptions

The Board makes estimates and assumptions concerning the future in the preparation of the financial statements. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates, assumptions and judgements that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are outlined below.

Consistent with previous years the Company has obtained two independent valuations which have been reviewed by the Board. Following discussions with the Investment Advisor and the valuers, the Directors believe that an average of the two valuations taking into account other management assumptions represents the most appropriate estimate of the assets value. As such this average valuation has been used in the Directors' assessment of the recoverability of the loan receivable from Mandalina (note 11).

In addition to the above, the Directors have made assessments with regard to contingent liabilities and an assessment of the matter discovered post year end in relation to the financial impact of the amount of funds that have been removed from the Group's Turkish entities (and entities affiliated with the Group) without authorisation. Please refer to notes 23 and 24.

(k) Changes in accounting policy and disclosures

New and amended standards adopted by the group

There are no IFRSs or IFRIC interpretations that are effective for the first time for this financial year that would be expected to have a material impact on the Group.

New standards, amendments and interpretations issued but not effective and not early adopted

At the date of the authorisation of these consolidated financial statements, the following statements, standards and interpretations were in issue but not yet effective for periods commencing on or after 1 January 2014 and have not been early adopted:

IFRS 9, 'Financial instruments' − classification and measurement' (effective 1 January 2015)

The full impact of the adoption of these standards and interpretations in future periods on the financial statements of the Group is still being assessed by the Directors.

3. Segment reporting

The chief operating decision maker (the "CODM") in relation to the Group is considered to be the Board itself. The factor used to identify the Group's reportable segments is geographical area.

Based on the above and a review of information provided to the Board, it has been concluded that the Group is currently organised into one reportable segment: Turkey.

Within the above segment, the remaining ongoing project relates to new build residential property. The CODM considers on a quarterly basis the results of the position of the project as part of their ongoing performance review.

The CODM receives regular reports on the Company's assets by the Investment Advisors, Civitas Property Partners S.A. ("Civitas"). During this financial year Civitas has provided detailed reviews, as requested, of the Turkish economy and real estate market and also their strategic advice regarding the new build residential property project. In addition the year end valuations provided by BNP Paribas (through an alliance member, Kuzeybati) and TSKB are reviewed and reported on by the investment advisor to the Board of Directors.

Other than cash and cash equivalent assets and related interest and charges, the results of the Group are deemed to be generated in Turkey.

4. Management/advisory fee

Civitas was appointed as Investment Advisors to the Group on 2 December 2009. The advisory fee structure is incentive-based with an annual fixed component of €212,500, and an incentive component based on a percentage of realisation value. Civitas was paid £179,717 (2013: £179,632) during the year. The incentive fee paid for the year was £925,692 (2013: £18,298) which includes commissions received on the sale of inventory being either 1% or 2% depending on the asset sold.

5. Other operating expenses

The Group has no employees.

This tax represents taxation on taxable profits earned by the Turkish subsidiaries. The increase in tax compared to the prior year due to the increased profit made in relation to the sales of inventory.

7. Earnings per share

(a) Basic

Basic earnings per share is calculated by dividing the gain attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the year.

(b) Diluted

The diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. As the options expired without exercise, the basic and diluted earnings per share are the same.

Both the basic and diluted loss per share are calculated as 8.33 pence (2013: 2.55 pence gain).

8. Intangible assets

The intangible asset relates to computer software, with a useful life of 6 years. There has been no impairment during the year.

9. Plant and equipment

In the prior year, the above represented 149,550 square metres of development land on the Bodrum peninsula and 931,739 square metres on the Riva coastline.

In accordance with the accounting policy in note 2, inventories were stated at the lower of cost and net realisable value.

The historical profit on sale of inventory is the difference between the cost in the Turkish subsidiary records and the sale proceeds using an average FX rate for the year to 31 August 2014. The foreign exchange loss on sale arises as a result of the difference between the cost of land translated at historical FX rate and the cost translated at the 2014 average FX rate. The exchange rate between Pound Sterling and Turkish Lira moved significantly from the original purchase date and 2014.

The amount above relates to the write back of all previous impairments to Riva and Bodrum upon sale of the assets, this is included in the Statement of Comprehensive Income. The prior year write back/impairment relates to Riva (write back of £5,199,755) and Bodrum (impairment of £1,390,000).

The Alanya loan was impaired in the prior year to reflect the anticipated amount to be received based on the value of the Alanya apartments and future running costs of Mandalina which are deducted from the sales proceeds of the Alanya apartments before being remitted to the Group.

The valuation of the Alanya apartments used by the Directors in the assessment of the recoverability of the loan is based on valuation estimates and subjective judgements, which may vary from the actual values and sales prices realised upon ultimate disposal.

Foreign currency gains or losses on transactions and balances in the Turkish subsidiaries are recognised in the translation reserve, not in the amounts above. The Company has no accounts in any currency other than Pound Sterling. The translation of cash balances relates to the Jersey group entities, with the balances of the Turkish entities being recognised as subsidiary translation foreign exchange as part of other foreign exchange losses. The translation of cash balances noted above relates to the translation of cash held in Euros held by Ottoman Finance Company 1 Limited.

13. Investment in subsidiaries - Company

All of the above companies have been incorporated into the Group accounts.

14. Trade and other receivables

The Directors consider that the carrying amount of the above receivables approximates to their fair value. Prepayments include advances to suppliers.

15. Trade and other payables

The Directors consider that the carrying amount of the above payables approximates to their fair value.

16. Share capital

The 2 founder shares of no par value are held by Vistra Nominees I Limited. These shares are not eligible for participation in the Company's investments and carry no voting rights at general meetings of the Company.

Capital Management

As a result of the Group being closed-ended, capital management is wholly subject to the discretion of the Board and is not influenced by subscriptions or redemptions. The Group's objectives for managing capital are to maintain sufficient liquidity to meet the expenses of the Group as they fall due and to invest in the Group's current assets when the Board feels it will give rise to capital appreciation. As the Group has sold assets during the year, the Board decided to return excess capital to shareholders. As part of the process, the Board review cash flow forecasts to ensure that sufficient cash is retained to support the operations of the Group.

17. Retained earnings

18. Net asset value per share

The net asset value per ordinary share is based on the net assets attributable to equity shareholders of £40,976,092 (2013: £88,862,288) and on 134,764,709 ordinary shares(2013: 134,764,709), being the number of ordinary shares in issue at the year end. The net asset value per share for the year ended 31 August 2014 was 30.4 pence (2013: 65.9 pence).

19. Cash and cash equivalents

20. Financial instruments

The disclosures below assume that the land held in the prior year by the Group is in US Dollars as this is the currency in which they were valued by Kuzeybati (an alliance member of BNP Paribas).

The Group's financial instruments comprise loans, cash balances, receivables and payables that arise directly from its operations, for example, in respect of sales and purchases awaiting settlement, and receivables for accrued income.

The principal risks the Group faces from its financial instruments are:

(i) Market risk

(ii) Credit risk

(iii) Foreign currency risk

(iv) Interest rate risk

(v) Liquidity risk

As part of regular Board functions, the Board reviews each of these risks. As required by IFRS 7: Disclosure and Presentation, an analysis of financial assets and liabilities, which identifies the risk to the Group of holding such items, is given below.

(i) Market price risk

Market price risk arises mainly from uncertainty about future prices of financial instruments used in the Group's operations. It represents the potential loss the Group might suffer through holding market positions as a consequence of price movements. Consistent with the prior year, the Group has no such exposures to market price risk.

(ii) Credit risk

Credit risk is the risk that counterparties will be unable to deliver on assets due to the Group. The Group's third party loan in respect of the investment in the Riverside Resort in Alanya is potentially at risk from the failure of the third party. On 3 December 2010, the third party loan was assigned to a related entity. In order to protect the Group's interest in the Alanya apartments, the Group holds signed share transfer letters from the shareholders of Mandalina which may be executed at any time at the discretion of the Directors and would transfer ownership of the shares in the Mandalina from the existing shareholders to the Group.

The largest counterparty risk is with the Group's bankers. Bankruptcy or insolvency of Deutsche Bank International Limited may cause the Group's rights with respect to cash held to be delayed or limited. There is no policy in place to mitigate this risk as the Board believes there is no need to do so, due to the likelihood of it occurring being deemed to be minimal.

The Board does not monitor the credit quality of receivables on an ongoing basis. Cash balances have been placed with Deutsche Bank International Limited due to its Moody's credit rating of A3.

The Group's principal financial assets are other receivables and cash and cash equivalents. The maximum exposure of the Group to credit risk is the carrying amount of each class of financial assets. Loans and receivables are represented by loans to and receivables from third parties. Other receivables are represented mainly by prepayments and other receivables where no significant credit risk is recognised.

Credit risk exposure

In summary, compared to the amounts in the consolidated statement of financial position, the maximum exposure to credit risk at 31 August 2014 was as follows:

Fair value of financial assets and liabilities

The book values of the cash at bank and loans and receivables included in these financial statements approximate to their fair values.

(iii) Foreign currency risk

The Group operates Pound Sterling, Euro, US Dollar and Turkish Lira bank accounts. Exchange gains or losses arise as a result of movements in the exchange rates between the date of a transaction denominated in a currency other than Sterling and its settlement. There is no policy in place to mitigate this risk as the Board believes such a policy would not be cost effective given the Group's exposure.

Currency rate exposure

An analysis of the Group's currency exposure in Pound Sterling is detailed below:

Foreign currency sensitivity

The table below details the Group's sensitivity to a 5% increase in the value of Sterling against the relevant currencies. This percentage is considered reasonable due to volatility in current and historic exchange rate movements. With all other variables held constant, net assets attributable to shareholders and the change in net assets attributable to shareholders per the consolidated income statement would have decreased by the amounts shown below. The analysis has been performed on the same basis as for 2013.

A 5% weakening of Sterling against the relevant currency would have resulted in an equal but opposite effect on the amounts in the financial statements to the amounts shown above, on the basis that all other variables remain constant.

(iv) Interest rate risk

Interest rate movements may affect the level of income receivable on cash deposits. There is no policy in place to mitigate this risk as the Board believes such a policy would not be cost effective, given the Group's exposure.

The Group holds only cash deposits.

The interest rate profile of the Group excluding short term receivables and payables was as follows:

Maturity profile

The following table sets out the carrying amount, by maturity, of the Group's financial instruments:

Non-interest bearing

Non-interest bearing

Interest rate sensitivity

An increase of 10 basis points in interest rates during the period would have increased the net assets attributable to shareholders and changes in net assets attributable to shareholders by £37,901 (2013:£2,762). A decrease of 10 basis points would have had an equal but opposite effect.

(v) Liquidity risk

The Group's assets mainly comprise cash balances and loans receivable, which can be sold to meet funding commitments if necessary. The Board monitors the cash situation of the Group on an ongoing basis and reviews cash flow forecasts at the time of making capital distributions to shareholders to ensure that sufficient cash is retained to support the operations of the Group. As at 31 August 2014 the Group does not have any significant liabilities due.

The Group has sufficient cash reserves to meet liabilities due for the foreseeable future.

21. Related party transactions

Information regarding subsidiaries can be found in note 13.

John D. Chapman is a shareholder in the Turkish subsidiaries due to Turkish law requirements. Mr Chapman receives no additional benefit from being a shareholder of the Turkish subsidiaries.

Information regarding Directors' interests can be found in note 22.

Ali Pamir is a director of the Investment Advisor, Civitas Property Partners S.A. and is a director and shareholder of the Turkish subsidiaries due to Turkish law requirements. Mr Pamir receives no additional benefit from being a shareholder of the Turkish subsidiaries. Information regarding amounts paid to the Investment Advisor can be found in note 4.

Sinan Kalpakcioglu was engaged during the period as a Turkish resident consultant to the Group. Mr Kalpakcioglu is a director and shareholder of the Turkish subsidiaries due to Turkish law requirements. Mr Kalpakcioglu is not entitled to any additional benefit from being a director or shareholder of the Turkish subsidiaries. Consultancy fees paid to Mr Kalpakcioglu amounted to £55,200 (2013: £48,400); £7,867 remained outstanding at the year end (2013: £7,867).

Vistra Nominees I Limited is a related party being the holder of the 2 founder shares of The Ottoman Fund Limited (see Note 16).

Sinan Kalpakcioglu and Ali Pamir are shareholders in Mandalina, which holds the title to the Alanya apartments (see Note 11).

The Directors do not consider there to be an ultimate controlling party.

22. Directors' interests

Total compensation (excluding performance fees) paid to the Directors of the Company over the year was £150,000 (2013: £150,000).

During the year John D. Chapman as Executive Chairman has been employed under an executive service contract that provides for an annual fee of £75,000 pro-rated monthly and a discretionary performance fee. A performance fee of US$100,000 has been paid during the year. Antony Gardner-Hillman, Andrew Wignall and Eitan Milgram were remunerated £25,000 per director for their services during the year (2013: £25,000 per director).

Eitan Milgram is an Executive Vice President of Weiss Asset Management LLC which is a substantial investor in the Company.

23. Contingent liability

The Directors have been informed that an intermediate Turkish court has upheld an administrative order disallowing certain tax benefits from a restructuring transaction that may have had similarities to the restructuring of Osmanli Yapi 2. This intermediate court decision is now under appeal to the Turkish Supreme Court. The Group is monitoring the appeal, but at present this development does not meet the recognition criteria under IAS 37, and the Directors have consequently made no provision in the financial statements.

During the year, a case against the Group has been lodged in Turkey for US$1m by a party who claims to have acted as an intermediary on one of the land sale transactions during the year. The Directors have obtained legal advice as to the likely outcome of the case and are of the understanding that it is probable that the Group will successfully defend this action. The Directors are therefore of the opinion, taking this advice into consideration, that it is not appropriate to provide for this legal claim as it does not meet the recognition criteria under IAS 37.

24. Post balance sheet events

On 2 September 2014, the Group announced a return of capital of approximately GBP 12.84 million, or 9.5277 pence per share, payable to shareholders of record as of 12 September 2014. The shares traded ex-entitlement on 10 September 2014 and payment was made on 26 September 2014. This return of capital primarily comprised the remaining proceeds from the sale of Riva land as announced on 15 May 2014.

On 24 December 2014, the Group announced a return of capital of approximately GBP 18.92 million, or 14.0369 pence per share, payable to shareholders of record as of 9 January 2015. The shares traded ex-entitlement on 8 January 2015 with payment being made on or about 16 January 2015. This return of capital primarily comprised proceeds from asset sales that had been announced previously.

In December 2014 the Directors became aware that funds had been removed from the Group's Turkish entities (and entities affiliated with the Group) without authorisation. BDO LLP was engaged to review the books and records of the Turkish entities to determine how much had been removed.

BDO LLP completed its forensic review of the books and records of the Group's Turkish entities in February 2015. From these findings, the Directors determined that the Group's former Chief Financial Officer in Turkey had removed from the Group's Turkish entities the net amount in Turkish Lira equivalent to US$1.35 million as of 10 February 2015 exchange rates. The amounts removed from 2010 until the beginning of the current financial year were approximately US$610,000 (GBP 400,000), during the current financial year were approximately US$463,000 (GBP 303,000) and subsequent to the financial year end were approximately US$279,000 (GBP 183,000). The Group has retained White & Case's affiliated local law firm in Istanbul as well as a Turkish criminal attorney to obtain civil and criminal redress against the former Chief Financial Officer. The Group has also brought suit against him in the Royal Court of Jersey and has obtained a worldwide freezing order and a default judgment. The Directors will make further announcements in due course. The Directors are, in consultation with their lawyers and advisors, in the process of assessing the course of the potential legal action to be taken. The Directors have assessed this matter and its implications for the consolidated Financial Statements and the Directors are content that the consolidated Financial Statements can be approved for release to shareholders. As a result of this financial assessment, no adjustments have been made to these consolidated Financial Statements as it would not be appropriate to book any contingent assets when no final decisions have as yet been taken on any course of legal proceedings.

The Directors have been made aware that there may be additional Turkish tax liabilities due as a consequence of decisions on future legal proceedings. However at this stage it is not appropriate to provide for this situation as it is only deemed to be a possibility.

Other than the above, the Directors are satisfied that there were no material events subsequent to the year end that would have an effect on these financial statements.