Final Results

THE OTTOMAN FUND LIMITED (the "Company")

Final results for the year ended 31 August 2015

The Company is pleased to announce as follows its final results for the year ended 31 August 2015 together with the publication of its 2015 annual report and accounts, a full copy of which will shortly be available on the Company's website: www.theottomanfund.com.

Enquiries:

Chairman's Statement

Dear Shareholders,

On 25 February 2016 we announced a distribution of 2p per share or £2.7m in total. This figure primarily represents cash proceeds from the Riva and Bodrum sales, which the Company recovered from its Turkish subsidiaries' bank accounts following the resolution of a lengthy process with Garanti Bank.

Following the payment of this distribution, the Group's principal assets will comprise Jersey bank balances of approximately £3.9 million, a loan to Mandalina that could be satisfied by the approximately £1 million that we believe Mandalina holds in a Turkish bank account, and a claim against the Company's former chief financial officer for approximately £1 million. In the Group's financial statements, the Mandalina loan balance and the claim against the former CFO have been fully provided against, which reflects the uncertainty over their ultimate collection. The Company currently has collection proceedings underway against both Mandalina and the Company's former CFO to recover these amounts. The Company's potential liabilities following the distribution could total £1.65 million and may include possible Turkish tax liabilities and third party claims. Any future distributions will be contingent on the Company's progress in resolving the Group's tax liabilities, prevailing in the collection proceedings that are now pending, exchange rate movements, and concluding the various legal cases now pending in Turkey. For now it is premature to offer a view as to the likely outcome of these various matters.

Over the past year we have continued our efforts to recover the money embezzled from the Group. We are working with a Turkish criminal lawyer and the local prosecutor's office in Istanbul to commence criminal proceedings against the Company's former CFO, and I will be traveling to Turkey in the next several weeks to give evidence. We are also taking the steps necessary to conclude the Group's affairs so the Company's net assets can be distributed to shareholders and the Company can then be placed in voluntary liquidation. These steps include determining the Group's tax liabilities and if necessary resolving opportunistic litigation that has been brought against the Company's Turkish subsidiaries and affiliates.

The resolution of these matters depends on complex Turkish legal, accounting and tax matters that must be addressed before the Company is placed in liquidation. We have been working within the Turkish legal system for about fifteen months and our impression is that the Turkish legal system is not designed to deal efficiently with private business disputes or even to punish a clear case of embezzlement. There are no barriers to filing meritless lawsuits. There is no mechanism for summarily dismissing a meritless lawsuit. There are no barriers to filing meritless appeals. There is no real cost shifting from a losing party to a prevailing one. There is no mechanism for the posting of security. Nonetheless, we are working closely with our Turkish accountants and tax advisors, the Istanbul office of BDO, and our Turkish lawyers, the Istanbul office of the law firm White & Case LLP, to resolve these outstanding issues.

Over the next several weeks, we will be sending a circular to shareholders seeking to extend the life of the Company so we can continue our efforts to recover Company's assets and make further distributions to shareholders. The alternative would be to hand the Company over to a liquidator now. Under this scenario, the Board would resign and the shareholders would lose any say in how the liquidator goes about his activities. The liquidator rather than the Board would have to resolve the issues identified above before any distributions would be made. The liquidation process would be non-transparent, costs would likely be higher, the liquidator's powers would not give him the flexibility the directors have to act commercially, and there would be no incentives to resolve things earlier rather than later. Given these facts and likelihoods, it is the Board's view that extending the life of the Company gives the best prospect for additional cash distributions.

I might further point out that in seeking to extend the Company's life, recover money embezzled from the Group, recover funds that remain in Turkey, and defend the Group against various bogus lawsuits underway, we weigh the choices we have against the costs that likely will be incurred, the amount of time that will likely be required, and the uncertainty of any outcome.

Very truly yours,

John D. Chapman

Chairman

The Ottoman Fund Limited

25 February 2016

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 2015. 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 was established to invest in Turkish property. During 2014 the Company sold its remaining property interests. The Company's remaining assets are substantially cash balances. In addition, the Company has proceeded with legal actions in Turkey to recover remaining monies taken without authorisation by the former Chief Financial Officer, totalling $1.35m and to recover a loan to Mandalina of €1.3m. There is no certainty as to the recoverability of these amounts.

Investment Policy

Upon Admission to AIM, the Company's strategy was to invest in 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, having sold all investments previously held.

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 2015 (2014: nil). The consolidated statement of comprehensive income is set out on page 9 of this Annual Report and consolidated Financial Statements.

The Group is involved in ongoing litigation in relation to events from the current and prior years. Details of the ongoing matters have been disclosed in notes 20 and 21.

Auditor

Baker Tilly Channel Islands Limited were appointed during the year and have expressed their willingness to continue in office. A resolution for their re-appointment will be considered at the next Annual General Meeting ("AGM").

Life

Under the Company's articles, as soon as practicable after 28 December 2015 the Directors are required to convene an Extraordinary General Meeting ("EGM") to consider a resolution to wind up the Company. The Directors will shortly be convening an EGM and expect to be recommending to shareholders that, in lieu of commencing a winding up at this stage, the articles are amended to extend the life of the Company, which the Directors believe is the most appropriate way to facilitate the best conclusion to the ongoing matters referred to in notes 20 and 21.

Manager & Custodian

Subsequent to the removal of Development Capital Management (Jersey) Limited as manager of the Company in 2010, management was internalised at the Board level and the Board engaged with 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 27. John D Chapman (Executive Chairman), Antony Gardner-Hillman and Andrew Wignall all served as Directors throughout the year. Eitan Milgram served as a Director from the beginning of the year up until his resignation on 4 August 2015.

Shareholders' Interests (as at 31 August 2015)

At 31 August 2015 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 other 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 2015 (2014: £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. In addition to the above, Andrew Wignall was remunerated £25,000 and Antony Gardner-Hillman was remunerated £18,400 for additional services provided to the Group in connection with the ongoing matters in Turkey concerning the recovery of remaining monies taken without authorisation by the former Chief Financial Officer.

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. As noted above, Eitan Milgram resigned as a director of the Company on 4 August 2015.

Andrew Wignall

Director

The Ottoman Fund Limited

25 February 2016

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 profit 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

25 February 2016

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

We have audited the consolidated financial statements of The Ottoman Fund Limited (the "company" and together with its subsidiaries is referred to as the ''Group'') for the year ended 31 August 2015, which comprise the consolidated statement of comprehensive income, the consolidated statement of financial position, the consolidated statement of changes in equity, the consolidated statement of cash flows, and related notes. The financial framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRS) as adopted by the European Union.

This report is made solely to the company's members, as a body, in accordance with Article 113A of the Companies (Jersey) Law 1991, as amended. Our audit work is undertaken so that we might state to the company's members those matters we are required to state to them in an auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of the Directors and Auditor

As explained more fully in the Statement of Directors' Responsibilities on page 6, the Directors are responsible for the preparation of the consolidated financial statements and for being satisfied that they give a true and fair view.

Our responsibility is to audit and express an opinion on the consolidated financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's (APBs) Ethical Standards for Auditors.

Scope of the audit of the financial statements

An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the Group's circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall presentation of the financial statements. In addition we read the other information contained in the annual report and consider whether it is consistent with the audited financial statements. If we become aware of any apparent misstatements or material inconsistencies with the financial statements, we consider the implications for our report. Our responsibilities do not extend to any other information.

Opinion on the financial statements

In our opinion the financial statements:

· give a true and fair view of the state of the Group's affairs as at 31 August 2015 and of its loss for the year then ended;

· have been properly prepared in accordance with IFRS as adopted by the European Union; and

· have been prepared in accordance with the requirements of the Companies (Jersey) Law, 1991 as amended.

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF THE OTTOMAN FUND LIMITED (CONTINUED)

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters where the Companies (Jersey) Law 1991 requires us to report to you if, in our opinion:

· proper accounting records have not been kept; or

· proper returns adequate for our audit have not been received from branches not visited by us; or

· the financial statements are not in agreement with the accounting records and returns.

Ewan John Spraggon

For and on Behalf of Baker Tilly Channel Islands Limited

Chartered Accountants

St Helier, Jersey

25 February 2016

All items in the above statement derive from continuing operations.

The accompanying notes on pages 13 to 26 are an integral part of the financial statements.

The accompanying notes on pages 13 to 26 are an integral part of the financial statements.

These financial statements were approved by the Board on 25 February 2016.

Antony Gardner-Hillman Andrew Wignall

Director Director

The accompanying notes on pages 13 to 26 are an integral part of the financial statements.

The accompanying notes on pages 13 to 26 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 as at the year end sold its investments. 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 25 February 2016.

2. Accounting policies

The consolidated financial statements of the Group for the year ended 31 August 2015 comprise the Company and its subsidiaries, listed in note 10, (together, the "Group") and have been prepared in accordance with International Financial Reporting Standards ("IFRS") issued by the International Accounting Standards Board ("IASB") as applicable in the European Union 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 & going concern

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

The Company has sufficient funds to remain in operation for the foreseeable future. However the shareholders are due to vote on extending the Company's life. See "Life" paragraph in the Directors' Report. The directors have assumed that the Company's life will be extended and accordingly have prepared these financial statements on the going concern assumption.

(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 of an entity exists when the Company directly or indirectly controls a majority of the voting rights in that entity or has the ability to appoint or remove the majority of its board of directors. 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 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.

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 2015 year of assessment and future periods will be subject to tax at the rate of 0% (2014: 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 (2014: £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 and a dividend tax of 15% may arise on certain distributions from the subsidiaries.

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 balances 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 of 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.

The Directors' have assessed the recoverability of the loan receivable from Mandalina Yapi

Insaat Sanayi ve Ticaret Anonim Sirketi ("Mandalina"), the results of which are disclosed in note 8.

In addition to the above, the Directors have made assessments with regard to contingent liabilities and an assessment of the matter discovered during 2014 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 20 and 21.

(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 2015 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 significant asset at the year end date was cash. The CODM considers on a regular basis the repatriation of money from Turkey to Jersey.

4. Management/advisory fee

Civitas was appointed as Investment Advisor to the Group on 2 December 2009. The advisory fee structure was incentive-based with an annual fixed component of €212,500, and an incentive component based on a percentage of realisation value. It was agreed that the fee for the current financial year would be based upon a percentage of the realised sales value of the Alanya apartments. In the prior year, Civitas was paid £179,717 in relation to the fixed component. The incentive fee paid for the prior year was £925,692 which included commissions received on the sale of inventory being either 1% or 2% depending on the asset sold.

5. Other operating expenses

The Group has one employee in Turkey, the costs for whom are included in the amounts above.

This above represents taxation on profits earned by the Turkish subsidiaries, and therefore no tax reconciliation is deemed necessary. The increase in tax compared to the prior year is partly due to the outstanding amounts payable in relation to the funds removed from the Group's Turkish entities without authorisation during the period.

Refer to note 2(g) for further information.

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 1.73 pence (2014: 8.33 pence loss).

The loan in relation to the Riverside Resort apartments in Alanya has been impaired this year to reflect the Group's ongoing difficulties with receiving the amounts owed from Mandalina, which are related to the action being taken against the Group's former Chief Financial Officer in Turkey, see note 21 for further details.

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 for the prior year relates to the translation of cash held by Ottoman Finance Company 1 Limited in Euros. The balance of this account at 31 August 2015 was nil.

10. Investment in subsidiaries - Company

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

11. 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.

12. Trade and other payables

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

See notes 6 and 2(g) for further information on taxation.

13. 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 determined by 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 reviews cash flow forecasts to ensure that sufficient cash is retained to support the operations of the Group.

14. Retained earnings

15. Net asset value per share

The net asset value per ordinary share is based on the net assets attributable to equity shareholders of £5,730,382 (2014: £40,976,092) and on 134,764,709 ordinary shares(2014: 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 2015 was 4.3 pence (2014: 30.4 pence).

16. Cash and cash equivalents

17. Financial instruments

The Group's financial instruments comprise loans, cash balances, receivables and payables that arise directly from its operations, for example, in respect of 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 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 remote.

The Group's holds a third party loan in respect of the investment in the Riverside Resort in Alanya which is potentially at risk from the failure of the third party to repay the loan. The Board considers the recovery of the loan on an ongoing basis; please refer to note 8 for further details.

The Board monitors 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 A2.

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. 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 2015 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 2014.

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 £6,487 (2014:£37,901). 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. 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.

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

18. Related party transactions

Information regarding subsidiaries can be found in note 10.

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

Andrew Wignall has served as a director of the Turkish subsidiaries since 4 June 2015 and receives director's fees of £10,000 per annum in total for his services.

Information regarding Directors' interests can be found in note 19.

Ali Pamir is a director of the Investment Advisor, Civitas Property Partners S.A. and was a director during the year, resigning on 2 November 2015, and is 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.

Vistra Nominees I Limited is a related party being the holder of the 2 founder shares of The Ottoman Fund Limited (see note 13).

Sinan Kalpakcioglu and Ali Pamir are shareholders in Mandalina, which until disposal held the title to the Alanya apartments (see note 8).

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

19. Directors' interests

Total compensation (excluding performance fees and additional service fees) paid to the Directors of the Company over the year was £150,000 (2014: £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. No performance fee has been paid during the year (2014: US$100,000). Antony Gardner-Hillman, Andrew Wignall and Eitan Milgram were remunerated £25,000 per director for their services during the year (2014: £25,000 per director).

In addition to the above, Andrew Wignall was remunerated £25,000 and Antony Gardner-Hillman was remunerated £18,400 for additional services provided to the Group in connection with the ongoing matters in Turkey concerning the recovery of remaining monies taken without authorisation by the former Chief Financial Officer.

Eitan Milgram is an Executive Vice President of Weiss Asset Management LLC which is a substantial investor in the Company. Eitan Milgram resigned as a director of the Company on 4 August 2015.

20. 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 prior 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. On 19 March 2015, the lawyers acting on behalf of the Group advised that the case had been heard in court and that the presiding judge, after hearing from both parties, accepted the Group's lawyer's motion to immediately dismiss the lawsuit that had been filed against the Group. The counterparty to the lawsuit has appealed the decision and the case is therefore yet to be concluded. The Directors are of the opinion, taking note of the initial judgement, that it is not appropriate to provide for this legal claim as it does not meet the recognition criteria under IAS 37.

During the period, and remaining at the time of signing the financial statements, various collection proceedings have been filed against Osmanli Yapi 1 and Osmanli Yapi 2 in relation to amounts payable for services rendered totalling TL1.38m (£356k). The Directors are of the opinion that the proceedings have been filed without merit, and therefore do not meet the recognition criteria under IAS 37.

21. Post balance sheet events

Extension to the Company's Life

In conjunction with the release of these financial statements, the Board of Directors has announced its recommendation that shareholders vote to extend the Company's life. A meeting will be held in due course to consider this.

Legal Action

Since the year end civil and criminal proceedings have been launched in Turkey against the Company's former Chief Financial Officer as part of an attempt to recover the sum of $1.35m embezzled by him.

Recovery Proceedings

Since the year end recovery proceedings have been launched against Mandalina to recover the loan of €1.3m made to Mandalina by the Company.

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.