Final Results

THE OTTOMAN FUND LIMITED (the "Company")

Final results for the year ended 31 August 2013

The Company is pleased to announce as follows its final results for the year ended 31 August 2013, a full copy of which is available on the Company's website: www.theottomanfund.com.

Enquiries:

N+1 Singer

James Maxwell/Matthew Thomas 020 7496 3000

Vistra Secretaries Limited 01534 504 700

Company Secretary

Chairman's Statement

Dear Shareholders:

Our net asset value per share as at 31 August 2013 was 65.9 pence as compared with 63.5 pence as at 28 February 2013. The primary reason for this increase in NAV is the reversal of a prior impairment for the Riva asset, which was offset against a small impairment to the Bodrum asset and a small impairment of the Alanya loan. Over the last financial year, we have sold 10 units at Alanya and have realized €957,500. Following period end, we announced the sale of 106,207 m² of Riva land for $12 million plus VAT. That transaction closed this past October and we are now in the process of completing the mandatory judicial procedure required to transfer the proceeds from Turkey to Jersey. We expect to be able to announce a distribution of excess capital, including the Riva proceeds, early in the new year. Following this post-period transaction, 824,793 m² of Riva land remains available for sale.

As I have explained previously, for each valuation period we retain two appraisers, BNP Paribas and TSKB, to each independently appraise our properties. We had historically relied on the BNP valuations for the disclosure in our financial statements and the TSKB valuation as a check on the BNP valuations. Historically both valuation companies had tended to reach similar conclusions. Over the last three valuation periods, however, the valuations have diverged substantially so we have used an average of the two. We and our local advisors believe that the average of the two valuations most closely approximates what we would expect to realize upon sale or development.

One reason for the wide variance in the Riva valuation has been until very recently the absence of comparable transactions. Without good comparables, the appraisers are forced to rely on their projections of future costs and sale prices. These factors necessarily require judgment and give rise to variances of opinion. Nonetheless, based on recent transactions, the bulk of which were post valuation, progress in completing required infrastructure, and the opinions of our valuers and advisor, we are comfortable with carrying this asset at approximately $100 m².

Riva's viability as an Istanbul suburb has been dependent on infrastructure development. The third bridge crossing the Bosporus to the north is now expected to be completed by 2015. This bridge and the planned road leading off of the bridge and running alongside Riva's southern portion are important developments that will reduce travel time and should make Riva a more viable community. These developments have been reflected in Riva land sale prices. In late 2012, several transactions were reported for a total of 60,000 m² of land at prices averaging $275 m². Given the economics of building and selling residential units in Riva this figure seemed on the high side, and questions were raised about whether the transaction was bona fide. Earlier this year, however, a single buyer purchased around 100,000 m² of land for $165 m². And this past October we sold 106,207 m² of Riva land for about $113 m² plus VAT.

There are various reasons why different parcels of Riva land will sell for different prices including differences in zoning and location. But the long term prospects seem positive, and our current view of the best way to monetize the Riva asset is through land sales rather than any development deal.

We continue to have serious expressions of interest for the Bodrum asset. Reputable developers and investors in the region have put resources into evaluating the asset but have ultimately backed away for various reasons. We also continue to sell units at Alanya, and during calendar year 2013 have sold 18 units with 20 available for sale. Given the age and quality of our remaining inventory, we have cut prices and increased broker commissions. We will endeavour to dispose of the remaining Alanya inventory by the end of calendar year 2014.

In the face of currency depreciation and a large current account deficit, demand in Turkey for property assets remains robust. Based on current market conditions, I expect that we will eventually receive a fair value for our assets.

I look forward to writing again when we release our semi-annual report for the period ended 28 February 2014.

Respectfully yours,

John D. Chapman

Chairman

19 December 2013

¹ Valuation figures for Riva do not reflect the post-period sale of 106,207 m² of Riva land for $12 million plus VAT

Directors' Report

The Directors submit their Report and the audited consolidated financial statements of The Ottoman Fund Limited (the "Company") and its subsidiaries (together, the "Group") for the year ending 31 August 2013.

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.

Listing

The Company is quoted on the AIM market of the London Stock Exchange.

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 (2012: nil).

The consolidated statement of comprehensive income is set out in this Annual Report and Financial Statements.

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).

Manager

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 SA to manage and sell the Company's Turkish assets.

Custodian

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

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 2013)

At 31 August 2013 the Company was aware of the following interests of 3% or more in the ordinary share capital of the Company:

Otherwise, 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 2013 (2012:£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.

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 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.

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

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

19 December 2013

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 which comprise the consolidated statement of financial position as of 31 August 2013 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 anda 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 2013, 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 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.

Christopher Stuart

For and on behalf of PricewaterhouseCoopers CI LLP

Chartered Accountants

Jersey, Channel Islands

19 December 2013

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 are an integral part of the financial statements.

The accompanying notes are an integral part of the financial statements.

These financial statements were approved by the Board on 19 December 2013.

Antony Gardner-Hillman Andrew Wignall

The accompanying notes are an integral part of the financial statements.

The accompanying notes are an integral part of the financial statements.

Notes to the financial statements

1. General information

The Ottoman Fund Limited has invested in Turkish land and new-build residential property in Riva, Bodrum and Alanya. The Company is a limited liability company domiciled in Jersey, Channel Islands. 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 19 December 2013.

2. Accounting policies

The consolidated financial statements of the Group for the year ended 31 August 2013 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 £2.77m at the balance sheet date and under £100,000 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. 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 has the power, directly or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities. 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.

Joint ventures

A joint venture is a contractual arrangement whereby the Group and another party undertake an economic activity that is subject to joint control; that is, when the strategic financial and operating policy decisions relating to the activities require the unanimous consent of the parties sharing control.

The Group reports its interests in jointly controlled entities using proportionate consolidation. The Group's share of the assets, liabilities, income, expenses and cash flows of jointly controlled entities are combined with the equivalent items in the results on a line-by-line basis.

(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.

(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 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 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 Company.

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 Company 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.

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 comprise current and short term fixed deposits with banks.

(g) Taxation

Profits arising in the Company for the 2013 year of assessment and future periods will be subject to tax at the rate of 0% (2012: 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 (2012: £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 presentation 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;

- 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.

(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.

Principal assumptions underlying management's estimation of net realisable value and loan recoverability

In reflection of the economic environment and market conditions during the prior year which continued throughout the current financial year end, the frequency of transactions similar to the inventory and apartments on an arm's length basis remained consistently low as in the prior periods.

Consistent with previous years the Company has obtained two independent valuations which have been reviewed by the Board. In prior years, the more conservative of the two valuations was used as the starting point for the assessment of the net realisable values as the Directors believed this represented a more realistic and prudent outcome. As in the prior year, the valuations are significantly different from each other. The reasons for the differences in the two valuations obtained arise primarily due to differing assumptions used by the valuers, exacerbated by the lack of recent comparative sales and the unique nature of the assets. 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 net realisable value of the properties (note 10) and the recoverability of the loan receivable from Mandalina (note 11).

As a result of their assessment, the Directors believe that impairment is necessary to the inventory and the loan receivable. Please refer to notes 10 and 11 for further details.

Critical judgements in applying the Group's accounting policies

The Group did not make any other critical accounting judgements during the current financial year.

(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 2013 and have not been early adopted:

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

IFRS 10, 'Consolidated financial statements' (effective 1 January 2013)

IFRS 11, 'Joint arrangements' (effective 1 January 2013)

IFRS 12, 'Disclosures of interests in other entities' (effective 1 January 2013)

IFRS 13, 'Fair value measurement' (effective 1 January 2013)

IAS 28 (revised 2011), 'Associates and joint ventures' (effective 1 January 2013)

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.

There are two types of real estate projects within the above segment; these are development land and new build residential property. There are two individual projects held within the development land type and one project in new build residential property. The CODM considers on a quarterly basis the results of the aggregated position of both property types as a whole 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 individual properties listed in the table above. 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 Property Partners S.A. ("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 £197,930 (2012: £217,635) during the year.

5. Other operating expenses

The Group has no employees.

This tax represents taxation on taxable profits earned by the Turkish subsidiaries.

7. Earnings per share

(a) Basic

Basic earnings per share is calculated by dividing the gain/(loss) 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 gain/(loss) per share are calculated as 2.55 pence (2012: (5.23) pence).

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

This represents 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 are stated at the lower of cost and net realisable value. Consistent with previous years the Company has obtained two independent valuations of the inventories from BNP Paribas (through an alliance member, Kuzeybati) and TSKB on the basis of market values which have been reviewed by the Board. In the previous and current year, the valuations have been significantly different from each other and, following discussions with the Investment Advisor and the valuers, the Directors believe that as of the balance sheet date the current inventory valuation is a fair approximation of what the Board currently expects is realisable, being an average of the two valuations taking into account other management assumptions. On this basis, a total market value of £83.6 million (gross of selling costs) (2012: £79.6 million) has been determined by the Directors for inventories held at the balance sheet date. In accordance with the accounting policy, unrealised gains or losses as a result of this valuation have not been recognised in the statement of comprehensive income.

The impairment above relates to the write back of previous impairments to Riva (£5,199,755), which the Directors believe are now recoverable. There has been a further impairment during the year to Bodrum (£1,390,000). The Directors believe the net realisable value for Bodrum (£18.7 million) at the year end was lower than the cost and have therefore impaired the asset accordingly. The prior year impairment relates to Riva (£5,199,755) and Bodrum (£617,271).

The Alanya loan has been impaired 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.

13. Investment in subsidiaries - Company

All of the above companies have been incorporated into the Group accounts. On 14 June 2013, Ottoman Finance Company III Limited, Ottoman Finance Company IV Limited and Ottoman Finance Company V Limited were dissolved. During the period, Osmanli Yapi 1 and Osmanli Yapi 4 were combined. Osmanli Yapi 2 and Osmanli Yapi 3 were also combined.

14. Interests in joint ventures

In the year ended 31 August 2012, as part of the sale of the Kazikli village, the Group sold its interest in the joint venture, Mobella Insaat Taahhut Turizm San ve Tic A.S. ("Mobella"), a project management company.

On sale of Mobella, a gain of £386,897 was recorded by the Group due to a combination of exchange losses from prior periods, the write-off of intercompany loans and the write-off of other assets held in Mobella by the Group.

15. 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.

16. Trade and other payables

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

17. 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; to invest in the Group's current assets when the Board feels it will give rise to capital appreciation; and to return excess capital to shareholders.

18. Retained earnings

19. Net asset value per share

The net asset value per ordinary share is based on the net assets attributable to equity shareholders of £88,862,288 (2012: £86,152,179) and on 134,764,709 ordinary shares (2012:134,764,709), being the number of ordinary shares in issue at the year end. The net asset value per share for the year ended 31 August 2013 was 65.9 pence (2012: 63.9 pence).

20. Cash and cash equivalents

21. Financial instruments

The disclosure on the financial instruments has been limited to the consolidated financial position. This approach has been adopted as this covers all of the principal risks associated with the Group.

The disclosures below assume that the properties held by the Group are in US Dollars as this is the currency in which they are valued by Kuzeybati (an alliance member of BNP Paribas). In the opinion of the directors this is also the currency that any future disposals would occur in.

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

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, see note 11 for further information. 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 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. 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 2013 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 2012.

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: (i) the fair value of the investments in fixed interest rate securities, (ii) the level of income receivable on cash deposits, (iii) interest payable on the company's variable rate borrowings. 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 exposure.

The Company 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 £2,762 (2012:£3,038). 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, loans receivable and development property, which can be sold to meet funding commitments if necessary. As at 31 August 2013 the Group does not have any significant liabilities due.

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

22. Related party transactions

Information regarding subsidiaries can be found in note 13. Information regarding the joint venture sold in 2012 can be found in note 14.

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 23.

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 has been engaged during the period as a Turkish resident consultant to The Ottoman Fund Limited. Mr Kalpakcioglu is a director and shareholder of the Turkish subsidiaries due to Turkish law requirements. Mr Kalpakcioglu receives no additional benefit from being a shareholder of the Turkish subsidiaries. Consultancy fees paid to Mr Kalpakcioglu amounted to £48,400 (2012: £61,458); £7,867 remained outstanding at the year end (2012: £6,667).

Vistra Nominees I Limited is a related party being the holder of the 2 founder shares of The Ottoman Fund Limited (see Note 17).

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.

23. Directors' interests

Total compensation (excluding performance fees) paid to the Directors of the Company over the year was £150,000 (2012: £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 (2012: £25,000 per director).

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

24. 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 Company 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 accounts.

25. Post balance sheet events

On 1 November 2013, the Group sold 106,207 m² of its Riva land parcel for $12 million plus VAT to EAG Tourism & Construction AS. The sale price was at a small premium to the Group's last published carrying value at the year end. It is expected that the entire $12 million minus a 1% fee to the investment advisor will be available for distribution to shareholders following a court approved capital reduction in Turkey, which is expected to occur within three months. Following this transaction, 824,793 m² of Riva land remain available for sale or development.

Trade and other receivables include amounts relating to VAT receivable on the purchase of the land in Turkey, it is anticipated that this amount will fall by £242,793 as some of the VAT is recoverable on completion of the above transaction.

Subsequent to the year end, the decision was taken to reduce the share capital requirements of Osmanli Yapi 2 to facilitate a return of capital to the Company. Using 31 August 2013 exchange rates, the value of the reduction is estimated to be £11,242,337, which represents repayment of payables to Osmanli Yapi 2 and remittance of sales proceeds by £3,618,991 and £7,623,346, respectively.

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.