Half Yearly Report

The Ottoman Fund Limited (the "Company")

Interim Financial Statements for the period ending 29 February 2012

The Company is pleased to announce as follows its interim results for the 6 months ended 29 February 2012, a full copy of which is also available on the Company's website: www.theottomanfund.com.

Chairman's Statement

Dear Shareholders:

Our net asset value per share as at 29 February 2012 was 70.6 pence as compared with 74.7 pence as at 31 August 2011. The primary reasons for the reduction in NAV are write downs in the carrying values of Riva and the Alanya receivable. As I have explained previously, for each valuation period we retain two appraisers, Savills and TSKB, to each independently appraise the value of our properties. We have historically relied on the Savills valuations for the disclosure in our financial statements and the TSKB valuation as a check on the Savills one. Historically both valuation companies have tended to reach similar conclusions. This time however the valuations diverged substantially and 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. Shareholders should bear in mind however that there has been a dearth of comparable transactions given the size of Ottoman's assets.

Since I wrote to you last, we have closed the sale of our interest in Kazikli and received the $9.5 million we were promised. This figure is approximately what Ottoman paid for the asset in 2006 and approximately what we have carried it at. We expect to distribute the cash proceeds from that transaction once they are upstreamed from Turkey to Jersey. We also continue to sell units at Alanya, and during the current financial year have sold 25 units with 48 remaining.

We are currently considering a revenue sharing deal with a large Turkish developer in connection with monetizing our Riva asset. The broad outlines of the structure are we would contribute our land and the developer would contribute financing and permitting, construction and marketing expertise. The revenues upon sale would then be split according to a formula. Demand for residential units in and around the Istanbul area continues to be robust while there is little demand for large tracts of undeveloped land. We may consider a similar arrangement in connection with our Bodrum asset as well.

I look forward to writing again when we release our annual report for the year ended 31 August 2012.

Respectfully yours,

John D. Chapman

Chairman

29 May 2012

Independent review report to The Ottoman Fund Limited

Introduction

We have been engaged by the company to review the condensed interim financial statements in the half-yearly financial report for the six months ended 29 February 2012, which comprises the consolidated statement of comprehensive income, the consolidated balance sheet, the consolidated statement of changes in equity, the consolidated statement of cash flows and related notes. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed interim financial statements.

Directors' responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the AIM Rules for Companies which require that the financial information must be presented and prepared in a form consistent with that which will be adopted in the company's annual financial statements.

As disclosed in note 1, the annual financial statements of the group are prepared in accordance with International Financial Reporting Standards ("IFRSs") as issued by the International Accounting Standards Board. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting".

Our responsibility

Our responsibility is to express to the company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review. This report, including the conclusion, has been prepared for and only for the company for the purpose of the AIM Rules for Companies and for no other purpose. We do not, in producing this report, 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.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the International Auditing and Assurance Standards Board. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed unaudited interim financial statements in the half-yearly financial report for the six months ended 29 February 2012 is not prepared, in all material respects, in accordance with International Accounting Standard 34 and the AIM Rules for Companies.

PricewaterhouseCoopers CI LLPChartered Accountants29 May 2012Jersey, Channel Islands

(a) 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 condensed unaudited interim financial statements since they were initially presented on the website.

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

Consolidated Statement of Comprehensive Income

Consolidated Balance Sheet

These financial statements were approved by the Board of Directors on 29 May 2012.

Consolidated Statement of Changes in Equity

Consolidated Statement of Cash Flows

Notes to the financial statements

1. Accounting policies

The annual financial statements for the year ended 31 August 2011 were 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). The accounting policies adopted in the preparation of the condensed consolidated interim financial statements (the "interim financial statements") are consistent with those followed in the preparation of the Group's annual financial statements for the year ended 31 August 2011.

The interim financial statements should be read in conjunction with the annual financial statements for the year ended 31 August 2011, which have been prepared in accordance with IFRS.These interim financial statements have been reviewed, not audited.

(a) Basis of preparation

The interim financial statements have been prepared on a historical cost basis, except for certain financial instruments as detailed in this note.

The interim financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting.

(b) Basis of consolidation

Subsidiaries

The interim financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries) (together "the Group") made up to 29 February 2012. 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 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 estimate 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 income statement.

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

Throughout the year under the Jersey "Zero/Ten" regime the Company was zero rated for Jersey taxation purposes. Profits arising in the Company for the 2012 year of assessment and future periods will be subject to tax at the rate of 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 or pays Goods and Services Tax, this fee is currently £200 (2011: £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. Tax paid during the period relates to the tax year end of 31 December 2011.

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 income statement 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 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 income statement.

(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

In reflection of the economic environment and market conditions during the prior year which continued throughout to the period end, the frequency of transactions similar to the inventory and apartments on an arms length basis decreased compared to prior periods.

The Board have reviewed the independent valuations that have been provided and believe impairment is necessary to the inventory and the loan receivable. Please refer to note 7 and 8 for further details.

Critical judgements in applying the Group's accounting policies

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

2. 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 three 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. During this financial period Civitas have 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 on page 1. In addition the period end valuations provided by Savills 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.

3. Management fee

Civitas Property Partners S.A. ("Civitas") were 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. The incentive fee paid for the period to 29 February 2012 was £35,474 (28 February 2011: £nil; 31 August 2011: £36,443).

4. Earnings per share

Earnings per share are calculated by dividing the profit attributable to equity holders of the group by the weighted average number of ordinary shares in issue during the year.

Due to the options lapsing without exercise in December 2010, there is no dilution to the earnings per share.The earnings per share are calculated as (4.07) pence (28 February 2011:(0.11) pence; 31 August 2011:(6.69) pence).

5. Intangible assets

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

6. Plant and equipment

7. Inventories

This represents 149,550 square metres of development land on the Bodrum peninsula, 931,739 square metres on the Riva coastline and 209,853 square metres, of which the Group has a 50% share, in the Kazikli village, in the district of Milas. See note 12 regarding the sale of Kazikli village.

The impairment above relates to Riva. The Directors believe the net realisable value (£59,876,010) at the period end was lower than cost and have therefore impaired the asset accordingly.

8. Loans and receivables

Previously, the third party loan in respect of the investment in the Riverside Resort in Alanya had been made to the developer, Okyapı İnşaat ve Mühendislik ve Özel Eğitim Hizmetleri Sanayi ve Ticaret Limited Şirketi ("Okyapı").

On 3 December 2010, as a means of achieving improved economic benefit for the Group, a fiduciary agreement and a settlement agreement were signed by all relevant parties which resulted in the loan due to the Group (€8,193,091 at the time of signing the agreement) and the titles of the apartments being assigned to Mandalina Yapı Turizm Sanayi ve Ticaret A.Ş. ("Mandalina") for the ultimate benefit of the Group. Mandalina is not a part of the Group. In order to further 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 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 estimate and subjective judgements that may vary from the actual values and sales prices realised upon ultimate disposal.

9. Called up share capital

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 capital to shareholders where possible.

10. Net asset value per share

The net asset value per ordinary share is based on the net assets attributable to equity shareholders of £95,143,824 on 134,764,709 shares (28 February 2011: £109,052,027 on 134,764,709 shares; 31 August 2011: £100,618,917 on 134,764,709 shares).

11. Financial risk management

The disclosure on the financial risk management 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 Savills. 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. 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. 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.

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 Aa3.

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.

(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.

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

(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.

The Company holds only cash deposits.

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

(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 29 February 2012 the Group does not have any significant liabilities due.

The Group has sufficient cash reserves to meet liabilities due.

12. Subsequent Events

On 4 April 2011 the Company entered into a conditional agreement to sell its entire interest in the Kazikli joint venture for a total consideration of $9.5 million in cash. Under the terms of the sale agreement, the buyer is obliged to pay the Company twenty-five percent of the purchase price on signing with the remainder due upon the Company's fulfilment of certain conditions. The buyer has the right to rescind the transaction if the Company fails to fulfil these conditions within four months from the signing of the agreement.

In accordance with the Company's policy, all excess cash, including sale proceeds, will be returned to shareholders.

As at 29 February 2012, payments of $3,000,000 (£1,881,591) had been received with a $6.5 million post-dated cheque dated 31 March 2012 also being received After numerous discussions with the buyer, the transaction was extended from 30 September 2011 to 31 March 2012 with a payment being received on 19 January 2012 of $625,000 as a further deposit on the transaction. The effective date of the sale of Kazikli and Mobella was 17 April 2012, at which time the loan due to Osmanli Yapi 3 from Mobella (£222,973) was written off. As at the date of approval of these financial statements, a distribution has been agreed in principle by the Board with final amounts to be announced.

Enquiries:

Singer Capital Markets 020 3205 7500

James Maxwell

Matt Thomas

Company Secretary 01534 504 735

Vistra Fund Services Limited