Circular and Notice of Extraordinary General Meeting - The Ottoman ...

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If Shareholders do not vote in favour of the Resolutions, the Proposals will not be implemented, in which case the Company may be required to seek other arrangements, with no guarantee of success. If Shareholders do not vote in favour of the Resolutions, the Proposals will not be implemented. The Company may be required to seek further alternatives to deal with management of the assets and there could be no guarantee that the policy to realise the assets in a managed way could be achieved. If the Proposals are not implemented, the Company may remain as an externally managed entity and will need to appoint a new manager. Failure to implement the Proposals may mean that the Company remains as an externally managed entity. As the Management Agreement has been terminated the Company will need to seek a new manager and the Company will not be able to take advantage of the benefits of management internalisation described in this Circular. There can be no guarantee that a new manager could be appointed on terms that are suitable to the Company. Terms to be agreed with a new manager could be more onerous for the Company than the terms and fees agreed with the Manager currently. In addition, if the Proposals are not implemented, there can be no certainty that the Company will be able to negotiate terms with a suitable manager. Each of these considerations is an important element that, in the Board’s view, contributed positively to the benefits of the Proposals. 3. RISKS RELATING TO THE COMPANY’S POLICY OF REALISING ASSETS IN A MANAGED WAY The Company’s managed asset realisation policy may not be met. There can be no guarantee that the managed asset realisation policy of the Company will be met. If the valuations of the Assets or land values decrease significantly before the assets of the Company are realised, the potential returns from property investments, and, therefore available for Shareholders, may be less than those targeted by the Directors. The level of dividend to be paid on the Shares is not guaranteed and may fluctuate. Any dividend growth on the Shares will depend upon, inter alia, capital value growth in the Company’s underlying Assets. Macroeconomic Risks. The Company’s business is affected by economic conditions in the geographical areas in which it operates. The global financial markets and credit conditions have been affected by financial dislocations which are impacting the wider economy. Adverse economic conditions in these markets could have a material adverse effect on the realisation of Assets. The value of the Company's Assets may be affected by various uncertainties such as economic, political or diplomatic developments, social and religious instability, taxation and interest rates, currency repatriation restrictions, crime and corruption and developments in the law or regulations in Turkey and, in particular, the risks of expropriation, nationalisation and confiscation of assets and changes in legislation relating to the level, or permissibility, of foreign ownership. 16
Currency Risk. The Company will transact in currencies other than pounds Sterling, primarily in Turkish lira, Euros and USD and does not hedge its currency exposure. Consequently, the Company’s realisation of assets will be subject to the effect of exchange rate fluctuations with respect to the currencies employed. Tax Residency. If the Company is found to be, or to have been, tax resident in any jurisdiction other than that in which it is incorporated or domiciled or to have a taxable permanent establishment or other taxable presence elsewhere, other than in the case of certain companies providing advisory and staff services which may have permanent establishments in Turkey, whether on the basis of existing law or the current practice of any tax authority or by reason of a change in law or practice, this may have a material adverse effect on the amount of tax payable by the Company. Any change in any member of the Company’s tax status or in taxation legislation, practice or its interpretation, could adversely affect the post-tax returns to Shareholders. Illiquid Assets. Investments in property are relatively illiquid and more difficult to realise than equities or bonds. Political Instability. Significant political instability or social unrest could have a material adverse effect on the value of realisation of the Assets. 4. GENERAL RISKS RELATING TO THE COMPANY Dividends. If under Jersey law there were to be a change to the basis on which dividends could be paid by Jersey companies, this could have a negative effect on the Company’s ability to pay dividends. Accounting Standards. If under Jersey law there were to be changes to accounting standards or the interpretation of accounting standards, this could have a negative effect on the Company’s ability to pay dividends. Changes in law. Any changes to the laws and regulations relating to the Turkish property may have an adverse effect on the capital value and/or the rental income of the Assets. 17
Page 1 and 2: THIS DOCUMENT IS IMPORTANT AND REQU
Page 3 and 4: CONTENTS Expected Timetable of Even
Page 5 and 6: “FSA” the UK Financial Services
Page 7 and 8: PART I LETTER FROM THE CHAIRMAN OF
Page 9 and 10: Changes to investment management an
Page 11 and 12: In January 2007, the JFSC issued th
Page 13 and 14: should treat the Admission Document
Page 15: PART II RISK FACTORS Shareholders s
Page 19 and 20: Regulatory requirements which may b
Page 21 and 22: elsewhere outside the Island of Jer
Page 23 and 24: 4.7 The New Investment Advisory Agr
Page 25 and 26: Andrew Wignall is an independent me
Page 27 and 28: The Ottoman Fund Limited (a public

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