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Share Name Share Symbol Market Type Share ISIN Share Description
Ceiba Investments Limited LSE:CBA London Ordinary Share GG00BFMDJH11 ORD NPV
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Equity Investment Instruments 16.2 1.5 4.5 15.3 97

Ceiba Investments Limited Annual Financial Report

28/04/2020 7:00am

UK Regulatory (RNS & others)


Ceiba Investments (LSE:CBA)
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From Apr 2020 to Oct 2020

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TIDMCBA

RNS Number : 0466L

Ceiba Investments Limited

28 April 2020

27 April 2020

CEIBA INVESTMENTS LIMITED

(the "Company")

(TICKER CBA, ISIN: GG00BFMDJH11)

Legal Entity Identifier: 213800XGY151JV5B1E88

ANNUAL FINANCIAL REPORT

COMPANY OVERVIEW

GENERAL

CEIBA Investments Limited ("CEIBA" or the "Company") is a Guernsey-incorporated, closed-ended investment company, with registered number 30083. Its shares were listed (the "Listing") on the Specialist Fund Segment ("SFS") of the London Stock Exchange's Main Market on 22 October 2018, where it currently trades under the symbol CBA. The Company is governed by a Board of Directors, the majority of whom are independent. Like many other investment companies, it outsources its investment management, administration and other services to third party providers. The Company does not have a fixed life. Through its consolidated subsidiaries (together with the Company, the "Group"), the Company invests in Cuban real estate and other assets by acquiring shares in Cuban joint venture companies that own the underlying properties. The Company also arranges and invests in financial instruments granted in favour of Cuban borrowers.

FINANCIAL HIGHLIGHTS AS AT 31 DECEMBER 2019 IN GBP AND US$ (FOREX: GBP/US$ = 1.3113)

Given the fact that the Net Asset Value ("NAV") and share price of the Company are quoted in Sterling (GBP) and that the functional currency of the Company is the U.S. Dollar (US$), the financial highlights of the Company set out below are being provided in both currencies, applying the applicable exchange rate as at 31 December 2019.

In GBP

 
 Total Net Assets               NAV per share (1)        Number of shares in 
  GBP157.7m (2018: GBP162.0m)    114.5p (2018: 117.7p)    issue 
  GBP160.6m (2) (2018:           116.6p (2) (2018:        137,671,576 Ordinary 
  GBP165.8m) (2)                 120.5p) (2)              Shares 
                                                          (2018: 137,671,576 
                                                          Ordinary Shares) 
 Market Capitalisation          Share price              Net Gain to shareholders 
  GBP97.7m (2018: GBP139.7m)     71.0p (2018: 101.5p)     GBP5.8m (2018: GBP1.4m) 
                                                          GBP5.0m (2) (2018: 
                                                          GBP5.2m) (2) 
                               -----------------------  ------------------------- 
 Earnings per share             NAV Total Return(1,3)    Premium (Discount) 
  4.2p (2018: 1.2p)              0.8% (2018: 1.0%)        to NAV(1) 
  3.6p (2) (2018: 4.6p)          0.3% (2) (2018: 3.9%)    (38.0%) (4) (2018: 
  (2)                            (2)                      (13.8%)) (4) 
                                                          (39.1%) (2) (2018: 
                                                          15.7%) (2) 
                               -----------------------  ------------------------- 
 

In US$

 
 Total Net Assets             NAV per share (1)          Number of shares in 
  US$206.7m (2018: $205.6m)    US$1.50 (2018: $1.49)      issue 
  US$210.6m (2) (2018:         US$1.53 (2) (2018:         137,671,576 Ordinary 
  $210.5m) (2)                 $1.53) (2)                 Shares 
                                                          (2018: 137,671,576 
                                                          Ordinary Shares) 
 Market Capitalisation        Share price                Net Gain to shareholders 
  US$128.2m (2018: $177.3m)    US$0.93 (2018: $1.29)      US$7.6m (2018: $1.8m) 
                                                          US$6.6m (2) (2018: 
                                                          $6.6m) (2) 
                             -------------------------  ------------------------- 
 Earnings per share           NAV Total Return(1,3)      Premium (Discount) 
  US$0.06 (2018: $0.02)        4.9% (2018: (4.2%))        to NAV(1) 
  US$0.05 (2) (2018:           4.3% (2) (2018: (2.1%))    (38.0%) (4) (2018: 
  $0.06) (2)                   (2)                        (13.8%)) (4) 
                                                          (39.1 %) (2) (2018: 
                                                          (15.7%)) (2) 
                             -------------------------  ------------------------- 
 

1 These are considered Alternative Performance Measures. See glossary below for more information.

2 These figures differ from the figures derived from the audited Consolidated Financial Statements. The figures are calculated in full accordance with International Financial Reporting Standards ("IFRS"), except that they include an adjustment recognising the full amount of US$5.0m / GBP3.9m received from Aberdeen Standard Fund Managers Limited on 23 November 2018 in connection with the execution of the Management Agreement in the Statement of Comprehensive Income for the year ended 31 December 2018, rather than deferring this amount over the five-year term of the Management Agreement as required by IFRS. This adjustment resulted in the increase of the net income attributable to the shareholders of the Company for the year ended 31 December 2018 by US$4.8m / GBP3.8m, to be followed by a US$1.0m / GBP0.8m decrease in the net income attributable to the shareholders of the Company in each subsequent year for the remainder of the five year term of the Management Agreement. Consequently, for the year ended 31 December 2019 the adjustment resulted in a decrease in the net income attributable to the shareholders of the Company in the amount of US$1.0m / GBP0.8m.

3 The comparative 2018 NAV Total Return figures have been restated from the prior year due to a change in the methodology of their calculation. In 2018, the calculations accounted for the reinvestment of the dividend at the year end, not when the dividends went ex-dividend. To be in line with industry practice, the figures above have been calculated on the basis that dividends declared during the period are reinvested on the day that the shares traded ex-dividend.

4 The rationale for the movement is discussed within the Chairman's Statement.

MANAGEMENT

The Company has appointed Aberdeen Standard Fund Managers Limited ("ASFML" or the "AIFM") as the Company's alternative investment fund manager to provide portfolio and risk management services to the Company. The AIFM has delegated portfolio management to Aberdeen Asset Investments Limited (the "Investment Manager"). Both ASFML and the Investment Manager are wholly-owned subsidiaries of Standard Life Aberdeen plc, a publicly-quoted company on the London Stock Exchange. Aberdeen Standard Investments ("ASI") is a brand of Standard Life Aberdeen plc. References throughout this document to ASI refer to both the AIFM and the Investment Manager.

CHAIRMAN'S STATEMENT

OVERVIEW

As I write these words, the entire world is battling the COVID-19 pandemic. Nearly all countries are presently facing an unprecedented public health crisis as well as an as-yet undefined, but surely profound, disruption to their national economies and international trade relations. On the investment front, this crisis will affect corporate revenues and investment valuations in a myriad of ways, and I do not expect the full implications of the present disruption to become apparent for some time.

Consequently, both I and the Investment Manager have attempted to describe in our respective reports the operations, developments and results of the Company and its investments during the year recently ended, as well as the initial effects of the crisis on the operations and assets of the Group and our first responses. However, we believe it is impossible at this point in time to make accurate judgements about the duration of the crisis and the expected return to normal operations, nor to make coherent statements about the outlook for the future, other than the obvious.

As this crisis has unfolded in recent weeks, our first concern was to protect our people and our assets. The Investment Manager, the Havana team, the Administrator and other service providers have adopted all reasonable measures, to the best of their abilities, to protect the safety of all of the people working to advance the affairs of the Company. Regarding the assets and operations of the Group, in a trading note dated 3 April 2020 the Board withdrew all prior guidance on the expected performance of the Company for the current year 2020, and described the initial measures taken by the Board to mitigate the impact of the pandemic on the operations and assets of the Company. As its first response, the Board has taken the following decisions:

-- to support the decision of Miramar to close its hotels in Havana and Varadero and substantially reduce its workforce;

-- to support the decision of TosCuba to substantially lower capital expenditure on the construction of the new hotel, and to agree on a revised time-line and disbursement schedule until such time as there is greater certainty around the economic and financial viability of the hotel development;

-- to discuss and agree with Casa Financiera FINTUR S.A a new payment schedule for the EUR24 million and EUR12 million tranches of the credit facility granted to FINTUR, under which the aggregate present exposure of the Company is EUR1,716,667;

-- to suspend the existing dividend policy of the Company and to cancel the dividend scheduled to be paid by the Company in June 2020;

-- to restrict discretionary spending and uncommitted capital expenditure in Miramar and Monte Barreto for the present time;

-- to carry out a detailed review of the costs and expenditures of the Company and its subsidiaries with a view to limiting unnecessary spending.

The Board will re-evaluate and refine these measures as the situation evolves further.

In addition to the above, in order to alleviate the working capital requirements of the Company during the present difficult circumstances, the Investment Manager has agreed to defer the management fee payable in respect of the second and third quarters of 2020 until 31 December 2022 (or sooner if the operational results of the Company permits). The Board is very grateful for the support of the Investment Manager in these unprecedented times.

2019 REV IEW

General

While 2019 was a difficult year for Cuba and the Company alike, and the overall performance of the Company's hotel interests was disappointing, the results of the Miramar Trade Center and the progress in construction of the TosCuba Project near Trinidad were very encouraging.

The political backdrop with regard to U.S. - Cuba relations, and in particular the introduction of a number of increasingly tough new measures by the Trump administration over the past year, has naturally provided Cuba and the Company with some significant challenges. Inevitably, the Company's hotel assets were adversely affected by a significant drop in U.S. travel to Cuba, with the Havana based Meliã Habana Hotel suffering more than the Varadero Hotels. Occupancy levels were generally maintained at all of the hotels, although average room rates were materially reduced as a result of market conditions.

Set against this, the Company's investment in the Miramar Trade Center, the Havana office complex, recorded its best year ever. In addition, the construction of the new 400 room Meliã Trinidad Playa Hotel development project located near the historic town of Trinidad, in the south of Cuba, was on budget at the end of the year and has exciting potential once tourism operations return to normal.

Cuban economic backdrop

As described in the Investment Manager's Review below, the past year has witnessed numerous further measures taken by the U.S. Government which have had an adverse impact upon the Cuban economy. These include the coming into force of Title III of the Helms-Burton Act; new restrictions on the amount of family remittances that can be sent from the U.S. to family members in Cuba; further restrictions aimed at limiting the amount of U.S. travel to Cuba; the prohibition of U.S. flights to Cuba (other than to Havana); the elimination of all U.S. cruise ship visits to Cuba; and certain banking restrictions that make it increasingly difficult for banks to process Cuba-related funds transfers. These measures have had an overall adverse impact on the country and have led to shortages of fuel and basic food supplies as well as a deterioration in the country's liquidity position. Although the Company has not been affected by Helms-Burton litigation, the decline in U.S. travel to Cuba that has resulted from these new measures, as well as numerous banking and other restrictions, have had and are expected to continue to have a negative impact on the operations of the Company.

With the upcoming U.S. presidential election in November 2020, it is difficult to envisage any immediate easing of the adverse headwinds which Cuba and the Company will face in the coming period. However, once the election is out of the way it is possible that we may well see a hoped-for new situation emerge.

At the outset of 2019, the number of tourists travelling to Cuba was predicted at 5.1m - an expected increase of 7% over 2018. In the event, only 4.3m tourists visited Cuba in 2019, a 16% decrease against the forecast. While this fall in tourist arrivals did not result in significant declines in occupancy rates at the Company's hotels,

room rates were affected, most keenly at the Meliã   Habana Hotel. 

Results and Dividend

The trading results of the Company for the year ended 31st December 2019 benefited from the Monte Baretto office complex recording its best year but this excellent performance was offset by a drop in the income generated by the Company's hotel interests. In particular the Havana based, Meliã Habana hotel was adversely impacted by the significant drop in US tourism. The dividends received from the joint venture companies which manage the office complex and hotel interests amounted to US$20.7m/ GBP 15.8m (2018: US$16.2m/ GBP12.7m ) and provided a healthy cash flow to the Company. The valuations of the Company's interests in the joint venture companies recorded an aggregate drop in value of US$14.2m. This fall was largely driven by a reduction in the value of the underlying hotel assets, with the write down of the Meliã Habana being the largest, offset to some degree by an increase in the value of the Monte Barreto office complex.

After careful consideration, the Board has taken the decision to cancel the dividend which was scheduled to be paid in June 2020. This decision has been taken against the backdrop of the significant impact that the COVID-19 pandemic is expected to have on the Cuban tourism sector in the present year, as well as the planned investment programme of the Group. The Board is conscious that this changes the dividend policy set out in the Company's prospectus in 2018, which stated that the Company intended to pay an annual dividend targeting a yield of 4%, and the Board intends to reinstate the dividend at the indicated rate as soon as possible.

Board

I am grateful to the Board for their commitment and input during the year. In last year's Annual Report I indicated that I intended to step down as Chairman, however the independent directors have requested that I remain as Chairman for the present time, given the very challenging environment in which the Company is currently operating. It is the Board's policy to undertake a regular review of its performance and skills to ensure that is has the appropriate mix of relevant experience and skills to ensure the effective overall operation of the Company.

The Manager

Aberdeen Standard Fund Managers Limited ("ASFML"), a wholly owned subsidiary of Standard Life Aberdeen plc, has acted as manager of the Group's portfolio of assets throughout the year. There has been no change in the underlying key operational management of the Company and this team continues to be headed up by Sebastiaan Berger, who is exclusively focused on the Company's assets and business and has acted in this role for a number of years. The Board reviewed the work of the Manager during the year and concluded that it was satisfied with the performance of the Manager and that it was in the best interests of shareholders that ASFML remain as Manager of the portfolio.

Auditor

During the year, in an effort to improve the efficiency and cost-effectiveness of the Company's operations, the Board sought offers from numerous audit firms. As a result of this process, the Board has appointed Grant Thornton Limited as the auditor of the Company on 3 December 2019. The appointment of Grant Thornton Limited will be subject to approval by shareholders at the Company's Annual General Meeting.

Discount

As at 31 December 2019, the audited NAV of the Company stood at US$1.50 or 114.5p. At 31 December 2019, the shares traded at 71p per share and therefore at a 38% discount to their underlying NAV. The Board is acutely aware of the present lack of connection between the share price and the underlying net asset value and will look at all ways to narrow the discount to the NAV. With the continuous negative news concerning the U.S. - Cuba relationship and the ongoing worldwide public health crisis that is having a major impact on the travel and tourism industries on a global scale, it is understandably difficult to generate investor interest and the liquidity in the shares is also limited. In conjunction with Aberdeen Standard Investments and the Company's brokers N+1 Singer, there will be an ongoing drive to increase investor awareness of the Company and its long-term potential.

Outlook

In light of the high degree of uncertainty regarding the depth and duration of the COVID-19 pandemic and the resulting economic disruption, it is not possible at the present time to comment on the outlook of the Company in the coming years. The Board has taken sensible mitigation steps to safeguard the assets and cash position of the Company in the present circumstances and the Board believes that the Company has adequate resources to sustain the immediate period of uncertainty. The Board, in consultation with the Investment Manager, will adjust its views and its actions as new developments occur.

In addition, the Board remains convinced of the long-term investment case for its investment strategy regarding Cuba. The country is resilient and has long experience in dealing with difficult circumstances. We are hopeful that Cuba and its people will weather the present storm as effectively as they have traversed past challenges, and are confident that as this crisis subsides foreign investment will play an even more central role in Cuba's development strategy and that the Company will be able to continue contributing in a positive and profitable manner to this strategy.

John Herring ,

Chairman

27 April 2020

GENERAL INFORMATION ON THE COMPANY AND ITS INVESTMENT STRATEGY

BACKGROUND / HISTORY

The Company was incorporated in 1995 in Guernsey as a closed-ended investment company for the purpose of investing in Cuba. The Company made its first Cuban investment in 1996 and its portfolio subsequently included interests in a variety of Cuban assets and businesses, including biotechnology ventures, mining, residential real estate, consumer/industrial ventures and trade finance.

In 2002 a new external investment manager was appointed to manage the Company. The founders of this external manager included Sebastiaan A.C. Berger and Cameron Young. Paul Austin subsequently joined the Company's management team in 2005.

Under this new external investment manager, the Company began to focus its investment activities on the Cuban real estate and tourism sectors, and disposed of its interests in non-complementary assets and businesses. In repositioning the business of the Company during this period, the Company developed a new investment strategy with the following main features:

-- to acquire ownership interests in Cuban joint venture companies that own high-quality Cuban commercial real estate and hotel assets;

-- to pursue investments in development projects through the entering into of new joint ventures with the Cuban government or the acquisition of interests in existing joint ventures;

   --    to arrange secured financing for Cuban borrowers, primarily in the tourism sector; 

-- to establish a professional "on-the-ground" management team with experience in negotiating, managing and exiting investments in Cuba; and

   --    to pay a regular annual dividend to Shareholders. 

The Company's total equity has grown from approximately US$19 million in 2001 to US$256 million as at 31 December 2019. During the 2019 accounting period the Company paid approximately US$8.6 million in cash dividends.

The Company was listed on the Irish Stock Exchange from 1996 to 2002 and subsequently on the Channel Islands Stock Exchange (now known as The International Stock Exchange) from 2004 until the end of 2010. During the period from 2011 to 2018 the Company was unlisted and internally-managed.

The Company is regulated by the Guernsey Financial Services Commission as a Registered Closed-Ended Collective Investment Scheme with effect from 11 September 2018 under The Protection of Investors (Bailiwick of Guernsey) Law, 1987 as amended.

MANAGEMENT CONTRACT AND SPECIALIST FUND SEGMENT LISTING

In October 2018, the Company completed an IPO and listed its Ordinary Shares on the Specialist Fund Segment of the Main Market of the London Stock Exchange, where it trades under the symbol CBA. As part of the process for listing on the SFS, the Company reconverted itself to a registered collective investment scheme regulated by the Guernsey Financial Services Commission and re-externalised management.

In addition, the Company entered into a Management Agreement under which the Company has appointed ASFML as the Company's Alternative Investment Fund Manager to provide portfolio and risk management services to the Company. ASFML has delegated portfolio management to the Investment Manager. Both ASFML and the Investment Manager are wholly-owned subsidiaries of Standard Life Aberdeen plc.

As at 31 December 2019, the issued share capital of the Company consisted of 137,671,576 fully paid Ordinary Shares (2018: -137,671,576).

INVESTMENT OBJECTIVE

The investment objective of the Company is to provide a regular level of income and substantial capital growth.

INVESTMENT POLICY

The Company is a country fund with a primary focus on Cuban real estate assets. The Company seeks to deliver the investment objective primarily through investment in, and management of, a portfolio of Cuban real estate assets, with a focus on the tourism and commercial property sectors. Cuban real estate assets may also include infrastructure, industrial, retail, logistics, residential and mixed-use assets (including development projects).

The Company may also invest in any type of financial instrument or credit facility secured by Cuba-related cash flows.

In addition, subject to the investment restrictions set out below, the Company may invest in other Cuba-related businesses, where such are considered by the Investment Manager to be complementary to the Company's core portfolio ("Other Cuban Assets"). Other Cuban Assets may include, but are not limited to, Cuba-related businesses in the construction or construction supply, logistics, energy, technology and light or heavy industrial sectors.

Investments may be made through equity, debt or a combination of both.

The Company will invest either directly or through holdings in special purpose vehicles ("SPVs"), joint venture vehicles, partnerships, trusts or other structures. The Cuban Foreign Investment Act guarantees that the holders of interests in Cuban joint venture companies may transfer their interests, subject always to agreement between the parties and the approval of the Cuban government.

INVESTMENT RESTRICTIONS

The following investment limits and restrictions apply to the Company and its business which, where appropriate, will be measured at the time of investment:

-- the Company will not knowingly or intentionally use or benefit from confiscated property to which a claim is held by a person subject to U.S. jurisdiction;

-- the Company may invest in Cuban and non-Cuban companies, joint ventures and other entities that earn all or a substantial part of their revenues from activities outside Cuba, although such investments will, in aggregate, be limited to less than 10 per cent. of the Gross Asset Value;

-- save for Monte Barreto (please see the Investment Manager's Review for more information on this asset), the Company's maximum exposure to any one asset will not exceed 30 per cent. of the Gross Asset Value;

-- no more than 20 per cent. of the Gross Asset Value will be invested in Other Cuban Assets; and

-- no more than 20 per cent. of the Gross Asset Value will be exposed to "greenfield" real estate development projects, being new-build construction projects carried out on undeveloped land.

The Company will not be required to dispose of any asset or to re-balance the Portfolio as a result of a change in the respective valuations of its assets. The investment limits detailed above will apply to the Group as a whole on a look through basis, i.e. where assets are held through subsidiaries, SPVs, or equivalent holding vehicles, the Company will look through the holding vehicle to the underlying assets when applying the investment limits.

KEY PERFORMANCE INDICATORS ("KPIs")

The KPIs by which the Company measures its economic performance include:

   --     Total income 
   --     Net income 
   --     Total net assets (NAV) 
   --     Net asset value per share* 
   --     Non IFRS net asset value per share* 
   --     Net asset value total return* 
   --     Market capitalisation 
   --     Premium / Discount to NAV * 
   --     Dividend yield * 
   --     Dividend per share 
   --     Gain/Loss per share 

* These are considered Alternative Performance Measures.

In addition to the above measures, the Board also regularly monitors the following KPIs of the joint venture companies in which the Company is invested and their underlying real estate assets, all of which are Alternative Performance Measures.

In the case of commercial properties, other KPIs include:

   --      Occupancy levels 
   --      Average monthly rate per square meter (AMR) 
   --      Earnings before interest, tax, depreciation and amortisation (EBITDA) 
   --      Net income after tax 

In the case of hotel properties, other KPIs include:

   --      Occupancy levels 
   --      Average Daily Rate per room (ADR) 
   --      Revenue per available room (RevPAR) 
   --      EBITDA 
   --      Net income after tax 

The Board monitors the financial performance of the Cuban joint venture companies owning the commercial and hotel properties using these KPIs with the objective, using its best efforts to influence the management decisions of the Cuban joint venture companies through representation on their corporate bodies, of generating reliable and growing cash flow for the Cuban joint venture companies, which in turn will be reflected in reliable and growing dividend streams in favour of the Company.

PRINCIPAL RISKS

PRINCIPAL RISKS & UNCERTAINTIES

There are a number of risks which, if they occurred, could have a material adverse effect on the Company and its financial condition, performance and prospects.

The Company invests in Cuba, which may increase the risk as compared to investing in similar assets in other jurisdictions.

A full description of the risks faced by the Company is contained in the Company`s Prospectus and should be referred to prior to any investment decision.

Risk Management and Internal Controls

The Board is responsible for the management of risk and regularly carries out a robust assessment of the principal risks and uncertainties affecting the business, discusses how these may impact on operations, performance and solvency and what mitigating actions, if any, can be taken. As part of its risk process, the Board seeks to identify emerging risks to ensure that they are effectively managed as they develop. The Audit Committee is responsible for ensuring that the internal control procedures are robust and that risk management processes are appropriate.

Principal Risks and Uncertainties

The most significant risks identified by the Board appear in the table below, together with a description of the possible impact thereof, mitigating actions taken by the Company and an assessment of how such risks have changed during the year.

The Board relies upon its external service providers to ensure the Company's compliance with applicable regulations and, from time to time, employs external advisers to advise on specific concerns.

 
     Description                  Possible Impact                       Mitigating Action             Change 
        of Risk                                                                                        during 
                                                                                                        Year 
 Emerging Risk 
 Global Pandemic        The emergence of the global            The Board, the Investment 
  Risk                   COVID-19 pandemic post-year            Manager, the local team 
                         end may, as is the case                in Havana, the joint venture 
                         in many places around the              companies in which the 
                         world and in many economic             Company has participations, 
                         sectors, have a profound               the Administrator and other 
                         and as yet unquantifiable              service providers have 
                         negative impact on the                 all acted to the best of 
                         operations and performance             their abilities and in 
                         of the assets of the Company,          a coordinated fashion in 
                         and may directly or indirectly         the best interests of stakeholders 
                         affect all other risk categories       (i) to protect the welfare 
                         mentioned in this matrix.              of the various teams involved 
                         More information on COVID-19           in the affairs of the Company, 
                         is set out in the Chairman's           (ii) to ensure operations 
                         Statement and Manager's                are maintained to the extent 
                         Review.                                possible and to protect 
                                                                and support the assets 
                                                                of the Company for the 
                                                                duration of the present 
                                                                crisis, and (iii) to mitigate 
                                                                insofar as possible the 
                                                                longer-term negative impact 
                                                                of economic and operational 
                                                                disruption caused by the 
                                                                pandemic. Given the unknown 
                                                                duration of the crisis, 
                                                                all of the above actors 
                                                                will communicate regularly 
                                                                in order to properly adapt 
                                                                and coordinate the response 
                                                                of the Company to changing 
                                                                circumstances. 
                       -------------------------------------  -------------------------------------  -------- 
 Risks Relating to the Company and its Investment Strategy 
 Investment             The setting of an unattractive         The Company's investment                 -> 
  Strategy and           strategic proposition to               strategy and objective 
  Objective              the market and the failure             is subject to regular review 
                         to adapt to changes in                 to ensure that it remains 
                         investor demand may lead               attractive to investors. 
                         to the Company becoming                The Board considers strategy 
                         unattractive to investors,             regularly and receives 
                         a decreased demand for                 strategic updates from 
                         shares and a widening discount.        the Investment Manager, 
                                                                investor relations reports 
                                                                and updates on the market 
                                                                from the Company's Broker. 
                                                                At each Board meeting, 
                                                                the Board reviews the shareholder 
                                                                register and any significant 
                                                                movements. The Board considers 
                                                                shareholder sentiment towards 
                                                                the Company with the Investment 
                                                                Manager and Broker, and 
                                                                the level of discount at 
                                                                which the Company's shares 
                                                                trade. 
                       -------------------------------------  -------------------------------------  -------- 
 Investment             Investing outside of the               The Board sets, and monitors,            -> 
  Restrictions           investment restrictions                its investment restrictions 
                         and guidelines set by the              and guidelines, and receives 
                         Board could result in poor             regular reports which include 
                         performance and inability              performance reporting on 
                         to meet the Company's objectives,      the implementation of the 
                         as well as a discount.                 investment policy, the 
                                                                investment process and 
                                                                application of the guidelines. 
                                                                The Investment Manager 
                                                                attends all Board meetings. 
                                                                The Board monitors the 
                                                                share price relative to 
                                                                the NAV. 
                       -------------------------------------  -------------------------------------  -------- 
 Portfolio and Operational Risks 
 Joint Venture          The investments of the                 Prior to entering into                   -> 
  Risk                   Group in Cuban real estate             any agreement to acquire 
                         assets are made through                an investment, the Investment 
                         Cuban joint venture companies          Manager will perform or 
                         in which Cuban government              procure the performance 
                         entities hold an equity                of due diligence on the 
                         interest, giving rise to               proposed acquisition target. 
                         risks relating to the liquidity        The Group tries to structure 
                         of investments, government             its equity investments 
                         approval and deadlock.                 in Cuban joint venture 
                                                                companies so as to include 
                                                                a viable exit strategy. 
                                                                The Investment Manager, 
                                                                or the members of the on-the-ground 
                                                                team, regularly attend 
                                                                the Board meetings of the 
                                                                joint venture companies 
                                                                through which its interests 
                                                                are held. 
                       -------------------------------------  -------------------------------------  -------- 
 Real Estate            As an indirect investor                The Investment Manager 
  Risk                   in real estate assets,                 regularly monitors the 
                         the Company is subject                 level of real estate risk 
                         to risks relating to property          in the Cuban market and 
                         investments, including                 reports to the Board at 
                         access to capital and global           each meeting regarding 
                         capital market conditions,             recent developments. The 
                         acquisition and development            Investment Manager works 
                         risk, competition, tenant              closely with the on-the-ground 
                         risk, environmental risk               team, the external hotel 
                         and others, and the materialisation    managers and the joint 
                         of these risks could have              venture managers to identify, 
                         a negative effect on specific          monitor and actively manage 
                         properties or the Group                local real estate risk. 
                         generally. 
                       -------------------------------------  -------------------------------------  -------- 
 Tourism Risk           As an indirect investor                The Investment Manager 
                         in hotel assets, the Company           regularly monitors the 
                         is subject to numerous                 local and regional tourism 
                         risks relating to the tourism          markets and meets regularly 
                         sector, both in outbound               with the external hotel 
                         and inbound markets, including         management to identify, 
                         the cost and availability              monitor and manage global 
                         of air travel, seasonal                and local tourism risk 
                         variations in cash flow,               and to develop appropriate 
                         demand variations, changes             strategies for dealing 
                         in or significant disruptions          with changing conditions. 
                         to travel patterns, risk               The Company aims to maintain 
                         related to the manager                 a diversified portfolio 
                         of the hotel properties,               of tourism assets spanning 
                         and the materialisation                various hotel categories 
                         of these risks could have              (city hotel / beach resort, 
                         a negative impact on specific          business / leisure travel, 
                         properties or the Company              luxury / family) in numerous 
                         generally.                             locations across the island. 
                       -------------------------------------  -------------------------------------  -------- 
 Valuation Risk         Asset valuations may fluctuate         As part of the valuation                 -> 
                         materially between periods             process, the Investment 
                         due to changes in market               Manager engages an independent 
                         conditions.                            third party valuator to 
                                                                provide an independent 
                                                                valuation report on each 
                                                                of the indirectly owned 
                                                                real estate assets of the 
                                                                Group. The valuations are 
                                                                also subject to review 
                                                                by the Investment Manager's 
                                                                Alternatives Pricing Committee. 
                       -------------------------------------  -------------------------------------  -------- 
 Dependence             The Company is dependent               The Board receives reports               -> 
  on Third Party         on the Investment Manager              from its service providers 
  Service Providers      and other third parties                on internal controls and 
                         for the provision of all               risk management at each 
                         systems and services relating          Board meeting. It receives 
                         to its operations and investments,     assurance from all its 
                         and any inadequacies in                significant service providers 
                         design or execution thereof,           as well as back to back 
                         control failures or other              assurances where activities 
                         gaps in these systems and              are themselves sub-delegated 
                         services could result in               to other third party providers 
                         a loss or damage to the                with which the Company 
                         Company.                               has no direct contractual 
                                                                relationship. Further details 
                                                                of the internal controls 
                                                                which are in place are 
                                                                set out in the Directors' 
                                                                Report. 
                       -------------------------------------  -------------------------------------  -------- 
 Loss of Key            The loss of key managers               Sebastiaan Berger, a key                 -> 
  Fund Personnel         contracted by the Investment           member of the CEIBA management 
                         Manager to manage the portfolio        team, became an employee 
                         of investments of the Group            of the Investment Manager 
                         could impact performance               on 1 January 2019. Sebastiaan 
                         of the Company.                        continues to be supported 
                                                                by the long-standing foreign 
                                                                and local management team 
                                                                that has successfully managed 
                                                                the Company and its portfolio 
                                                                for the last 18 years. 
                                                                Under the Management Agreement, 
                                                                the Investment Manager 
                                                                has the obligation to at 
                                                                all times provide personnel 
                                                                with adequate knowledge, 
                                                                experience and contacts 
                                                                in the Cuban market. 
                       -------------------------------------  -------------------------------------  -------- 
 Risks Relating to Investment in Cuba and the U.S. Embargo 
 General Economic,      The Group's underlying                 Mr Berger has lived and 
  Political,             investments are situated               worked in Cuba for 24 years 
  Legal and Financial    and operate within a unique            and has been lead investment 
  Environment            economic and legal market,             manager of the Company 
  within Cuba            with a comparatively high              since 2001, utilising his 
                         level of uncertainty, and              extensive experience in 
                         a sensitive political environment.     the market in selecting 
                                                                top-performing investments. 
                                                                The Company benefits from 
                                                                the services of its highly 
                                                                experienced on-the-ground 
                                                                team consisting of nine 
                                                                members and being one of 
                                                                the most practised investment 
                                                                teams focused exclusively 
                                                                on investment in the Cuban 
                                                                market, which constantly 
                                                                monitors the economic, 
                                                                political and financial 
                                                                environment within Cuba. 
                                                                Mr Berger regularly visits 
                                                                Cuba and the Board undertakes 
                                                                an overseas trip to Cuba 
                                                                at least annually. The 
                                                                subsidiaries of the Company 
                                                                have been structured to 
                                                                benefit from existing investment 
                                                                protection and tax treaties 
                                                                to which Cuba is a party. 
                       -------------------------------------  -------------------------------------  -------- 
 U.S. government        Tensions remain high between           The Investment Manager 
  restrictions           the governments of the                 closely follows developments 
  relating to            United States and Cuba                 relating to the relationship 
  Cuba                   and the U.S. government                between the United States 
                         maintains numerous legal               and Cuba and monitors all 
                         restrictions aimed at Cuba.            new restrictions adopted 
                         The Trump administration               by the United States to 
                         continues to adopt new                 measure their possible 
                         restrictions. The rise                 impact on the assets of 
                         of further tensions with               the Group. The Group has 
                         the United States or the               adapted its investment 
                         adoption by the U.S. government        model to the existing sanctions, 
                         of further restrictions                but the risk remains of 
                         against Cuba could negatively          further sanctions being 
                         impact the operations of               adopted in the future. 
                         the Company, the value 
                         of its investments, the 
                         liquidity or tradability 
                         of its shares, or its access 
                         to international capital 
                         and financial markets. 
                       -------------------------------------  -------------------------------------  -------- 
 Helms-Burton           On 2 May 2019, Title III               At the time of acquiring 
  Risk                   of the Helms-Burton Act                each of its interests in 
                         was brought fully into                 Cuban joint venture companies, 
                         force following 23 years               the Company carried out 
                         of successive uninterrupted            extensive due diligence 
                         suspensions. Canada, the               investigations in order 
                         European Union and other               to ensure that no claims 
                         governments have strongly              existed under applicable 
                         objected to the move and               U.S. legislation, and in 
                         have stated that they are              particular that there were 
                         prepared to defend their               no claims certified by 
                         companies' interests in                the U.S. Foreign Claims 
                         Cuba before the World Trade            Settlement Commission under 
                         Organization. A number                 its Cuba claims program 
                         of legal claims were subsequently      with respect to any of 
                         launched before US courts              the properties in which 
                         against U.S and foreign                the Company acquired an 
                         investors in Cuba, which               interest. However, given 
                         has had and could have                 the broad definitions and 
                         a further negative impact              terms of the Helms-Burton 
                         on the foreign investment              Act and its purpose of 
                         climate in Cuba and may                creating uncertainty on 
                         hinder the ability of the              the part of investors, 
                         Company to access international        as well as the absence 
                         capital and financial markets          of any register of uncertified 
                         in the future. In light                claims or case law, there 
                         of the political nature                is no certain way for the 
                         of the Helms-Burton Act                Company to have diligently 
                         and the fact that under                verified whether or not 
                         Title III Cuban persons                a Helms-Burton action under 
                         who were not U.S. Persons              Title III could be brought 
                         at the time their property             in respect to a particular 
                         was expropriated but subsequently      property, or whether the 
                         became U.S. Persons have               Company may be deemed to 
                         the right to make claims,              indirectly profit or benefit 
                         there is also a risk that              from certain activities 
                         legal claims might be initiated        carried out by other parties. 
                         against the Company or                 The Company does not have 
                         its subsidiaries before                any property or assets 
                         U.S. courts.                           in the United States that 
                                                                could be subject to seizure. 
                       -------------------------------------  -------------------------------------  -------- 
 Liquidity Risk         The continued rise in regional         The Investment Manager 
                         tensions between the United            actively manages the liquidity 
                         States and Venezuela may               position of the Company, 
                         impact the economic and                its subsidiaries and the 
                         liquidity position in Cuba,            joint ventures in which 
                         which may in turn have                 it invests so that cash 
                         a negative impact on the               flows are transferred to 
                         position of the Company.               bank accounts outside of 
                                                                Cuba. In addition, financial 
                                                                facilities in which the 
                                                                Company participates are 
                                                                structured so that secured 
                                                                cash flows and debt service 
                                                                payments originate and 
                                                                remain outside Cuba. 
                       -------------------------------------  -------------------------------------  -------- 
 Risks relating to Regulatory and Tax framework 
 Tax Risk               Changes in the Group's                 The Investment Manager 
                         tax status or tax treatment            regularly reviews the tax 
                         in any of the jurisdictions            rules that may affect the 
                         where is has a presence                operations or investments 
                         may adversely affect the               of the Company and seeks 
                         Company or its shareholders.           to structure the activities 
                                                                of the Company in the most 
                                                                tax efficient manner possible. 
                                                                However the Company holds 
                                                                investment structures in 
                                                                numerous jurisdictions 
                                                                arising from past acquisitions, 
                                                                and the general direction 
                                                                of change in many jurisdictions 
                                                                is not favourable. 
                       -------------------------------------  -------------------------------------  -------- 
 

The financial risks associated with the Company include market risk, liquidity risk and credit risk, all of which are described in greater detail in note 17 to the Consolidated Financial Statements.

Following the ongoing assessment of the principal and emerging risks facing the Company, and its current position, the Board is confident that the Company will be able to continue in operation and meet its liabilities as they fall due.

VIABILITY STATEMENT

VIABILITY STATEMENT

The Board considers the Company, with no fixed life, to be a long-term investment vehicle.

The Board continually considers the prospects for the Company over the longer term. Based on the Company's current financial position, its operating model and track record, as well as the experience of the Investment Manager from both a Cuban investment and closed-end investment company perspective, the Board believes that the Company has a sound basis upon which to continue to deliver capital growth and returns over the long term.

For the purposes of this viability statement, the Board has decided that a period of three years is an appropriate period over which to report. In assessing the viability of the Company over the review period, the Directors have conducted a robust review of the principal risks focusing upon the following factors:

   --    The principal risks as detailed in the Principal Risks above; 
   --    The ongoing relevance of the Company's investment objective in the current environment; 
   --    The level of income generated by the Company and forecast income; 

-- The valuation of the Company's property portfolio, the Investment Manager's portfolio strategy for the future and the market outlook; and

   --    The liquidity and cash position of the Company over the next 36 months 

The COVID-19 pandemic has created a high level of uncertainty regarding the future income and commitments of the Group. Factors that the Board have considered in relation to the current crisis when assessing the viability of the Company include:

-- The impact on the general liquidity position of Cuba and the ability of Miramar and Monte Barreto to distribute dividends to their shareholders, including the Group.

   --    The impact on the Cuban tourism industry and the financial results of Miramar. 

-- The impact on the timing of construction of the TosCuba Project due in part to delays in the receipt of construction imports from Europe.

Although the Board believes that the Company and the Group currently have sufficient cash resources to meet their commitments during the next twelve months, the Board recognises that short-term financing or the syndication to other lenders of existing finance facilities extended to the joint venture companies may be required during the latter part of the review period. The amount and timing of any required financing would be dependent on several factors, including the length and depth of the current crisis and its effect on the economy and liquidity position of Cuba, the amount of time required for Cuba and its tourism industry to recover from the current crisis, the impact of the current crisis on the timing and rate of construction of the TosCuba project, and the results of the upcoming U.S. presidential election and its impact on Cuba, if any. The Board is confident that any required short-term financing can be obtained.

Accordingly, the Directors have a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due for the period of assessment, which is three years from the date of this Annual Report. In making this assessment, the Board has also considered the fact that potential developments such as the current COVID -19 crisis continuing for a prolonged period of time, a substantial adverse change in the outlook for Cuba and the U.S embargo, or changes in investor sentiment could have an impact on the accuracy of its assessment of the Company's prospects and viability in the future.

GOING CONCERN

In accordance with the guidance of the Financial Reporting Council, the Directors have undertaken to review the Company's ability to continue as a going concern.

The Directors are mindful of the principal risks and uncertainties disclosed above and the Viability Statement. The Company does not have any external debt obligations and does not anticipate the need for external finance over the next 12 months.

The Directors have reviewed cash flow projections that detail revenue and liabilities and will continue to receive cashflow projections as part of the full year reporting and monitoring processes. After reviewing the cashflow projections and the significant capital commitments, the Directors believe that the Company has adequate financial resources to continue its operational existence for the foreseeable future and at least 12 months from the date of this Annual Report.

Accordingly, the Directors believe that it is appropriate to continue to adopt the going concern basis in preparing the Financial Statements.

SECTION 172 STATEMENT

Stakeholder Engagement

The Board wishes to describe to the Company's shareholders how the Directors have discharged their duties and responsibilities over the course of the financial year. This section, which serves as the Company's section 172 statement as required by the AIC Code on Corporate Governance 2019, explains how the Directors have promoted the success of the Company for the benefit of its stakeholders as a whole during the financial year to 31 December 2019, taking into account the likely long term consequences of decisions, the need to foster relationships with all stakeholders and the impact of the Company's operations on the environment.

The Role of the Directors

The Company is a closed-ended investment company, has no executive directors or direct employees and is governed by the Board of Directors. Its main stakeholders are Shareholders, the Investment Manager, investee companies, service providers, and the environment and community.

As set out in the Corporate Governance Report, the Board has delegated day-to-day management of the assets to the Investment Manager and either directly or through the Investment Manager, the Company employs key suppliers to provide services in relation to valuation, legal and tax requirements, auditing, company secretarial, depositary obligations and share registration, amongst others. All decisions relating to the Company's investment policy, investment objective, dividend policy, gearing, corporate governance and strategy in general are reserved for the Board. The Board meets quarterly and receives full information on the Company's performance, financial position and any other relevant information. At least once a year, the Board also holds a meeting specifically to review the Group's strategy.

The Board regularly reviews the performance of the Investment Manager, and its other service providers, to ensure they manage the Company, and its relations with its stakeholders, effectively and that their continued appointment is in the best long term interests of the stakeholders as a whole.

Shareholders

The Board's primary focus is to promote the long-term success of the Company for the benefit of its stakeholders as a whole. The Board oversees the delivery of the investment objective, policy and strategy, as agreed by the Company's shareholders.

Shareholders are key stakeholders and the Board places great importance on communication with them. The Board welcomes all shareholder views and aims to act fairly on them. Through investment into the Company, the Board believes that the Company's shareholders seek exposure to Cuban real estate assets, a regular level of income and substantial capital growth, a well-executed sustainable investment policy, responsible capital allocation and value for money.

The Investment Manager and the Company's broker regularly meet with shareholders, and prospective shareholders, to discuss Company initiatives and seek feedback. The views of shareholders are discussed by the Board at every Board meeting, and action is taken to address any shareholder concerns. The Board and Investment Manager provides regular updates to shareholders and the market through the Annual Report, Half-Yearly Report, quarterly Net Asset Value announcements, and its website.

In the event of any changes to strategy, the Board will proactively engage with major shareholders to determine their appetite for any such change. The Chairman offers to meet with key shareholders at least annually, and other Directors are available to meet shareholders as required. This allows the Board to hear feedback directly from shareholders. During the financial year to 31 December 2019, the Board members, and the Investment Manager, participated in several meetings with large shareholders to provide reports on the progress of the Company and receive feedback, which was then provided to the full Board.

The Company's AGM provides a forum, both formal and informal, for shareholders to meet and discuss issues with the Directors and Investment Manager of the Company. The Board encourages as many shareholders as possible to attend the Company's AGM and to provide feedback on the Company.

Investee Companies

Another key stakeholder group is that of the special purpose vehicles, joint venture vehicles, partnerships, trusts and other structures through which the Company invests. Representatives of the Company are appointed to the boards of the underlying investment vehicles and, acting in the best interests of the Company's stakeholders, influence management decisions to ensure that the investee companies are run in accordance with the Company's expectations.

The Board believes that the companies in which the Company invests would like a positive and trusting working relationship with the Investment Manager and the Board, sustainable and long-term investment, positive governance practices, and value creation for all stakeholders.

In addition to engagement with the investee companies, the Investment Manager works closely with the external hotel managers and managers of office complexes who are responsible for running the Company's properties. This allows the Investment Manager to fully understand the operational risks associated with the management of the Company's underlying assets. The Board oversees the Investment Manager's interactions with the investee companies and receives reports on engagement, interaction and revenue streams at every Board meeting.

Investment Manager

The Investment Manager's Report details the key investment decisions taken during the year and subsequently. The Investment Manager has continued to manage the Company's assets in accordance with the mandate provided by shareholders, with the oversight of the Board. The Board receives presentations from the Investment Manager at every Board meeting to help it to exercise effective oversight of the Investment Manager and the Company's strategy. The Board formally reviews the performance of the Investment Manager, and the fees it receives, at least annually. More details on the conclusions from the Board's review is set out below.

Other Service Providers

The Board seeks to maintain constructive relationships with the Company's suppliers either directly or through the Investment Manager with regular communications and meetings. The Board via the Management Engagement Committee also ensures that the views of its service providers are considered and at least annually reviews these relationships in detail. The aim is to ensure that contractual arrangements remain in line with best practice, services being offered meet the requirements and needs of the Company and performance is in line with the expectations of the Board, Investment Manager and other relevant stakeholders. Reviews will include those of the company secretary, broker, share registrar and auditor.

The Community and the Environment

The Board and the Investment Manager are committed to investing in a responsible manner. There are a number of geopolitical, technological, social and demographic trends underway that can, and do, influence real estate investments - many of these changes fall under the umbrella of the Environment and Community, or Environmental, Social and Governance ("ESG"), considerations. As a result, the Investment Manager fully integrates ESG factors into its investment decision making and governance process.

The Board has adopted the Investment Manager's ESG Policy and associated operational procedures and is committed to environmental management in all phases of the investment process. The Company aims to invest responsibly, to achieve environmental and social benefits alongside returns.

Strategic Activity during the Year

The Chairman's Statement and Investment Manager's Report details the key decisions taken during the year and subsequently. Notable actions where the interests of stakeholders were actively considered include:

   --    the Board's decision to change auditor; and 

-- the Board's decision to cancel the dividend for the year ended 31 December 2019 in light of the difficult and unpredictable economic conditions created by the COVID-19 public health crisis worldwide as well as the investment programme of the Company.

As set out above, the Board considers the long-term consequences of its decisions on its stakeholders to ensure the long-term sustainability of the Company.

INVESTMENT MANAGER'S REVIEW

INTRODUCTION

While uncertainty is inevitable in the business of the Company, at present the social, economic and political landscapes in which we operate all seem to be in major turmoil. With the entire world struggling to cope with the COVID-19 pandemic and governments everywhere making valiant efforts to deal with this new reality to the best of their ability, it seems inevitable that we will all be affected by this crisis, although its medium and long-term impact on economic and social patterns, and the operations and assets of the Company are as yet uncertain. In addition to this new global phenomenon, Cuba's economy continues to be particularly affected by the ongoing U.S. Cuban embargo regulations which may be subject to change following the outcome of the US Presidential election in November 2020.

COVID-19

The outbreak of the Novel Coronavirus (COVID-19) pandemic in 2020 has resulted in numerous deaths, adversely impacted global commercial activity and contributed to significant volatility in certain equity and debt markets. The global impact of the outbreak is rapidly evolving and on 11th March 2020, the World Health Organization declared the crisis a pandemic. Many countries have reacted by instituting quarantines, prohibitions on travel and the closure of offices, businesses, schools, retail stores and other public venues. Businesses are also implementing similar precautionary measures. Such measures, as well as the general uncertainty surrounding the dangers and impact of COVID-19, are creating significant disruption in supply chains and economic activity and are having a particularly adverse impact on transportation, hospitality, tourism, entertainment and other industries.

The impact of COVID-19 has led to significant volatility and declines in the global public equity markets and it is uncertain how long this volatility will continue. As COVID-19 continues to spread, the potential impacts, including the possibility of a global, regional or other economic recession, are increasingly uncertain and difficult to assess. The Investment Manager considers the emergence of the COVID-19 pandemic to be a non-adjusting post balance sheet event. Further details can be found in Note 24 to the financial statements.

US-Cuban Embargo

For Cuba, the arrival of the COVID-19 pandemic immediately follows a year during which the Trump administration implemented an almost constant stream of harsh new measures against the country. These new embargo restrictions have strongly impacted its tourism sector, the export of medical and other services, family remittances and other parts of the Cuban economy. With respect to the deteriorating relationship between the United States and Cuba, perhaps the most difficult questions to answer are: Where this will all end? And what can Cuba do to reverse the gradual deterioration of its relationship with the U.S.?

In early January 2020, Cuba's President Miguel Díaz-Canel stated that he did not believe that the Trump administration would drop sanctions against the island in exchange for concessions from his government. And he may be right. Ongoing Cuban government efforts to open the national economy, extend internet access to the population, adopt a new Constitution, appoint a new president and rejuvenate government, as most recently demonstrated by the appointment of Tourism minister Manuel Marrero Cruz (56) as Prime Minister (officially "President of the Council of Ministers") and adding Cuba's minister of Economy and Planning, Alejandro Gil Fernández (55), as Deputy Prime Minister (officially Vice-President of the Council of Ministers) are not even mentioned by the U.S. administration. An often expressed explanation is that, although the recent strengthening of U.S. sanctions against Cuba has as its primary purpose to punish Cuba for its ongoing support for Venezuela's President Maduro, it also serves President Trump's 2020 re-election strategy which is based on the assumption that in order to win the State of Florida he needs the support of hard-line Cuban American and Venezuelan voters. The election of former Vice-President Joe Biden as President of the United States would likely trigger a renewed rapprochement between the countries and easing of the U.S.-Cuban embargo regulations, but even a re-elected President Trump could change his tune, especially since in April 2021 Raul Castro (who will then be 89 years old) will step down as First Secretary of Cuba's Communist Party.

PERFORMANCE

The Net Asset Value of the Company as at 31 December 2019 amounted to US$206,734,334 / GBP157,656,016 (2018: US$205,641,346 / GBP162,037,149), of which approximately 87% was indirectly invested in income-generating Cuban commercial and tourism related real estate assets and 10% represented finance facilities and cash. The total dividend income from the Cuban joint venture companies during the year ended 31 December 2019 was US$20,670,560 / GBP15,763,410 (2018: US$16,158,458 / GBP12,732,218).

During the 2019 financial year, the operational results of the joint ventures in which CEIBA has an interest were mixed. Inmobiliaria Monte Barreto S.A. ("Monte Barreto") had its best performance ever with a net income of US$13.5 million / GBP10.3 million (2018: US$12.7 million / GBP10.0 million). However the performance of the Meliã Habana and the Varadero Hotels were below expectation. Taking into account, the receipt by Miramar S.A. ("Miramar") of a tax credit described below, the net income after tax of Miramar was US$17.9 million / GBP13.6 million (2018: US$21.7 million / GBP17.1 million - includes net income of Cubacan S.A. that was merged with Miramar in September 2018).

The net income of the Company for the year ended 31 December 2019 attributable to the shareholders was US$7,579,514 / GBP5,780,152 (2018: US$1,775,926 / GBP1,399,359), and NAV per share at 31 December 2019 was US$1.50 / GBP1.14 (2018: US$1.49 / GBP1.18). The principal factor that contributed negatively to the results was the decrease in the fair value of Miramar, the joint venture company that owns the Hotel investments. This was partially offset by an increase in the fair value of Monte Barreto, the joint venture company that owns the Miramar Trade Center, and an increase in dividend income compared to the prior year.

As noted above, the loss on the change in the fair value of the equity investments of US$14,658,562 / GBP11,178,649 (2018: loss of US$4,483,525 / GBP3,532,838) was primarily due to the decrease in the fair value of Miramar, which was a result of lower room rates and income levels compared to the prior year. The decrease of the Group's share in the fair value of Miramar, was US$26,742,193 / GBP20,393,650.

CUBA - ECONOMIC BACKDROP

In January 2020, before the COVID-19 pandemic, Deputy Prime Minister and Minister of Economy and Planning Alejandro Gil Fernández highlighted that over the last 12 months, Cuba's economy saw growth of around 0.5%, and that despite the economic blockade and increased political pressure from the U.S., Cuba's economy was on course to show 1% growth in 2020. Gil stated that it was a testament to Cuba's resilience that Cuba managed to pass through an "extremely tense year" without entering into economic decline. In addition, he asserted that Cuba was prepared for an anticipated tightening of the U.S. blockade in the coming year and that the National Assembly had identified 12 priorities for the Cuban economy in 2020, including diversification and "serious action around exports." The Economic Commission for Latin America and the Caribbean (CEPAL) has estimated average 2019 economic growth for the region of 0.1% and projected growth for 2020 of around 0.3%. However in a special COVID-19 report published by CEPAL on 3 April 2020, it stated that as a result of the COVID-19 pandemic its original projections should be adjusted downwards by some three, four or even more percentage points. So far, no estimates are available on the effect COVID-19 will have on Gil's original growth projections for the Cuban economy.

THE US CUBAN EMBARGO

In any case, 2019 proved to be a very challenging one for the Cuban economy. The re-strengthening of the U.S. economic blockade against Cuba and the constant onslaught of negative U.S. rhetoric have hurt Cuba's tourism sector, family remittances to the island, the availability of subsidized Venezuelan oil and the export of medical and other services. The Manager believes that the negative impact of the further tightening of U.S. travel restrictions will continue to be felt in 2020. Against the backdrop of the upcoming U.S. Presidential election and the ongoing efforts made by the U.S. administration to force Cuba to withdraw its support for Venezuela, there is little hope that relations between the U.S. and Cuba will improve this year.

The new economic measures adopted by the Trump administration during 2019 include:

Ø The restriction of family remittances (through the imposition of a cap of US$1,000 per quarter and the elimination of the donation category of "remittance"), although the US Treasury subsequently confirmed an exemption from the new limits on remittances that "support the operation of economic activity in the non-state sector" (in other words: private sector enterprise);

Ø The adoption of new restrictions aimed at limiting U.S. travel to Cuba (the removal of the "people-to-people" category of approved travel and the cancellation of U.S. cruise ship travel to the island);

Ø The coming into force of Title III of the Helms-Burton Act (see below);

Ø The prohibition of U.S. flights to Cuba, except Havana; and

Ø The announcement of further rollbacks of Obama-era normalisation measures in the banking and other areas, including the elimination of the "U-turn transactions", which allowed banking institutions to process certain Cuba-related funds transfers originating and terminating outside the United States, provided neither the originator nor the recipient was a U.S. person.

The coming into force of Title III of the Helms-Burton Act in May 2019 (a contentious law previously suspended by all U.S. presidents since it was adopted in 1996) has resulted in the launch by Cuban American plaintiffs of a number of lawsuits in U.S. courts against certain Cuban as well as U.S. and foreign companies doing business in Cuba, who are accused of "trafficking in confiscated property".

These lawsuits will take some time to work their way through the court process, although a number of them have already been withdrawn or dismissed. T he law remains highly controversial and its coming into force has been strongly condemned by the European Union, Canada, Mexico and other allies of the United States who trade with and invest in Cuba. In a departure from past policy towards U.S. legal actions against it, the Cuban government has hired U.S. lawyers to defend the interests of Cuban state companies in at least one of the Title III lawsuits. The Cuban government also appears to be cooperating with foreign defendants in their efforts to defeat the Title III lawsuits. While this is frustrating for all those concerned, it is important to stress that none of the properties in which the Company has an investment are subject to a Title III action.

This renewed hostility towards Cuba on the part of the United States would seem to form part of the more general U.S. policy of pressuring the Maduro government in Venezuela with a view to encouraging regime-change there. The actions specifically target some of the leading sources of Cuban hard currency income: tourism revenues relating to U.S. travel to Cuba; subsidised oil imports from Venezuela; service income relating to medical services abroad and new foreign investment transactions. The new travel measures have already had a negative impact on U.S. travel to the island, with a corresponding fall in tourism arrivals and receipts, down from an original projection of 5.1 million arrivals at the beginning of the year to an actual number of 4.28 million at the end of 2019, and the initiation of lawsuits against foreign companies under Title III of the Helms-Burton Act has begun to have the clearly-intended chilling effect on the foreign investment climate more generally, as well as on the willingness of international banks and other financial institutions to deal with Cuba.

The recent political developments are monitored closely but we do not believe that they undermine the long-term investment case or value of the Company's assets, although it is expected that the short-term operational context will remain very challenging for at least the remainder of the year and it is unclear when the general situation will start to improve.

PORTFOLIO ACTIVITY

Overall the performance of the Miramar Trade Centre, the office complex of Monte Barreto, in which the Company has a 49% stake, had its most profitable year ever - occupancy rates remained at 100% throughout the year and revenues and gross profit were up 2.0 % and 6.5% respectively. The Hotel Assets faced the challenging political and economic backdrop referred to above and the results reflect this. While the resort hotels in Varadero generally saw occupancy remain strong, room rates declined. The Meliã Habana Hotel was particularly affected by the tightened embargo on U.S. visitors and consequently saw a more pronounced decline in room rates.

From a development perspective, construction of the Meliã Trinidad Playa Hotel development project located near Trinidad, Cuba was progressing steadily until the COVID-19 crisis in Italy began affecting the Italian partner in the construction joint venture that is constructing the hotel in March 2020. Structural works are now approximately 90% complete and the hotel has a sealed roof on most structures. Progress is now being made on internal works, including doors, windows, flooring and other installations, although at a slower pace as a result of the pandemic.

During 2020, construction works relating to planned improvements were also scheduled at the Company's hotels in Havana and Varadero. At the December board meeting of Miramar, it was agreed to approve a 2020 CAPEX and investment programme of US$21 million that will be funded by Miramar out of existing cash resources held by the joint venture company at its Cuban bank accounts, without jeopardizing dividend distributions. The timing of these investments will now be re-evaluated.

In mid-January 2019, we learned that the Cuban Ministry of Finance and Prices granted a request made by Miramar and awarded a US$2.5 million tax credit, which partially alleviates the disappointing result of the Hotel Assets in 2019. The tax credit results from the re-investment of profits by Miramar in 2018 at the time of the Cubacan S.A. - Miramar merger and subsequent capitalization. As well, HOMASI S.A., the foreign shareholder of Miramar has been successful in obtaining a credit-line (initially in the principal amount of EUR3.5 million) in order to fund its confirming and discounting activities with the hotel suppliers.

PORTFOLIO UPDATE

The Miramar Trade Centre / Monte Barreto

During 2018 and 2019, the Miramar Trade Center has effectively maintained a 100% occupancy rate. The average monthly rent per square meter rose from US$25.22 in 2018 to US$26.28 in 2019. As a result, Monte Barreto continued its strong performance, with an EBITDA of US$18.1 million / GBP13.8 million for (2018: US$17.3 million/ GBP13.2 million) and net income after tax of US$13.5 million / GBP10.3 million (2018: US$12.7 million/ GBP10.0 million) for the year. The increase is due to Monte Barreto continuing to raise rental rates as tenant leases are renewed.

The valuation of Monte Barreto has been adjusted upward by some US$25.5 million. The principal factor for the increased value is the inclusion of a residual value for the property in order to align with the valuation methodology used for establishing the values of the Hotel Assets.

Demand, predominantly from multi-national companies, NGOs and foreign diplomatic missions for international-standard office accommodation in Havana currently exceeds supply. Monte Barreto remains the dominant option in this market segment. As a consequence, and notwithstanding the COVID-19 pandemic, the outlook for Monte Barreto in 2020 remains encouraging, as we expect occupancy levels to remain in the high nineties and loss of rental income as a result of concessions to travel and tourism companies to be modest. However, the tense general liquidity situation in Cuba in the coming year may have a negative effect on the ability of Monte Barreto to distribute dividends to its shareholders, including CEIBA.

The Hotels of Miramar S.A.

Through its indirect ownership of a 32.5% interest in Miramar, the Group has interests in the following hotels (the "Hotels"):

- the Meliã Habana Hotel, a 397-room international-category 5-star business hotel located on prime ocean-front property in Havana (directly opposite the Miramar Trade Center);

- the Meliã las Americas Hotel, a 340-room international-category 5-star beach resort hotel located in Varadero;

- the Meliã Varadero Hotel, a 490-room international-category 5-star beach resort hotel located in Varadero; and

- the Sol Palmeras Hotel, a 607-room international-category 4-star beach resort hotel located in Varadero.

All of the Hotels are operated by Meliã Hotels International S.A. ("Meliã Hotels International"), which also has a 17.5% equity interest in Miramar (and a 10% equity interest in TosCuba).

Performance of the Hotels

During 2019, the Hotels continued to suffer from various negative external factors, including the strengthening of the U.S. embargo (as described elsewhere in this report), the bankruptcy of travel company Thomas Cook, a decrease in the number of international flights to Varadero and Havana, financial turmoil in Argentina, and fierce competition between numerous Caribbean countries and the Yucatan peninsula in Mexico to capture Canadian tourists as well as longer distance tourists from Europe and Asia. Taking into account the receipt by Miramar of a tax credit described below, the net income after tax of Miramar S.A. was US$17.9 million / GBP13.6 million (2018: US$21.7 million / GBP17.1 million - includes net income of Cubacan S.A. that was merged with Miramar in September 2018).

Financial information of the Hotels is as follows:

 
                                   2019                          2018 
 Meliã Habana 
  Hotel 
 EBITDA                 US$6,120,591 / GBP4,667,575   US$7,686,699 / GBP6,056,811 
 Occupancy Rate                     66%                           65% 
 ADR                          US$142 / GBP108               US$146 / GBP111 
 RevPAR                        US$94 / GBP72                US$112 / GBP88 
 
 Meliã Las 
  Americas Hotel 
 EBITDA                 US$5,378,939 / GBP4,101,990   US$7,639,134 / GBP6,019,332 
 Occupancy Rate                     76%                           81% 
 ADR                          US$129 / GBP98                US$141 / GBP108 
 RevPAR                        US$98 / GBP75                US$114 / GBP91 
 
 Meliã Varadero 
  Hotel 
 EBITDA                 US$7,013,618 / GBP5,348,599   US$8,262,384 / GBP6,510,428 
 Occupancy Rate                     80%                           79% 
 ADR                          US$103 / GBP79                US$112 / GBP85 
 RevPAR                        US$82 / GBP63                 US$88 / GBP71 
 
 Sol Palmeras Hotel 
 EBITDA                 US$6,965,194 / GBP5,311,671   US$8,862,908 / GBP6,983,617 
 Occupancy Rate                     82%                           82% 
 ADR                           US$90 / GBP69                US$100 / GBP76 
 RevPAR                        US$74 / GBP56                 US$82 / GBP65 
                       ----------------------------  ---------------------------- 
 

During the year, the Hotels were able to maintain their average occupancy rates as compared to the prior year, with the exception of the Meliã Las Americas Hotel, which saw a 5% decline. All of the Hotels suffered a significant decrease in average room rates, resulting in lower income and EBITDA compared to the prior year.

The decrease in the 2019 operational results of Miramar were partially compensated by a tax credit it received in the amount of US$2.5 million. In late December 2019, the Cuban Ministry of Finance and Prices granted Miramar a tax credit relating to the re-investment of profits by Miramar at the time of completion of the 2018 merger between Miramar and Cubacan S.A. (at the time the joint venture company that owned the Varadero Hotels), and will be applied against the tax payable of the joint venture company for the 2019 and 2020 tax years.

Confirming and Discounting Facility

In early December 2019, HOMASI (the foreign shareholder of Miramar) executed a US$7 million confirming and discounting facility with Miramar for the purpose of confirming and discounting supplier invoices relating to the operations of the four Hotels owned by the joint venture company. The facility will be financed in part by a EUR3.5 million credit line received by HOMASI from a Spanish bank for this purpose, thus alleviating the present cash flow position of the Company. The facility has attractive economic terms (finance cost below 5%), and the facility will be secured by the offshore cash flows generated by two of the Hotels. Management expects that the execution of this facility will assist in stabilising the operations relating to supply of the Hotels and minimizing the impact of the current liquidity difficulties that Cuba is experiencing.

Planned Investments

In December 2019, the joint venture agreed that a four year refurbishment and development plan will be carried out, which includes all of the Miramar hotels and which will see a total of 187 new rooms and new facilities added and 512 rooms and 57 bungalows refurbished across the whole estate.

The planning and permission process for the expansion of the Meliã Habana Hotel is well underway. These involve improvements to existing rooms, public areas and restaurants, the construction of an additional 163 new rooms and the construction of a large modern ballroom and conference centre. This investment is scheduled to be carried out in phases over the coming four years when same is economically justified.

In the case of the Varadero Hotels, planned investments include the modernisation and upgrade of existing rooms and bungalows and, in the case of the Meliã las Americas Hotel, the renovation of common areas.

At the December board meeting of Miramar, an investment programme in the amount of US$21 million was approved for 2020, to be funded by Miramar out of existing cash resources held by the joint venture in its Cuban bank accounts. This investment programme is deemed essential to enable the Hotels to remain competitive in the face of new hotel inventory that has recently become or will soon be operational in Havana and Varadero.

T he 2020 investment programme includes:

- Meliã Habana Hotel: modernisation and upgrade of common areas and 68 existing rooms, as well as the construction of 24 new rooms within the existing structure of the Hotel.

   -      Sol Palmeras Hotel: modernisation and upgrade of 50 bungalows and 63 rooms. 

- Meliã las Americas Hotel: modernisation and upgrade of common areas, 144 rooms and 7 bungalows.

   -      Meliã Varadero Hotel: modernisation and upgrade of 238 rooms. 

Whether the 2020 investment programme will be carried out partially or in full will, amongst others, depend on the impact of the COVID-19 pandemic and the timing of the re-opening of the Hotels.

2020 Outlook

In mid March 2020, Cuba adopted a range of measures to confront the COVID-19 pandemic, which included the closing of almost all hotels in Cuba, including the four hotels owned and operated by Miramar. Although, Miramar has no third party finance and a healthy cash balance which will allow it to operate without receiving any income for a period in excess of 12 months, it is inevitable that the real income levels for 2020 and possibly beyond will fall below the projections that were used by ABACUS, the independent valuer of the Company, at the time of calculating the fair values of the Company's operating Hotel Assets as at 31 December 2019. It is therefore likely that the fair values of the Hotels will be adjusted downwards as at 30 June 2020 to reflect the temporary loss of income and the present uncertainty surrounding the effects of the COVID-19 pandemic.

The TosCuba Project

Construction of the Meliã Trinidad Playa Hotel near Trinidad, Cuba was started in December 2018 was advancing on budget. Although the project has been progressing steadily, the operations of the Italian-Cuban construction partnership and the flow of imported materials and equipment have been severely impacted by the COVID-19 pandemic.

At present major structural works are approximately 90% complete and significant internal works are already underway, including electrical, plumbing, doors and windows, flooring, internal structures and drywall installation.

The total capital of TosCuba is US$16 million. The capital has been spent on the surface rights over the property, pre-construction planning and development costs and the payment of part of the required deposit under the turnkey construction contract executed with a Cuban-Italian construction joint venture in 2018, which provides for a total construction cost of approximately US$60 million. During 2019, additional investments to include elevators, roadworks (entrance, parking, etc.), beach improvement, and other costs were identified that will be added to the investment budget once the costs thereof have been approved.

In April 2018, the Company arranged and presently participates in a US$45 million construction finance facility to be disbursed under two tranches of US$22.5 million / GBP17.2 million each. The amount disbursed under the Company's participation in the first tranche (A) as at 31 December 2019 amounted to US$9.9 million / GBP7.5million. The second tranche (B) will begin disbursement once the first tranche is fully disbursed. Repayment of the facility is secured by the future income of the hotel, and Tranche B has received further security over additional tourism cash flows granted by the Cuban shareholder in the joint venture company.

TosCuba received a grant in the amount of US$10 million / GBP7.6 million under the Spanish Cuban Debt Conversion Programme. In accordance with the terms of the grant, these funds were used by the joint venture company to fund local purchases of goods and services delivered under the construction contract by Cuban suppliers, thereby reducing the external funding that the Company would otherwise have needed to provide.

In March 2020, the Italian-Cuban partnership that is constructing the hotel informed TosCuba that the construction would likely be affected by the COVID-19 pandemic and would suffer delays. In parallel, CEIBA is presently in discussions with TosCuba to substantially lower the rate of capital expenditure on the TosCuba Project until there is greater certainty around the repatriation of dividends from the Cuban joint venture companies Miramar and Monte Barreto. This will inevitably extend the time-line for construction of the TosCuba Project as well as the disbursement schedule under the facility. Further information will be provided when there is greater clarity on the development.

FINTUR and TosCuba Finance Facilities

FINTUR Facility

Since 2002, the Company has arranged and participated in numerous secured finance facilities extended to Casa Financiera FINTUR S.A. ("FINTUR"), the Cuban government financial institution for the tourism sector. These facilities act as a medium-term investment and treasury management tool for the Group. The facilities are fully secured by offshore tourism proceeds from numerous internationally managed hotels. The Group has a successful 18year track record in arranging and participating in over EUR150 million of facilities extended to FINTUR, with no defaults occurring during this period.

Under the most recent facility, originally executed in 2016 in the principal amount of EUR24 million and subsequently amended in 2019through the addition of a second tranche in the principal amount of EUR12 million, the Company has a EUR4 million participation under Tranche A and a EUR2 million participation under Tranche B. This facility generates an 8.00% interest rate and is operating successfully without delay or default. As at 31 December 2019, the principal amount of US$1,213,648 / GBP925,530 was outstanding under the Company's participation in Tranche A, and the principal amount of US$2,016,523 / GBP1,537,804 was outstanding under the Company's participation in Tranche B.

As a result of the COVID-19 pandemic, the income from the hotels that serve as the basis for payments under the FINTUR facility are expected to abruptly stop as of April 2020 and to resume only after Cuba's tourism sector restarts (and the hotels) re-open during the second half of the year. Negotiations with FINTUR to re-schedule payments are presently underway.

TosCuba - Construction Facility

As stipulated above in April 2018 CEIBA arranged and executed a secured construction finance facility in favour of TosCuba in order to provide funding for the construction of the Meliã Trinidad Playa Hotel. The facility is in the maximum principal amount of up to US$45 million, to be disbursed in two tranches, with an 8.00% interest rate. The first disbursement under the facility was made in November 2018 in the lead-up period to the formal construction start of the project in December 2018, and as at 31 December 2019 the principal amount of US$9,915,552 / GBP7,561,619 had been disbursed under the Company's participation. The remainder of the facility will be disbursed over the remaining construction period, followed by a nine-year repayment period.

This facility may be syndicated and is secured by future income of the hotel under construction and 50% of the principal amount is further secured by a guarantee given by Cubanacán S.A., Corporación de Turismo y Comercio Internacional ("Cubanacán"), the Cuban shareholder of TosCuba, backed by income from another hotel in Cuba.

As stipulated above, the COVID-19 pandemic has had a material adverse effect on the development of this investment. As a result of the expected temporary loss of dividend income from Miramar and the uncertainty with respect to the receipt of dividend income from Monte Barreto the timing of construction and of the disbursements to be made under the facility are presently being discussed between the constructor, TosCuba and its shareholders. In addition, it is likely that at some point in time in the future the Company may be forced to attract funding from its shareholders or third parties in order to continue providing the amounts committed under the facility. The Investment Manager is currently envisaging debt rather than equity funding for this purpose.

OUTLOOK

Management expects that, as a result of the COVID-19 pandemic, the very difficult economic and political circumstances faced by Cuba during 2019 will continue into 2020, and that the local market conditions in which the Group operates will remain very challenging throughout the year. The further accentuation of the liquidity challenges faced by the Cuban economy as a result of the pandemic and the U.S. Cuban embargo are expected to negatively impact the timing of dividend and other payments to the Company, as well as the timing of the ongoing development of the TosCuba Project.

However, we do expect that all of the hotels of Miramar will re-open in 2020 and that all of our underlying Cuban real estate assets, the Cuban joint ventures in which we are invested and the loan facilities in which we participate will continue to generate positive operational results. In addition, with numerous construction projects under development and in execution, we are investing today to ensure and safeguard growth in the future. We also anticipate that we will be able to leverage our long-standing experience in the marketplace to continue investing in the country despite the challenging environment, as well as to negotiate and execute attractive new long-term investment opportunities.

Sebastiaan A.C. Berger

Aberdeen Asset Investments Limited

27 April 2020

DIRECTORS' REPORT (EXTRACTS)

The Directors present their Report and the audited Consolidated Financial Statements for the year ended 31 December 2019.

The principal activity, and purpose, of the Company is to provide a regular level of income and substantial capital growth. The Company is a country fund with a primary focus on Cuban real estate assets. The Company seeks to deliver the investment objective primarily through investment in, and management of, a portfolio of Cuban real estate assets, with a focus on the tourism-related and commercial property sectors. A description of the activities for the Company for the year under review is provided in the Chairman's Statement above.

STATUS

The Company is a Guernsey company which was incorporated on 10 October 1995. With effect from 11 September 2018, the Company became a Registered Closed-ended Collective Investment Scheme pursuant to The Protection of Investors (Bailiwick of Guernsey) Law, 1987, as amended and the Registered Collective Investment Schemes Rules 2015 issued by the Guernsey Financial Services Commission.

The Company invests either directly or through holdings in special purpose vehicles, joint venture vehicles, partnerships, trusts or other structures. As at 31 December 2019, the Group held the following interests in joint venture companies in Cuba:

-- an indirect 49 per cent. interest in Inmobiliaria Monte Barreto S.A., which is the Cuban joint venture company that owns and operates the Miramar Trade Centre, a 56,000m(2) mixed-use office and retail complex in Havana;

-- an indirect 32.5 per cent. interest in Miramar S.A., which is the Cuban joint venture company that owns the Meliã Habana Hotel and the Varadero Hotels; and

-- an indirect 40 per cent. interest in TosCuba S.A., which is the Cuban joint venture company that owns and is constructing the Meliã Trinidad Playa Hotel.

The Directors are of the opinion that the Company has conducted its affairs from 1 January 2019 to 31 December 2019 as a registered collective investment scheme, so as to comply with the Registered Collective Investment Scheme Rules 2015.

The Directors, having considered the Group's objectives and available resources along with its projected income and expenditure, are satisfied that the Group has adequate resources to continue in operational existence for the foreseeable future. The Directors are closely monitoring the latest market developments relating to COVID-19, and possible future impact on the Company in particular on the Group's investment portfolio and financing arrangements and following enquiries with the Group's property advisors, the Directors remain confident that the going concern basis remains appropriate in preparing the consolidated financial statements.

RESULTS AND DIVIDS

Details of the Company's results are shown below.

CAPITAL STRUCTURE AND ISSUANCE

The Company's capital structure is summarised in note 11 to the financial statements.

At 31 December 2019, there were 137,671,576 fully paid Ordinary Shares (2018 - 137,671,576) in issue.

VOTING RIGHTS

Ordinary Shareholders are entitled to vote on all resolutions which are proposed at general meetings of the Company. The Ordinary Shares carry a right to receive dividends. On a winding up, after meeting the liabilities of the Company, the surplus assets will be paid to Shareholders in proportion to their shareholdings.

MANAGEMENT AGREEMENT

On 31 May 2018, the Company entered into the Management Agreement under which ASFML was appointed as the Company's alternative investment fund manager to provide portfolio and risk management services to the Company. The Management Agreement took effect on 1 November 2018. ASFML has delegated portfolio management to the Investment Manager. Both AFSML and the Investment Manager are wholly-owned subsidiaries of Standard Life Aberdeen plc.

Pursuant to the terms of the Management Agreement, ASFML is responsible for portfolio and risk management on behalf of the Company and will carry out the on-going oversight functions and supervision and ensure compliance with the applicable requirements of the AIFMD.

There are no performance, acquisition, exit or property management fees payable to the AIFM and/or the Investment Manager.

MANAGEMENT FEE

Under the terms of the Management Agreement, ASFML is entitled to receive an annual management rate of 1.5 per cent. of Total Assets. For this purpose, the term Total Assets means the aggregate of the assets of the Company less liabilities on the last business day of the period to which the fee relates (excluding from liabilities any proportion of principal borrowed for investment and treated in the accounts of the Company as current liabilities).

The annual management fee payable by the Company to the AIFM will be reduced by deduction of the (annual) running costs of the Havana operations of CEIBA Property Corporation Limited, a subsidiary of the Company.

In addition, the AIFM is entitled to reimbursement for all costs and expenses properly incurred by the AIFM and/or the Investment Manager in the performance of its duties under the Management Agreement.

In connection with execution of the Management Agreement, ASFML paid the Company US$5,000,000 to compensate the Company for the costs relating to the IPO and Listing as well as for releasing and making available the Company's internal management team to ASFML. In the event that the Management Agreement is terminated prior to the fifth anniversary of its coming into effect, the Company must pay ASFML a pro-rated amount of the US$5,000,000 payment based on the amount of time remaining in the five year period. As such, this payment has been recorded as a deferred liability and is being amortised over the five year period. The amount amortised each period is accounted for as a reduction of the management fee.

The Directors reviewed the terms of the Management Agreement and management fees during the year and have confirmed that, due to the investment skills, experience and commitment of the Investment Manager, the appointment of ASFML, on the terms agreed, is in the interests of Shareholders as a whole. The Management Engagement Committee is responsible for undertaking a review of the Management Agreement on a regular basis and providing a recommendation on the continued appointment of the AIFM to the Board.

POLITICAL AND CHARITABLE DONATIONS

The Company does not make political donations and has not made any charitable donations during 2019 (2018 - Nil).

RISK MANAGEMENT

Details of the financial risk management policies and objectives relative to the use of financial instruments by the Company are set out in note 17 to the financial statements.

THE BOARD

The names and short biographies of the directors of the Company, all of whom are non-executive, at the date of this report are shown above. John Herring is the Chairman and Peter Cornell is the Senior Independent Director. Trevor Bowen, Keith Corbin and Peter Cornell are considered independent non-executive Directors.

The Board considers that John Herring and Colin Kingsnorth continue to be independent in character and judgement and bring a wealth of experience. However, due to John's historical connection with Northview Investment Fund Limited (the Company's largest shareholder), and his length of service on the Board, John is not considered independent for the purposes of The AIC Code of Corporate Governance (published in February 2019) (the "AIC Code").

In addition, Colin Kingsnorth, having served on the Board for an extended period of time and as a representative of Laxey Partners, and the investment manager of Value Catalyst Fund, both major shareholders in the Company, is also not considered independent for the purposes of the AIC Code.

The Board, which comprises five male directors, regularly reviews composition of the Board and succession planning. Given the length of service of the independent non-executive directors and the interests being represented by the other non-executive directors, as well as the current position of the Company, the Board believes that the Board composition continues to be appropriate.

ROLE OF THE CHAIRMAN

The Chairman is responsible for providing effective leadership to the Board, demonstrating objective judgement and promoting a culture of openness and debate. The Chairman facilitates the effective contribution, and encourages active engagement, by each Director. In conjunction with the Company Secretary, the Chairman ensures that Directors receive accurate, timely and clear information to assist them with effective decision-making. The Chairman leads the evaluation of the Board and individual Directors, and acts upon the results of the evaluation process by recognising strengths and addressing any weaknesses. The Chairman also engages with major shareholders and ensures that all Directors understand shareholder reviews.

ELECTION OF THE BOARD

In accordance with corporate governance best practice, the Board has agreed that all Directors will retire annually and, if appropriate, will seek re-election at the annual general meeting of the Company. All Directors will stand for re-election at the forthcoming Annual General Meeting. The Board has reviewed the skills and experience of each Director and believes that each contributes to the long-term sustainable success of the Company. The Board has no hesitation in recommending their election or re-election to shareholders.

In common with most Registered Closed Ended Collective Investment Schemes, the Company has no direct employees. Directors' & Officers' liability insurance cover has been maintained throughout the year at the expense of the Company.

CORPORATE GOVERNANCE

The Company is committed to high standards of corporate governance. As the Company is listed on the SFS, the Company has undertaken to voluntarily comply with provision 9.8 of Chapter 9 of the Listing Rules regarding corporate governance and the principles and provisions of the AIC Code for the year ended 31 December 2019.

The AIC Code addresses all the principles and provisions set out in the UK Corporate Governance Code, as well as setting out additional principles and provisions on issues that are of specific relevance to investment companies. The Board considers that reporting in accordance with the principles and provisions of the AIC Code provides more relevant and comprehensive information to shareholders. The AIC Code is available on the AIC website at; https://www.theaic.co.uk .

The Company has compiled throughout the accounting period with the relevant provisions contained within the AIC Code except provisions relating to:

   --    the independence and tenure of the chairman (provisions 11 and 13); 
   --    the role and responsibility of the chief executive (provisions 9 and 14); and 
   --    executive directors' remuneration ( provisions 33 and 36 to 40). 

The Board considers that provisions 9, 14, 33 and 36 to 40 are not relevant to the position of the Company, being an externally-managed investment company. In particular, all of the Company's day to day management and administrative functions are outsourced to third parties. And, as set out above, the Board has not complied with provisions 11 and 13 and has resolved that, given the projects currently underway at the Company, and the present economic disruption caused by the COVID-19 pandemic, John's continued appointment as Chairman is in the best interests of the Company and shareholders as a whole. The Board evaluates appointments, including the Chairman, on an annual basis.

Directors have attended the following scheduled Board meetings during the year ended 31 December 2019.

 
     Director        No of Meetings Attended   Meetings during 
                                                period on the 
                                                    Board 
   John Herring                 4                     4 
   Keith Corbin                 4                     4 
   Trevor Bowen                 3                     4 
   Peter Cornell                4                     4 
 Colin Kingsnorth               3                     4 
                    ------------------------  ---------------- 
 

Policy on Tenure

The Board's policy on tenure is that Directors need not serve on the Board for a limited period of time only. The Board does not consider that the length of service of a Director is as important as the contribution he or she has to make, and therefore the length of service will be determined on a case-by-case basis. The Board believes that changes to its composition, including succession planning for Directors, can be managed without undue disruption to the Company's operations. Directors are able and encouraged to provide statements to the Board of their concerns and ensure that any items of concern are recorded in the Board minutes and the Chairman encourages all Directors to present their views on matters in an open forum.

The Board notes that some Shareholders may see longevity on the Board as a negative. The Board is compliant with the provisions of the AIC Code relating to corporate governance and time served on boards and will continue to ensure that it meets these rules in the future. The Board has a mix of longer serving and more recently appointed Directors and the Board believes that the experience of the longer serving Directors has served the Company well through numerous investment cycles and is valued by the Board as a whole.

The Board has a schedule of matters reserved to it for decision and the requirement for Board approval on these matters is communicated directly to the senior staff at the Investment Manager. Such matters include strategy, gearing, treasury and dividend policy. Full and timely information is provided to the Board to enable the Directors to function effectively and to discharge their responsibilities. The Board also reviews the financial statements, performance and revenue budgets.

The Board intends to conduct, on an annual basis, an appraisal of the Chairman of the Board, Directors' individual self-evaluation and a performance evaluation of the Board and its committees as a whole. The Board has not undertaken a formal performance evaluation during the year to 31 December 2019. In February 2020, the Board considered an externally facilitated Board evaluation but concluded that, as the composition of the Board was still relatively new, this should be deferred until 2021, at which time it will be considered again. Instead the Board decided that the process for 2020 would consist of a Chairman lead questionnaire-based evaluation.

However, the Board has no hesitation in recommending to Shareholders the re-election of all Directors.

There is an agreed procedure for Directors to take independent professional advice if necessary and at the Company's expense. This is in addition to the access which every Director has to the advice and services of the Company Secretary, which is responsible to the Board for ensuring that Board procedures are followed and that applicable rules and regulations are complied with.

Board Committees

The Board has established an Audit Committee, a Management Engagement Committee and a Nomination Committee. These committees undertake specific activities through delegated authority from the Board. Terms of reference for each committee may be found on the Company's website ( www.ceibalimited.co.uk ) and copies are available from the Company's Secretary upon request. The terms of reference are reviewed and re-assessed by the Board for their adequacy on an annual basis .

The Board has not appointed a separate remuneration committee but, as set out below, delegates the consideration of the remuneration of the Directors to the Nomination Committee.

Details of the activities of each of the committees are set out below.

Audit Committee

Information regarding the composition, responsibilities and activities of the Audit Committee is detailed in the Report of the Audit Committee below.

Nomination Committee

All appointments to the Board are considered by the Nomination Committee which is chaired by Keith Corbin and is made up of all of the independent non-executive Directors. The Board's overriding priority in appointing new directors to the Board is to identify the candidate with the best range of skills and experience to complement existing Directors. The function of the Nomination Committee is to ensure that the Company goes through a formal process of reviewing the structure, size and composition (including the skills, knowledge, experience and diversity) of the Board, identifying the experience and skills which may be needed and those individuals who might best provide them and to ensure that the individual has sufficient available time to undertake the tasks required. When considering the composition of the Board, members will be mindful of diversity, inclusiveness and meritocracy. The outside directorships and broader commitments of Directors are also monitored by the Nomination Committee.

The Company's aim as regards the composition of the Board is that it should have a balance of experience, skills and knowledge to enable each Director and the Board as a whole to discharge their duties effectively. Whilst the Board agrees that it is entirely appropriate that it should seek diversity, it does not consider that this can be best achieved by establishing specific quotas and targets and appointments will continue to be made based wholly on merit. Accordingly, when changes to the Board are required, the Nomination Committee will have regard to diversity and to a comparative analysis of candidates' qualifications and experience. A pre-established, clear, neutrally formulated and unambiguous set of criteria will be utilised to determine the most suitable candidate for the specific position sought. Once appointed, the successful candidate will receive a formal and tailored induction.

The remuneration of the Directors is reviewed on an annual basis by the Nomination Committee and compared with the level of remuneration for directorships of other similar companies. All Directors receive an annual fee and there are no share options or other performance related benefits available to them. The remuneration of the Directors has been set in order to attract individuals of a calibre appropriate to the future development of the Company. The Company's policy on Directors' remuneration, together with details of the remuneration of each Director, is detailed in the Directors' Remuneration Report below.

The Nomination Committee meets at least once per year and otherwise as required.

During the year the Nomination Committee met once to consider succession planning for the current Chairman. The Nomination Committee agreed that, given the projects currently underway at the Company, and the present climate, Mr Herring's continued appointment was in the best interests of the Company and shareholders as a whole but the position of Chairman would be kept under regular review.

Management Engagement Committee

The Management Engagement Committee comprises the entire Board of Directors and is chaired by John Herring. The principal duties of the Management Engagement Committee are to review the performance of the Investment Manager and its compliance with the terms of the Management Agreement. The terms and conditions of the Investment Manager's appointment, including an evaluation of fees, are reviewed by the Management Engagement Committee on an annual basis.

The Management Engagement Committee shall also review the terms of appointment of other key service providers to the Company.

The Management Engagement Committee meets at least once per year and otherwise as required.

During the year the Management Engagement Committee met once to consider the performance of, and the contractual arrangements with the key service providers of the Company, including the Investment Manager, the AIFM and the Administrator.

INTERNAL CONTROL & RISK MANAGEMENT

The Board is ultimately responsible for the Company's system of internal control and for reviewing its effectiveness and confirms that there is an ongoing process for identifying, evaluating and managing the significant risks faced by the Company. This process has been in place during the year under review and up to the date of approval of this Annual Report. It is regularly reviewed by the Board and accords with the Financial Reporting Council Guidance.

The Board has reviewed the effectiveness of the system of internal control focussing in particular on the process for identifying and evaluating the principal risks affecting the Company and policies by which these risks are managed.

The Directors have delegated the investment management of the Company's assets to ASFML within overall guidelines, and this embraces implementation of the system of internal control, including financial, operational and compliance controls and risk management. Internal control systems are monitored and supported by the Investment Manager's internal audit function which undertakes periodic examination of business processes, including compliance with the terms of the management agreement, and ensures that recommendations to improve controls are implemented.

Risks are identified and documented through a risk management framework by each function within the Investment Manager's group activities. Risk includes financial, regulatory, market, operational and reputational risk. This helps the internal audit risk assessment model identify those functions for review. Any weaknesses identified are reported to the Board, and timetables are agreed for implementing improvements to systems. The implementation of any remedial action required is monitored and feedback provided to the Board.

The principal risks and uncertainties faced by the Company are detailed above.

The key components of the process designed by the Directors to provide effective internal control are outlined below:

-- the Investment Manager prepares forecasts and management accounts which allow the Board to assess the Company's activities and review its performance;

-- the Board and Investment Manager have agreed clearly defined investment criteria, specified levels of authority and exposure limits. Reports on these issues, including performance statistics and investment valuations, are regularly submitted to the Board and there are meetings with the Investment Manager as appropriate;

-- as a matter of course the Investment Manager's compliance department continually reviews the Investment Manager's operations and reports to the Audit Committee on a six monthly basis;

-- written agreements are in place which specifically define the roles and responsibilities of the Investment Manager and other third-party service providers and, where relevant, ISAE3402 Reports, a global assurance standard for reporting on internal controls for service organisations, or their equivalents are reviewed;

-- the Board has considered the need for an internal audit function but, because of the compliance and internal control systems in place within the Investment Manager, has decided to place reliance on the Investment Manager's systems and internal audit procedures; and

-- the Audit Committee carried out an annual assessment of internal controls for the year ended 31 December 2019 by considering documentation from the Investment Manager, and the Depositary, including their internal audit and compliance functions and taking account of events since 31 December 2019. The results of the assessment, that internal controls are satisfactory, will be reported to the Board at the next Board meeting.

Internal control systems are designed to meet the Company's particular needs and the risks to which it is exposed. Accordingly, the internal control systems are designed to manage rather than eliminate the risk of failure to achieve business objectives and by their nature can only provide reasonable and not absolute assurance against misstatement and loss.

MANAGEMENT OF CONFLICTS OF INTEREST

The Board has a procedure in place to deal with a situation where a Director has a conflict of interest. As part of this process, the Directors prepare a list of other positions held and all other conflict situations that may need to be authorised either in relation to the Director concerned or his connected persons. The Board considers each Director's situation and decides whether to approve any conflict, taking into consideration what is in the best interests of the Company and whether the Director's ability to act in accordance with his or her wider duties is affected. Each Director is required to notify the Company's Secretary of any potential, or actual, conflict situations that will need authorising by the Board. Authorisations given by the Board are reviewed at each Board meeting. No Director has a service contract with the Company although Directors are issued with letters of appointment upon appointment. The Directors' interests in contractual arrangements with the Company are as shown in note 13 to the financial statements. No other Directors had any interest in contracts with the Company during the period or subsequently. The conflicts of the non-independent directors are well known to the Board and reviewed regularly.

The Board has adopted appropriate procedures designed to prevent bribery. The Company receives periodic reports from its service providers on the anti-bribery policies of these third parties. It also receives regular compliance reports from the Investment Manager and the Administrator.

The Criminal Finances Act 2017 has introduced a new corporate criminal offence of "failing to take reasonable steps to prevent the facilitation of tax evasion". The Board has confirmed that it is the Company's policy to conduct all of its business in an honest and ethical manner. The Board takes a zero-tolerance approach to facilitation of tax evasion, whether under Guernsey law or under the law of any foreign country.

SUBSTANTIAL INTERESTS

The Company has been advised that the following shareholders owned 5% or more of the issued Ordinary share capital of the Company at 31 December 2019:

 
 Shareholder                      Number of shares held   % held 
 Northview Investment 
  Fund Ltd                        37,854,018              27.5 
                                 ----------------------  ------- 
 Laxey Partners Limited           23,736,481              17.2 
                                 ----------------------  ------- 
 Aberdeen Standard Investments    9,747,852               7.1 
                                 ----------------------  ------- 
 Citco Global Custody 
  NV Ref Ifoghas Investments 
  Ltd                             7,477,144               5.4 
                                 ----------------------  ------- 
 The Value Catalyst 
  Fund Ltd                        7,242,835               5.3 
                                 ----------------------  ------- 
 

There have been no significant changes notified in respect of shareholdings between 31 December 2019 and 27 April 2020.

ANNUAL GENERAL MEETING

The Notice of the Annual General Meeting ("AGM") is included within this Annual Report and Consolidated Financial Statements. The AGM will take place at the registered office of the Company, Dorey Court, Admiral Park, St. Peter Port, Guernsey, GY1 2HT Channel Islands on 19 June 2020 at 2.00pm. All shareholders will have the opportunity to put questions to the Board or the Investment Manager at the Company's AGM. Please note that the Company's Secretary is available to answer general Shareholder queries at any time throughout the year. In the event that the situation surrounding COVID-19 should affect the plans to hold the AGM on 19 June 2020 the Company will update shareholders through an announcement to the London Stock Exchange and will provide further details on the Company's website. The Board would encourage all shareholders to exercise their votes, and submit any questions, in respect of the meeting in advance. This should ensure that your votes are registered in the event that attendance at the AGM might not be possible.

RELATIONS WITH STAKEHOLDERS

The Directors place a great deal of importance on communication with Shareholders. The Board welcomes feedback from all Shareholders. The Chairman meets periodically with the largest Shareholders to discuss the Company. The Annual Report and Consolidated Financial Statements are widely distributed to other parties who have an interest in the Company's performance. Shareholders may obtain up to date information on the Company through the Company's website www.ceibalimited.co.uk .

The Board's policy is to communicate directly with Shareholders and their representative bodies without the involvement of the Investment Manager in situations where direct communication is required and usually a representative from the Board is available to meet with major Shareholders on an annual basis in order to gauge their views.

By order of the Board

27 April 2020

JTC Fund Solutions (Guernsey) Limited

Secretary

Ground Floor

Dorey Court

Admiral Park

St Peter Port

Guernsey GY1 2HT

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The Directors are responsible for preparing the Annual Report and Consolidated Financial Statements, in accordance with applicable law and regulations.

The Companies (Guernsey) Law, 2008, as amended (the "Law") requires the Directors to prepare financial statements for each financial year. Under the Law, the Directors have elected to prepare the Consolidated Financial Statements in accordance with IFRS. Under the Law the Directors must not approve the Consolidated Financial Statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.

In preparing these Consolidated Financial Statements, the Directors are required to:

   --    select suitable accounting policies and then apply them consistently; 
   --    make judgments and estimates that are reasonable and prudent; 

-- prepare the Consolidated Financial Statements on a going concern basis unless it is inappropriate to presume that the Company will continue in business; and

-- state whether all applicable IFRS 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 are sufficient to show and explain the Company's transactions and which disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that it's Consolidated Financial Statements comply with the Law. They are also responsible for taking such steps as are reasonably open to them to safeguard the assets of the Company and to prevent and detect fraud and other irregularities.

The Directors listed, being the persons responsible, hereby confirm to the best of their knowledge that:

-- the Consolidated Financial Statements, prepared in accordance with the applicable accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company, and all the undertakings included in the consolidation taken as a whole;

-- that in the opinion of the Directors, the Annual Report and Consolidated Financial Statements taken as a whole, is fair, balanced and understandable and it provides the information necessary to assess the Company's position and performance, business model and strategy; and

-- the General Information section and Directors' Report include a fair review of the development and performance of the business and the position of the Company and all the undertakings included in the consolidation taken as a whole, and the Principal Risks section provides a description of the principal risks and uncertainties that they face.

   --    there is no additional information of which the Company's auditor is not aware. 

For Ceiba Investments Limited

John Herring

Chairman

27 April 2020

 
 Consolidated Statement of Financial               31 Dec 2019     31 Dec 
  Position                                                           2018 
  As at 31 December 2019 
                                            Note       US$           US$ 
                                           -----  ------------  ------------ 
 Assets 
 Current assets 
 Cash and cash equivalents                   4      13,102,578    19,814,790 
 Accounts receivable and accrued income      5       2,211,832     1,558,288 
 Loans and lending facilities                6       2,558,018     1,811,257 
                                                  ------------  ------------ 
 Total current assets                               17,872,428    23,184,335 
                                                  ------------  ------------ 
 
 Non-current assets 
 Accounts receivable and accrued income      5       5,646,484       131,664 
 Loans and lending facilities                6      10,587,702     5,703,057 
 Equity investments                          7     227,340,559   238,795,681 
 Property, plant and equipment               8         568,346       537,265 
                                                  ------------  ------------ 
 Total non-current assets                          244,143,091   245,167,667 
                                                  ------------  ------------ 
 Total assets                                      262,015,519   268,352,002 
                                                  ------------  ------------ 
 
 Liabilities 
 Current liabilities 
 Accounts payable and accrued expenses       9       2,066,213     2,202,953 
 Deferred liabilities                        15      1,000,000     1,000,000 
 Total current liabilities                           3,066,213     3,202,953 
                                                  ------------  ------------ 
 
 Non-current liabilities 
 Deferred liabilities                        15      2,833,333     3,833,333 
                                                  ------------  ------------ 
 Total non-current liabilities                       2,833,333     3,833,333 
                                                  ------------  ------------ 
 
 Total liabilities                                   5,899,546     7,036,286 
                                                  ------------  ------------ 
 Equity 
 Stated capital                              11    106,638,023   106,638,023 
 Revaluation surplus                                   319,699       298,449 
 Retained earnings                                  95,422,003    96,403,178 
 Accumulated other comprehensive income              4,354,609     2,301,696 
                                                  ------------  ------------ 
 Equity attributable to the shareholders 
  of the parent                                    206,734,334   205,641,346 
                                                  ------------  ------------ 
 
 Non-controlling interest                    11     49,381,639    55,674,370 
 Total equity                                      256,115,973   261,315,716 
 
 Total liabilities and equity                      262,015,519   268,352,002 
                                                  ------------  ------------ 
 NAV                                         11    206,734,334   205,641,346 
 NAV per share                               11           1.50          1.49 
 

See accompanying notes 1 to 24, which are an integral part of these consolidated financial statements.

These audited Financial Statements were approved by the board of Directors and authorised for issue on 27 April 2020.

They were signed on the Company's behalf;

Keith Corbin, Director Peter Cornell, Director

 
                                                       31 Dec 2019    31 Dec 2018 
                                                Note       US$            US$ 
                                               -----  -------------  ------------- 
 Income 
 Dividend income                                 7       20,670,560     16,158,458 
 Interest income                                            820,588        321,323 
 Travel agency commissions                                   15,426         89,264 
 Gain on settlement of financial liabilities 
  at fair value                                  10               -      1,625,406 
 Foreign exchange gain                                            -        787,662 
                                                         21,506,574     18,982,113 
                                                      -------------  ------------- 
 Expenses 
 Foreign exchange loss                                    (383,162)              - 
 Loss on change in fair value of equity 
  investments                                    7     (14,658,562)    (4,483,525) 
 Management salaries                             20               -    (2,672,549) 
 Management fees                                 15     (1,985,429)      (358,557) 
 Other staff costs                                         (73,080)      (214,638) 
 Travel                                                    (82,055)      (212,415) 
 Operational costs                                        (144,783)      (214,578) 
 Legal and professional fees                     21     (1,028,242)    (2,353,365) 
 Administration fees and expenses                         (266,250)      (278,348) 
 Finance cost                                    10               -    (3,560,772) 
 Audit fees                                      23       (465,514)      (392,508) 
 Miscellaneous expenses                                   (196,509)      (139,840) 
 Director fees and expenses                      13       (239,085)      (146,246) 
 Depreciation                                    8         (38,062)       (37,693) 
                                                       (19,560,733)   (15,065,034) 
                                                      -------------  ------------- 
 Net income before taxation                               1,945,841      3,917,079 
                                                      -------------  ------------- 
 Income taxes                                   3.8               -              - 
                                                      -------------  ------------- 
 Net income for the year                                  1,945,841      3,917,079 
                                                      -------------  ------------- 
 Other comprehensive income to be 
  reclassified to profit or loss in 
  subsequent periods 
 Gain/(loss) on exchange differences 
  of translation of foreign operations                    3,158,328    (7,285,831) 
 Other comprehensive income that will 
  not be reclassified to profit or 
  loss in subsequent periods 
 Revaluation reserve movements                               21,250         50,250 
 Total comprehensive income/(loss)                        5,125,419    (3,318,502) 
                                                      -------------  ------------- 
 
 Net income/(loss) for the year attributable 
  to: 
 Shareholders of the parent                               7,579,514      1,775,926 
 Non-controlling interest                               (5,633,673)      2,141,153 
 Total comprehensive income /(loss) 
  attributable to: 
 Shareholders of the parent                               9,653,677    (2,909,615) 
 Non-controlling interest                               (4,528,258)      (408,887) 
 
 Basic and diluted earnings per share            14            0.06           0.02 
 

See accompanying notes 1 to 24, which are an integral part of these consolidated financial statements.

 
                                                                31 Dec 2019               31 Dec 2018 
                                                  Note               US$                      US$ 
                                               -------  ---------------------------  -------------------- 
 Operating activities 
 Net income for the year                                                  1,945,841             3,917,079 
 Items not affecting cash: 
 Depreciation                                     8                          38,062                37,693 
 Change in fair value of equity investments       7                      14,658,562             4,483,525 
 Change in fair value of financial 
  liabilities                                     10                              -           (1,625,406) 
 Non-cash dividend income                         7                               -           (6,725,092) 
 Loss on property, plant & equipment 
  disposal                                                                        -                 1,650 
 Dividend income received                                              (20,670,560)          (16,158,458) 
                                                                                                ( 321,323 
 Interest income                                                          (820,588)                     ) 
 Interest expense                                                                 -             3,560,772 
 Foreign exchange loss/(gain)                                               383,162             (787,662) 
                                                                        (4,465,521)          (13,617,222) 
 
 Increase/(decrease) in accounts receivable 
  and accrued income                                                         98,064             (89,191)) 
 Decrease in accounts payable and accrued 
  expenses                                                                (136,740)           (2,546,093) 
 Amortisation of deferred liability               15                    (1,000,000)             (166,667) 
 Dividend income                                                         14,997,092            14,908,958 
 Interest income received                                                   227,628               281,213 
 Interest paid                                                                    -           (3,560,772) 
 Net cash flows from operating activities                                 9,720,523           (4,789,774) 
                                                        ---------------------------  -------------------- 
 
 Investing activities 
 Purchase of equity investments                   7                               -          (12,169,002) 
 Purchase of property, plant & equipment          8                        (47,893)              (30,688) 
 Loans and lending facilities disbursed                                 (7,408,813)           (4,749,764) 
 Loans and lending facilities recovered                                   1,777,407             1,713,062 
 Net cash flows from investing activities                               (5,679,299)          (15,236,392) 
                                                        ---------------------------  -------------------- 
 
 Financing activities 
 Short-term borrowings paid (i)                   10                              -          (34,195,489) 
 Net proceeds from share issuance                 11                              -            37,966,014 
 Proceeds of sale of non-controlling 
  interest                                                                        -            20,500,000 
 Cash payment received from investment 
  manager                                         15                              -             5,000,000 
 Cash distribution to non-controlling 
  interest                                        11                    (1,786,874)                     - 
 Receipt of past dividends not settled 
  with shareholder                                9                               -             1,305,982 
 Payment of cash dividends                                              (8,560,689)           (6,974,578) 
 Contributions received from non-controlling 
  interest                                                                   22,401             4,531,109 
 Net cash flows from financing activities                              (10,379,991)            28,133,038 
                                                        ---------------------------  -------------------- 
 
 Change in cash and cash equivalents                                    (6,283,938)             8,106,872 
 Cash and cash equivalents at beginning 
  of the period                                                          19,814,790            11,630,102 
 Foreign exchange on cash                                                 (428,274)                77,816 
 Cash and cash equivalents at end of 
  the period                                                             13,102,578            19,814,790 
                                                        ---------------------------  -------------------- 
 

(i) The Northview loans of US$35,820,895 were settled in 2018 at US$34,195,489 cash, or at a gain of US$1,625,406, and there are no further external loans raised in 2019.

(ii) Dividends received, income received and interest paid for 2018 has been presented in accordance with the 2019 presentation, shown separately within the cashflow.

See accompanying notes 1 to 24, which are an integral part of these consolidated financial statements

 
                                          For the year ended 31 December 2018 
                                                                              Total Equity 
                                                                   Other      attributable 
                          Stated     Revaluation   Retained    comprehensive     to the     Non-controlling     Total 
                          Capital      Surplus      Earnings      income         parent         interest       Equity 
                 Notes      US$          US$          US$           US$           US$             US$            US$ 
Opening 
 Balance                 68,672,009      248,199   99,262,456      7,037,487   175,220,151       53,981,522  229,111,673 
Share issuance           37,966,014            -            -              -    37,966,014                -   37,966,014 
 
Revaluation of 
 assets / Net 
 other 
 comprehensive 
 income/(loss) 
 to be 
 reclassified 
 to profit or 
 loss 
 in subsequent 
 periods        7, 11             -       50,250            -    (4,735,791)   (4,685,541)      (2,550,040)  (7,235,581) 
 
  Net income 
  for 
  the year        11              -            -    1,775,926              -     1,775,926        2,141,153    3,917,079 
Capital 
 increase/ 
 contributions 
 during the 
 period           11              -            -    2,339,374              -     2,339,374        2,191,735    4,531,109 
Dividend 
 declared 
 during the 
 year             22              -            -  (6,974,578)              -   (6,974,578)                -  (6,974,578) 
Balance at 31 
 December 2018          106,638,023      298,449   96,403,178      2,301,696   205,641,346       55,674,370  261,315,716 
                        -----------  -----------  -----------  -------------  ------------  ---------------  ----------- 
 

See accompanying notes 1 to 24, which are an integral part of these consolidated financial statements

 
                                                   For the year ended 31 December 2019 
                                                                          Other        Total Equity 
                            Stated     Revaluation      Retained      comprehensive     attributable    Non-controlling 
                            Capital      Surplus        Earnings         income        to the parent        interest       Total Equity 
                   Notes      US$          US$             US$             US$              US$               US$               US$ 
Opening Balance           106,638,023      298,449        96,403,178      2,301,696        205,641,346       55,674,370        261,315,716 
Revaluation of 
 assets / Net 
 other 
 comprehensive 
 income/(loss) 
 to be 
 reclassified 
 to profit or 
 loss 
 in subsequent 
 periods          7, 11             -       21,250                 -      2,052,913          2,074,163        1,105,415          3,179,578 
 
  Net 
  income/(loss) 
  for the year      11              -            -         7,579,514              -          7,579,514      (5,633,673)          1,945,841 
Capital 
 increase/ 
 contributions 
 during the 
 period             11              -            -                 -              -                  -           22,401             22,401 
Cash 
 distribution 
 to 
 non-controlling 
 interest           11              -            -                 -              -                  -      (1,841,703)        (1,841,703) 
Payable 
 transferred 
 to 
 non-controlling 
 interest           11              -            -                 -              -                  -           54,829             54,829 
Dividend 
 declared 
 during the year    22              -            -       (8,560,689)              -       ( 8,560,689)                -        (8,560,689) 
                          -----------  -----------  ----------------  -------------  -----------------  ---------------  ----------------- 
Balance at 31 
 December 2019            106,638,023      319,699        95,422,003      4,354,609        206,734,334       49,381,639        256,115,973 
                          -----------  -----------  ----------------  -------------  -----------------  ---------------  ----------------- 
See accompanying notes 1 to 24, which are an integral part of 
 these consolidated financial statements. 
 
   1.                    Corporate information 

These consolidated financial statements for the year ended 31 December 2019 include the accounts of CEIBA Investments Limited and its subsidiaries, which are collectively referred to as the "Group" or "CEIBA".

CEIBA was incorporated in 1995 in Guernsey, Channel Islands as a registered closed-ended collective investment scheme with registered number 30083. In May 2013, the status of CEIBA changed to an unregulated investment company rather than a regulated investment fund. The status of CEIBA was changed back to a registered closed-ended collective investment scheme on 11 September 2018 under The Protection of Investors (Bailiwick of Guernsey) Law, 1987 as amended. The registered office of CEIBA is located at Dorey Court, Admiral Park, St. Peter Port, Guernsey, Channel Islands GY1 2HT.

The principal holding and operating subsidiary of the Group is CEIBA Property Corporation Limited ("CPC") which holds a license issued by the Cuban Chamber of Commerce and has offices in Cuba located at the Miramar Trade Center, Edificio Barcelona, Suite 401, 5(ta) Avenida, esq. a 76, Miramar, Playa, La Habana, Cuba.

The principal investment objective of CEIBA is to achieve capital growth and dividend income from direct and indirect investment in or with Cuban businesses, primarily in the tourism and commercial real estate sectors, and other revenue-generating investments primarily related to Cuba.

The Group currently invests in Cuban joint venture companies that are active in two major segments of Cuba's real estate industry: (i) the development, ownership and management of revenue-producing commercial properties, and (ii) the development, ownership and management of hotel properties. In addition, the Group occasionally arranges and participates in secured finance facilities and other interest-bearing financial instruments granted in favour of Cuban borrowers, primarily in the tourism sector. The Group's asset base is primarily made up of equity investments in Cuban joint venture companies that operate in the real estate segments mentioned above.

The officers are contracted through third party entities or consultancy agreements. CEIBA and its subsidiaries do not have any obligations in relation to other future employee benefits.

On 22 October 2018, CEIBA completed an initial public offering and listed its ordinary shares on the Specialist Fund Segment of the London Stock Exchange ("LSE-SFS"), where it trades under the symbol "CBA" (see note 11) The Group also entered into a management agreement, with effect from 1 November 2018, under which the Group has appointed Aberdeen Standard Fund Managers Limited ("ASFML" or the "AIFM") as the Group's alternative investment fund manager to provide portfolio and risk management services to the Group. The AIFM has delegated portfolio management to Aberdeen Asset Investments Limited (the "Investment Manager"). Both the AIFM and the Investment Manager are wholly-owned subsidiaries of Standard Life Aberdeen plc (see note 15).

   2.                    Basis of preparation 

2.1 Statement of compliance and basis of measurement

These consolidated financial statements have been prepared under the historical cost convention, except for certain financial instruments as disclosed in note 3.9 and certain property, plant and equipment as disclosed in note 3.12 which are measured at fair value, in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB").

2.2 Functional and presentation currency

These consolidated financial statements are presented in United States Dollars ("US$"), which is also the Company's functional currency. The majority of the Group's income, equity investments and transactions are denominated in US$, subsidiaries are re-translated to US$ to be aligned with the reporting currency of the Group.

2.3 Use of estimates and judgments

The preparation of the Group's consolidated financial statements, in conformity with IFRS, requires management to make judgments, estimates, and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period.

Management judgements

The key management judgements made by management in relation to the financial statements are:

   a)      That the Group is not an Investment Entity (see note 3.15); 
   b)      That the Group is a Venture Capital Organisation (see note 3.16); 

c) That the functional currency of the parent company (Ceiba Investments Limited) is US$ dollar (see note 3.18)

Management estimates - valuation of equity investments

Significant areas requiring the use of estimates also include the valuation of equity investments. Actual results could differ from those estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future period affected.

In determining estimates of recoverable amounts and fair values for its equity investments, the Group relies on independent valuations, historical experience, assumptions regarding applicable industry performance and prospects, as well as general business and economic conditions that prevail and are expected to prevail. Assumptions underlying asset valuations are limited by the availability of reliable comparable data and the uncertainty of predictions concerning future events (see note 7).

By their nature, asset valuations are subjective and do not necessarily result in precise determinations. Should the underlying assumptions change, the carrying amounts could change and, potentially, by a material amount.

Change in Management estimates - valuation of equity investments

The determination of the fair values of the equity investments may include independent valuations of the underlying properties owned by the joint venture companies. These valuations assume a level of working capital required for day to day operations of the properties. Management estimates the amount of cash required for these working capital needs to determine if the joint venture companies hold any excess cash that should be added as a component of the fair value of the equity investments.

2.4 Reportable operating segments

An operating segment is a distinguishable component of the Group that is engaged in the provision of products or services (business segment). The primary segment reporting format of the Group is determined to be business segments as the Group's business segments are distinguishable by distinct financial information provided to and reviewed by the chief operating decision maker in allocating resources arising from the products or services engaged by the Group.

2.5 Equity investments

Equity investments include the direct and indirect interests of the Group in Cuban joint venture companies, which in turn hold commercial properties, hotel properties and hotel properties under development. Cuban joint venture companies are incorporated under Cuban law and have both Cuban and foreign shareholders.

Equity investments of the Group are measured at fair value through profit or loss in accordance with IFRS 9, Financial Instruments: Recognition and Measurement ("IFRS 9"), on the basis of the exception provided for per IAS 28. Changes in fair value are recognised in the statement of comprehensive income in the period of the change.

2.6 New standards, amendments and interpretations issued but not effective for the financial year beginning 1 January 2019 and not early adopted that are relevant to the Group

There are no other standards, interpretations or amendments to existing standards that are not yet effective that would be expected to have a significant impact on the Group.

2.7 Changes in accounting policies

Standards and interpretations applicable this period

The accounting policies applied during this year are fully consistent with those applied in the previous period except for the adoption of new standards effective as of 1 January 2019.

During the fiscal year the Group applied the following standard applicable for reporting periods beginning on or after 1 January 2019:

-- IFRS 16 Leases: (Full or partial) application with retrospective effect for reporting periods beginning on or after 1 January 2019 is required.

IFRS 16 specifies how an IFRS reporter will recognise, measure, present and disclose leases. The standard provides a single lessee accounting model, requiring lessees to recognise assets and liabilities for all leases unless the lease term is 12 months or less or the underlying asset has a low value. Lessors continue to classify leases as operating or finance, with IFRS 16's approach to lessor accounting substantially unchanged from its predecessor, IAS 17. The Group assesses new lease contracts to determine the right of use asset. The Group has elected to use the recognition exemption for lease contracts that, at the commencement date, have a lease term of 12 months or less and do not contain a purchase option. The Group has assessed that there is not a material impact to the consolidated financial statements as a result of the adoption of IFRS 16.

   3.                    Summary of significant accounting policies 

The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial statements.

3.1 Consolidation

The consolidated financial statements comprise the financial statements of CEIBA and its subsidiaries as at 31 December 2019. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Group controls an investee if and only if the Group has:

-- Power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee)

   --      Exposure, or rights, to variable returns from its involvement with the investee, and 
   --      The ability to use its power over the investee to affect its returns 

When the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:

   --      The contractual arrangement with the other vote holders of the investee 
   --      Rights arising from other contractual arrangements 
   --      The Group's voting rights and potential voting rights 

The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control.

Subsidiaries are consolidated from the date on which control is transferred to the Group and cease to be consolidated from the date on which control is transferred out of the Group. Where there is a loss of control of a subsidiary, the consolidated financial statements include the results for the part of the reporting period during which the Group has control.

The Group had direct and indirect equity interests in the following entities as at 31 December 2019 and 31 December 2018:

 
                                                                                        Equity interest 
                                                                                         held indirectly 
                                                          Country of                      by the Group 
                      Entity Name                        Incorporation                  or holding entity 
                                                                              31 Dec 2019         31 Dec 
                                                                                                   2018 
 1. CEIBA Property Corporation Limited 
  (a) (i)                                            Guernsey                    100%              100% 
   1.1. GrandSlam Limited (a) (ii)                   Guernsey                    100%              100% 
   1.2. CEIBA MTC Properties Inc.(a) 
    (iii)                                             Panama                     100%              100% 
        1.2.1 Inmobiliaria Monte Barreto 
         S.A. (b) (iv)                                 Cuba                       49%              49% 
  1.3. CEIBA Tourism B.V. (a) (viii)                Netherlands                  100%              100% 
    1.3.1. HOMASI S.A. (a) (iii)                       Spain                      65%               65% 
    1.3.1.1. Miramar S.A. (b) (vi)                      Cuba                      50%               50% 
    1.3.2. Mosaico Hoteles S.A. (a) 
    (iii)                                           Switzerland                   80%                - 
    1.3.2.1 TosCuba S.A. (b) (vii)                      Cuba                      50%                - 
    1.3.3. Mosaico B.V. (a) (v)                     Netherlands                   80%               80% 
    1.3.3.1 Mosaico Hoteles S.A. (a) 
    (iii)                                           Switzerland                    -               100% 
    1.3.3.1.1 TosCuba S.A. (b) (vii)                    Cuba                       -                50% 
 
   a)          Company consolidated at 31 December 2019 and 31 December 2018. 
   b)          Company accounted at fair value at 31 December 2019 and 31 December 2018. 

(i) Holding company for the Group's interests in real estate investments in Cuba that are facilitated by a representative office in Havana.

(ii) Operates a travel agency that provides services to international clients for travel to Cuba.

   (iii)       Holding company for underlying investments with no other significant assets. 
   (iv)       Joint venture company that holds the Miramar Trade Center as its principal asset. 

(v) On 11 March 2019, all of the shares in Mosaico Hoteles S.A. held by Mosaico B.V., together with (i) the full outstanding value of the shareholder loan extended by Mosaico B.V. to Mosaico Hoteles S.A., and (ii) all payables owed by Mosaico B.V., were transferred by Mosaico B.V. to CEIBA Tourism B.V. (80%) and to Meliã Hotels International (20%) in accordance with their shareholdings in Mosaico B.V., with the result that Mosaico Hoteles S.A. is now owned directly by CEIBA Tourism B.V. (80%) and Meliã Hotels International S.A. (20%) and Mosaico B.V. no longer has any assets or liabilities. It is intended that Mosaico B.V. will be liquidated in the near future.

(vi) Joint venture that holds the Meliã Habana Hotel, Meliã Las Americas Hotel, Meliã Varadero Hotel and Sol Palmeras Hotel as its principal assets.

   (vii)      Joint venture company incorporated to build a beach hotel in Trinidad, Cuba. 

(viii) Dutch company responsible for the holding and management of the Group's investments in tourism. In December 2017 it was converted from a cooperative to a limited liability company (B.V.).

All inter-company transactions, balances, income, expenses and unrealised surpluses and deficits on transactions between CEIBA Investments Limited and its subsidiaries have been eliminated on consolidation. Non-controlling interest represent the interests in the operating results and net assets of subsidiaries attributable to minority shareholders.

3.2 Foreign currency translation

Transactions denominated in foreign currencies during the period are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are translated at the reporting date into functional currency at the exchange rate at that date. Foreign currency differences arising on translation are recognised in the consolidated statement of comprehensive income as foreign exchange income (loss).

The financial statements of foreign subsidiaries included in the consolidation are translated into the reporting currency in accordance with the method established by IAS 21, The Effects of Changes in Foreign Exchange Rates. Assets and liabilities are translated at the closing rates at the statement of financial position date, and income and expense items at the average rates for the period. Translation differences are taken to other comprehensive income and shown separately as foreign exchange reserves on consolidation without affecting income. Translation differences during the year ended 31 December 2019 were gains of US$ 3,158,328 (2018: loss of US$7,285,831).

The exchange rate used in these consolidated financial statements at 31 December 2019 is 1 Euro = US$1.2030 (2018: 1 Euro = US$1.1440).

3.3 Change in fair value from equity investments and short term borrowings at fair value through profit or loss

Changes in fair value from equity investments and short term borrowings at fair value through profit or loss includes all realised and unrealised fair value changes, but excludes interest and dividend income.

3.4 Dividend income

Dividend income arising from the Group's equity investments is recognised in the consolidated statement of comprehensive income when the Group's right to receive payment is established or cash amounts have been received.

3.5 Interest income

Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable. Interest income is recognised in the consolidated statement of comprehensive income.

3.6 Travel agency commissions

GrandSlam, a wholly-owned subsidiary of the Group, is a travel agency that acts as an intermediary between the customer and airlines, tour operators and hotels. GrandSlam facilitates transactions and earns a commission in return for its service. This commission may take the form of a fixed fee per transaction or a stated percentage of the customer billing, depending on the transaction and the related vendor. Commission is recognised when the respective bookings have been made.

3.7 Fees and expenses

Fees and expenses are recognised in the statement of comprehensive income on the accrual basis as the related services are performed. Transaction costs incurred during the acquisition of an investment are recognised within the expenses in the consolidated statement of comprehensive income and transactions costs incurred on share issues or placements are included within consolidated statement of changes in equity in respect of stated capital.

Transaction costs incurred on the disposal of investments are deducted from the proceeds of sale and transactions costs incurred on shares are deducted from the share issue proceeds.

3.8 Taxation

Deferred taxes are provided for the expected future tax consequences of temporary differences between the carrying amounts and tax bases of assets and liabilities using current corporation tax rate.

Deferred tax liabilities are recognized for temporary differences that will result in taxable amounts in future years. Deferred tax assets are recognised for temporary differences that will result in deductible amounts in future years. Where it is not certain that the temporary difference will be reversed no deferred taxation asset is established. At 31 December 2019 and 31 December 2018 the Group has not established any deferred tax assets or liabilities.

The average tax rates applicable to the income earned by the Group and its subsidiaries in their respective jurisdictions are as follows:

 
 Guernsey           Exempt 
 The Netherlands    Exempt 
 Panama             Exempt 
 Spain              Exempt 
 Cuba (i)              15% 
 

(i) The Cuban tax rate does not apply to the Group itself, but is rather the tax rate of the underlying Cuban joint venture companies of the equity investments and is taken into account when determining their fair value (see note 7).

3.9 Financial assets and financial liabilities

   (a)      Recognition and initial measurement 

Financial assets and financial liabilities at fair value through profit or loss are measured initially at fair value.

   (b)      Classification 

The Group has classified financial assets and financial liabilities into the following categories:

Financial assets and financial liabilities classified at fair value through profit or loss:

Financial assets and financial liabilities classified in this category are those that have been designated by management upon initial recognition. Management may only classify an instrument at fair value through profit or loss upon initial recognition when one of the following criteria are met, and designation is determined on an instrument-by-instrument basis:

-- The designation eliminates, or significantly reduces, the inconsistent treatment that would otherwise arise from measuring the assets or liabilities or recognising gains or losses on them on a different basis or,

-- For financial liabilities that are part of a group of financial liabilities, which are managed and their performance evaluated on a fair value basis, in accordance with a documented risk management or investment strategy or,

   --      For financial liabilities that contain one or more embedded derivatives, unless they do not significantly modify the cash flows that would otherwise be required by the contract, or it is clear with little or no analysis when a similar instrument is first considered that separation of the embedded derivative(s) is prohibited in relation to financial liabilities. 

Financial assets and financial liabilities at fair value through profit or loss are carried in the consolidated statement of financial position at fair value. Changes in fair value are recognised in the statement of comprehensive income.

Financial assets and financial liabilities measured at fair value through profit or loss are the following:

-- Equity Investments are classified at fair value through profit or loss, with changes in fair value recognised in the statement of comprehensive income for the period.

-- Short-term Borrowings that include an equity conversion feature are designated at fair value through profit or loss. (see note 10)

Financial assets and financial liabilities measured at amortised cost:

Financial assets and financial liabilities measured at amortised cost are initially recognised at fair value and are subsequently measured at amortised cost using the effective interest rate methodology, in respect of financial assets less allowance for impairment. A debt instrument is measured at amortised cost if the objective of the business model is to hold the financial asset for the collection of the contractual cash flows and the contractual cash flows under the instrument solely represent payments of principal and interest (SPPI). Amortised cost is calculated by taking into account any discount or premium on acquisition and fees and costs that are an integral part of the effective interest rate. Therefore, the Group recognises interest income using a rate of return that represents the best estimate of a constant rate of return over the expected behavioural life of the loan, hence, recognising the effect of potentially different interest rates charged at various stages, and other characteristics of the product life cycle (prepayments, penalty interest and charges). If expectations are revised the adjustment is booked a positive or negative adjustment to the carrying amount in the statement of financial position with an increase or reduction in interest income. The adjustment is subsequently amortised through Interest and similar income in the income statement.

Financial assets and financial liabilities measured at amortised cost are the following:

   --      Cash and cash equivalents, 
   --      Accounts receivable and accrued income, 
   --      Loan and advances, 
   --      Accounts payable and accrued expenses 
   (c)       Fair value measurement 

Fair value is the amount for which an asset can be exchanged, or a liability settled, between knowledgeable, willing parties in an arm's-length transaction on the measurement date.

The Group does not have any instruments quoted in an active market. A market is regarded as active if quoted prices are readily and regularly available and represent actual and regularly occurring market transactions on an arm's length basis.

As the financial instruments of the Group are not quoted in an active market, the Group establishes their fair values using valuation techniques. Valuation techniques include using recent arm's length transactions between knowledgeable, willing parties (if available), reference to the current fair value of other instruments that are substantially the same, estimated replacement costs and discounted cash flow analyses. The chosen valuation technique makes maximum use of market inputs, relies as little as possible on estimates specific to the Group, incorporates all factors that market participants would consider in setting a price, and is consistent with accepted economic methodologies for pricing financial instruments. Inputs to valuation techniques reasonably represent market expectations and measures of the risk-return factors inherent in the financial instrument. The Group calibrates valuation techniques and tests them for validity using prices from observable current market transactions of similar instruments or based on other available observable market data.

The best evidence of the fair value of a financial instrument at initial recognition is the transaction price, i.e. the fair value of the consideration given or received, unless the fair value of the instrument is evidenced by comparison with other observable current market transactions in the other instruments that are substantially the same or based on a valuation technique whose variables include only data from observable markets.

All changes in fair value of financial assets, other than interest and dividend income, are recognised in the consolidated statement of comprehensive income as change in fair value of financial instruments at fair value through profit or loss.

   (d)      Identification and measurement of impairment 

IFRS 9 Financial Instruments requires the Group to measure and recognise impairment on financial assets at amortised cost based on Expected Credit Losses. The Group was required to revise its impairment methodology under IFRS 9 for each class of financial asset.

From 1 January 2018, the Group assesses on a forward looking basis the expected credit losses ("ECL") associated with its debt instruments carried at amortised cost. The impairment methodology applied depends on whether there has been a significant increase in credit risk.

While cash and cash equivalents are also subject to the impairment requirements of IFRS 9, the identified impairment loss was immaterial. Investments held at fair value through profit or loss are not subject to IFRS 9 impairment requirements.

Loans receivable measured at amortised cost fall within the scope of ECL impairment under IFRS 9. As per IFRS 9, a loan has a low credit risk if the borrower has a strong capacity to meet its contractual cash flow obligations in the near term, and adverse changes in economic and business conditions in the longer term might, but will not necessarily reduce the ability of the borrower to fulfil its obligations. For loans that are low credit risk, IFRS 9 allows a 12-month expected credit loss to be recognised.

The Group's approach to ECLs reflects a probability- weighted outcome, the time value of money and reasonable and supportable information that is available without undue cost or effort at the reporting date about past events, current conditions and forecasts of future economic conditions.

   (e)       Derecognition 

The Group derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or when it transfers the financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred or in which the Group neither transfers nor retains substantially all the risks and rewards of ownership and does not retain control of the financial asset. Any interest in transferred financial assets that qualify for derecognition that is created or retained by the Group is recognised as a separate asset or liability in the consolidated statement of financial position.

On derecognition of a financial asset, the difference between the carrying amount of the asset (or the carrying amount allocated to the portion of the asset derecognised) and the consideration received (including any new asset obtained less any new liability assumed) is recognised in the consolidated statement of comprehensive income.

The Group derecognises a financial liability when its contractual obligations are discharged or cancelled or expire.

3.10 Cash and cash equivalents

Cash and cash equivalents are defined as cash on hand and short-term deposits and other short-term highly liquid investments with remaining maturities at the time of acquisition of three months or less.

3.11 Loans and lending facilities

Loans and lending facilities comprise investments in unquoted interest-bearing debt instruments. They are carried at amortised cost. Interest receivable is included in accrued income.

3.12 Property, plant and equipment

Property, plant and equipment, with the exception of works of art, held by the Group and its subsidiaries are stated at cost less accumulated depreciation and impairment. Depreciation is calculated at rates to write off the cost of each asset on a straight-line basis over its expected useful life, as follows:

 
Office furniture and equipment  4 to 7 years 
Motor vehicles                       5 years 
 

The carrying amounts are reviewed at each statement of financial position date to assess whether they are recorded in excess of their recoverable amounts, and where carrying values exceed this estimated recoverable amount, assets are written down to their recoverable amount. Works of art are carried at their revalued amount, which is the fair value at the date of revaluation. Increases in the net carrying amount are recognised in the related revaluation surplus in shareholders' equity. Valuations of works of art are conducted with sufficient regularity to ensure the value correctly reflects the fair value at the statement of financial position date. Valuations are mostly based on active market prices, adjusted for any difference in the nature or condition of the specific asset.

3.13 Stated capital

Ordinary shares are classified as equity if they are non-redeemable, or redeemable only at CEIBA's option.

3.14 Acquisitions of subsidiary that is not a business

Where a subsidiary is acquired, via corporate acquisitions or otherwise, management considers the substance of the assets and activities of the acquired entity in determining whether the acquisition represents the acquisition of a business.

Where such acquisitions are not judged to be an acquisition of a business, they are not treated as business combinations. Rather, the cost to acquire the corporate entity or assets and liabilities is allocated between the identifiable assets and liabilities (of the entity) based on their relative values at the acquisition date. Accordingly, no goodwill or deferred taxation arises.

3.15 Assessment of investment entity status

Entities that meet the definition of an investment entity within IFRS 10 "Consolidated Financial Statements" are required to measure their subsidiaries at fair value through profit and loss rather than consolidate them. The criteria which define an investment entity are, as follows:

-- An entity that obtains funds from one or more investors for the purpose of providing those investors with investment management services;

-- An entity that commits to its investors that its business purpose is to invest funds solely for returns from capital appreciation, investment income, or both; and

-- An entity that measures and evaluates the performance of substantially all of its investments on a fair value basis.

The Group's objective includes providing investment management services to investors to achieve capital growth and dividend income from direct and indirect investment in or with Cuban businesses, primarily in the tourism and commercial real estate sectors, and other revenue-generating investments primarily related to Cuba.

However, in addition to reviewing fair values, the Group also reports to its Directors, via internal management reports, various other performance indicators in relation to the operating performance of the investments. Therefore Management is not measuring and evaluating the performance of the investments solely on a fair value basis.

Accordingly, Management has concluded that the Group does not meet all the characteristics of an investment entity. These conclusions will be reassessed on a continuous basis, if any of these criteria or characteristics change.

3.16 Assessment of venture capital organisation

There is no specific definition of a "venture capital organisation". However, venture capital organisations will commonly invest in start-up ventures or investments with long term growth potential.

Venture capital organisations will also frequently obtain board representation for the investments that it has acquired an equity interest. The Group has representation on all of the board of directors of the joint venture companies in which it has an interest and participates in strategic policy decisions of its investments, but does not exercise management control.

Accordingly Management has concluded that the Group is a venture capital organisation and has applied the exemption in IAS 28 "Investments in Associates and Joint Ventures" to measures it investments in joint venture companies at fair value through profit or loss.

3.17 Going concern

The Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future and has significant liquid funds to do so. Accordingly, the Directors have adopted the going concern basis in preparing the financial statements.

3.18 Assessment of functional currency of parent company

An entity's functional currency is the currency of the primary economic environment in which the entity operates (i.e. the environment in which it primarily generates and expends cash). Any other currency is considered a foreign currency. Management has made an assessment of the primary economic environment of the parent company, CEIBA Investments Limited, and the currency of its principal income and expenses. Based on this assessment, Management has determined that the functional currency of the parent US$.

   4.                    Cash and cash equivalents 
 
                               31 Dec 2019   31 Dec 2018 
                                   US$           US$ 
                              ------------  ------------ 
 
 Cash on hand                       16,183        17,480 
 Bank current accounts (i)      13,086,395    19,797,310 
                                13,102,578    19,814,790 
                              ------------  ------------ 
 

(ii) Balance without restriction. Included within the balance as at 31 December 2018 are amounts held on behalf of shareholders amounting to $1,305,982 (see note 9). The amount was subsequently paid to Shareholders in July 2019.

   5.                    Accounts receivable and accrued income 
 
                                            31 Dec 2019   31 Dec 2018 
                                                US$           US$ 
                                           ------------  ------------ 
 
 Dividends receivable from Inmobiliaria 
  Monte Barreto S.A.                          6,922,968     1,249,500 
 Loan interest receivable from TosCuba 
  S.A.                                          633,070        40,109 
 Other accounts receivable and deposits         302,278       400,342 
                                              7,858,316     1,689,952 
                                           ------------  ------------ 
 
 Current portion                              2,211,832     1,558,288 
                                           ------------  ------------ 
 Non-current portion                          5,646,484       131,664 
                                           ------------  ------------ 
 

(i) Presented below is the ageing of receivables and accrued income based on their contractual terms of repayment.

 
                               31 Dec 2019   31 Dec 2018 
                                   US$           US$ 
                              ------------  ------------ 
 
  Up to 30 days                    120,898     1,359,642 
  Between 31 and 90 days            66,335       116,124 
  Between 91 and 180 days        2,010,678        45,603 
  Between 181 and 365 days          13,921        36,919 
  Over 365 days                  5,646,484       131,664 
                              ------------  ------------ 
                                 7,858,316     1,689,952 
                              ------------  ------------ 
 

Trade receivables are assessed in terms of the simplified approach for expected credit losses per IFRS 9 due to the trade receivables not containing a significant financing component and that the majority of the balance consists of dividends receivable, prepayments and an insignificant amount of receivables of the travel agency activities of GrandSla m, a wholly owned subsidiary of the Group. As a result of the composition of the trade receivables balance, the credit risk has been assessed to be low as the majority of the composition is comprised of prepayments and dividends receivable. Potential impairment loss has been estimated to be immaterial.

   6.                   Loans and lending facilities 
 
                                      31 Dec 2019   31 Dec 2018 
                                          US$           US$ 
                                     ------------  ------------ 
 TosCuba S.A. (i)                       9,915,549     4,749,764 
 Casa Financiera FINTUR S.A. (ii)       3,230,171     2,764,550 
                                       13,145,720     7,514,314 
                                     ------------  ------------ 
 
 Current portion                        2,558,018     1,811,257 
                                     ------------  ------------ 
 Non-current portion                   10,587,702     5,703,057 
                                     ------------  ------------ 
 

(i) In April 2018, the Group entered into a construction finance agreement (the "Construction Facility") with TosCuba S.A. ("TosCuba") for the purpose of extending to TosCuba part of the funding necessary for the construction of the Meli ã Trinidad Playa Hotel. The Construction Facility is in the maximum principal amount of US$45,000,000, divided into two separate tranches of US$22,500,000 each. The Group has an 80% participation in Tranche A of the Construction Facility and a 100% participation in Tranche B. The Group has the right to syndicate Tranche B of the Construction Facility to other lenders.

The principal terms of the Construction Facility include, (i) a grace period for principal and interest during the construction period of the hotel , (ii) upon expiry of the grace period, accumulated interest will be repaid, followed by a repayment period of eight years during which blended payments of principal and interest will be made, (iii) interest will accrue on amounts outstanding under the Construction Facility at the rate of 8 per cent.

The first disbursement under the Construction Facility was made on 23 November 2018. Repayment of the Construction Facility is secured by an assignment in favour of the lenders of all of the future income of the Meli ã Trinidad Playa Hotel following start-up of operations. In addition, Tranche B of the Construction Facility is also secured by a guarantee provided by Cubanacán S.A., Corporaciön de Turismo y Comercio Internacional (the Cuban shareholder of TosCuba) as well as by an assignment in favour of the Group (in its capacity as Tranche B lender) of all international tourism proceeds generated by the Meli ã Santiago de Cuba Hotel. The Construction Facility represents a financial asset, based on the terms of the loan the loan is not repayable on demand and there is no expectation to be repaid within 12 months since there is a grace period during the construction period of the hotel and a further 8 year payment period, therefore we have assessed the immediate expected credit loss to be immaterial to the Group.

(ii) In July 2016, the Group arranged and participated in a EUR24,000,000 syndicated facility provided to Casa Financiera FINTUR S.A. ("FINTUR"). The facility was subsequently amended through the addition of a second tranche in the principal amount of EUR12,000,000. The Group has a EUR4,000,000 participation under Tranche A of the facility and a EUR2,000,000 participation under Tranche B. The facility has a term that expires in June 2020 in the case of Tranche A and in June 2021 in the case of Tranche B, a fixed interest rate of 8%, and quarterly payments principal and interest. This facility is secured by Euro-denominated off-shore tourism proceeds payable to FINTUR by certain international hotel operators managing hotels in Cuba. The loan to FINTUR represents a financial asset. Based on historical analysis FINTUR has made all payments on time with no defaults since the inception of this facility as well with previous loan facilities. The loan is not repayable on demand. It has been determined that there is no significant risk of default over the next 12 months, therefore the expected credit loss is assessed to be immaterial to the Group.

The following table details the expected maturities of the loans and lending facilities portfolio according based on contractual terms:

 
                               31 Dec 2019   31 Dec 2018 
                                   US$           US$ 
                              ------------  ------------ 
 
  Up to 30 days                    504,135       285,988 
  Between 31 and 90 days           802,882       476,647 
  Between 91 and 180 days          802,882       476,647 
  Between 181 and 365 days         448,119       571,975 
  Over 365 days                 10,587,702     5,703,057 
                              ------------  ------------ 
                                13,145,720     7,514,314 
                              ------------  ------------ 
 
   7.                    Equity investments 
 
                                31 Dec 2019   31 Dec 2018 
                                    US$           US$ 
                               ------------  ------------ 
 
 Miramar S.A.                   127,887,983   154,630,176 
 Inmobiliaria Monte Barreto 
  S.A.                           86,702,576    76,165,505 
 TosCuba S.A.                    12,750,000     8,000,000 
                                227,340,559   238,795,681 
                               ------------  ------------ 
 
 
                                                    Monte 
                                     Miramar       Barreto       TosCuba       Cubacan         Total 
                                       (i)           US$           (ii)          US$            US$ 
                                       US$                         US$ 
                                 -------------  ------------  -----------  -------------  ------------- 
 
 
 Balance at 31 December 
  2017                              57,014,708    77,708,907    3,612,412     78,750,010    217,086,037 
 
 Merger of Miramar and 
  Cubacan                           78,750,010             -            -   (78,750,010)              - 
 Capital contributions              28,381,566             -    4,387,588              -     32,769,154 
 Foreign currency translation 
  reserve                          (6,575,985)             -            -              -    (6,575,985) 
 Change in fair value 
  of equity investments            (2,940,123)   (1,543,402)            -              -    (4,483,525) 
 Balance at 31 December 
  2018                             154,630,176    76,165,505    8,000,000              -    238,795,681 
 
 Foreign currency translation 
  reserve                            3,203,440             -            -              -      3,203,440 
 Change in fair value 
  of equity investments           (29,945,633)    10,537,071    4,750,000              -   (14,658,562) 
 Balance at 31 December 
  2019                             127,887,983    86,702,576   12,750,000              -    227,340,559 
                                 -------------  ------------  -----------  -------------  ------------- 
 

Below is a description of the equity investments of the Group and the key assumptions used to estimate their fair values.

Monte Barreto

The Group holds the full foreign equity interest of 49% in the Cuban joint venture company Monte Barreto, incorporated in 1996 for the construction and subsequent operation of the Miramar Trade Center. The Miramar Trade Center is a six-building complex comprising approximately 80,000 square meters of constructed area of which approximately 56,000 square meters is net rentable area.

The Group is the sole foreign investor in Monte Barreto and holds its 49% interest in the joint venture company through its wholly-owned subsidiary CEIBA MTC Properties Inc. ("CEIBA MTC"), incorporated in Panama. The remaining 51% interest in Monte Barreto is held by the Cuban partner in the joint venture company.

The incorporation and operations of Monte Barreto are governed by a deed of incorporation (including an association agreement and corporate by-laws) dated 7 March 1996 between CEIBA MTC and the Cuban shareholder. Under the Monte Barreto deed of incorporation, Monte Barreto was incorporated for an initial term of 50 years expiring in 2046. All decisions at shareholder meetings require the unanimous agreement of the Cuban and foreign shareholders.

Key assumptions used in the estimated fair value of Monte Barreto:

The fair value of the equity investment in Monte Barreto is determined by the Investment Manager and the Directors of CEIBA taking into consideration various factors, including estimated future cash flows from the investment, estimated replacement costs, transactions in the private market and other available market evidence to arrive at an appropriate value. The Group also engages an independent valuation firm to perform an independent valuation of the property owned by the joint venture.

The Investment Manager and the Directors may also take into account additional relevant information that impacts the fair value of the equity investment that has not been considered in the valuation of the underlying property of the joint venture. One such fair value consideration is cash held by the joint venture in excess of its working capital needs ("Excess Cash"). As the valuation of the underlying property only assumes a level of working capital to allow for day to day operations, the existence of any Excess Cash needs to be included as an additional component of the fair value of the joint venture company.

In the case of Monte Barreto, the amount of cash required for working capital needs is estimated as the sum of: (i) 30% of tenant deposits, (ii) taxes payable, (iii) dividends declared and payable, (iv) a reserve for employee bonuses, and (v) 2 months of estimated operating expenses. The sum of these amounts are deducted from the balance of cash and cash equivalents of the joint venture with the remaining balance, if any, being considered Excess Cash. At 31 December 2019, the amount of Excess Cash that is included in the fair value of Monte Barreto stated in these financial statements is US$1,197,575 (2018: US$2,959,505).

At 31 December 2019, Cash flows have been estimated for a ten year period. Cash flows from year 11 onward are equal to the capitalised amount of the cash flows at year 10. At 31 December 2018, cash flows were estimated until 2046 when the joint venture expires. The key assumptions used in the discounted cash flow model are the following:

 
                                                31 Dec 2019   31 Dec 2018 
 Discount rate (after tax) (i)                     9.75%         9.5% 
 Occupancy year 1                                  100%          100% 
 Average occupancy year 2 to 8                     98.9%          98% 
 Occupancy year 8 and subsequent periods           97.5%          95% 
 Average rental rates per square meter per       US$28.28      US$26.93 
  month - year 1 to 6 
 Annual increase in rental rates subsequent 
  to year 7 (ii)                                   3.0%          2.5% 
 Capital investments as percentage of rental 
  revenue                                           2%            2% 
 
   (i)          The effective tax rate is estimated to be 18% (2018: 19%). 

(ii) The increase in rental rates in subsequent periods is in-line with the estimated rate of long-term inflation.

Miramar

HOMASI is the foreign shareholder (incorporated in Spain) that owns a 50% share equity interest in the Cuban joint venture company Miramar, which owns the Meli ã Habana Hotel, a 5-star hotel that has 397 rooms, including 16 suites. Miramar also owns t hree beach resort hotels in Varadero known as the Meli ã Las Americas, Meli ã Varadero and Sol Palmeras Hotels having an aggregate total of 1,437 rooms (the "Varadero Hotels") . The Meli ã Las Americas Hotel and Bungalows is a 5-star luxury beach resort hotel with 340 rooms, including 90 bungalows and 14 suites and began operations in 1994. The 5-star Meli ã Varadero Hotel is located next to the Meli ã Las Americas Hotel and has 490 rooms, including 7 suites and began operations in 1992. The 4-star Sol Palmeras Hotel is located next to the Meli ã Varadero Hotel and has 607 rooms, including 200 bungalows, of which 90 are of suite or deluxe standard and began operations 1990. The remaining share equity interest in Miramar is held by CUBANACAN (as to 50%). All decisions at shareholder meetings require the unanimous agreement of the Cuban and foreign shareholders.

In November 2018, Miramar was merged with Cubacan, the Cuban joint venture company that previously owned the Varadero Hotels. As a result of the merger, the four hotels are now owned by Miramar as the remaining joint venture company. Subsequent to the merger CUBANACAN contributed to Miramar surface rights for the four hotels which have been extended / granted to 2042.

At 31 December 2019 the Group holds 65% of the share equity of HOMASI, representing a 32.5% interest in Miramar. The remaining 35% interest in HOMASI is held by Meliã Hotels International, representing a 17.5% interest in Miramar, and has been accounted for as a non-controlling interest in these consolidated financial statements.

Key assumptions used in the estimated fair value of Miramar:

The fair value of the equity investment in Miramar is determined by the Investment Manager and the Directors of CEIBA taking into consideration various factors, including estimated future cash flows from the investment, estimated replacement costs, transactions in the private market and other available market evidence to arrive at an appropriate value. The Group also engages an independent valuation firm to perform independent valuations of the properties held by the joint venture.

The Investment Manager and the Directors may also take into account additional relevant information that impacts the fair value of the equity investment that has not been considered in the valuations of the underlying properties of the joint venture. One such fair value consideration is cash held by the joint venture in excess of its working capital needs. As the valuations of the underlying properties only assume a level of working capital to allow for day to day operations, the existence of any Excess Cash needs to be included as an additional component of the fair value of the joint venture company.

In the case of Miramar, the amount of cash required for working capital needs is estimated as the sum of: (i) taxes payable, (ii) dividends declared and payable, (iii) trade payables greater than 90 days outstanding, and (iv) 2 months of estimated operating expenses. The sum of these amounts are deducted from the balance of cash and cash equivalents of the joint venture with the remaining balance, if any, being considered Excess Cash. At 31 December 2019, the amount of Excess Cash that is included in the fair value of Miramar stated in these financial statements is US$20,187,983(2018: US$21,680,176). Cash flows have been estimated for a ten year period. Cash flows from year 11 onward are equal to the capitalised amount of the cash flows at year 10. The key assumptions used in the discounted cash flow model are the following:

 
                                                31 Dec 2019     31 Dec 2018 
 Meliã Habana 
 Discount rate (after tax) (i)                     12.5%           12.7% 
 Average occupancy years 1 to 10                   70.8%            72% 
 Average daily rate per guest - year 1           US$137.75       US$165.95 
 Average increase in average daily rate 
  per guest - year 2 to 6                          7.5%             10% 
 Increase in average daily rate per guest 
  subsequent to year 6 (ii)                         3%             2.5% 
 Capital investments as percentage of total 
  revenue                                           7%              7% 
 
 
                                                 31 Dec 2019     31 Dec 2018 
 Meliã Las Americas 
 Discount rate (after tax) (iii)                  12.25%           12.2% 
 Average occupancy year 1 to 3                      78%             82% 
 Occupancy year 4 and subsequent periods           79.5%            83% 
 Average daily rate per guest - year 1           US$145.48       US$148.37 
 Average increase in average daily rate 
  per guest - year 2 to 6                          3.8 %            3% 
 Increase in average daily rate per guest 
  subsequent to year 6 (ii)                         3%             2.5% 
 Capital investments as percentage of total 
  revenue                                           7%              7% 
 
 
                                               31 Dec 2019   31 Dec 2018 
 Meliã Varadero 
 Discount rate (after tax) (iii)                 12.25%         12.2% 
 Average occupancy year 1 to 5                    80.2%          81% 
 Occupancy year 6 and subsequent periods          80.4%          81% 
 Average daily rate per guest - year 1          US$104.57     US$118.13 
 Average increase in average daily rate 
  per guest - year 2 to 6                          4%            3% 
 Increase in average daily rate per guest 
  subsequent to year 6 (ii)                        3%           2.5% 
 Capital investments as percentage of total 
  revenue                                          7%            7% 
 
 Sol Palmeras 
 Discount rate (after tax) (iii)                 12.25%         12.2% 
 Average occupancy year 1 to 5                     79%           84% 
 Occupancy year 6 and subsequent periods           80%           84% 
 Average daily rate per guest - year 1          US$95.12      US$103.01 
 Increase in average daily rate per guest 
  - year 2                                         5%            5% 
 Average increase in average daily rate 
  per guest - year 3 to 6                          4%            3% 
 Increase in average daily rate per guest 
  subsequent to year 6 (ii)                        3%           2.5% 
 Capital investments as percentage of total 
  revenue                                          7%            7% 
 
   (i)          The effective tax rate is estimated to be 19% (2018: 19%). 

(ii) The increase in the average daily rate per guest in subsequent periods is in-line with the estimated rate of long-term inflation.

   (iii)       The effective tax rate is estimated to be 21% (2018: 21%). 

Sensitivity to changes in the estimated rental rates / average daily rates

The discounted cash flow models include estimates of the future rental rates / average daily rates of the joint venture companies. Actual rental rates / average daily rates may differ from these estimates due to several factors including the general business climate and economic conditions, the strength of the overall tourism market and the influence of competitors. Therefore, the following tables detail the change in fair values of the equity investments, when applying what Management considers to be the reasonable possible spread in rental rates / average daily rates of between 15% lower and 15% higher compared to the rates used in these consolidated financial statements .

The following table details the fair values of the equity investments at 31 December 2019 when applying lower rental rates / average daily rates:

 
                   Financial 
                   statements        -5%          -10%          -15% 
                      US$           US$           US$           US$ 
                 ------------  ------------  ------------  ------------ 
 
 Monte Barreto     86,702,576    82,380,413    78,058,250    73,736,088 
 
 Miramar          127,887,983   124,636,618   121,384,942   118,096,999 
 

The following table details the fair values of the equity investments at 31 December 2019 when applying higher rental rates / average daily rates:

 
                   Financial 
                   statements        +5%          +10%          +15% 
                      US$           US$           US$           US$ 
                 ------------  ------------  ------------  ------------ 
 
 Monte Barreto     86,702,576    91,328,282    95,346,901    99,669,063 
 
 Miramar          127,887,983   131,139,349   134,390,715   137,642,082 
 

The following table details the fair values of the equity investments at 31 December 2018 when applying lower rental rates / average daily rates:

 
                   Financial 
                   statements        -5%          -10%          -15% 
                      US$           US$           US$           US$ 
                 ------------  ------------  ------------  ------------ 
 
 Monte Barreto     76,165,505    72,395,925    68,626,345    64,856,765 
 
 Miramar          154,630,176   148,425,688   142,213,285   135,998,848 
 
 
 

The following table details the fair values of the equity investments at 31 December 2018 when applying higher rental rates / average daily rates:

 
                   Financial 
                   statements        +5%          +10%          +15% 
                      US$           US$           US$           US$ 
                 ------------  ------------  ------------  ------------ 
 
 Monte Barreto     76,165,505    79,935,085    83,704,665    87,474,245 
 
 Miramar          154,630,176   160,834,665   167,039,155   173,243,646 
 
 

Sensitivity to changes in the occupancy rates

The discounted cash flow models include estimates of the future occupancy rates of the joint venture companies. Actual occupancy rates may differ from these estimates due to several factors including the general business climate and economic conditions, the strength of the overall tourism market and the influence of competitors. Therefore, the following tables detail the change in fair values of the equity investments, when applying what Management considers to be the reasonable possible spread in occupancy rates of between 15% lower and 15% higher compared to the rates used in these consolidated financial statements.

The following table details the fair values of the equity investments at 31 December 2019 when applying lower occupancy rates:

 
                   Financial 
                   statements        -5%          -10%          -15% 
                      US$           US$           US$           US$ 
                 ------------  ------------  ------------  ------------ 
 
 Monte Barreto     86,702,576    82,279,267    77,852,944    73,423,072 
 
 Miramar          127,887,983   121,797,791   115,682,917   109,515,239 
 

The following table details the fair values of the equity investments at 31 December 2019 when applying higher occupancy rates:

 
                       Financial 
                       statements        +5%          +10%          +15% 
                          US$           US$           US$           US$ 
                     ------------  ------------  ------------  ------------ 
 
 Monte Barreto (i)     86,702,576    91,123,299       n/a           n/a 
 
 Miramar              127,887,983   133,978,176   140,068,370   146,158,565 
 
 

(i) In the case of Monte Barreto, only a constant occupancy rate of 100% is shown under the increase of 5% as projected occupancy is already above or equal to 95%.

The following table details the fair values of the equity investments at 31 December 2018 when applying lower occupancy rates:

 
                   Financial 
                   statements        -5%          -10%          -15% 
                      US$           US$           US$           US$ 
                 ------------  ------------  ------------  ------------ 
 
 Monte Barreto     76,165,505    72,230,239    68,289,794    64,343,255 
 
 Miramar          154,630,176   146,970,365   139,298,568   131,614,024 
 
 

The following table details the fair values of the equity investments at 31 December 2018 when applying higher occupancy rates:

 
                       Financial 
                       statements        +5%          +10%          +15% 
                          US$           US$           US$           US$ 
                     ------------  ------------  ------------  ------------ 
 
 Monte Barreto (i)     76,165,505    79,432,599       n/a           n/a 
 
 Miramar              154,630,176   162,286,229   169,942,284   177,592,705 
 
 

(ii) In the case of Monte Barreto, only a constant occupancy rate of 100% is shown under the increase of 5% as projected occupancy is already above or equal to 95%.

Sensitivity to changes in the discount and capitalisation rates

The discount and capitalisation rates used in the discounted cash flow models have been estimated taking into various factors including the current risk-free interest rate, country risk rate and other industry factors. Different methodologies or assumptions may lead to an increase or decrease in the discount and capitalisation rates. Therefore, the following tables detail the change in fair values of the equity investments when applying what Management considers to be the reasonable possible spread in the discount and capitalisation rates of between 3% lower and 3% higher compared to the rates used in these consolidated financial statements. The following table details the fair values of the equity investments at 31 December 2019 when applying lower discount and capitalization rates:

 
                   Financial 
                   statements        -1%           -2%           -3% 
                      US$           US$           US$           US$ 
                 ------------  ------------  ------------  ------------ 
 
 Monte Barreto     86,702,576    98,365,774   114,227,257   137,096,450 
 
 Miramar          127,887,983   139,993,689   155,101,777   174,476,187 
 

The following table details the fair values of the equity investments at 31 December 2019 when applying higher discount and capitalization rates:

 
                   Financial 
                   statements        +1%           +2%           +3% 
                      US$           US$           US$           US$ 
                 ------------  ------------  ------------  ------------ 
 
 Monte Barreto     86,702,576    77,753,412    70,660,355    65,941,079 
 
 Miramar          127,887,983   117,974,292   109,709,199   102,714,755 
 

The following table details the fair values of the equity investments at 31 December 2018 when applying lower discount and capitalization rates:

 
                   Financial 
                   statements        -1%           -2%           -3% 
                      US$           US$           US$           US$ 
                 ------------  ------------  ------------  ------------ 
 
 Monte Barreto     76,165,505    82,383,213    89,565,609    97,908,076 
 
 Miramar          154,630,176   170,289,179   189,951,563   215,364,775 
 
 

The following table details the fair values of the equity investments at 31 December 2018 when applying higher discount and capitalization rates:

 
                   Financial 
                   statements        +1%           +2%           +3% 
                      US$           US$           US$           US$ 
                 ------------  ------------  ------------  ------------ 
 
 Monte Barreto     76,165,505    70,753,968    66,019,424    61,856,143 
 
 Miramar          154,630,176   141,869,178   131,272,828   122,335,494 
 
 

Sensitivity to changes in the estimation of Excess Cash

The fair values of the equity investments have been estimated using the discounted cash flow method and adjusted for the Excess Cash held by the joint venture companies. Within the calculation of Excess Cash, it is estimated that the joint ventures will maintain a sufficient cash balance for working capital purposes equal to the equivalent of two months' operating expenses.

The amount of cash on hand required for working capital purposes may fluctuate due to a change in the aging of receivables and payables of the joint venture companies. Management believes that the maximum amount of cash that would be required to be kept on hand would not exceed three months of operating expenses. Therefore the following table details the changes in fair values of the equity investments at 31 December 2019 if the number of months of operating expenses used in the calculation is increased by an additional 1 to 3 months in comparison to the calculation used in these consolidated financial statements.

 
                   Financial 
                   statements     + 1 month     + 2 months     + 3 months 
                      US$           US$           US$            US$ 
                 ------------  ------------  -------------  ------------- 
 
 Monte Barreto     86,702,576    86,464,354     86,226,132     85,987,911 
 
 Miramar          127,887,983   125,617,753    123,347,522    121,077,292 
 

The following table details the changes in fair values of the equity investments at 31 December 2018 if the number of months of operating expenses used in the calculation is increased by an additional 1 to 3 months in comparison to the calculation used in these consolidated financial statements.

 
                   Financial 
                   statements     + 1 month     + 2 months     + 3 months 
                      US$           US$           US$            US$ 
                 ------------  ------------  -------------  ------------- 
 
 Monte Barreto     76,165,505    75,925,078     75,684,651     75,444,225 
 
 Miramar          154,630,176   152,001,858    149,373,541    146,745,223 
 
 

A reduction in the number of months of operating expenses used in the calculation would increase the changes in fair values of the equity investments at 31 December 2019 and 2018, however this is considered unlikely and therefore the related sensitivities have not been shown.

TosCuba

At 31 December 2019 and 2018 the Group owned an indirect 80% interest in Mosaico Hoteles S.A, which in turn has a 50% share equity interest in TosCuba, a Cuban joint venture company that is developing a 400 room 4-star hotel at Playa Maria Aguilar near the city of Trinidad, Cuba. Construction of the hotel began in December 2018 and is expected to be completed the first half of 2021. The Group has made capital contributions of US$8,000,000 (2018: US$8,000,000) to TosCuba which is the estimated fair value of the investment.

On 9 April 2019 it was announced that TosCuba was awarded a US$10 million grant under the Spanish Cuban Debt Conversion Programme, a Spanish-Cuba initiative aimed at promoting Spanish private sector investments in Cuba under which outstanding bilateral debts owed to Spain by Cuba may be settled through awards granted to investment projects in Cuba from a special countervalue fund created for this purpose. Under these awards, local currency invoices relating to services and materials received in Cuba in the course of constructing the projects will be paid from the countervalue fund on behalf of the joint ventures. As of 31 December 2019, TosCuba has received cash grants under the programme totalling US$9,500,000. The 50% interest of the Group in amounts received under the programme by TosCuba have been recorded as a change in the fair value in the investment in TosCuba.

Dividend income from equity investments

Dividend income (including participation payments) from the equity investments above during the period is as follows:

 
                  31 Dec 2019   31 Dec 2018 
                      US$           US$ 
                 ------------  ------------ 
 
 Monte Barreto      9,133,233     7,583,366 
 Miramar           11,537,327     8,575,092 
                   20,670,560    16,158,458 
                 ------------  ------------ 
 

Financial information of joint venture companies

The principal financial information of the joint venture companies for the years ended 31 December 2019 and 2018 is as follows:

 
                      Monte Barreto                  Miramar (i)                   Cubacan                  TosCuba (iv) 
                           (i) 
                                 2018           2019          2018(ii)         2019    2018(iii)         2019          2018 
                                  US$            US$                            US$       US$             US$           US$ 
                   2019           000's                          US$ 
                    US$                         000's                          000's     000's           000's         000's 
                   000's                                        000's 
                 -------                      --------  ---  ---------       -------  ----------       -------  ---  ------- 
 Cash and 
  equivalents     19,141          7,191         56,399          66,352             -      48,336         2,407         3,184 
 Other current 
  assets           2,206          5,670         21,434          19,213             -      13,025         5,483         8,586 
 Non-current 
  assets          48,507         50,006        138,054         136,973             -      74,823        32,828        10,196 
 Current 
  financial 
  liabilities     18,389          6,286         20,099          23,624             -      36,365         2,554         1,217 
 Other current 
  liabilities          -              -              -               -             -           -             -             - 
 Non-current 
  financial 
  liabilities      3,687          3,675          1,055           1,041             -           -        12,164         4,750 
 Other 
 non-current 
 liabilities           -              -              -               -             -           -             -             - 
 
 Revenue          23,867         23,396         85,759          38,138             -      56,064             -             - 
 Interest 
  income              31             31              -               -             -           -             -             - 
 Interest 
 expense               -              -              -               -             -           -             -             - 
 Depreciation 
  and 
  amortisation     1,658          1,606          6,831           2,623             -       3,973             -             - 
 Taxation          2,919          3,038            263           1,998             -       1,559             -             - 
 Profit (loss) 
  from 
  continuing 
  operations      13,536         12,714         17,872           8,486             -      13,178             -             - 
 Other 
 comprehensive 
 income                -              -                              -             -           -             -             - 
 Total 
  comprehensive 
  income (loss)   13,536         12,714         17,872           8,486             -      13,178             -             - 
 
 
   (i)        Figures obtained from financial statements prepared under IFRS. 

(ii) Cubacan was merged with Miramar in November 2018. As such, amounts recorded in the statement of comprehensive income of Cubacan prior to 30 September 2018 have not been included in the 2018 figures of Miramar.

(iii) Figures of 2018 of Cubacan are from its final financial statements for the nine months ended 30 September 2018 prior to its merger with Miramar (see note 7). Figures of 2018 have been obtained from financial statements prepared under Cuban GAAP.

   (iv)     Figures obtained from financial statements prepared under Cuban GAAP. 
   8.                    Property, plant and equipment 
 
 
                                                 Office furniture     Works of 
                                Motor vehicles     and equipment        art         Total 
                                     US$                US$             US$          US$ 
                             -----------------  -----------------  -----------  ---------- 
 
 Cost: 
 At 1 January 2018                     335,672            158,636      384,800     879,108 
 Additions                                   -             23,688        7,000      30,688 
 Revaluation                                 -                  -       50,250      50,250 
 Disposals                             (5,500)                  -            -     (5,500) 
 At 31 December 
  2018                                 330,172            182,324      442,050     954,546 
 
 Additions                              44,330              3,563            -      47,893 
 Revaluation (i)                             -                  -       21,250      21,250 
 At 31 December 
  2019                                 374,502            185,887      463,300   1,023,689 
 
 
 Accumulated Depreciation: 
 At 1 January 2018                     281,968            101,470            -     383,438 
 Charge                                 21,665             16,028            -      37,693 
 Disposals                             (3,850)                  -            -     (3,850) 
 At 31 December 
  2018                                 299,783            117,498            -     417,281 
 
 Charge                                 20,155             17,907            -      38,062 
 At 31 December 
  2019                                 319,938            135,405            -     455,343 
 
 Net book value: 
 At 31 December 
  2018                                  30,389             64,826      442,050     537,265 
 At 31 December 
  2019                                  54,564             50,482      463,300     568,346 
 

(i) A valuation was performed by an independent valuer dated 20 December 2019. The cost value of the art work is $143,601.

   9.                    Accounts payable and accrued expenses 
 
                                                  31 Dec 2019        31 Dec 2018 
                                                      US$                US$ 
                                                 ------------       ------------ 
 Due to shareholders (i)                                5,399          1,305,982 
  Due to Meliã Hotels International 
   SA (ii)                                            354,581                  - 
 Accrued professional fees                            586,981            374,250 
 Management fees payable (see note 
  15)                                               1,041,950            288,269 
 Due to Enrique Rottenberg                                  -             57,809 
 Accrued Directors fees                                 1,617             57,579 
 Due to Intercan Inc.                                       -              2,865 
 Other accrued expenses                                57,116             51,764 
 Other accounts payable                                18,569             64,435 
                                                 ------------       ------------ 
                                                    2,066,213          2,202,953 
                                                 ------------       ------------ 
 

(i) Due to shareholders represents past dividends declared that the Group has been unable to settle due to reasons internal to the relevant shareholders. The majority of these amounts were subsequently paid to shareholders in July 2019.

(ii) Amounts due to Meliã Hotels International S.A represent funds held for disbursement under the TosCuba Construction Facility, scheduled to be disbursed to the constructor in January 2020.

The future maturity profile of accounts payable and accrued expenses based on undiscounted contractual payments:

 
                              31 Dec 2019   31 Dec 2018 
                                  US$           US$ 
                             ------------  ------------ 
 
 Up to 30 days                    409,709       134,777 
 Between 31 and 90 days         1,115,552       762,194 
 Between 91 and 180 days          535,553     1,305,982 
 Between 181 and 365 days           5,399             - 
                                2,066,213     2,202,953 
                             ------------  ------------ 
 
   10.                 Short-term borrowings 
 
                               31 Dec 2019     31 Dec 2018 
                                   US$             US$ 
                              ------------    ------------ 
 
 Northview Investment Fund               -               - 
  Ltd. (i) 
                                         -               - 
                              ------------    ------------ 
 

(i) On 8 November 2017 the Group entered into a bridge loan agreement (as amended on 3 April 2018 and 30 July 2018) with Northview Investment Fund Ltd., a shareholder of the Group, to borrow EUR30,000,000 (US$35,374,619) with an annual interest rate of 12.0% which amounted to interest incurred for the year ended 31 December 2019 of US$Nil (2018: US$3,560,772). The principal was due in full on or before 1 April 2020 with accrued interest payments made quarterly until the final principal payment date. Short-term borrowings were secured by a conversion right which allowed the lender to convert outstanding amounts to shares of CEIBA and a security interest in the shares of CEIBA Property Corporation Ltd. The principal and outstanding interest under the bridge loan was paid in full on 25 October 2018.

The movement of the short-term borrowings is as follows:

 
                                            31 Dec 2019           31 Dec 2018 
                                                US$                   US$ 
                                    --------------------------   ------------- 
 Initial balance                                              -      35,820,895 
 Gain on settlement of financial 
  liabilities                                                  -    (1,625,406) 
 Cash paid                                                     -   (34,195,489) 
 Final balance                                                 -              - 
                                     ---------------------------  ------------- 
 
   11.                 Stated capital and net asset value 

Authorised

The Group has the power to issue an unlimited number of shares. The issued shares of the Group are ordinary shares of no par value.

Issued

The following table shows the movement of the issued shares during the year:

 
                                       Number of    Stated capital 
                                        ordinary          US$ 
                                         shares 
                                     ------------  --------------- 
 Stated capital 
 Stated capital at 1 January 2018      13,458,947       68,672,009 
                                     ------------  --------------- 
 
 Split of shares at 12 September 
  2018 (i)                            107,671,576       68,672,009 
                                     ------------  --------------- 
 
 Issuance of shares (ii)               30,000,000       37,966,014 
 
 Stated capital at 31 December 
  2018                                137,671,576      106,638,023 
                                     ------------  --------------- 
 
 Stated capital at 31 December 
  2019                                137,671,576      106,638,023 
                                     ------------  --------------- 
 

(i) On 12 September 2018, the 13,458,947 issued ordinary shares of CEIBA were split on an 8-for-1 basis, and consequently each shareholder of the CEIBA received 8 new ordinary shares of no par value for each ordinary share held. All existing pre-split ordinary shares were automatically cancelled upon issuance of the 107,671,576 new post-split ordinary shares.

(ii) On 22 October 2018, CEIBA listed all its existing ordinary shares on the Specialist Fund Segment of the Main Market of the London Stock Exchange. In connection with the Listing, CEIBA also issued 30,000,000 new ordinary shares by way of an Initial Public Offering with an issue price of GBP 1.00 per share. The net proceeds of the Initial Public Offering has been calculated as follows:

 
                                                 US$ 
                                            ------------ 
 
 Gross proceeds (GBP 30,000,000)              39,114,000 
 Share issue costs                           (1,147,986) 
 Net proceeds of initial public offering      37,966,014 
                                            ------------ 
 

Rights, preferences and restrictions attaching to shares

The holder of each share is entitled to one vote at any Shareholders' meeting, to receive a share of any dividends declared by the Directors and to a share of the residual net assets upon winding up of CEIBA.

Net asset value

The net asset value attributable to the shareholders of the Group ("NAV") is calculated as follows:

 
                                      31 Dec 2019    31 Dec 2018 
                                           US$            US$ 
                                     -------------  ------------- 
 
 Total assets                          262,015,519    268,352,002 
 Total liabilities                     (5,899,546)    (7,036,286) 
 Less: non-controlling interests      (49,381,639)   (55,674,370) 
                                     -------------  ------------- 
 NAV                                   206,734,334    205,641,346 
 Number of ordinary shares 
  issued (i)                           137,671,576    137,671,576 
 NAV per share                                1.50           1.49 
 

Non-controlling interest

At 31 December 2019, the non-controlling interest corresponds to the 35% participation of Meliã Hotels International, in the equity of HOMASI and the 20% participation of Meliã Hotels International, in the equity of Mosaico Hoteles S.A

The non-controlling interests in the above companies are as follows:

 
                                      31 Dec 2019   31 Dec 2018 
                                          US$           US$ 
                                     ------------  ------------ 
 
 Non-controlling interest of 
  HOMASI                               46,878,858    54,161,837 
 Non-controlling interest of 
  Mosaico Hoteles S.A.                  2,502,781             - 
 Non-controlling interest of 
  Mosaico B.V.                                  -     1,512,533 
                                     ------------  ------------ 
 Total non-controlling interests       49,381,639    55,674,370 
                                     ------------  ------------ 
 

The movement of the non-controlling interests is as follows:

 
                                                 31 Dec 2019   31 Dec 2018 
                                                     US$           US$ 
                                                ------------  ------------ 
 
 Initial balance                                  55,674,370    53,891,522 
 Interest of non-controlling interest 
  in net (loss)/income                           (5,633,673)     2,141,153 
 Net other comprehensive income/(loss) 
  to be reclassified to profit or loss 
  in subsequent periods                            1,105,415   (2,550,040) 
 Cash distribution to non-controlling 
  interest                                       (1,786,874)             - 
 Capital contributions from non-controlling 
  interest                                            22,401     2,191,735 
                                                ------------  ------------ 
 Final balance                                    49,381,639    55,674,370 
                                                ------------  ------------ 
 
 

The movement of the non-controlling interests HOMASI is as follows:

 
                                           31 Dec 2019   31 Dec 2018 
                                               US$           US$ 
                                          ------------  ------------ 
 
 Initial balance                            54,161,837    53,201,995 
 Net other comprehensive (loss)/income 
  to be reclassified to 
 profit or loss in subsequent periods        1,105,415   (2,550,040) 
 Interest of non-controlling interest 
  in net income                            (6,546,691)     2,178,147 
 Cash distribution to non-controlling 
  interest                                 (1,841,703)             - 
 Capital contributions attributable to 
  non-controlling interest (i)                       -     1,331,735 
                                          ------------  ------------ 
 Final balance                              46,878,858    54,161,837 
                                          ------------  ------------ 
 

(i) During 2018, the non-controlling interest of HOMASI made capital contributions in excess of its equity interest totalling US$3,671,109 of which US$2,339,374 was attributable to the Group and US$1,331,735 to the non-controlling interest.

The movement of the non-controlling interests of Mosaico Hoteles S.A. is as follows:

 
                                                  31 Dec 2019     31 Dec 2018 
                                                      US$             US$ 
                                                 ------------    ------------ 
 
 Initial balance                                            -               - 
 Non-controlling interest transferred 
  from Mosaico B.V.                                 1,567,361               - 
 Interest of non-controlling interest 
  in net income                                       913,019               - 
 Capital contributions from non-controlling 
  interest                                             22,401               - 
                                                 ------------    ------------ 
 Final balance                                      2,502,781               - 
                                                 ------------    ------------ 
 
 

The movement of the non-controlling interests of Mosaico B.V. is as follows:

 
                                                 31 Dec 2019   31 Dec 2018 
                                                     US$           US$ 
                                                ------------  ------------ 
 
 Initial balance                                   1,512,533       689,527 
 Interest of non-controlling interest 
  in net loss                                            (1)      (36,994) 
 Capital contributions from non-controlling 
  interest                                                 -       860,000 
 Non-controlling interest transferred 
  to Mosaico Hoteles S.A.                        (1,512,532) 
                                                ------------  ------------ 
 Final balance                                             -     1,512,533 
                                                ------------  ------------ 
 
 

The principal financial information of HOMASI, Mosaico Hoteles S.A. and Mosaico B.V. for the years ended 31 December 2019 and 2018 is as follows:

 
                                                                Mosaico 
                                                                 Hoteles 
                                        HOMASI                    S.A.               Mosaico BV. 
                             ---------------------------       ---------       ---------------------- 
                                2019             2018             2019           2019          2018 
                                 US$              US$              US$            US$           US$ 
                                000's            000's            000's          000's         000's 
                             ----------  ---  ----------       ---------       -------  ---  -------- 
 
 Current assets                   6,316              211             104             -              - 
 Non-current assets             127,888          154,630          12,750             -          8,000 
 Current liabilities              (264)            (291)           (340)             -          (437) 
 Equity                       (133,940)        (154,550)        (12,514)             -        (7,563) 
 
 
 Income                          11,615            7,406           4,751             -              - 
 Expenses                      (30,320)          (1,183)           (186)             -          (185) 
 Depreciation                         -                -               -             -              - 
 Taxation                             -                -               -             -              - 
 Net income/(loss) 
  for the year                 (18,705)            6,223           4,565           (7)          (185) 
 Other comprehensive 
  (loss)/income                   3,158          (7,286)               -             -              - 
 Total comprehensive 
  loss                         (15,547)          (1,063)           4,565           (7)          (185) 
 
   12.                 Reportable operating segments 

IFRS 8 requires the Group to report on where primary business activities are engaged and where the Group earns revenue, incurs expenses and where operating results are reviewed by chief operating decision maker about resources allocated to the segment and assess its performance and for which discrete financial information is available. The primary segment reporting format of the Group is determined to be business segments as the Group's business segments are distinguishable by distinct financial information provided to and reviewed by the chief operating decision maker in allocating resources arising from the products or services engaged by the Group . No geographical information is reported since all investment activities are located in Cuba. The operating businesses are organised and managed separately through different companies. For management purposes, the Group is currently organised into three business segments:

Ø Commercial property: Activities concerning the Group's interests in commercial real estate investments in Cuba.

Ø Tourism / Leisure: Activities concerning the Group's interests in hotel investments in Cuba and operations of a travel agency that provides services to international clients for travel to Cuba.

Ø Other: Includes interest from loans and lending facilities, the Group entered into the Construction Facility with TosCuba for the purpose of extending to TosCuba part of the funding necessary for the construction of the Meli ã Trinidad Playa Hotel and also includes a facility provided to FINTUR. (see note 6 )

Management monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on operating income or loss and is measured consistently with operating income or loss in the consolidated financial statements. The Group has applied judgment by aggregating its operating segments according to the nature of the underlying investments. Such judgment considers the nature of operations, types of customers and an expectation that operating segments within a reportable segment have similar long-term economic characteristics.

 
                                                         31 December 2019 
                                                                US$ 
                                     -------------------------------------------------------- 
                                      Commercial      Tourism         Other         Total 
                                        property      / Leisure 
 Total assets                          91,969,762    149,273,530    20,772,227    262,015,519 
 Total liabilities                    (2,345,827)    (3,553,719)             -    (5,899,546) 
 Total net assets                      89,623,935    145,719,811    20,772,227    256,115,973 
 
 Dividend income                        9,133,233     11,537,327             -     20,670,560 
 Other income                                   -         15,426       820,588        836,014 
 Change in fair value of 
  equity investments                   10,537,071   (25,195,633)             -   (14,658,562) 
 Allocated expenses                   (2,525,970)    (1,913,614)      (79,425)    (4,519,009) 
 Foreign exchange loss                          -              -     (383,162)      (383,162) 
 Net income                            17,144,334   (15,556,494)       358,001      1,945,841 
 
   Other comprehensive loss                     -      3,158,328        21,250      3,179,578 
                                     ------------  -------------  ------------  ------------- 
 Total comprehensive income/(loss)     17,144,334   (12,398,166)       379,251      5,125,419 
 
 Other segment information: 
 Property, plant and equipment 
  additions                                47,893              -             -         47,893 
 Depreciation                              32,416          5,646             -         38,062 
 Total assets                          91,969,762    149,273,530    20,772,227    262,015,519 
 Total liabilities                    (2,345,827)    (3,553,719)             -    (5,899,546) 
                                                         31 December 2018 
                                                                US$ 
                                      Commercial      Tourism         Other         Total 
                                        property      / Leisure 
 
 Total assets                          85,548,677    179,942,146     2,861,179    268,352,002 
 Total liabilities                      (764,593)    (6,271,693)             -    (7,036,286) 
                                     ------------  -------------  ------------  ------------- 
 Total net assets                      84,784,084    173,670,453     2,861,179    261,315,716 
 
 Dividend income                        7,583,366      8,575,092             -     16,158,458 
 Other income                                   -         89,264     1,946,729      2,035,993 
 Change in fair value of 
  equity investments                  (1,543,402)    (2,940,123)             -    (4,483,525) 
 Allocated expenses                   (4,369,969)    (5,543,096)     (668,444)   (10,581,509) 
 Foreign exchange gain                          -              -       787,662        787,662 
                                     ------------  -------------  ------------  ------------- 
 Net income                             1,669,995        181,137     2,065,947      3,917,079 
 
   Other comprehensive loss                     -              -   (7,235,581)    (7,235,581) 
 
 Total comprehensive income/(loss)      1,669,995        181,137   (5,169,634)    (3,318,502) 
 Other segment information: 
 Property, plant and equipment 
  additions                                10,922         19,766             -         30,688 
 Depreciation                              35,187          2,506             -         37,693 
 
   13.                 Related parties disclosures 

Compensation of Directors

As of 15 June 2018, each Director receives a fee of GBP35,0 00 (US$39,111) per annum with the Chairman receiving GBP 40,000 (US$44,419). The Chairman of the Audit Committee also receives an annual fee of GBP40,000 (US$ 44,419 ). The Chairman and Directors are also reimbursed for other expenses properly incurred by them in attending meetings and other business of the Group. No other compensation or post-employment benefits are provided to Directors. Total Director fees including the fees of the Chairman, for the year ended 31 December 2019 were US$239,085 (year ended 31 December 2018: US$146,246).

Transactions with other related parties

Transactions and balances between the Group and the joint venture companies included within the equity investments of the Group are detailed in notes 5, 6, 7 and 8.

CPC and GrandSlam Limited, wholly-owned subsidiaries of the Group, lease office space totalling 319 square meters from Monte Barreto, a commercial property investment in which the Group holds a 49% interest. The rental charges paid under these leases are accounted for in operational costs and for the year ended 31 December 2019 amounted to US$24,500 (2018: US$143,788) with an average rental charge per square meter at 31 December 2019 of US$37.64 (2018: US$26.79) plus an administration fee of US$9.75 per square meter.

Transactions with Investment Manager

Under the terms of the Management Agreement, ASFML is entitled, with effect from 1 November 2018, to receive an annual management fee at the rate of 1.5 per cent of Total Assets. For this purpose, the term Total Assets means the aggregate of the assets of the Company less liabilities on the last business day of the period to which the fee relates (excluding from liabilities any proportion of principal borrowed for investment and treated in the accounts of the Company as current liabilities). The annual management fee payable by the Group to ASFML will be lowered by the (annual) running costs of the Havana operations of CEIBA Property Corporation Limited, a subsidiary of the Group. The management fees earned by ASFML for the year ended 31 December 2019 were US$2,985,429 (2018: US$525,224) (see note 15). In connection with the Management Agreement, ASFML paid the Group US$5,000,000 for the purpose of compensating the Group for the costs related to the initial public offering and the listing of its shares on the SFS as well as for releasing and making available the Group's internal management team to ASFML. In the event that the Management Agreement is terminated prior to the fifth anniversary of its coming into effect, the Group must pay to ASFML a prorated amount of the US$5,000,000 based on the amount of time remaining in the five year period. As such, this payment has been recorded as a deferred liability and is being amortised over the five year period. The amount amortised each period is accounted for as a reduction of the management fee. At 31 December 2019, the amount of the payment recorded as a deferred liability is US$3,833,333 (2018: US$4,833,333): with US$1,000,000 (2018: US$1,000,000) being the current portion and US$2,833,333 (2018: US$3,833,333) being the non-current portion ASFML is a wholly-owned subsidiary of Standard Life Aberdeen plc which has an interest at 31 December 2019 in 9,747,852 shares of the stated capital (2018: 9,747,852).

Interests of Directors and Executives in the stated capital

At 31 December 2019 John Herring, a Director of CEIBA, had an indirect interest in 40,000 shares (2018: 40,000 shares).

At 31 December 2019 Peter Cornell, a Director of CEIBA, has an indirect interest in 100,000 shares (2018: 100,000 shares).

At 31 December 2019 Trevor Bowen a Director of CEIBA, has an indirect interest in 43,600 shares (2018: 43,600 shares).

At 31 December 2019 Colin Kingsnorth, a Director of CEIBA, is a director and shareholder of Laxey Partners Limited ("Laxey"). Laxey holds 17,303,252 shares (2018: 17,303,252 shares). Funds managed by Laxey hold 13,676,064 shares (2018: 13,676,064 shares) .

At 31 December 2019 Sebastiaan A.C. Berger, Portfolio manager and Chief Executive Officer of CEIBA, has an interest in 3,273,081 s hares (2018: 3,273,081 s hares ).

At 31 December 2019 Cameron Young, Chief Operating Officer of CEIBA, has an indirect interest in 4,129,672 shares (2018: 4,129,672 shares).

At 31 December 2019 Paul S. Austin, Chief Financial Officer of CEIBA, has an interest in 144,000 shares (2018: 144,000).

   14.                 Basic and diluted earnings per share 

The earnings per share have been calculated on a weighted-average basis and are arrived at by dividing the net income for the year/period attributable to shareholders by the weighted-average number of shares in issue. The weighted-average number of shares in issue has been updated to take into account the share split for current and comparative figures below:

 
                                                   31 Dec        31 Dec 
                                                     2019          2018 
                                                     US$           US$ 
                                                ------------  ------------ 
 Weighted average of ordinary shares in issue    137,671,576   113,425,001 
 Net income for the year attributable to the 
  shareholders                                     7,579,514     1,775,926 
 Basic and diluted earnings per share                   0.06          0.02 
 
   15.                 Investment Manager 

On 31 May 2018, the Group entered into a Management Agreement under which ASFML was appointed as the Group's alternative investment fund manager to provide portfolio and risk management services to the Group. The Management Agreement took effect on 1 November 2018. ASFML has delegated portfolio management to the Investment Manager. Both ASFML and the Investment Manager are wholly-owned subsidiaries of Standard Life Aberdeen plc.

Pursuant to the terms of the Management Agreement, ASFML is responsible for portfolio and risk management on behalf of the Group and will carry out the on-going oversight functions and supervision and ensure compliance with the applicable requirements of the AIFM Rules. Under the terms of the Management Agreement, ASFML is entitled, with effect from 1 November 2018, to receive an annual management fee at the rate of 1.5 per cent of Total Assets. For this purpose, the term Total Assets means the aggregate of the assets of the Company less liabilities on the last business day of the period to which the fee relates (excluding from liabilities any proportion of principal borrowed for investment and treated in the accounts of the Company as current liabilities).The annual management fee payable by the Group to ASFML will be lowered by the (annual) running costs of the Havana operations of CEIBA Property Corporation Limited, a subsidiary of the Group. The management fees earned by the Investment Manager for the year ended 31 December 2019 were US$ 2,985,429 (2018: US$525,224).

There are no performance, acquisition, exit or property management fees payable to ASFML or the Investment Manager.

In connection with the Management Agreement, ASFML paid the Group US$5,000,000 for the purpose of compensating the Group for the costs related to the initial public offering and the listing of its shares on the SFS as well as for releasing and making available the Group's internal management team to ASFML. In the event that the Management Agreement is terminated prior to the fifth anniversary of its coming into effect, the Group must pay to ASFML a prorated amount of the US$5,000,000 based on the amount of time remaining in the five year period. As such, this payment has been recorded as deferred liability and is being amortised over the five year period. The amount amortised each period is accounted for as a reduction of the management fee. At 31 December 2019, the amount of the payment recorded as a deferred liability is US$3,833,333 (2018: US$4,833,333) with US$1,000,000 (2018: US$1,000,000) being the current portion and US$2,833,333 (2018: US$3,833,333) being the non-current portion.

For the year ended 31 December 2019, the amount of the payment amortised and recorded as a reduction of the management fee expense in the consolidated statement of comprehensive income was US$1,000,000 (2018: US$166,667):

 
                                          2019         2018 
                                           US$          US$ 
                                      ------------ 
 Management fees earned                  2,985,429     525,224 
 Amortisation of deferred liability    (1,000,000)   (166,667) 
 Management fee expense                  1,985,429     358,557 
                                      ------------  ---------- 
 
   16.                 Commitments and contingencies 

Operating lease commitments

The Group has operating leases for office building space. These have a contractual life of one year with mutual acceptance required through issuing a notice of extension in order for lease renewal to be undertaken annually. There are no restrictions placed upon the lessee by entering into these leases. The annual lease payments in place at 31 December 2019 were US$24,500 (2018: US$146,469).

The rental charges paid under operating leases accounted for in operational costs of the statement of comprehensive income for the year ended 31 December 2019 amounted to US$24,500 (2018: US$143,788).

TosCuba Construction Facility

In April 2018, the Group entered into the TosCuba Construction Facility for the purpose of extending to TosCuba part of the funding necessary for the construction of the Meli ã Trinidad Playa Hotel. The Construction Facility is in the maximum principal amount of US$45,000,000, divided into two separate tranches of US$22,500,000 each, US$9,915,549 (2018: US$4,749,764) of which has been advanced as at 31 December 2019. The Group has the right to syndicate Tranche B of the Construction Facility to other lenders (see note 6).

FINTUR Facility

Since 2002, the Company has arranged and participated in numerous secured finance facilities extended to FINTUR, the Cuban government financial institution for Cuba's tourism sector. These facilities act as a medium-term investment and treasury management tool for the Group. The facilities are fully secured by offshore tourism proceeds from numerous internationally managed hotels.

The Group has a successful 18-year track record of arranging and participating in over EUR150 million of facilities extended to FINTUR, with no defaults occurring during this period.

The Company has a EUR4 million participation in the most recent facility executed in March 2016 (a EUR24 million four-year facility with an 8 per cent. interest rate), which is operating successfully without delay or default. As at 31 December 2019 the principal amount of EUR2,883,333 (US$3,230,171) (2018: EUR2,416,667 (US$2,764,550)) was outstanding under the Company's participation.

The transaction documents were amended in May 2019 in order to create a new second tranche of the 2016 FINTUR facility in the principal amount of EUR12 million (US$13,644,294), of which the Company agreed to assume a lender participation in the principal amount of EUR2 million (US$2,274,049), which was disbursed in July 2019.

   17.                 Financial risk management 

Introduction

The Group is exposed to financial risks that are managed through a process of identification, measurement and monitoring and subject to risk limits and other controls. The objective of the Group is, consequently, to achieve an appropriate balance between risk and benefits, and to minimise potential adverse effects arising from its financial activity.

The main risks arising from the Group's financial instruments are market risk, credit risk and liquidity risks. Management reviews policies for managing each of these risks and they are summarised below. These policies have remained unchanged since the beginning of the period to which these consolidated financial statements relate.

Market risk

Market risk is the risk that the fair value of future cash flows of financial instruments will fluctuate due to changes in market variables. Market price risk comprises two types of risks: foreign currency risk and interest rate risk. The Group is not materially exposed to market price risk.

(i) Foreign currency risk

Currency risk is the risk that the value of a financial instrument denominated in a currency other than the functional currency will fluctuate due to changes in foreign exchange rates.

The statement of comprehensive income and the net value of assets can be affected by currency translation movements as certain assets and income are denominated in currencies other than US$.

Management has identified the following three main areas of foreign currency risk:

   --     Movements in rates affecting the value of loans and advances denominated in Euros; 

-- Movements in rates affecting the value of cash and cash equivalents denominated in Euros; and

Movements in rates affecting any interest income received from loans and advances denominated in Euros.

The sensitivity of the income (loss) to a variation of the exchange rate (EUR/US$) in relation to Euro denominated assets is the following:

 
   Effect of the 
  variation in the 
  foreign exchange 
        rate 
         %                 Income (loss)    Income (loss) 
                            31 Dec 2019      31 Dec 2018 
                                US$              US$ 
------------------       ---------------  --------------- 
        +15                 1,882,162        2,613,683 
        +20                  2,509,549        3,484,911 
        -15                 (1,882,162)      (2,613,683) 
        -20                 (2,509,549)      (3,484,911) 
 

(ii) Interest rate risk

Interest rate risk is the risk that the fair value of future cash flows may fluctuate due to changes in market interest rates.

At any time that it is not fully invested in equities, surplus funds may be invested in fixed-rate and floating-rate securities both in Euro and in currencies other than Euro. Although these are generally short-term in nature, any change to the interest rates relevant for particular securities may result in either income increasing or decreasing, or management being unable to secure similar returns on the expiry of contracts or the sale of securities. In addition, changes to prevailing rates or changes in expectations of future rates may result in an increase or decrease in the value of securities held. In general, if interest rates rise, income potential also rises but the value of fixed rate securities may decline. A decline in interest rates will in general have the opposite effect.

As the only interest-bearing financial instruments held by the Group are fixed rate assets measured at amortised cost, the Group has no material interest rate risk and therefore no sensitivity analysis has been presented.

The interest rate risk profile of the Group's consolidated financial assets was as follows:

 
                                                 Fixed         Floating       Non-interest 
                                     Total        rate           rate            bearing 
                                      US$         US$             US$              US$ 
                                  -----------  ---------  ------------------  ------------ 
 
31 December 2019 
Equity investments (US$)          227,340,559          -                   -   227,340,559 
Loans and lending facilities 
 (EUR)                              3,230,171  3,230,171                   -             - 
Loans and lending facilities 
 (US$)                              9,915,549  9,915,549                   -             - 
Accounts receivable and accrued 
 income (US$)                       7,736,695          -                   -     7,736,695 
Accounts receivable and accrued 
 income (EUR)                         121,621          -                   -       121,621 
Cash at bank (EUR)                 11,230,891          -                   -    11,230,891 
Cash at bank (US$)                  1,191,898          -                   -     1,191,898 
Cash at bank (GBP)                    663,606          -                   -       663,606 
Cash on hand (EUR)                        996          -                   -           996 
Cash on hand (US$)                      1,724          -                   -         1,724 
Cash on hand (CUC)                     13,463          -                   -        13,463 
 
 
                                                 Fixed    Floating  Non-interest 
                                     Total        rate      rate       bearing 
                                      US$         US$        US$         US$ 
                                  -----------  ---------  --------  ------------ 
31 December 2018 
Equity investments (US$)          238,795,681          -         -   238,795,681 
Loans and lending facilities 
 (EUR)                              2,764,550  2,764,550         -             - 
Loans and lending facilities 
 (US$)                              4,749,764  4,749,764         -             - 
Accounts receivable and accrued 
 income (US$)                       1,431,484          -         -     1,431,484 
Accounts receivable and accrued 
 income (EUR)                         258,468          -         -       258,468 
Cash at bank (EUR)                 18,814,623  2,027,302         -    16,787,321 
Cash at bank (US$)                    117,073          -         -       117,073 
Cash at bank (GBP)                    865,614          -         -       865,614 
Cash on hand (EUR)                        583          -         -           583 
Cash on hand (US$)                      8,545          -         -         8,545 
Cash on hand (CUC)                      8,352          -         -         8,352 
 

Credit risk

Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation, expected credit losses are measured using probability of default, exposure at default and loss given default. Management consider both historical analysis and forward looking information in determining an expected credit loss. Refer to note 6 for the assessment expected credit loss for loans and lending facilities.

Maximum exposure to credit risk

The table below shows the maximum exposure to credit risk for each component of the consolidated statement of financial position as well as future loan commitments, irrespective of guarantees received:

 
                                                  31 Dec 2019   31 Dec 2018 
                                                      US$           US$ 
                                                 ------------  ------------ 
 
 Loans and lending facilities                      13,145,720     7,514,314 
 Future loan commitments (TosCuba Construction 
  Facility) (i)                                    30,584,451    40,250,236 
 Accounts receivable and accrued income             2,142,673     1,689,952 
 Cash and cash equivalents                         13,102,578    19,814,790 
                                                 ------------  ------------ 
 Total maximum exposure to credit risk             58,975,422    69,269,292 
                                                 ------------  ------------ 
 

(i) The TosCuba Construction Facility is secured by future income of the hotel under construction and 50% of the principal construction amount is further secured by a guarantee given by Cubanacán S.A., Corporación de Turismo y Comercio Internacional, the Cuban shareholder of TosCuba S.A., backed by income from another hotel in Cuba.

The Group holds its cash and cash equivalents at financial institutions located in the countries listed below. Also included in the following table are the credit ratings of the corresponding financial institutions, as determined by Moody's:

 
                                    Credit     31 Dec 2019   31 Dec 2018 
                                    Rating         US$           US$ 
                                   --------   ------------  ------------ 
 Cash at bank 
 Cuba                                 Caa2       1,083,763       112,661 
 Guernsey                              A2          725,110     3,760,419 
 Spain                                Ba3        2,678,694    13,877,600 
 Spain                                 A2           18,913        19,328 
 Spain                                Baa2       8,579,915     2,027,302 
                                                13,086,395    19,797,310 
                                              ------------  ------------ 
 Cash on hand 
 Spain                                                 100             - 
 Cuba                                               16,083        16,897 
 The Netherlands                                         -           583 
                                              ------------  ------------ 
                                                    16,183        17,480 
                                              ------------  ------------ 
 
 Total cash and cash equivalents                13,102,578    19,814,790 
                                              ------------  ------------ 
 

At 31 December 2019 and 31 December 2018, all cash and short-term deposits that are held with counter-parties have been assessed for probability of default; as a result no loss allowance has been recognised based on 12-month expected credit losses as any such impairment would be wholly insignificant to the Group.

Guarantees received

The amount and type of guarantees required depends on an assessment of the credit risk of the counter-party. The Group has neither financial nor non-financial assets obtained as property on executed guarantees. See note 6 regarding guarantees obtained for loans and lending facilities.

Liquidity risk

Liquidity risk is the risk that the Group will encounter in realising its non-cash assets or otherwise raising funds to meet financial commitments. Assets principally consist of unlisted securities and loans, which are not readily realisable. If the Group, for whatever reason, wished to dispose of these assets quickly, the realisation values may be lower than those at which the relevant assets are held in the consolidated statement of financial position. (For maturities of financial assets and liabilities refer to note 5, 6 and 9).

Although the Group has a number of liabilities (see note 9 - Accounts payable and accrued expenses, note 10 - Short-term borrowings and note 16 - commitments and contingencies), Management assesses the liquidity risk of the Group to be low because the Group has a sufficient amount of cash and cash equivalents.

The Group also has entered into the Construction Facility for the purpose of extending to TosCuba part of the funding necessary for the construction of the Meli ã Trinidad Playa Hotel (see note 6). The Construction Facility is in the maximum principal amount of US$45,000,000 of which US$9,915,549 was disbursed as at 31 December 2019 (31 December 2018: US$4,749,764) under the Company's participation. The Group has the right to syndicate Tranche B of the Construction Facility to other lenders.

The principal of the Construction Facility is to be disbursed on a monthly basis on the percentage of construction completed in each preceding month. Prior to the COVID-19 pandemic, it was anticipated that the full amount of the Construction Facility would be disbursed by the end of 2020. However, the timing of construction will be affected by the pandemic and consequently the disbursement of the principal under the Construction Facility will also be delayed. The Group currently does not have sufficient cash and cash equivalents to cover the full disbursement of the Construction Facility. Therefore, the disbursement of the Construction Facility will be financed in part by the future operating income of the Group. If future operating income is not sufficient to allow for the disbursement of the Construction Facility, the Group may syndicate a portion of the facility to other lenders or seek short-term financing to cover any shortfall.

The estimated timing of cash outflows under the TosCuba Construction Facility entered into in April 2018 are as follows:

 
                              31 Dec 2019   31 Dec 2018 
                                  US$           US$ 
                             ------------  ------------ 
 
  Between 31 and 90 days        1,151,827       600,154 
  Between 91 and 180 days       1,317,800     4,647,659 
  Between 181 and 1 year        2,400,000    10,724,063 
  Over 365 days                25,714,823    24,278,360 
                             ------------  ------------ 
                               30,584,451    40,250,236 
                             ------------  ------------ 
 

Capital management

The Group maintains an actively managed capital base to cover risks inherent in the business. The Group manages its capital structure and makes adjustments in the light of changes in economic conditions and the risk characteristics of its activities. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividend payment to shareholders. No changes were made in the objectives, policies, and processes from the previous period.

The capital base managed by the Group is composed of stated capital, reserves and retained profits that amount at 31 December 2019 and 2018 to a total of US$256,115,973 and US$261,315,716, respectively. The Group is not subject to external capital requirements.

   18.                 Fair value disclosures 

Key sources of estimation uncertainty

Determining fair values

The determination of fair values for investment and financial assets and liabilities for which there is no observable market price requires the use of valuation techniques as described in note 3.9 (c). For financial instruments that trade infrequently and have little price transparency, fair value is less objective, and requires varying degrees of judgement depending on liquidity, concentration, uncertainty of market factors, pricing assumptions and other risks affecting the specific instrument.

Critical accounting judgements in applying the Group's accounting estimates

Valuation of financial instruments

The Group's accounting policy on fair value measurements is discussed in note 3.9 (c).

The Group measures fair values using the following fair value hierarchy that reflects the significance of the inputs used in making the measurements:

   --      Level 1: Quoted price (unadjusted) in an active market for an identical instrument. 

-- Level 2: Valuation techniques based on observable inputs, either directly (i.e. as prices) or indirectly (i.e. derived from prices). This category includes instruments valued using: quoted prices in active markets for similar instruments; quoted prices for identical or similar instruments in markets that are considered less than active; or other valuation techniques for which all significant inputs are directly or indirectly observable from market data.

-- Level 3: Valuation techniques using significant unobservable inputs. This category includes all instruments for which the valuation technique includes inputs not based on observable data and the unobservable inputs have a significant effect on the instrument's valuation. This category includes instruments that are valued based on quoted prices for similar instruments for which significant unobservable adjustments or assumptions are required to reflect differences between the instruments.

Fair values of financial assets and financial liabilities that are traded in active markets are based on quoted prices or dealer price quotations. The Group does not currently have any financial assets or financial liabilities trading in active markets.

For all other financial instruments, the Group determines fair values using valuation techniques. Valuation techniques include net present value and discounted cash flow models, comparison to similar instruments for which market observable prices exist and other valuation models. Assumptions and inputs used in valuation techniques include risk-free and benchmark interest rates and foreign currency exchange rates. The objective of valuation techniques is to arrive at a fair value determination that reflects the price of the financial instrument at the reporting date that would have been determined by market participants acting at arm's length.

For certain instruments, the Group uses proprietary valuation models, which usually are developed from recognised valuation models. Some or all of the significant inputs into these models may not be observable in the market, and are derived from market prices or rates or are estimated based on assumptions. Examples of instruments involving significant unobservable inputs include the equity investments of the Group in Cuban joint venture companies. Valuation models that employ significant unobservable inputs require a higher degree of management judgement and estimation in the determination of fair value. Management judgement and estimation are usually required for selection of the appropriate valuation model to be used, determination of expected future cash flows on the financial instrument being valued, selection of appropriate discount rates and an estimate of the amount of cash required for working capital needs of the joint ventures in order to determine if they hold any Excess Cash.

The table below analyses financial instruments measured at fair value at the end of the reporting period by the level in the fair value hierarchy into which the fair value measurement is categorised:

 
                                         31 December 2019 
                                                US$ 
                          Level 1     Level 2        Level 3         Total 
                        ---------   ---------   ------------  ------------ 
 Financial assets at 
  fair value through 
  profit or loss 
 Equity investments               -          -    227,340,559   227,340,559 
           -            -                        227,340,559   227,340,559 
  ----------   ----------  -------------------  ------------  ------------ 
 
                                         31 December 2018 
                                                US$ 
                          Level 1     Level 2        Level 3         Total 
                        ---------   ---------   ------------  ------------ 
 Financial assets at 
  fair value through 
  profit or loss 
 Equity investments               -          -    238,795,681   238,795,681 
           -            -                        238,795,681   238,795,681 
  ----------   ----------  -------------------  ------------  ------------ 
 
 

The following table shows a reconciliation from the beginning balances to the ending balances for fair value measurements in Level 3 of the fair value hierarchy:

 
                                            31 Dec 2019    31 Dec 2018 
 Unlisted private equity investments            US$            US$ 
                                           -------------  ------------ 
 
 Initial balance                             238,795,681   217,086,037 
 Total gains recognised in 
  income or loss                            (14,658,562)   (4,483,525) 
 Foreign currency translation 
  reserve                                      3,203,440   (6,575,985) 
 Acquisitions and capital contributions                -    32,769,154 
 Final balance                               227,340,559   238,795,681 
                                           -------------  ------------ 
 
 Total losses for the year/period 
  included in income or loss 
  relating to assets and liabilities 
  held at the end of the reporting 
  year/period                               (14,658,562)   (4,483,525) 
                                           -------------  ------------ 
                                            (14,658,562)   (4,483,525) 
                                           -------------  ------------ 
 

The fair value of short-term borrowing (see note 10) was measured using valuation techniques based on observable inputs such as interest rates, foreign exchange rates as well as the estimated probability of conversion. There were no significant changes in these inputs between the date in which the loan was entered into and when the loan was repaid on 25 October 2018.

The following table shows a reconciliation from the beginning balances to the ending balances for fair value measurements in Level 2 of the fair value hierarchy:

 
                                         31 Dec 2019     31 Dec 2018 
 Short-term borrowings                       US$             US$ 
                                        -------------   ------------- 
 
 Initial balance                                      -     35,820,895 
 Cash paid                                            -   (34,195,489) 
 Gain on settlement of financial 
  liabilities                                         -    (1,625,406) 
 Final balance                                      -               - 
                                        -------------   ------------- 
 
 Total gains for the year/period 
  included in income or loss 
  relating to assets and liabilities 
  held at the end of the reporting 
  period                                              -    (1,625,406) 
                                         --------------  ------------- 
               -                                          (1,625,406) 
  --------------                                        ------------- 
 

Gains/losses related to unlisted private equity investments are recognised as change in fair value of equity investments in the consolidated statement of comprehensive income. The accounting value of the remaining financial assets and liabilities (cash and cash equivalents, accounts receivable/payable, loans receivable/payable) approximate their fair values due to their short-term maturities.

   19.                 Classifications of financial assets and liabilities 

The table below provides a reconciliation of the line items in the Group's consolidated statement of financial position to the categories of financial instruments.

 
                                                         31 December 2019 
                                                                US$ 
                                                     Cash and 
                                      Fair value     Financial       Financial 
                                         through       assets       liabilities          Total 
                                       profit or    at amortised    at amortised      carrying 
                              Note          loss        cost            cost            amount 
                                    ------------  --------------  --------------  ------------ 
 
 Cash and cash equivalents     4               -      13,102,578               -    13,102,578 
 Accounts receivable 
  and accrued income           5               -       7,858,316               -     7,858,316 
 Loans and lending 
  facilities                   6               -      13,145,720               -    13,145,720 
 Equity investments            7     227,340,559               -               -   227,340,559 
                                     227,340,559      34,106,614               -   261,447,173 
                                    ------------  --------------  --------------  ------------ 
 
 Accounts payable 
  and accrued expenses         9               -               -       2,066,213     2,066,213 
                                               -               -       2,066,213     2,066,213 
                                    ------------  --------------  --------------  ------------ 
 
                                                         31 December 2018 
                                                                US$ 
                                                     Cash and 
                                     Fair value      Financial       Financial 
                                       through         assets       liabilities          Total 
                                      profit or     at amortised    at amortised      carrying 
                              Note       loss           cost            cost            amount 
                                    ------------  --------------  --------------  ------------ 
 
 Cash and cash equivalents     4               -      19,814,790               -    19,814,790 
 Accounts receivable 
  and accrued income           5               -       1,689,952               -     1,689,952 
 Loans and lending 
  facilities                   6               -       7,514,314               -     7,514,314 
 Equity investments            7     238,795,681               -               -   238,795,681 
                                     238,795,681      29,019,056               -   267,814,737 
                                    ------------  --------------  --------------  ------------ 
 
 Accounts payable 
  and accrued expenses         9               -               -       2,202,953     2,202,953 
                                               -               -       2,202,953     2,202,953 
                                    ------------  --------------  --------------  ------------ 
 

There were no reclassifications of financial assets during the year ended 31 December 2019 (year ended 31 December 2018: nil).

   20.       Management salaries 
 
                                              31 Dec 
                             31 Dec 2019        2018 
                                 US$            US$ 
                            -------------   ---------- 
 
 Management salaries (i)                  -   2,672,549 
                             --------------  ---------- 
 

(i) Management salaries in 2018 included management bonuses paid due to the successful listing of the Group on the SFS in 2018. In 2019, Management salaries were paid by the Investment Manager (see note 15).

   21.     Legal and professional fees 
 
                                      31 Dec 2019   31 Dec 2018 
                                          US$           US$ 
                                     ------------  ------------ 
 
 Legal and professional fees 
  (i)                                   1,028,242     2,353,365 
                                     ------------  ------------ 
 
 

(i) Included within the legal and professional fees of 2018 is US$912,588 attributable to the listing of the Group's Ordinary Shares on the SFS and also incurred additional legal fees due to corporate restructuring.

   22.                 Dividend per share 

The dividend per share has been calculated by dividing the dividend paid by the number of shares in issue at the date of the dividend distribution. On 29 April 2019, the Board of Directors declared a dividend of US$8,604,474 or US$0.0625 per share which was distributed on 14 June 2019 to the shareholders on the share register as at 31 May 2019. No dividend has been declared in 2020 in relation to the 2019 financial year.

   23.                 Audit fees 

Audit fees incurred for the period below:

 
                          31 Dec 2019   31 Dec 2018 
                              US$           US$ 
                         ------------  ------------ 
 
 Audit fee expense (i)        465,514       392,508 
 

(i) Breakdown of audit and non-audit fees for 2019 and 2018, non-audit fees classified to legal and professionals due to the fees relating to the listing on the SFS in 2018.

 
                                              31 Dec 2019   31 Dec 2018 
                                                  US$           US$ 
                                             ------------  ------------ 
 
 Audit fee expense                                465,514       392,508 
 Non- audit fees (2018:USD 41,230 of the 
  non - audit fees has been capitalised to 
  stated capital)                                       -       316,706 
 
   24.                 Events after the reporting period 

Impact of COVID-19

The outbreak of the Novel Coronavirus ("COVID-19") in 2020 has adversely impacted global commercial activity and contributed to significant volatility in the equity and debt markets. The global impact of the outbreak is rapidly evolving and on 11 March 2020, the World Health Organization declared a pandemic. Many countries have reacted by instituting quarantines, prohibitions on travel and the closure of offices, businesses, schools, retail stores and other public venues. Businesses are also implementing similar precautionary measures. Such measures, as well as the general uncertainty surrounding the dangers and impact of COVID-19, are creating significant disruption in supply chains and economic activity and are having a particularly adverse impact on transportation, hospitality, tourism, entertainment and other industries. The impact of COVID-19 has led to significant volatility and declines in the global public equity markets and it is uncertain how long this volatility will continue. As COVID-19 continues to spread, the potential impacts, including a global, regional or other economic recession, are increasingly uncertain and difficult to assess.

The outbreak of COVID-19 and the resulting financial and economic market uncertainty could have a significant adverse impact on the Group, including the fair value of its investments. The most significant conditions relating to COVID-19 arose after the reporting period and as a result the Directors considers the emergence of the COVID-19 Coronavirus pandemic to be a non-adjusting post balance sheet event. Any future impact on the Group is likely to be in connection with the assessment of the fair value of its equity investments, the timing of the construction of TosCuba's hotel in Trinidad and the income of the Group. At the date of reporting it is not possible to quantify the future financial impact of COVID-19 on the Group's investments or income with any degree of certainty.

A description of the present situation of the principal assets of the Group and mitigating steps taken to date is set out below.

Equity Investments

Monte Barreto

The operations of Monte Barreto do not appear to be materially impacted to date. Only a limited number of tenants of Monte Barreto are airlines, travel agencies and other tourism-related companies that have suffered an instant loss of income. In addition, Monte Barreto has no debt financing and a cash balance in excess of US$10 million, which would allow Monte Barreto to operate without income for an extended period of time if it were to become necessary. However, the general liquidity situation in Cuba may have a negative effect on the ability of Monte Barreto to distribute dividends to its shareholders, including CEIBA.

Miramar

On 20 March 2020, the Cuban Government announced a set of measures aimed at controlling the spread of COVID-19 within its national territory, which included strict border restrictions and the prohibition against entry of tourists. As a direct result of these measures, Miramar is temporarily closing its hotels and substantially decreasing its workforce. Miramar has no debt financing and a healthy cash balance in excess of US$40 million, which would allow Miramar to operate without income for an extended period of time. However, the closing of the hotels will clearly have a negative effect on the results of Miramar, which will impact its estimated fair value and its ability to distribute dividends to its shareholders, including CEIBA.

TosCuba

In March 2020, the Italian-Cuban construction partnership that is constructing TosCuba's 400-room beachfront hotel at Trinidad, Cuba informed TosCuba that the construction schedule will be affected by the COVID-19 pandemic and will suffer delays. In parallel, the Company is presently in discussions with TosCuba to substantially lower the capital expenditure on the construction until there is greater certainty around the repatriation of dividends from Miramar and Monte Barreto that will allow for the future financing and construction of the new hotel. This will inevitably extend the timeline and disbursement schedule of the project and result in a new completion date for the turn-key construction contract and subsequent start-up of operations of the hotel.

FINTUR Facility

As at 1 April 2020, the Company is owed EUR1,716,667 in a finance facility secured by offshore income from numerous hotels in Cuba. Payment of the outstanding amount is scheduled to take place in quarterly installments ending on 30 June 2021, but this schedule will now likely be re-negotiated and the final payment date extended.

The Directors will continue to closely analyse and review the impact of COVID-19 on the Group and will take appropriate action as required.

Confirming and Discounting Facility

The Company's subsidiary HOMASI (the foreign shareholder of Miramar) executed a US$7 million confirming and discounting facility with Miramar for the purpose of confirming and discounting supplier invoices relating to the operations of the four Hotels owned by the joint venture company. The facility will be financed in part by a EUR3.5 million credit line received by HOMASI from a Spanish bank for this purpose. The facility will be secured by the offshore cash flows generated by two of the Hotels. In March and April 2020, a total of EUR1,173,750.37 was disbursed under the facility. As a result of COVID-19, it has been agreed with Miramar that no further disbursements will be made under the facility until the Hotels resume operations.

ALTERNATIVE PERFORMANCE MEASURES

Alternative Performance Measures

Alternative performance measures are numerical measures of the Company's current, historical or future performance, financial position or cash flows, other than financial measures defined or specified in the applicable financial framework. The Directors assess the Company's performance against a range of criteria which are viewed as particularly relevant for closed-end investment companies.

NAV Per Share

A very common measure of the underlying value of a share in an investment company.

In basic terms, the net asset value ('NAV') is the value of the investment company's assets, less any liabilities it has. The NAV per share is the NAV divided by the number of shares in issue. This will very often be different to the share price. The difference is known as the discount or premium.

The NAV per share was US$1.50 / 1.145p per share as at 31 December 2019.

NAV Total Return

NAV total return involves investing the same net dividend in the NAV of the Company with debt at fair value on the date on which that dividend was earned.

The table below provides information relating to the NAV of the Company on the dividend reinvestment dates during the years ended 31 December 2019 and 31 December 2018.

 
                                              US$ 
 NAV at 31 December 2018              205,641,346 
 Dividends paid                      ( 8,560,689) 
 Net comprehensive income for the 
  year(1)                               9,653,677 
                                    ------------- 
 IFRS NAV at 31 December 2019         206,734,334 
 Non-IFRS adjustment                    3,833,333 
                                    ------------- 
 Non-IFRS NAV at 31 December 2019     210,567,667 
                                    ------------- 
 

(1) Net comprehensive income for the year includes a net loss on changes in the fair value of equity investments of (US$ 14,658,562 ).

Premium (Discount) to NAV

As at 31 December 2019, the share price was 71.0p / US$0.93 and the net asset value per share was 114.5p / US$1.50, the discount was therefore (38.0)%.

ADDITIONAL NOTES TO THE ANNUAL FINANCIAL REPORT

The Annual General Meeting will take place at the registered office of the Company, Dorey Court, Admiral Park, St. Peter Port, Guernsey, GY1 2HT Channel Islands on 19 June 2020 at 2.00pm

Please note that past performance is not necessarily a guide to the future and that the value of investments and the income from them may fall as well as rise. Investors may not get back the amount they originally invested.

The Annual Financial Report Announcement is not the Company's statutory accounts. The above results for the year ended 31 December 2019 are an abridged version of the Company's full financial statements, which have been approved and audited with an unqualified report. The Annual Report and financial statements will be delivered to the Guernsey Financial Services Commission in due course.

The audited Annual Report and financial statements will be posted in May 2020. Copies may be obtained during normal business hours from the Company's Registered Office, JTC Fund Solutions (Guernsey) Limited, Dorey Court, Admiral Park, St. Peter Port, Guernsey, GY1 2HT Channel Islands or from the Company's website, ceibalimited.co.uk*.

* Neither the content of the Company's website nor the content of any website accessible from hyperlinks on the Company's website (or any other website) is (or is deemed to be) incorporated into, or forms (or is deemed to form) part of this announcement.

By Order of the Board

JTC Fund Solutions (Guernsey) Limited

Secretary

27 April 2020

For further information, please contact:

 
 Aberdeen Standard Fund Managers Limited           Tel: +44 (0)20 7463 
  Sebastiaan Berger / Evan Bruce-Gardyne            6000 
 
 Nplus1 Singer Advisory LLP                        Tel: +44 (0)20 7496 
  James Maxwell / James Moat (Corporate Finance)    3000 
  James Waterlow (Sales) 
 
   JTC Fund Solutions (Guernsey) Limited             Tel: +44 (0) 1481 702400 
 

** END**

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

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