Annual Financial Report

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 £ AND US$ (FOREX: £/US$ = 1.3113)

Given the fact that the Net Asset Value ("NAV") and share price of the Company are quoted in Sterling (£) 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 £

Total Net Assets £157.7m (2018: £162.0m) £160.6m 2 (2018: £165.8m) 2	NAV per share 1 114.5p (2018: 117.7p) 116.6p 2 (2018: 120.5p) 2	Number of shares in issue 137,671,576 Ordinary Shares (2018: 137,671,576 Ordinary Shares)
Market Capitalisation £97.7m (2018: £139.7m)	Share price 71.0p (2018: 101.5p)	Net Gain to shareholders £5.8m (2018: £1.4m) £5.0m 2 (2018: £5.2m) 2
Earnings per share 4.2p (2018: 1.2p) 3.6p 2 (2018: 4.6p) 2	NAV Total Return1,3 0.8% (2018: 1.0%) 0.3% 2 (2018: 3.9%) 2	Premium (Discount) to NAV1 (38.0%) 4 (2018: (13.8%)) 4 (39.1%) 2 (2018: 15.7%) 2

In US$

Total Net Assets US$206.7m (2018: $205.6m)   US$210.6m 2 (2018: $210.5m) 2	NAV per share 1 US$1.50 (2018: $1.49) US$1.53 2 (2018: $1.53) 2	Number of shares in issue 137,671,576 Ordinary Shares (2018: 137,671,576 Ordinary Shares)
Market Capitalisation US$128.2m (2018: $177.3m)	Share price US$0.93 (2018: $1.29)	Net Gain to shareholders US$7.6m (2018: $1.8m) US$6.6m 2 (2018: $6.6m) 2
Earnings per share US$0.06 (2018: $0.02) US$0.05 2 (2018: $0.06) 2	NAV Total Return1,3 4.9% (2018: (4.2%)) 4.3% 2 (2018: (2.1%)) 2	Premium (Discount) to NAV1 (38.0%) 4 (2018: (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 / £3.9m 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 / £3.8m, to be followed by a US$1.0m / £0.8m 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 / £0.8m.

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 €24 million and €12 million tranches of the credit facility granted to FINTUR, under which the aggregate present exposure of the Company is €1,716,667;

· 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/ £ 15.8m (2018: US$16.2m/ £12.7m ) 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 of Risk	Possible Impact	Mitigating Action	Change during Year
Emerging Risk
Global Pandemic Risk	The emergence of the global COVID-19 pandemic post-year end may, as is the case in many places around the world and in many economic sectors, have a profound and as yet unquantifiable negative impact on the operations and performance of the assets of the Company, and may directly or indirectly affect all other risk categories mentioned in this matrix.  More information on COVID-19 is set out in the Chairman's Statement and Manager's Review.	The Board, the Investment Manager, the local team in Havana, the joint venture companies in which the Company has participations, the Administrator and other service providers have all acted to the best of their abilities and in a coordinated fashion in the best interests of stakeholders (i) to protect the welfare of the various teams involved in the affairs of the Company, (ii) to ensure operations are maintained to the extent 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 Strategy and Objective	The setting of an unattractive strategic proposition to the market and the failure to adapt to changes in investor demand may lead to the Company becoming unattractive to investors, a decreased demand for shares and a widening discount.	The Company's investment strategy and objective is subject to regular review to ensure that it remains attractive to investors.  The Board considers strategy regularly and receives strategic updates from 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 Restrictions	Investing outside of the investment restrictions and guidelines set by the Board could result in poor performance and inability to meet the Company's objectives, as well as a discount.	The Board sets, and monitors, its investment restrictions and guidelines, and receives regular reports which include performance reporting on the implementation of the 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 Risk	The investments of the Group in Cuban real estate assets are made through Cuban joint venture companies in which Cuban government entities hold an equity interest, giving rise to risks relating to the liquidity of investments, government approval and deadlock.	Prior to entering into any agreement to acquire an investment, the Investment Manager will perform or procure the performance of due diligence on the proposed acquisition target.  The Group tries to structure its equity investments 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 Risk	As an indirect investor in real estate assets, the Company is subject to risks relating to property investments, including access to capital and global capital market conditions, acquisition and development risk, competition, tenant risk, environmental risk and others, and the materialisation of these risks could have a negative effect on specific properties or the Group generally.	The Investment Manager regularly monitors the level of real estate risk in the Cuban market and reports to the Board at each meeting regarding recent developments. The Investment Manager works closely with the on-the-ground team, the external hotel managers and the joint venture managers to identify, monitor and actively manage local real estate risk.	↑
Tourism Risk	As an indirect investor in hotel assets, the Company is subject to numerous risks relating to the tourism sector, both in outbound and inbound markets, including the cost and availability of air travel, seasonal variations in cash flow, demand variations, changes in or significant disruptions to travel patterns, risk related to the manager of the hotel properties, and the materialisation of these risks could have a negative impact on specific properties or the Company generally.	The Investment Manager regularly monitors the local and regional tourism markets and meets regularly with the external hotel management to identify, monitor and manage global and local tourism risk and to develop appropriate strategies for dealing with changing conditions.  The Company aims to maintain a diversified portfolio of tourism assets spanning various hotel categories (city hotel / beach resort, business / leisure travel, luxury / family) in numerous locations across the island.	↑
Valuation Risk	Asset valuations may fluctuate materially between periods due to changes in market conditions.	As part of the valuation process, the Investment Manager engages an independent 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 on Third Party Service Providers	The Company is dependent on the Investment Manager and other third parties for the provision of all systems and services relating to its operations and investments, and any inadequacies in design or execution thereof, control failures or other gaps in these systems and services could result in a loss or damage to the Company.	The Board receives reports from its service providers on internal controls and risk management at each Board meeting.  It receives assurance from all its significant service providers as well as back to back assurances where activities are themselves sub-delegated to other third party providers with which the 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 Fund Personnel	The loss of key managers contracted by the Investment Manager to manage the portfolio of investments of the Group could impact performance of the Company.	Sebastiaan Berger, a key member of the CEIBA management team, became an employee of the Investment Manager on 1 January 2019.  Sebastiaan 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, Political, Legal and Financial Environment within Cuba	The Group's underlying investments are situated and operate within a unique economic and legal market, with a comparatively high level of uncertainty, and a sensitive political environment.	Mr Berger has lived and worked in Cuba for 24 years and has been lead investment manager of the Company since 2001, utilising his extensive experience in 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 restrictions relating to Cuba	Tensions remain high between the governments of the United States and Cuba and the U.S. government maintains numerous legal restrictions aimed at Cuba.  The Trump administration continues to adopt new restrictions.  The rise of further tensions with the United States or the adoption by the U.S. government of further restrictions against Cuba could negatively impact the operations of the Company, the value of its investments, the liquidity or tradability of its shares, or its access to international capital and financial markets.	The Investment Manager closely follows developments relating to the relationship between the United States and Cuba and monitors all new restrictions adopted by the United States to measure their possible impact on the assets of the Group.  The Group has adapted its investment model to the existing sanctions, but the risk remains of further sanctions being adopted in the future.	↑
Helms-Burton Risk	On 2 May 2019, Title III of the Helms-Burton Act was brought fully into force following 23 years of successive uninterrupted suspensions. Canada, the European Union and other governments have strongly objected to the move and have stated that they are prepared to defend their companies' interests in Cuba before the World Trade Organization.  A number of legal claims were subsequently launched before US courts against U.S and foreign investors in Cuba, which has had and could have a further negative impact on the foreign investment climate in Cuba and may hinder the ability of the Company to access international capital and financial markets in the future.  In light of the political nature of the Helms-Burton Act and the fact that under Title III Cuban persons who were not U.S. Persons at the time their property was expropriated but subsequently became U.S. Persons have the right to make claims, there is also a risk that legal claims might be initiated against the Company or its subsidiaries before U.S. courts.	At the time of acquiring each of its interests in Cuban joint venture companies, the Company carried out extensive due diligence investigations in order to ensure that no claims existed under applicable U.S. legislation, and in particular that there were no claims certified by the U.S. Foreign Claims Settlement Commission under its Cuba claims program with respect to any of the properties in which the Company acquired an interest.  However, given the broad definitions and terms of the Helms-Burton Act and its purpose of creating uncertainty on the part of investors, as well as the absence of any register of uncertified claims or case law, there is no certain way for the Company to have diligently verified whether or not a Helms-Burton action under Title III could be brought in respect to a particular property, or whether the Company may be deemed to indirectly profit or benefit from certain activities carried out by other parties.  The Company does not have any property or assets in the United States that could be subject to seizure.	↑
Liquidity Risk	The continued rise in regional tensions between the United States and Venezuela may impact the economic and liquidity position in Cuba, which may in turn have a negative impact on the position of the Company.	The Investment Manager actively manages the liquidity position of the Company, its subsidiaries and the joint ventures in which it invests so that cash flows are transferred to 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 tax status or tax treatment in any of the jurisdictions where is has a presence may adversely affect the Company or its shareholders.	The Investment Manager regularly reviews the tax rules that may affect the operations or investments of the Company and seeks 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 / £157,656,016 (2018: US$205,641,346 / £162,037,149), 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 / £15,763,410 (2018: US$16,158,458 / £12,732,218).

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 / £10.3 million (2018: US$12.7 million / £10.0 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 / £13.6 million (2018: US$21.7 million / £17.1 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 / £5,780,152 (2018: US$1,775,926 / £1,399,359), and NAV per share at 31 December 2019 was US$1.50 / £1.14 (2018: US$1.49 / £1.18).  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 / £11,178,649 (2018: loss of US$4,483,525 / £3,532,838) 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 / £20,393,650.

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 €3.5 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 / £13.8 million for (2018: US$17.3 million/ £13.2 million) and net income after tax of US$13.5 million / £10.3 million (2018: US$12.7 million/ £10.0 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 / £13.6 million (2018: US$21.7 million / £17.1 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 / £4,667,575	US$7,686,699 / £6,056,811
Occupancy Rate	66%	65%
ADR	US$142 / £108	US$146 / £111
RevPAR	US$94 / £72	US$112 / £88
Meliã Las Americas Hotel
EBITDA	US$5,378,939 / £4,101,990	US$7,639,134 / £6,019,332
Occupancy Rate	76%	81%
ADR	US$129 / £98	US$141 / £108
RevPAR	US$98 / £75	US$114 / £91
Meliã Varadero Hotel
EBITDA	US$7,013,618 / £5,348,599	US$8,262,384 / £6,510,428
Occupancy Rate	80%	79%
ADR	US$103 / £79	US$112 / £85
RevPAR	US$82 / £63	US$88 / £71
Sol Palmeras Hotel
EBITDA	US$6,965,194 / £5,311,671	US$8,862,908 / £6,983,617
Occupancy Rate	82%	82%
ADR	US$90 / £69	US$100 / £76
RevPAR	US$74 / £56	US$82 / £65

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 €3.5 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 / £17.2 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 / £7.5million.  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 / £7.6 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 €150 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 €24 million and subsequently amended in 2019through the addition of a second tranche in the principal amount of €12 million, the Company has a €4 million participation under Tranche A and a €2 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 / £925,530 was outstanding under the Company's participation in Tranche A, and the principal amount of US$2,016,523 / £1,537,804 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 / £7,561,619 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 56,000m² 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 DIVIDENDS

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 Position As at 31 December 2019			31 Dec 2019		31 Dec 2018
	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.

	Note		31 Dec 2019 US$		31 Dec 2018 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)
Interest income			(820,588)		( 321,323 )
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
	Notes	Stated Capital US$		Revaluation Surplus US$		Retained Earnings US$		Other comprehensive income US$		Total Equity attributable to the parent US$		Non-controlling interest US$		Total Equity 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
	Notes	Stated Capital US$		Revaluation Surplus US$		Retained Earnings US$		Other comprehensive income US$		Total Equity attributable to the parent US$		Non-controlling interest US$		Total Equity 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:

Entity Name	Country of Incorporation	Equity interest held indirectly by the Group 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)   1.3.1. HOMASI S.A. (a) (iii)   1.3.1.1. Miramar S.A. (b) (vi)   1.3.2. Mosaico Hoteles S.A. (a) (iii)   1.3.2.1 TosCuba S.A. (b) (vii)   1.3.3. Mosaico B.V. (a) (v)   1.3.3.1 Mosaico Hoteles S.A. (a) (iii)   1.3.3.1.1 TosCuba S.A. (b) (vii)	Netherlands Spain Cuba Switzerland Cuba Netherlands Switzerland Cuba	100% 65% 50% 80% 50% 80% - -	100% 65% 50% - - 80% 100% 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 €24,000,000 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 €12,000,000.  The Group has a €4,000,000 participation under Tranche A of the facility and a €2,000,000 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

		Miramar (i) US$		Monte Barreto US$		TosCuba (ii) US$		Cubacan US$		Total 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 month - year 1 to 6	US$28.28		US$26.93
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 (i)				Miramar (i)				Cubacan			TosCuba (iv)
	2019 US$ 000's		2018 US$ 000's		2019 US$ 000's		2018(ii) US$ 000's		2019 US$ 000's	2018(iii) US$ 000's		2019 US$ 000's		2018 US$ 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

	Motor vehicles US$		Office furniture and equipment US$		Works of art US$		Total 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) Due to Meliã  Hotels International SA (ii)		5,399 354,581		1,305,982   -
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 €30,000,000 (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 ordinary shares		Stated capital US$
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 US$		31 Dec 2018 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 US$		31 Dec 2018 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 US$		31 Dec 2018 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 US$		31 Dec 2018 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 US$		31 Dec 2018 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 US$		31 Dec 2018 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:

		HOMASI				Mosaico Hoteles S.A.		Mosaico BV.
		2019 US$ 000's		2018 US$ 000's		2019 US$ 000's		2019 US$ 000's		2018 US$ 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 property	Tourism / Leisure	Other	Total
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 property	Tourism / Leisure	Other	Total
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 £35,0 00 (US$39,111) per annum with the Chairman receiving £ 40,000 (US$44,419). The Chairman of the Audit Committee also receives an annual fee of £40,000 (US$ 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 2019 US$		31 Dec 2018 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 €150 million of facilities extended to FINTUR, with no defaults occurring during this period.

The Company has a €4 million participation in the most recent facility executed in March 2016 (a €24 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 €2,883,333 (US$3,230,171) (2018: €2,416,667 (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 €12 million (US$13,644,294), of which the Company agreed to assume a lender participation in the principal amount of €2 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) 31 Dec 2019 US$	Income (loss) 31 Dec 2018 US$
+15 +20 -15 -20		1,882,162 2,509,549 (1,882,162) (2,509,549)	2,613,683 3,484,911 (2,613,683) (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:

	Total US$		Fixed rate US$		Floating rate US$		Non-interest bearing US$
31 December 2019
Equity investments (US$)	227,340,559		-		-		227,340,559
Loans and lending facilities (€)	3,230,171		3,230,171		-		-
Loans and lending facilities (US$)	9,915,549		9,915,549		-		-
Accounts receivable and accrued income (US$)	7,736,695		-		-		7,736,695
Accounts receivable and accrued income (€)	121,621		-		-		121,621
Cash at bank (€)	11,230,891		-		-		11,230,891
Cash at bank (US$)	1,191,898		-		-		1,191,898
Cash at bank (GBP)	663,606		-		-		663,606
Cash on hand (€)	996		-		-		996
Cash on hand (US$)	1,724		-		-		1,724
Cash on hand (CUC)	13,463		-		-		13,463

	Total US$		Fixed rate US$		Floating rate US$		Non-interest bearing US$
31 December 2018
Equity investments (US$)	238,795,681		-		-		238,795,681
Loans and lending facilities (€)	2,764,550		2,764,550		-		-
Loans and lending facilities (US$)	4,749,764		4,749,764		-		-
Accounts receivable and accrued income (US$)	1,431,484		-		-		1,431,484
Accounts receivable and accrued income (€)	258,468		-		-		258,468
Cash at bank (€)	18,814,623		2,027,302		-		16,787,321
Cash at bank (US$)	117,073		-		-		117,073
Cash at bank (GBP)	865,614		-		-		865,614
Cash on hand (€)	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 US$		31 Dec 2018 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$
	Note	Fair value through profit or loss		Cash and Financial assets  at amortised cost		Financial liabilities at amortised cost	Total carrying 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$
	Note	Fair value through profit or loss		Cash and Financial assets  at amortised cost		Financial liabilities at amortised cost	Total carrying 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 2019		31 Dec 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 US$		31 Dec 2018 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 US$		31 Dec 2018 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 €1,716,667 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 €3.5 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 €1,173,750.37 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 year1	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 Sebastiaan Berger / Evan Bruce-Gardyne	Tel:  [phone]
Nplus1 Singer Advisory LLP James Maxwell / James Moat (Corporate Finance) James Waterlow (Sales)	Tel: [phone]
JTC Fund Solutions (Guernsey) Limited	Tel: [phone]

** END**

 

END

 

 

FR FFFSISVIDFII