TIDMCBA

RNS Number : 7689W

Ceiba Investments Limited

28 April 2021

28 April 2021

CEIBA INVESTMENTS LIMITED

(the "Company")

(TICKER CBA, ISIN: GG00BFMDJH11)

Legal Entity Identifier: 213800XGY151JV5B1E88

RESULTS FOR THE YEARED 31 DECEMBER 2020

COMPANY OVERVIEW

GENERAL

CEIBA Investments Limited ("CEIBA" or the "Company") is a Guernsey-incorporated, closed-ended investment company, with registered number 30083. The Ordinary Shares of the Company are listed on the Specialist Fund Segment ("SFS") of the London Stock Exchange's Main Market under the symbol CBA (ISIN: GG00BFMDJH11). The Bonds are listed on the The International Stock Exchange, Guernsey under the symbol CEIB1026 (ISIN: GG00BMV37C27). 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. 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 or other entities 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 2020 IN GBP AND US$ (FOREX: GBP/US$ = 1.3608)

The Company's Net Asset Value ("NAV") and share price are quoted in Sterling (GBP) but the functional currency of the Company is the U.S. Dollar (US$). As such, the financial highlights of the Company set out below are being provided in both currencies, applying the applicable exchange rate as at 31 December 2020 of GBP1:US$1.3608 (2019 GBP1=US$1.3113).

 
                                       GBP                            US$ 
                          2020            2019            2020            2019 
                         --------------  --------------  --------------  ------------ 
 Total Net Assets         GBP142.9m       GBP157.7m       US$194.4m       US$ 206.7m 
                           GBP145.0m       GBP160.6m       US$197.3m(2)    US$ 210.6m 
                           (2)             (2)                             (2) 
                         --------------  --------------  --------------  ------------ 
 NAV per share (1)        103.8p          114.5p          US$1.41         US$1.50 
                           105.3p (2)      116.6p (2)      US$1.43         US$1.53 
                                                           (2)             (2) 
                         --------------  --------------  --------------  ------------ 
 Market Capitalisation    GBP116.3m       GBP 97.7m       US$158.3m       US$128.2m 
                         --------------  --------------  --------------  ------------ 
 Share Price              84.5p           71.0p           US$1.15         US$0.93 
                         --------------  --------------  --------------  ------------ 
 Net (Loss)/Gain          (GBP14.6m)      GBP5.8m         (US$19.8m)      US$7.6m 
  to shareholders 
                            (GBP15.3m)      GBP5.0m (2)     (US$20.8m)      US$6.6m 
                            (2)                             (2)             (2) 
                         --------------  --------------  --------------  ------------ 
 (Loss)/Earnings          (10.6p)         4.2p            (US$0.14)       US$0.06 
  per share 
                            (11.1p) (2)     3.6p (2)        (US$0.15)       US$0.05 
                                                            (2)             (2) 
                         --------------  --------------  --------------  ------------ 
 NAV Total Return(1)      (9.4%)          0.8%            (6.0%)          4.9% 
                            (9.7%) (2)      0.3% (2)        (6.3%) (2)      4.3% (2) 
                         --------------  --------------  --------------  ------------ 
 Share Price Return 
  (1,3)                   19.0%           (26.1%)         22.8%           (23.1%) 
                         --------------  --------------  --------------  ------------ 
 Discount to NAV(1)       (18.6%)         (38.0%)         (18.6%)         (38.0%) 
                            (19.8 %)        (39.1 %)        (19.8%)         (39.1 %) 
                            (2)             (2)             (2)             (2) 
                         --------------  --------------  --------------  ------------ 
 

1 These are considered Alternative Performance Measures. See glossary 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 the effect of an adjustment recognising the full amount of US$5.0m / GBP3.9m received from Aberdeen Standard Fund Managers Limited on 23 November 2018 in connection with the execution of the Management Agreement in the Statement of Comprehensive Income for the year ended 31 December 2018, rather than deferring this amount over the five-year term of the Management Agreement as required by IFRS.

3 Source: Refinitiv

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$5.0m / GBP3.9m and decreases the net income attributable to the shareholders of the Company by the amount of US$1.0m / GBP0.7m per year over the five year term of the Management Agreement. Consequently, for the year ended 31 December 2020 the adjustment resulted in a decrease in the net income attributable to the shareholders of the Company in the amount of US$1.0m / GBP0.7m.

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

Since publication of the 2019 Annual Report of CEIBA Investments Limited ("CEIBA" or the "Company") in April 2020, both the Company and Cuba have, in line with most of the rest of the world, been battling the Covid-19 pandemic. The extreme impact of this virus was difficult to assess at that time and there still remains considerable uncertainty about its duration and the long-term impact, and the expected return to normality.

One of our prime concerns throughout this period has been ensuring the wellbeing of our people and protecting the safety of the people working to advance the affairs of the Company. It is notable that Cuba itself has handled the virus well, with some 103,524 total infections as of writing this report and a death toll of 604 people since the start of the pan demic , which on a global basis is an enviable record.

2020 REVIEW

Inmobiliaria Monte Barreto S.A. ("Monte Barreto"), the Cuban joint venture company in which the Company owns a 49% interest, owns and operates the Miramar Trade Centre. Given the backdrop, it has traded very strongly since the onset of the pandemic and occupancy levels have remained over 98% throughout 2020. Although revenues were down slightly as compared with the prior year, net income in 2020 reached US$14.4 million / GBP10.6 million for the year, representing a small increase over the prior year and making 2020 the most profitable year since incorporation of the joint venture.

The 2021 outlook for Monte Barreto continues to be positive, with occupancy percentage levels expected to remain in the high ninetiesthroughout the year. Furthermore, following the recent significant monetary reforms in Cuba it is anticipated that there may be some material savings in the overheads of the Miramar Trade Centre going forward.

The global hotel industry has been severely impacted by the Covid-19 pandemic and the hotels in which CEIBA has an interest have proved to be no exception. CEIBA 's main hotel interests are held through its 32.5% holding in the Cuban joint venture company, Miramar S.A. ("Miramar"). Miramar owns three hotels in Varadero and one hotel in Havana. In Varadero, the Meliã Las Am é ricas and the Meliã Varadero have remained closed since the end of March 2020 while the Meliã Sol Palmeras remained open for most of the year but has traded on a heavily scaled-back basis. The Havana-based hotel, the Meliã Habana, has similarly been open throughout 2020 and remains open, but also on a reduced basis. Given the trading environment, Miramar was still able to finish 2020 with a positive EBITDA of approximately US$ 3.9 million / GBP2.9 million (2019: US$25.0 million / GBP18.3 million) of which CEIBA's share amounts to US$1.3 million / GBP0.9 million. Miramar is well capitalised and is able to continue to operate without recourse to additional funding and has been using the closures to undertake certain cosmetic upgrading of rooms and facilities.

CEIBA 's other hotel interest is in its 40% holding in the Cuban joint venture company, TosCuba S.A. ("TosCuba"), which is constructing the 400 room Meliã Trinidad Pen í nsula Hotel. This hotel is situated on the south coast of Cuba close to the historic city of Trinidad and will be the first modern international-standard beach resort hotel in the area. The construction continued throughout the year, albeit at a reduced pace. The issue on 31 March 2021 by the Company of EUR25 million 10.00% senior unsecured convertible bonds due 2026 ensures that the funding for the completion and start-up of operations of this exciting new property is in place. It is presently anticipated that completion will take place during the third quarter of 2022 in time for the 2022-2023 high season.

The Board is also encouraged by the recent investment made in Grupo B.M. Interinvest Technologies Mariel S.L. ("GBM Mariel") through which the Company has acquired a 50% shareholding. The Company has made an initial commitment of EUR1.5 million / US$1.8million to the project to develop an industrial logistics and warehousing complex to be constructed on a 11.3 hectare site situated in the Special Development Zone of Mariel. To date, an amount of EUR250,000 / US$303,175 has been invested in order to partially fund the groundworks related to the construction of the first four warehouses of this multi-phase project .

Results for the year ended 31 December 2020

The NAV per Share at 31 December 2020 was US$1.41 / 103.8p compared to US$1.50 / 114.5p at 31 December 2019 and the loss per share for the financial year was US$0.14 / (10.6p) compared to a profit of US$0.06 / 4.2p for 2019. The valuation of the principal assets of the Company as well as the earnings generated by the Hotels of Miramar in respect of the year ended 31 December 2020 have clearly been negatively impacted by the Covid-19 pandemic. The Hotels have been written down in these financial statements by US$24.7 million / GBP18.2 million in aggregate from 31 December 2019, reflecting both the present lack of trading as compared to last year and the uncertain road to full recovery. However, as there is a much clearer route out of lockdown and towards the resumption of international travel than was the case in June 2020, the valuations have been increased from the position at 30 June 2020 by US$16.9 million / GBP12.4 million.

While the NAV total return was (9.4%) in Sterling terms, the share price total return was 19.0% (2019: (26.1%)). The share price fell, in line with most instruments, in the wake of the pandemic and at 30 June 2020 was as low as 64.5p. However, as we came through the summer, and particularly once news of successful vaccines and the outcome of the U.S. elections in November improved the outlook, we saw the share price recover strongly to close at 84.5p.

Cuban economic backdrop

For a country that relies heavily upon tourism to drive its economy, the Covid-19 pandemic and the continued tightening of economic sanctions imposed by the Trump administration have been extremely challenging for Cuba's economy and it experienced an 11% contraction in 2020.

Against this backdrop and in an effort to create jobs and revive the economy, the government very recently announced that it would greatly expand the number of economic activities open to private enterprise. While there is still a considerable number of businesses that will remain state controlled, this opening up of the economy is nonetheless a significant move. In addition, in late 2020 the government, at relatively short notice, announced and has now initiated the unification of the two Cuban currencies such that there will now be just one currency - the Cuban peso. While initially this has and will create operational challenges, in the longer term the unification of currencies will help drive many inefficiencies out of the economy and should prove of material benefit to the day-to-day operations of the Company's hotels and of the Monte Barreto office complex. The Board believes the changes implemented will greatly ease the ability to do business in Cuba, will enhance entrepreneurism and have positive long-term benefits to the general economy. In addition, although new currency exchange challenges may be created, full implementation of the reforms may very well increase the attractiveness of Cuba as a market for foreign direct investment, improve the autonomy of joint venture companies and have a material positive impact on the investments of the Company.

These, and other reforms, are being initiated at the same time as a significant change in the Cuba's leadership. On 16(th) April 2021, at the start of the 8(th) Congress of Cuba's Communist Party, Raul Castro announced that he is stepping down as Secretary of the Party - leaving the island without a Castro guiding affairs for the the first time in more than six decades - whilst stating that he will ".. keep one foot in the stirrups to defend the fatherland, the revolution and socialism". Cuba's President, Miguel Díaz-Canel, will be his successor tasked with combining "continuity" with progress and reforms.

U.S. Cuba relations

Under the Trump administration, the economic restrictions imposed upon Cuba were continuously tightened and no let up was experienced during the last year of his presidency. In June 2020, the U.S. expanded the Cuba Restricted List to include Fincimex, a Cuban financial corporation that handles the majority of US and many other international family remittances to Cuba, and finally, on 11 January 2021 the Trump administration chose to reinstate Cuba to the list of State Sponsors of Terrorism. However, with the new Biden presidency, we can anticipate a gradual reversal of the Trump initiatives and a return to the relationship experienced in the later years of the Obama presidency. We would envisage the initial steps to include the removal once again of Cuba from the list of State Sponsors of Terrorism, the relaxation of rules concerning travel to Cuba by US citizens and the removal of restrictions on remittances to Cuba. We would also expect a suspension of Title III of the Helms Burton Act and the restoration of full operations at the US embassy in Havana. All of these and other initiatives to open the relationship between the two countries should have a very positive impact upon the Cuban economy and also on the Company's assets.

Dividend

It was decided in 2020 that, with the inherent uncertainty caused by the onset of the Covid pandemic, it was critical that the Company maintain sufficient cash to meet all of its existing and future undertakings . Accordingly, the Board took the decision to suspend the dividend policy and no dividend was paid during 2020. The Board would very much like to reinstate the payment of dividends but seeing as there still remains considerable uncertainty as to how long it will take to see a return of normal tourism numbers it has decided to maintain the present position for another year so no dividend will be paid to shareholders in 2021. This stance will be very much kept under constant review with a strong desire to reinstate the dividend as soon as appropriate.

Convertible Bonds

On 31 March 2021, the Company raised EUR25million in new funds through the issue of 10.00% senior unsecured convertible bonds due 2026 (the "Bonds"). Further details of the Bonds are set out in note 21 to the accounts. The proceeds from this fund raising significantly enhance the Company's financial position and will enable it to complete the development of the TosCuba hotel in a timely manner and also provide capital for additional investment opportunities as they arise.

25 Years Investing in Cuba

This year CEIBA celebrates 25 years of existence, all of it investing in the mostly uncharted investment territory of Cuba,and I believe that the Company has accomplished a great deal during this period. From a modest start in 1996, and after some initial fine-tuning to the investment strategy, the long years of asset growth, solid performance and US$89 million in steady dividend payments to our shareholders have demonstrated the virtues of a stable, long-term perspective and an experienced team in confronting the many uncertainties and ups and downs of the fascinating and unique Cuban investment market. Despite variable economic conditions on the island and changing U.S. government policies, the Company and its investments have led the way in many respects and have flourished over these years.

I am obliged to the team for their long-standing dedication and professionalism, and to the Cuban and other partners in each of the investments of the Company for their collaboration. Without their efforts, none of the many successes of the Company would have been possible. As I mark this important milestone and recognise past accomplishments I look ahead with optimism and trust that the Company still has a long and prosperous road ahead, with the best yet to come.

Board

I am grateful to the Board for their commitment and input during this challenging year. It is the Board's policy to undertake a regular review of its own performance to ensure that it has the appropriate mix of relevant experience and skills to ensure the effective overall operation of the Company.

The Investment Manager

Aberdeen Standard Fund Managers Limited, 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 by Sebastiaan Berger, who is exclusively focused on the Company's assets and business and has acted in this role for some 20 years. The Board reviewed the work of the Investment Manager during the year and concluded that it was very satisfied with the performance of the Investment Manager and that it was in the best interests of shareholders that ASFML remain as manager of the portfolio.

The Board extends its sincere thanks to the Investment Manager and to the entire management team based in Cuba for their commitment and efforts on behalf of the Company in these very challenging and uncertain times.

John Herring

Chairman

27 April 2021

STRATEGIC REPORT

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 investments, debt instruments 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 (Law 118/2014) 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% 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 
   --     Net asset value per share (NAV)* 
   --     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 also monitors the financial performance of the Cuban joint venture companies that own the commercial and hotel properties using these KPIs. The Board and the Investment Manager seek to influence the management decisions of the Cuban joint venture companies through representation on their corporate bodies with the objective 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

Introduction

The Board, through the Audit Committee, 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. 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. As part of its risk process, the Board seeks to identify emerging risks to ensure that they are effectively managed as they develop. In the event that an emerging risk has gained significant weight or importance, that risk is categorised and added to the Company's risk register and is monitored accordingly.

Principal Risks and Uncertainties

The Company invests in Cuba, a frontier or pre-emerging market, which may increase the risk as compared to investing in similar assets in other jurisdictions.

In addition to general country-risk, the most significant risks currently facing the Company 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 are trending at the present time.

A detailed description of the risks faced by the Company is contained in the Company`s Prospectus and should be read in conjunction with the risks described herein.

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          Description and Possible                  Mitigating Action             Trend 
     of Risk                      Impact 
 Public Health Risk 
 Global            The continued effects of              The Board discusses current            à 
  Pandemic          the public health risks               issues with the Investment 
  Risk              associated with the Covid-19          Manager to limit the impact 
                    or any other pandemic may             of the pandemic on the 
                    have a lasting and as yet             business of the Company. 
                    unquantifiable negative               The Board recognises that 
                    impact on the global tourism          tourism is particularly 
                    industry, the economy of              affected by the various 
                    Cuba, and the operations              travel restrictions being 
                    and performance of the                imposed and considers that 
                    assets of the Company.                this is a risk that is 
                    The pandemic may directly             likely to continue to impact 
                    or indirectly affect all              upon the operating environment 
                    other risk categories mentioned       of the Company in the short 
                    in this matrix.                       term . 
                                                          The Board's actions are 
                                                          targeted at (i) protecting 
                                                          the welfare of the various 
                                                          teams involved in the affairs 
                                                          of the Company, (ii) ensuring 
                                                          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 this and future 
                                                          pandemics. 
                  ------------------------------------  -------------------------------------  ------- 
 Risks Relating to the Company and its Investment Strategy 
 Investment        The setting of an unattractive        The Company's investment                 -> 
  Strategy          strategic proposition to              strategy and objective 
  and Objective     the market and the failure            is subject to regular review 
                    to adapt to changes in                to ensure that it remains 
                    investor demand may lead              attractive to investors. 
                    to the Company becoming               The Board considers strategy 
                    unattractive to investors,            regularly and receives 
                    a decreased demand for                strategic updates from 
                    shares and a widening discount.       the Investment Manager, 
                                                          investor relations reports 
                                                          and updates on the market 
                                                          from the Company's Broker. 
                                                          At each Board meeting, 
                                                          the Board reviews the shareholder 
                                                          register and any significant 
                                                          movements. The Board considers 
                                                          shareholder sentiment towards 
                                                          the Company with the Investment 
                                                          Manager and Broker, and 
                                                          the level of discount at 
                                                          which the Company's shares 
                                                          trade. 
                  ------------------------------------  -------------------------------------  ------- 
 Investment        Investing outside of the              The Board sets, and monitors,            -> 
  Restrictions      investment restrictions               its investment restrictions 
                    and guidelines set by the             and guidelines, and receives 
                    Board could result in poor            regular reports which include 
                    performance and inability             performance reporting on 
                    to meet the Company's objectives,     the implementation of the 
                    as well as a discount.                investment policy, the 
                                                          investment process and 
                                                          application of the guidelines. 
                                                          The Investment Manager 
                                                          attends all Board meetings. 
                                                          The Board monitors the 
                                                          share price relative to 
                                                          the NAV. 
                  ------------------------------------  -------------------------------------  ------- 
 Portfolio and Operational Risks 
 Joint Venture     The investments of the                Prior to entering into                   -> 
  Risk              Group in Cuban real estate            any agreement to acquire 
                    assets are made through               an investment, the Investment 
                    Cuban joint venture companies         Manager will perform or 
                    in which Cuban government             procure the performance 
                    entities hold an equity               of due diligence on the 
                    interest, giving rise to              proposed acquisition target. 
                    risks relating to the liquidity       The Group tries to structure 
                    of investments, government            its equity investments 
                    approval, corporate governance        in Cuban joint venture 
                    and deadlock.                         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 Group interests 
                                                          are held, and actively 
                                                          manage relations with the 
                                                          management teams of each 
                                                          joint venture company, 
                                                          the relevant Cuban shareholders 
                                                          and relevant third parties 
                                                          to ensure that Group interests 
                                                          are enhanced. 
                  ------------------------------------  -------------------------------------  ------- 
 Real Estate       As an indirect investor               The Investment Manager                   -> 
  Risk              in real estate assets,                regularly monitors the 
                    the Company is subject                level of real estate risk 
                    to risks relating to property         in the Cuban market and 
                    investments, including                reports to the Board at 
                    access to capital and finance,        each meeting regarding 
                    global capital and financial          recent developments. The 
                    market conditions, acquisition        Investment Manager works 
                    and development risk, competition,    closely with the on-the-ground 
                    tenant risk, environmental            team, the external hotel 
                    risk and others, and the              managers and the joint 
                    materialisation of these              venture managers to identify, 
                    risks could have a negative           monitor and actively manage 
                    effect on specific properties         local real estate risk. 
                    or the Group generally. 
                  ------------------------------------  -------------------------------------  ------- 
 Construction      As a developer and investor           The Investment Manager                   -> 
  Risk              in new construction as                regularly monitors all 
                    well as refurbishment projects,       construction and refurbishment 
                    the Company is subject                activities carried out 
                    to risks relating to the              within Group companies 
                    planning and execution                and works closely with 
                    of construction works,                the on-the-ground management 
                    including the availability            team and the joint venture 
                    and transportation of materials,      managers to identify, monitor 
                    increment weather, contractor         and actively manage all 
                    risk, execution risk and              construction risks. The 
                    the risk of delay. The                Investment Manager reports 
                    materialisation of these              to the Board at each meeting 
                    risks could have a negative           regarding recent developments 
                    effect on the implementation          in this respect. 
                    of development projects 
                    of the Group. 
                  ------------------------------------  -------------------------------------  ------- 
 Tourism           As an indirect investor               The Investment Manager                 á 
  Risk              in hotel assets, the Company          regularly monitors the 
                    is subject to numerous                local and regional tourism 
                    risks relating to the tourism         markets and meets regularly 
                    sector, both in outbound              with the external hotel 
                    and inbound markets, including        management to identify, 
                    the cost and availability             monitor and manage global 
                    of air travel, seasonal               and local tourism risk 
                    variations in cash flow,              and to develop appropriate 
                    demand variations, changes            strategies for dealing 
                    in or significant disruptions         with changing conditions. 
                    to travel patterns, risk              The Company aims to maintain 
                    related to the manager                a diversified portfolio 
                    of the hotel properties,              of tourism assets spanning 
                    and the materialisation               various hotel categories 
                    of these risks could have             (city hotel / beach resort, 
                    a negative impact on specific         business / leisure travel, 
                    properties or the Company             luxury / family) in numerous 
                    generally.                            locations across the island. 
                  ------------------------------------  -------------------------------------  ------- 
 Valuation         Asset valuations may fluctuate        As part of the valuation                 -> 
  Risk              materially between periods            process, the Investment 
                    due to changes in market              Manager engages an independent 
                    conditions.                           third party valuer to provide 
                                                          an independent valuation 
                                                          report on each of the indirectly 
                                                          owned real estate assets 
                                                          of the Group. The valuations 
                                                          are also subject to review 
                                                          by the Investment Manager's 
                                                          Alternatives Pricing Committee. 
                  ------------------------------------  -------------------------------------  ------- 
 Dependence        The Company is dependent              The Board receives reports               -> 
  on Third          on the Investment Manager             from its service providers 
  Party Service     and other third parties               on internal controls and 
  Providers         for the provision of all              risk management at each 
                    systems and services relating         Board meeting. It receives 
                    to its operations and investments,    assurance from all its 
                    and any inadequacies in               significant service providers 
                    design or execution thereof,          as well as back-to-back 
                    control failures or other             assurances where activities 
                    gaps in these systems and             are themselves sub-delegated 
                    services could result in              to other third party providers 
                    a loss or damage to the               with which the Company 
                    Company.                              has no direct contractual 
                                                          relationship. Further details 
                                                          of the internal controls 
                                                          which are in place are 
                                                          set out in the Directors' 
                                                          Report. 
                  ------------------------------------  -------------------------------------  ------- 
 Loss of           The loss of key managers              Under the Management Agreement,          -> 
  Key Fund          contracted by the Investment          the Investment Manager 
  Personnel         Manager to manage the portfolio       has the obligation to at 
                    of investments of the Group           all times provide personnel 
                    could impact performance              with adequate knowledge, 
                    of the Company.                       experience and contacts 
                                                          in the Cuban market. In 
                                                          order to mitigate key manager 
                                                          risk, the Investment Manager 
                                                          makes every effort to spread 
                                                          knowledge and experience 
                                                          of the Cuban market within 
                                                          the organisation so as 
                                                          to reduce reliance on a 
                                                          small team of individuals. 
                  ------------------------------------  -------------------------------------  ------- 
 Risks Relating to Investment in Cuba and the U.S. Embargo 
 General           The Group's underlying                The Company benefits from 
  Economic,         investments are situated              the services of its highly 
  Political,        and operate within a unique           experienced on-the-ground 
  Legal and         economic and legal market,            management team consisting 
  Financial         with a comparatively high             of eight members. With 
  Environment       level of uncertainty, and             a well-balanced mix of 
  within            a sensitive political environment.    Cuban and foreign professionals 
  Cuba                                                    who all have long-standing 
                                                          expertise in the country, 
                                                          the team is one of the 
                                                          most practised investment 
                                                          groups focused exclusively 
                                                          on investment in the Cuban 
                                                          market, which constantly 
                                                          monitors the economic, 
                                                          political and financial 
                                                          environment within Cuba. 
                                                          The subsidiaries of the 
                                                          Company have been structured 
                                                          to benefit from existing 
                                                          investment protection and 
                                                          tax treaties to which Cuba 
                                                          is a party. 
                  ------------------------------------  -------------------------------------  ------- 
 U.S. government   Tensions remain high between          The Investment Manager                 â 
  restrictions      the governments of the                closely follows developments 
  relating          United States and Cuba                relating to the relationship 
  to Cuba           and the U.S. government               between the United States 
                    maintains numerous legal              and Cuba and monitors all 
                    restrictions aimed at Cuba.           new restrictions adopted 
                    The rise of further tensions          by the United States to 
                    with the United States                measure their possible 
                    or the adoption by the                impact on the assets of 
                    U.S. government of further            the Group. The Group has 
                    restrictions against Cuba             adapted its investment 
                    could negatively impact               model to the existing sanctions, 
                    the operations of the Company,        but the risk remains of 
                    the value of its investments,         further sanctions being 
                    the liquidity or tradability          adopted in the future. 
                    of its shares, or its access 
                    to international capital 
                    and financial markets. 
                  ------------------------------------  -------------------------------------  ------- 
 Helms-Burton      On 2 May 2019, Title III              At the time of acquiring               â 
  Risk              of the Helms-Burton Act               each of its interests in 
                    was brought fully into                Cuban joint venture companies, 
                    force by the Trump administration     the Company carried out 
                    following 23 years of successive      extensive due diligence 
                    uninterrupted suspensions.            investigations in order 
                    Numerous legal claims were            to ensure that no claims 
                    subsequently launched before          existed under applicable 
                    U.S. courts against U.S.              U.S. legislation, and in 
                    and foreign investors in              particular that there were 
                    Cuba, which has had and               no claims certified by 
                    could have a further negative         the U.S. Foreign Claims 
                    impact on the foreign investment      Settlement Commission under 
                    climate in Cuba and may               its Cuba claims program 
                    hinder the ability of the             with respect to any of 
                    Company to access international       the properties in which 
                    capital and financial markets         the Company acquired an 
                    in the future. In light               interest. However, given 
                    of the political nature               the broad definitions and 
                    of the Helms-Burton Act,              terms of the Helms-Burton 
                    and the fact that under               Act and its purpose of 
                    Title III of the Act, Cuban           creating legal uncertainty 
                    persons who were not U.S.             on the part of investors 
                    Persons at the time their             in Cuba, as well as the 
                    property was expropriated             absence of any register 
                    but subsequently became               of uncertified claims or 
                    U.S. Persons have the right           case law, there is no certain 
                    to make claims, there is              way for the Company to 
                    also a risk that legal                verify beyond doubt whether 
                    claims might be initiated             or not a Helms-Burton action 
                    against the Company or                under Title III could be 
                    its subsidiaries before               brought in respect to a 
                    U.S. courts. However, in              particular property, or 
                    line with a more rational             whether the Company may 
                    and favourable U.S. policy            be deemed to indirectly 
                    towards Cuba expected to              profit or benefit from 
                    be adopted by the new Biden           certain activities carried 
                    administration in the United          out by other parties. The 
                    States, it is possible                Company does not have any 
                    that Title III of the Helms-Burton    property or assets in the 
                    Act may once again be suspended       United States that could 
                    or repealed.                          be subject to seizure. 
                  ------------------------------------  -------------------------------------  ------- 
 Liquidity         The continuation of regional          The Investment Manager                 â 
  and Transfer      tensions between the United           actively manages the liquidity 
  Risk              States and Venezuela, as              position of the Company, 
                    well as the global fall               its subsidiaries and the 
                    in international tourism              joint ventures in which 
                    and other economic impacts            it invests so that cashflows 
                    associated with the Covid-19          are transferred to bank 
                    pandemic, may continue                accounts outside of Cuba. 
                    to negatively impact the              In addition, financial 
                    fragile economic and liquidity        facilities in which the 
                    position in Cuba, which               Company participates are 
                    may in turn have a negative           structured so that secured 
                    impact on the position                cash flows and debt service 
                    of the Company.                       payments originate and 
                    During 2020, the Cuban                remain outside Cuba. Although 
                    government adopted new                the interpretation of the 
                    economic reforms aimed                new liquidity rules, as 
                    at creating an objective              well as the practical ability 
                    system for the allocation             of the Cuban financial 
                    of limited liquidity reserves         system to successfully 
                    within the economy and                implement them in the short 
                    providing "real financial             term, remain subject to 
                    autonomy" to Cuban foreign            uncertainty, the Investment 
                    investment vehicles such              Manager believes that the 
                    as the joint venture companies        new liquidity rules will 
                    in which the Company invests.         in most cases create an 
                    These new reforms largely             objective (non-discretionary) 
                    remove the requirement                and largely decentralised 
                    to obtain foreign exchange            mechanism for the allocation 
                    approvals for international           of liquid resources, thereby 
                    payments such as the distribution     significantly increasing 
                    of dividends to the Company.          the financial autonomy 
                    These measures may take               of joint venture companies 
                    time to show the intended             and representing a real 
                    effect or may not have                reduction in liquidity 
                    the stated positive impact            risk. 
                    on the liquidity position             The Investment Manager 
                    of the country, which may             is conscious of and closely 
                    have a negative effect                follows developments concerning 
                    of the affairs of the Company.        the U.S. legal restrictions 
                    Numerous U.S. legal restrictions      that target financial transactions 
                    contained in the Cuban                and assets. The Company 
                    Assets Control Regulations            does not carry out any 
                    and other legal provisions            international transfers 
                    target financial transactions,        in U.S. Dollars or through 
                    instruments, and other                U.S. banks or intermediaries. 
                    assets in which there is              The Investment Manager 
                    a Cuban connection. As                manages the banking relationships 
                    a result U.S. and international       of the Company and generally 
                    banks, clearing houses,               acts at all times so as 
                    brokers and other financial           to minimise the impact 
                    intermediaries may refuse             of these legal provisions 
                    to deal with the Company              on the legitimate transactions 
                    or may freeze, block, refuse          and assets of the Company. 
                    to honor, reverse or otherwise 
                    impede legitimate transactions 
                    or assets of the Company, 
                    even where no U.S. link 
                    is established. 
                  ------------------------------------  -------------------------------------  ------- 
 Currency          The Group deals in numerous           The Company does not hedge             á 
  Risk              currencies and fluctuations           its foreign currency risks. 
                    in exchange rates can have            The cash and currency positions 
                    a negative impact on the              of each of the joint venture 
                    performance of the Group,             companies in which the 
                    as well as the expression             Company has a participation 
                    of the Company's NAV in               are actively managed for 
                    Sterling and/or USD.                  the purpose of reducing 
                    As part of the 2020 economic          currency risk to the greatest 
                    reform package adopted                extent possible. There 
                    by the Cuban government               are presently no hedging 
                    in order to continue modernising      mechanisms available to 
                    the Cuban economy, new                mitigate this new risk. 
                    monetary reforms aimed 
                    at harmonising exchange 
                    rates and eliminating Cuba's 
                    dual currency system will 
                    require all foreign investment 
                    vehicles to denominate 
                    their assets and legal 
                    obligations, and to carry 
                    out all transactions, in 
                    Cuban Pesos (previously 
                    denominated and carried 
                    out in USD). The Cuban 
                    Peso has a fixed (non-market) 
                    exchange rate of US$1.00 
                    : CUP24, which may be subject 
                    to further devaluation 
                    at the discretion of the 
                    Cuban Central Bank. 
                  ------------------------------------  -------------------------------------  ------- 
 Risks relating to Regulatory and Tax framework 
 Tax Risk          Changes in the Group's                The Investment Manager 
                    tax status or tax treatment           regularly reviews the tax 
                    in any of the jurisdictions           rules that may affect the 
                    where it has a presence               operations or investments 
                    may adversely affect the              of the Company and seeks 
                    Company or its shareholders.          to structure the activities 
                                                          of the Company in the most 
                                                          tax efficient manner possible. 
                                                          However, the Company holds 
                                                          investment structures in 
                                                          numerous jurisdictions 
                                                          arising from past acquisitions, 
                                                          and the general direction 
                                                          of change in many jurisdictions 
                                                          is not favourable. 
                  ------------------------------------  -------------------------------------  ------- 
 

The financial risks associated with the Company include market risk, liquidity risk and credit risk, all of which are described in greater detail in note 16 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.

INVESTMENT MANAGER'S REVIEW

TWENTY-FIVE

25 years ago

I vividly remember my first visit to Havana in May 1996, twenty-five years ago. It was evening. Cuba's capital was dark, and although the Clinton administration had just strengthened the U.S.-Cuban embargo by implementing the extra-territorial Helms-Burton Act, there was a lot of energy, interest, hope and engagement - on all levels. I felt similar sensations when Mick Jagger stayed in our Meliã Habana hotel, when President Obama was elected, re-elected, and visited Cuba, and when the U.S. and Cuba took the first significant steps towards rapprochement.

By contrast, after four years of Donald Trump, a global pandemic that has profoundly impacted world-wide tourism markets, a struggling Cuban economy, and conflicting views regarding the best way forward, it is impossible to deny the serious challenges ahead. However, my personal conviction remains that mutual respect, engagement and economic growth are the essential building blocks upon which the country will move forward and I believe that the Biden administration shares this view. This reinforces my optimism that better times lie ahead of us.

2021 is likely to be an extremely important year for Cuba. Economic recovery will in no small measure depend on the world's ability to control the Covid-19 pandemic, the restarting of international travel and the reopening of Cuba for tourism, but may also be boosted by recently-adopted measures aimed at the overhaul of Cuba's monetary system, the stimulation of national production and import substitution and the invigoration of the nascent private sector.

On the political front, an historic moment took place during the 8(th) Congress of Cuba's Communist Party held in Havana between 16 and 19 April 2021 when Raul Castro (age 89 years) resigned as First Secretary of the Party and was replaced by Cuba's President, Miguel Díaz-Canel (age 61 years), making the latter the first non-Castro appointed to this important position since 1959.

Notwithstanding numerous statements made by President Biden during the campaign last year with respect to the U.S. Cuban embargo, and in particular his intention to "... promptly reverse the failed Trump policies regarding Cuba...", sadly it would appear that improving the relationship with Cuba is not amongst Biden's chief foreign policy priorities. Although the restoration of international cooperation seems to be high on his government's agenda, it would appear that no immediate need is felt to ease the Cuba restrictions that are currently in place.

However, following a formal review, we expect the Biden administration to cancel the designation of Cuba as a "state sponsor of terrorism", and subsequently to adopt measures aimed at increasing remittances to Cuba, the easing of travel restrictions and the restoration of services and staffing at the U.S. embassy in Havana. One may disagree with President Biden's careful pace, but gathering bipartisan support for a more substantial overhaul of the U.S.' Cuba policy may prove to be more sustainable in the long term.

25(th) Anniversary

Following its start of operations in 1996, the Cuba-dedicated investment trust that is CEIBA today (originally named Beta Gran Caribe Fund Limited) raised approximately US$29 million in initial capital and began putting together its Cuban portfolio. At the time, it was a pioneer and the first investment trust (originally listed on the Irish Stock Exchange) to benefit from the provisions of the new Foreign Investment Act adopted by Cuba on 5 September 1995 to pave the way for foreign investment in the country. In 2001-2002, control of the Company passed to new shareholders, the present executive team was appointed and developed a new investment strategy, and net asset value, which had shrunk during the first five years of operation to approximately US$19 million, began to grow.

This year, CEIBA Investments Limited celebrates its 25(th) anniversary.

It is now listed on the Specialist Fund Segment of the London Stock Exchange, its present net asset value is approximately US$194 million / GBP142 million, and during the last 17 years it has distributed approximately US$89 million in dividends to its shareholders. We are proud of all that has been achieved over the years, together with our Cuban partners and our Cuban assets, and this notwithstanding the US Cuban embargo legislation and many other challenging circumstances faced over the years. We are also thankful for our Cuban employees, who have been essential in getting the Company where it is today.

2020 PERFORMANCE

The performance of the Company is largely dependent on the fair values of the properties in which it has an interest and the total amount of annual dividends distributed by the joint venture companies that own these properties. The fair values of the properties in which the Company has an interest, which are located in a frontier market, are calculated by the independent RICS valuer Arlington Consulting - Consultadoria Imobiliaria Limitada, trading under the name Abacus ("Abacus") using discounted cash flow models. As at 31 December 2020, the fair values of all of the assets in which CEIBA Investments has an interest decreased as a result of a fall in projected income levels.

The NAV Total Return for the year in US$ was (6.0%) (2019: (4.9%)), and in GBP it was (9.4%) (2019: 0.8%). As at 31 December 2020, the Net Asset Value of the Company was US$194,425,614 / GBP142,875,966 (2019: US$206,734,334 / GBP157,656,016) . The loss on the change in the fair value of the equity investments was (US$41,914,276) / (GBP30,801,202) (2019: (US$14,658,562) / (GBP11,178,649)). The total dividend income from the Cuban joint venture companies during the year ended 31 December 2020 was US$13,258,912 / GBP9,743,469 (2019: US$20,670,560 / GBP15,763,410 ). The net loss of the Company for the year ended 31 December 2020 attributable to the shareholders was (US$19,808,620) / (GBP14,556,599) (2019: net income of US$7,579,514 / GBP5,780,152).

During 2020, the hotel investments of the Company were harshly impacted by the Covid-19 pandemic, although the EBITDA of Miramar S.A. ("Miramar"), the owner of the Meliã Habana, Meliã Las Américas, Meliã Varadero and Sol Palmeras hotels (the "Hotels"), was still positive for the year at US$ 3.9 million ( GBP2.9 million ) as a result of the positive results generated during the first months of the year. The pandemic also had a significant impact on the construction of the TosCuba hotel project at Trinidad, which incurred serious delays.

The principal factor that contributed negatively to the results was the decrease in the fair value of Miramar S.A. of US$24,703,820 / GBP18,153,895 (2019: decrease of US$26,742,193 / GBP20,393,650). The performance of the hotels of Miramar was profoundly impacted by the ongoing Covid-19 pandemic and the resulting dramatic collapse in the worldwide tourism and travel industries from March 2020 onwards. With two of its hotels closed from April 2020 onwards and the other two operating at minimal occupancy rates, the net loss after tax of Miramar was (US$3.5 million) / (GBP2.6 million) (2019: net income of US$17.9 million / GBP13.6 million). The combined occupancy rate of the Hotels for 2020 was 24% compared to a combined occupancy rate of 78% in 2019. This also resulted in lower dividend income earned by the Company from Miramar during the year of US$6,310,596 / GBP4,637,416 compared to US$11,537,327 / GBP8,798,388 in the prior year.

By contrast, the mixed-use office and retail centre of Inmobiliaria Monte Barreto S.A. ("Monte Barreto") had its best year ever, registering net income of US$14.4 million / GBP10.6 million (2019: US$13.5 million / GBP10.3 million). However, there was a decrease in the fair value of Monte Barreto of (US$5,268,689) / (GBP3,871,759) (2019: increase of US$10,537,071 / GBP8,035,591 ) due to a more conservative approach being taken regarding revenue growth during the next few years considering the pandemic's impact on the economy. Dividend income earned by the Company from Monte Barreto during the year was US$6,948,316 / GBP5,106,052 compared to US$9,133,233 / GBP6,965,022 in 2019.

CUBAN RESPONSE TO COVID-19 PANDEMIC

At the time of writing, Cuba has confirmed just over 100,000 total cases of the Covid-19 virus since the first case was registered in March 2020, and slightly more than 600 total deaths.

Cuba was very successful in defending against the virus from its first arrival in the country until the re-opening of flights in November 2020. Although strict protocols were imposed, including PCR testing on arrival in the case of tourists staying at resorts and a second PCR test five days following arrival as well as a quarantine period in the case of residents and Cuban expats staying with family members, the virus appears to have been reintroduced in a renewed fashion by Cuban expats visiting family without strictly complying with the mandated self-isolation requirements, especially around the year-end holidays.

In response to the relapse, authorities have reduced flights, introduced a new requirement that inbound travellers be able to show a negative PCR test before boarding and Havana was placed once again in a state of lockdown. However, few significant problems seem to have been identified at the tourism resorts, where health measures appear to have worked as intended.

Throughout the year, Cuba has been working on a number of vaccines to be used against the virus. The most promising of these vaccines, called Soberana 2, is presently in the final stage of phase 3 trials and showing positive results. Final approval of the vaccine is expected imminently, following which it will be rapidly rolled out to the population at large. The Finlay Institute, which developed Soberana 2, has announced a plan to produce up to 100 million doses before the end of 2021 and expects the entire Cuban population to be vaccinated during 2021, with a large excess of doses for export to other countries as part of Cuba's medical diplomacy efforts.

It remains impossible to predict how quickly the Cuban tourism sector will recover from the worldwide disruption caused by the Covid-19 pandemic. Although the Cuban Ministry of Tourism has not modified its projection of approximately 2.0-2.5 million visitors in 2021, it seems all but certain (given the circumstances in the principal outbound markets) that the first half of 2021 will disappoint.

Numerous Cuban tourism resort destinations are presently open, with a modest number of hotels under operation. Visitors have been arriving and departing in accordance with available flights and travel restrictions in outbound markets, with no significant virus-related issues since reopening of the market in mid-November 2020.

Hotel operators have tentative plans for a gradual reopening of hotels during 2021, although the ability to implement such plans will depend on external circumstances as the world emerges from the present pandemic.

THE ELECTION OF PRESIDENT BIDEN AND THE POTENTIAL IMPACT ON THE U.S.-CUBAN EMBARGO

Joe Biden was inaugurated as President of the United States on 20 January 2021, which we hope will bring to a final close the highly toxic chapter of U.S.-Cuba relations dictated by the Trump administration over the last four years. Regarding Cuba, President Biden stated during his campaign that he will:

"(...) promptly reverse the failed Trump policies that have inflicted harm on the Cuban people (...)" and "(...) immediately restore the Obama policy of engagement".

We believe that this statement of intent represents excellent news for Cuba and for the Company.

In the waning days of the Trump presidency, following the steady adoption over the course of the preceding four years of ever-increasing aggressive measures against Cuba, the U.S. administration took numerous controversial final steps to further penalise the island and to complicate the efforts of the incoming Biden administration to reverse course on Cuba policy. These included most notably the return of Cuba to the State Sponsor of Terrorism list, which may take time and effort to undo (since it will require a formal State Department review, a presidential certification to Congress and a 45-day waiting period).

However, other than the Terrorism list, the vast majority of anti-Cuba measures adopted by the Trump administration over the last four years can be reversed by simple executive order, without the need for any act of Congress, and so a return to the Obama policy of engagement with Cuba (leaving intact the underlying embargo legislation, which can only be revoked through legislative action) should be attainable with relative ease. We believe that the most likely first steps in such an effort could include:

1. Increasing U.S. travel to Cuba through the reinstatement of the general licence for the people-to-people category of authorised travel, the full restoration of commercial flights and cruise ship travel, the elimination of the Cuba Restricted List and the Cuba Restricted Accommodations List of businesses that cannot be engaged with by U.S. persons, and the reversal of other similar measures imposed by the Trump administration;

   2.    Increasing U.S. remittances to Cuba through the immediate removal of remittance limits; 
   3.    Facilitating U.S. agricultural, medical and other exports to Cuba; 

4. Facilitating U.S. financial transactions involving Cuba, including U-turn transactions whereby parties who are not subject to U.S. jurisdiction are allowed to use the U.S. financial system (and the U.S. dollar) for transactions related to Cuba that originate and terminate outside the U.S. and where no U.S. party is involved;

   5.    Suspension of Title III of the Helms-Burton Act; 

6. Restoring full operations at the U.S. embassy in Havana (including the appointment of a U.S. ambassador); and

   7.    Removing Cuba from the list of State Sponsors of Terrorism. 

The timing of the hoped-for return to a more productive and sensible Cuba policy remains uncertain, given the large number of important domestic and international issues that the new administration will need to confront, and numerous ongoing issues could potentially play a role, such as the question of Venezuela and the still unsolved mystery of U.S. diplomats who suffered ill health effects while stationed in Havana some years ago.

Moreover, with the newly restored Democratic control over both houses of Congress, it becomes possible once again to imagine a day when legislation fully rescinding the antiquated and counter-productive U.S. Cuban embargo can be introduced and have an honest chance of success. With the introduction of a new bill entitled the U.S.-Cuba Trade Act of 2021 to the Senate on 4 February 2021, which aims to repeal all of the legislation making up the embargo and re-establish normal trade relations and travel to the island nation, it would appear that Congress will soon have the opportunity to make this happen.

CUBA - MODERNISATION OF THE ECONOMY AND MONETARY REFORM

Modernisation of the Cuban Economy

Since 2011, the Cuban government has been pursuing a concerted effort to modernise the Cuban economy, with the principal goal of increasing efficiency within the economic sphere and elevating the levels of social and economic development of the country. To this end, the Cuban Communist Party in 2011 adopted a series of guidelines (the "2011 Guidelines") on economic and social policy aimed at transforming all sectors of the economy and liberating the country's productive forces through the concession of greater management autonomy to businesses in the state sector, the development of complementary private sector activities and an increase in new foreign direct investment and finance. The principles and actions outlined in the 2011 Guidelines were subsequently reiterated in later documents and programmes adopted by the Cuban government, such as its 2030 Development Plan.

However, implementation of the 2011 Guidelines has moved forward at a very cautious pace over the years since their adoption and came to a virtual standstill in the face of heightened aggression from the United States during the Trump administration. The arrival of the Covid-19 pandemic earlier this year has further pressured the already bleak economic and liquidity positions of the country by bringing the Cuban tourism industry to an abrupt halt and paralysing numerous import activities, resulting in crippling shortages of food and other basic commodities as well as necessary inputs for local industry.

Reforms of 16 July 2020

In July 2020, after many years of start-and-stop progress, the Cuban government returned its economic modernisation strategy, as originally contemplated in the 2011 Guidelines, to the fore. The measures adopted last summer were aimed at boosting hard currency income in the short term through an increase in exports and in the local production of food and other necessary products that can substitute imports, and through the creation of a new internal hard currency market for certain goods and services. They also included measures meant to augment management control over corporate assets, financial resources and activities, and decrease government control over the economy and the centralised allocation of hard currency resources. The increase of foreign direct investment in the country and stimulation of private sector activities are core goals of the recent reforms.

For the joint venture companies in which the Company has a participation, the most important of these measures was the adoption of Resolution 115 issued by the Ministry of Economy and Planning ("Resolution 115") on the allocation of hard currency resources within the economy, which is expected to provide a much greater degree of financial autonomy to the management of joint venture companies and to have a significant positive effect on their operations.

In mid-December 2020, the final piece of the reform puzzle was made public with the announcement that the long-planned currency unification and exchange rate harmonisation would be brought into effect on 1 January 2021.

Monetary Reforms

Monetary reform has long been called for by observers because for many years there have been numerous currencies circulating in parallel in the Cuban economy, with a variety of distinct, mandated (non-market based) exchange rates between them, depending on parties and circumstances, causing substantial distortions in the economy.

The principal Cuban currency, the Cuban peso ("CUP"), has been officially pegged to the USD at the rate of 1USD : 1CUP since 1959 for financial transactions between Cuban entities, with the exception of joint venture companies and other foreign direct investment vehicles. In practice, however, the retail exchange rate offered at State-owned currency exchange points (Cajas de Cambio or CADECA) has been 1USD : 24CUP for years. In parallel to the CUP, a second Cuban currency, the convertible peso ("CUC"), has circulated in the economy (also at a fixed exchange rate of 1USD : 1CUC) for the last two decades for local transactions involving a hard currency component. There were also numerous exchange rates between the CUC and the CUP. And lastly, certain transactions - including certain retail sales and the operations of foreign investment vehicles - have historically been denominated and carried out in USD.

Since the publication of the 2011 Guidelines, monetary reform has been recognised as a key component of the planned modernisation process. With little advance warning, the new measures constituting the reform were published in mid-December 2020 and came into effect on 1 January 2021.

The reform is directly applicable to foreign investment vehicles operating in the country, including joint venture companies, who will need to convert all of their accounting records to CUP and carry out all transactions in CUP going forward. By contrast, all entities operating in the Special Development Zone of Mariel will continue to denominate and carry out their operations exclusively in USD. We have included below, in the relevant sections dealing with our assets, comments regarding the expected impact of the new measures.

The principal goals of the reform are:

(i) the unification of the two Cuban currencies through the elimination of the CUC and the continuation of the CUP,

   (ii)       the harmonisation of exchange rates at 1USD : 24CUP, 
   (iii)      the reduction or removal of subsidies in the Cuban economy, and 

(iv) price and labour (salary, pension and social security) reforms aimed at correcting price levels.

The reform has been enacted through the adoption by different ministries of a large number of complex, interrelated resolutions and new measures continue to be adopted on a regular basis. The measures taken to date include rules relating to the conversion to CUP of cash, bank deposits and other monetary assets, as well as non-monetary items such as accounting records, contractual obligations and other legal instruments.

The reform will profoundly affect the pricing and payment of goods and services throughout the economy, including the foreign investment sector, as well as salaries, pension and social security payments. In addition, changes have already been made to the new Resolution 115 system for the allocation of hard currency resources to harmonise the allocation of financial resources with monetary reform. We expect further changes to be adopted in the coming months as problems arise and internal contradictions are discovered.

Amendments to Resolution 115: Allocation of Hard Currency Resources within the Economy

Prior to the adoption of Resolution 115, all allocations of hard currency for payments to be made outside the country (including the payment of dividends to foreign investors) were made centrally. This resulted in an inefficient and unfair allocation and numerous delays, especially during regular periods of reduced liquidity in the country, when payments to foreign investors appeared at times to be of secondary importance compared to other public expenditures.

Resolution 115, as recently amended to take into account monetary reform, provides for the systemic allocation of a certain level of "liquidity" (the ability to transfer funds overseas without the requirement of a prior foreign exchange permit) to the operations of foreign investment vehicles and other entities .

Since the system is untested it is as yet unclear whether the criteria used to determine the liquid resources to be allocated will be sufficient, in practice, to cover all international payments (imports, payments of dividends to foreign shareholder, etc.), but since Resolution 115 also includes the possibility to request exceptions we are confident that in most cases the new system will be workable, especially since the general rule is that all joint ventures must have the necessary liquid funds to allow them to comply at all times with their international obligations, including the payment of dividends.

We believe that this is a very significant step forward for the operations of Cuban foreign investment vehicles and in line with the stated aim of "providing real financial autonomy to foreign investment vehicles" and thereby reducing their dependence on centralised foreign exchange decisions. We expect that, following a transition period during which new working capital reserves will need to be accumulated, the new rules will provide a sound and predictable basis upon which joint venture companies will have the means to manage their international obligations in a timely fashion, including the payment of dividends to the foreign shareholder.

Conclusions

The corrective measures taken by the government to reduce the substantial distortions in the state sector of the Cuban economy caused by multiple exchange rates between the USD and the CUP, as well as between the CUC and the CUP, are necessary steps that are intended to return the Cuban monetary system to an internally coherent system for regulating and reporting transactions within the economy.

Similarly, the new system for the allocation of hard currency reserves represents a significant step forward towards the goal of greater financial autonomy for foreign investment vehicles. However, the scope and complexity of both of these projects is immense, with probable effects throughout the economy, and we expect the transition to be complicated and not without growing pains.

In addition, by imposing the use of the CUP as functional and reporting currency for all foreign investment vehicles going forward, the Cuban government has introduced a new foreign exchange risk to the operations of these investment vehicles, and in particular to their foreign investors, since the CUP will likely be subject to future devaluations, which could impact investments in numerous ways. Like in many other countries, this is an additional factor that will need to be properly managed by investors in order ensure success.

Areas of concern regarding the possible impacts of the above on the operations of the joint venture companies in which the Company has an interest have been identified and we have raised these with our Cuban partners and government officials. We believe that these concerns will be properly addressed in due course, either through the obtention of exceptional treatment or through clarifications or changes to the applicable rules.

We believe that these reforms constitute significant transformations to the highly centralised economic model followed by the Cuban government to date, and that these represent a significant positive development for the operations of the joint venture companies in which the Company is invested, as well as presenting numerous opportunities for the future. We are following these developments closely. The Cuban government has very clearly stated that one of its core objectives, both in carrying out monetary reform and in creating the new system of hard currency autonomy, is to increase the attractiveness of the country for foreign investment and finance. Therefore, we trust that this outcome will be borne out in the final result, notwithstanding the complicated transition process that is underway.

CUBA - ECONOMIC BACKDROP AND OTHER RECENT DEVELOPMENTS

At the year-end session of the Cuban National Assembly, Minister of Economy and Planning Alejandro Gil confirmed that the Cuban economy contracted by 11% in 2020, battered by the pandemic, increased U.S. sanctions and internal inefficiencies. He forecasts growth of 6-7% in 2021 as tourism gradually recovers and monetary reforms create the conditions for new development.

The congress of the Cuban Communist Party that took place on 16-19 April 2021 focused on core issues relating to the country's economic and social life. The further elaboration of the economic and social development model and the implementation of the 2011 Guidelines were central, although the stepping down of Raul Castro as First Secretary of the Party was the prime focus of the international press.

PORTFOLIO ACTIVITY

General

Overall, the performance of the Miramar Trade Centre, the office complex of Monte Barreto , in which the Company has a 49% interest, had its most profitable year ever - occupancy rates remained in the high nineties throughout the year. Although revenues were similar to the previous year, net income increased by 6.2%, primarily as a result of savings in energy costs.

As a result of the Covid-19 pandemic and the resulting collapse of the worldwide travel industry, the Hotels faced an extremely challenging business environment, and the results reflect this. While the Sol Palmeras and the Meliã Habana hotels were able to maintain services throughout most of the year, occupancy and room rates were inevitably very much affected, while the Meliã Las Americas and Meliã Varadero hotels were closed from 1 April 2020 until the end of the year. At present, the Meliã Habana is one of the few hotels in Havana where arriving travellers can spend their obligatory isolation period. The ability of the Hotels to reopen and return to a normal operating environment will depend upon numerous factors such as the success of vaccination campaigns in the tourists' home countries, the development and rollout of a Cuban vaccine, the availability of flights and others. There is obviously a great deal of uncertainty connected with the performance of the hotel sector in 2021.

The Miramar Trade Centre / Monte Barreto

The Company holds a 49% interest in Monte Barreto, the Cuban joint venture company that owns and operates the Miramar Trade Centre. Occupancy levels of the Miramar Trade Centre remained over 98% throughout 2020, notwithstanding the major disruption caused to the Cuban economy by the Covid-19 pandemic. Although revenues were similar to the prior year, net income in 2020 reached US$14.4 million / GBP10.6 million for the year (2019: US$13.5 million / GBP10.3 million), representing a 6.2% increase over the prior year and making 2020 the most profitable year since incorporation of the joint venture.

The principal drivers of the excellent results for the year were (i) continued high occupancy levels throughout the year, and (ii) a substantial reduction in operating expenses, primarily as a result of reduced electricity, consumables, third party services and other expenses resulting from reduced tenant activities during the Covid-19 pandemic of 2020.

Demand for international-standard office accommodation in Havana currently continues to exceed supply, predominantly from multi-national companies, NGOs and foreign diplomatic missions. 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 2021 remains very encouraging, as we expect occupancy levels to remain in the high nineties and loss of rental income as a result of the pandemic to be modest. In addition, further reductions to operating expenses are expected from the conversion of salaries, electricity and other local costs to Cuban Pesos, which undoubtedly is a positive outcome of the monetary reforms. However, in light of the present disruption in the market, the joint venture has temporarily halted its general strategy of rental increases as leases are renewed, which has resulted in a decrease in its fair value.

In accordance with the new provisions of Resolution 115 dealing with the allocation of hard currency resources, we expect that Monte Barreto will receive sufficient liquid resources in 2021 to distribute all profits generated during the year and to gradually pay out the remaining outstanding dividends from past periods. Commercial real estate activities have been excluded from some of the general rules relating to liquid payments, and consequently the local payments of many tenants of the joint venture will not be received with liquidity and conversely most local payments to be made by the joint venture will similarly not require liquidity. As a result, the joint venture will operate under a mixed regime having reduced liquidity requirements, where certain liquid resources of the joint venture will be generated internally and certain resources will be allocated centrally.

We are presently working with the management team of the joint venture to calculate the comprehensive liquidity requirements of the joint venture as well as the expected sources of liquidity available to it in the coming period in order to ensure that there will be sufficient liquid resources to distribute all dividends generated in 2021 and to gradually pay out the remaining outstanding dividends from past periods.

In December 2020, Monte Barreto paid US$4 million / GBP2.9 million in dividends to CEIBA MTC Properties Inc. by transferring that amount to TosCuba. These funds will be used by TosCuba in connection with the construction of the hotel and will be counted as disbursements under the construction facility as they are used (see below).

The valuation of Monte Barreto has been adjusted downward in the year by (US$ 5,268,689) / (GBP3,871,759) , representing a 6% decline on the December 2019 valuation. This was driven by a more conservative approach towards revenue growth during the next few years considering the impact of the pandemic on the Cuban economy and the resulting decision to halt rental increases temporarily as leases are renewed.

The Hotels of Miramar

Through its indirect ownership of a 32.5% interest in Miramar , the Group has interests in the following 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 Centre);

- 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.

The Hotels are operated by Meliã Hotels International S.A. ("Meliã Hotels International"), the Company's strategic partner in all of its hotel investments. Meliã Hotels International has a 17.5% equity interest in Miramar and a 10% equity interest in TosCuba, and remains fully committed to Cuba as one of its principal destinations.

Performance of the Hotels

From arrival of the Covid-19 pandemic in Cuba in March 2020 through the end of the year the Hotels faced an extremely difficult operating environment. With international borders closed and international flights grounded, all Cuban hotels were ordered to be closed. The Sol Palmeras and the Meliã Habana hotels were able to maintain modest services throughout most of the year, but occupancy and room rates were at low levels. The Meliã Las Americas and Meliã Varadero hotels remained closed from 1 April 2020 through the end of the year (and they remain closed at the date of writing).

The Meliã Habana hotel is one of the few hotels in Havana where arriving travellers can spend their obligatory isolation period and the hotel is popular with flight crews and other essential travellers, so we expect that operations will continue at these levels until international travel markets recover later this year. The Sol Palmeras is also expected to remain open in the coming months, with a modest number of guests from countries that have resumed flights to Cuba (such as Russia), but our expectation is that occupancy will remain at very low levels until the Canadian and European markets resume in earnest when their populations are fully vaccinated and regular flights from these important outbound markets resume.

In general, the ability of the Hotels to return to normal operations will be dependent upon numerous factors such as the success of the vaccination campaigns in the principal outbound markets in Canada and Europe, the development and rollout of a Cuban vaccine, the availability of flights, the implementation by the Biden administration of a new, more positive Cuba policy, and others. Like in many other places, there is obviously a great deal of uncertainty connected with the performance of the Cuban hotel sector in 2021 and we expect that the effects of the Covid-19 pandemic will continue to be felt throughout the first half of 2021, and possibly through the first three quarters of the year .

Once hotel operations return to normal as the world emerges from the Covid-19 pandemic and international travel and tourism markets recover from the disruption suffered over the last year, we expect the liquid resources directly generated by the operations of Miramar to be more than sufficient to allow Miramar to distribute all profits to be generated during the year and to gradually pay out the remaining outstanding dividends from past periods. This is because under the new liquidity rules international tourism income is treated as direct export income (of which 80% of the liquidity can be retained by the joint venture). In addition, we anticipate that the adopted monetary reforms may have a positive impact on the cost structures (and potentially on the profitability) of the Hotels.

Confirming and Discounting Facility

In 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 is financed in part by a EUR3.5 million credit line received by HOMASI from a Spanish bank for this purpose. The facility has attractive economic terms and is secured by the offshore cash flows generated by the hotels. Given the limited operations of the Hotels during the last three quarters of 2020, the operations financed under the facility during the year were largely aimed at resolving past issues with suppliers, rather than current operations. We expect that confirming and discounting transactions under the facility will accelerate once again when the operations of the Hotels return to normal levels.

Planned Investments

The planned refurbishment and development plan of the Hotels has been delayed by the Covid-19 pandemic and by the implementation of the monetary reforms. Miramar has profited from the hotel closures to proceed with maintenance and certain limited improvement works, as well as with the planning and permitting processes. The board of the joint venture company will review the timing of the planned investments in the coming year as the tourism sector recovers and the full implications of the new monetary rules are clarified.

The TosCuba Project

The Company has an 80% interest in Mosaico Hoteles S.A. ("Mosaico Hoteles"), representing a 40% indirect interest in TosCuba, the Cuban joint venture company that is constructing the 400 room Meliã Trinidad Península Hotel. The remaining 20% interest in Mosaico Hoteles is held by Meliã Hotels International. The Cuban shareholder in TosCuba is Cubanac án, with a 50% interest.

As at the end of 2020, all structural works of the hotel were completed and the project had reached an overall completion level of approximately 60%. Delays that had accumulated over the course of the project were exacerbated by the arrival of the Covid-19 pandemic in March 2020. In response to the crisis, the joint venture company slowed the pace of construction considerably for the remainder of the year.

During the first quarter of 2021, progress has been made at a modest pace on external finishing details and internal works, including doors, windows, flooring and other installations.

The total cost of the project - including incorporation of the joint venture company, acquisition of surface rights, construction of the hotel, and start-up costs - is presently estimated at US$76 million. Of this amount, US$16 million represents the share capital invested in TosCuba by its shareholders (CEIBA, US$6.4 million, Meliã Hotels International US$1.6 million and Cubanacán US$8 million) and approximately US$12 million represents grants received or to be received under the Spanish Cuban Debt Conversion Programme. In accordance with the terms of the Spanish Cuban Debt Conversion Programme the funds granted should be 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 would otherwise need to be provided.

The remaining funds necessary to complete the project will be disbursed under the construction finance facility that was originally extended in April 2018 as a US$45 million facility to be disbursed under two tranches of US$22.5 million / GBP16.5 million each. The first tranche (Tranche A) is presently being disbursed by CEIBA (80%) and Meliã (20%). Disbursements under Tranche B will only begin once Tranche A is fully disbursed. The construction finance facility is more fully described below. The EUR25 million in new funds raised through the issue of the Bonds in March 2021 will ensure the availability of funding for Tranche B of the facility and therefore that that the construction of the project can now proceed to completion.

The final terms of amendments to Tranche B of the construction finance facility are presently being negotiated, together with the construction contract, to take into account the new circumstances caused by the Covid-19 delay and other factors. A mended facility and construction agreements are expected to be executed shortly with a view to completing construction and start-up of the hotel before the start of the 2022-2023 high season .

Grupo B.M. Interinvest Technologies Mariel S.L.

In December 2020, the Company formalised its participation in a new multi-phase industrial logistics project to be developed in the Special Development Zone of Mariel, Cuba by acquiring a 50% interest in Grupo B.M. Interinvest Technologies Mariel S.L., the Spanish company that is developing the project.

Groundworks on the 11.3-hectare site for the construction of the first four warehouses of the project began in the first quarter of 2021.

The Company has paid an initial amount of US$303,175 / GBP222,792 for its 50% interest and is expected to invest a further US$1.5million / GBP1.1million during the course of 2021.

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. Under the most recent FINTUR Facility, originally executed in 2016 in the principal amount of EUR24 million and subsequently amended in 2019 through the addition of a second tranche in the principal amount of EUR12 million, the Company initially held a EUR4 million participation under Tranche A and a EUR2 million participation under Tranche B.

This facility generates an 8.00% interest rate and operated successfully without delay or default until the closure of all Cuban hotels in March 2020 as a result of the Covid-19 pandemic. At that time, the income from the hotels that serve as the basis for payments under the FINTUR facility ceased and such income is not expected to resume until Cuba's international tourism operations recover in earnest.

With effect from 1 April 2020, the Company and FINTUR agreed to revise the remaining outstanding payments under the FINTUR facility (combining the two tranches into a new single tranche C) and to provide a one-year period of grace on the payment of principal, with a two-year principal payment period thereafter. The first principal payment of the new Tranche C falls due on 30 June 2021. Interest payments were suspended until 31 December 2020, at which time interest accumulated during the year became payable.

FINTUR transferred funds from other sources to the collection account under the Facility and made the required interest payments at 31 December 2020 and at 31 March 2021.

As at 31 December 2020, the principal amount of US$2,110,795 / GBP1,551,143 was outstanding under the Company's participation in Tranche C of the Facility.

Cuba has reopened its borders to international travel and the tourism industry has resumed operations, although arrivals remain very modest at present because of numerous travel restrictions in outbound markets related to the Covid-19 pandemic as well as limited airlift at the present time. Operations are expected to gradually increase in the second half of 2021 and beyond as restrictions are lifted in outbound markets and airlines increase flights to the island.

All of the hotels granted as security for the repayment of the Facility remain closed at the present time. The Investment Manager meets regularly with FINTUR in order to gauge the speed with which the cash flows are likely return to acceptable levels and to determine whether any additional hotel security should be received.

TosCuba - Construction Finance Facility

CEIBA is the principal lender in the secured construction finance facility that was extended to TosCuba in 2018 in order to provide funding for the construction of the Meliã Trinidad Península Hotel. Originally, the facility was to be disbursed in two equal tranches of US$22.5 million. CEIBA (80%) and Meliã (20%) act as lenders under Tranche A. CEIBA is presently the sole lender under Tranche B, the repayment of which is fully guaranteed by Cubanacán.

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 2020 the principal amount of US$16,106,466 / GBP11,836,027 had been disbursed under the Company's participation in Tranche A. The remainder of Tranche A of the facility is presently being disbursed. In order to complete the construction and start-up of the hotel, CEIBA intends to increase the maximum principal amount of Tranche B of the facility to US$29 million and negotiations are presently ongoing in this respect.

The facility may be syndicated and is secured by the future income of the hotel under construction. Tranche B of the facility is further secured by a guarantee given by Cubanacán, backed by offshore tourism income from another Cubanacán hotel in Cuba. Debt service under the facility is expected to start in 2023 and includes a repayment period of 9 years for Tranche A and 7 years for Tranche B.

OUTLOOK

We expect that, as a result of the Covid-19 pandemic, the very difficult economic circumstances faced by Cuba during 2020 will continue well into 2021, and that the local market conditions in which the Group operates will remain very challenging throughout a good part of 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 may also negatively impact the timing of dividend and other payments to the Company.

However, as the world recovers from the pandemic, we expect that travel restrictions will start to be eased and that all of the Miramar hotels will re-open in 2021 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 return to profitable trading.

We expect that the new monetary reforms and liquidity rules adopted by the Cuban government during the year will over time have a strong positive effect on the Cuban economy as well as on the operations of the joint venture companies of the Company. As a result of these new measures, and in particular the de-centralisation of decision-making that they mandate, management of the joint ventures is expected to have a much greater degree of control over the financial resources generated by their operations, which we expect to be largely beneficial for new investments, ongoing operations, performance and the ability to make timely distributions to shareholders.

In addition, the election of Joe Biden to the presidency of the United States brings a welcome sense of relief after the turbulent years of the Trump administration. We look forward to a new era where U.S. policy towards Cuba is once again driven by policy experts in the State Department rather than the rough and tumble forces of election politics in Florida. We expect that during the course of the coming year tensions will be lowered between the two countries and the new Biden administration will adopt numerous new measures that will gradually allow more U.S. travel to Cuba, more U.S. funds to flow to Cuba and ultimately a significant improvement to the foreign investment climate in the country, all of which will be very positive for the people of both countries, as well as for the Company and its assets.

Moreover, having successfully raised EUR25 million in new funds through the issuance of the Bonds at a very difficult time, demonstrating strong confidence on the part of our investors, for which we are grateful, we enter into an exciting new period of development for the Company. With immediate deployment capacity, we are very strongly positioned to enhance our position in the Cuban market by driving ahead, with completion of the new hotel in Trinidad and construction of the first phase of the new industrial logistics project in Mariel. We will also be on the lookout for new opportunities.

Sebastiaan A.C. Berger

Aberdeen Asset Investments Limited

27 April 2021

DIRECTORS' REPORT (EXTRACTS)

ANNUAL GENERAL MEETING

The Notice of the Annual General Meeting ("AGM") is included within the 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 17 June 2021 at 2.00pm. An explanation of each resolution to be proposed at the AGM is included in the Letter from the Chairman below. All shareholders will have the opportunity to put questions to the Board or the Investment Manager at the Company's AGM. Shareholders are encouraged to vote on the resolutions proposed in advance of the AGM and to submit questions to the Board and the Investment Manager by emailing CEIBA.Investments@aberdeenstandard.com .

The Company Secretary is also 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 17 June 2021 the Company will update shareholders through an announcement to the London Stock Exchange and will provide further details on the Company's website. As noted above, the Board encourages 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.

By order of the Board

27 April 2021

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 2021

 
 Consolidated Statement of Financial 
  Position 
  As at 31 December 2020                             31 Dec 2020      31 Dec 
                                                                       2019 
                                            Note        US$            US$ 
                                           -----  --------------  ------------ 
 Assets 
 Current assets 
 Cash and cash equivalents                   4         4,270,860    13,102,578 
 Accounts receivable and accrued income      5        14,581,229     2,211,832 
 Loans and lending facilities                6         2,827,292     2,558,018 
                                                  --------------  ------------ 
 Total current assets                                 21,679,381    17,872,428 
                                                  --------------  ------------ 
 
 Non-current assets 
 Accounts receivable and accrued income      5         1,768,447     5,646,484 
 Loans and lending facilities                6        17,395,343    10,587,702 
 Equity investments                          7       197,921,225   227,340,559 
 Property, plant and equipment               8           533,598       568,346 
                                                  --------------  ------------ 
 Total non-current assets                            217,618,613   244,143,091 
                                                  --------------  ------------ 
 Total assets                                        239,297,994   262,015,519 
                                                  --------------  ------------ 
 
 Liabilities 
 Current liabilities 
 Accounts payable and accrued expenses       9         1,085,590     2,066,213 
 Deferred liabilities                        14        1,000,000     1,000,000 
 Total current liabilities                             2,085,590     3,066,213 
                                                  --------------  ------------ 
 
 Non-current liabilities 
 Accounts payable and accrued expenses       9         1,129,709             - 
 Deferred liabilities                        14        1,833,333     2,833,333 
                                                  --------------  ------------ 
 Total non-current liabilities                         2,963,042     2,833,333 
                                                  --------------  ------------ 
 
 Total liabilities                                     5,048,632     5,899,546 
                                                  --------------  ------------ 
 Equity 
 Stated capital                              10      106,638,023   106,638,023 
 Revaluation surplus                                     319,699       319,699 
 Retained earnings                                    75,613,383    95,422,003 
 Accumulated other comprehensive income               11,854,509     4,354,609 
                                                  --------------  ------------ 
 Equity attributable to the shareholders 
  of the parent                                      194,425,614   206,734,334 
                                                  --------------  ------------ 
 
 Non-controlling interest                    10       39,823,748    49,381,639 
 Total equity                                        234,249,362   256,115,973 
 
 Total liabilities and equity                        239,297,994   262,015,519 
                                                  --------------  ------------ 
 NAV                                         10      194,425,614   206,734,334 
 NAV per share                               10             1.41          1.50 
 

See accompanying notes 1 to 20, 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 2021.

They were signed on the Company's behalf;

Keith Corbin, Director Peter Cornell, Director

Consolidated Statement of Comprehensive Income

For the year ended 31 December 2020

 
                                                       31 Dec 2020    31 Dec 2019 
                                                Note       US$            US$ 
                                               -----  -------------  ------------- 
 Income 
 Dividend income                                 7       13,258,912     20,670,560 
 Interest income                                          1,899,468        820,588 
 Travel agency commissions                                    6,113         15,426 
 Foreign exchange gain                                    1,157,566              - 
                                                         16,322,059     21,506,574 
                                                      -------------  ------------- 
 Expenses 
 Foreign exchange loss                                            -      (383,162) 
 Loss on change in fair value of equity 
  investments                                    7     (41,914,276)   (14,658,562) 
 Management fees                                 14     (1,864,518)    (1,985,429) 
 Other staff costs                                         (67,035)       (73,080) 
 Travel                                                    (51,856)       (82,055) 
 Operational costs                                        (108,302)      (144,783) 
 Legal and professional fees                            (1,368,707)    (1,028,242) 
 Administration fees and expenses                         (292,534)      (266,250) 
 Audit fees                                      19       (270,909)      (465,514) 
 Miscellaneous expenses                                   (136,976)      (196,509) 
 Directors' fees and expenses                    12       (232,677)      (239,085) 
 Depreciation                                    8         (39,645)       (38,062) 
                                                       (46,347,435)   (19,560,733) 
                                                      -------------  ------------- 
 Net (loss)/ income before taxation                    (30,025,376)      1,945,841 
                                                      -------------  ------------- 
 Income taxes                                   3.7               -              - 
                                                      -------------  ------------- 
 Net (loss) / income for the year                      (30,025,376)      1,945,841 
                                                      -------------  ------------- 
 Other comprehensive income to be 
  reclassified to profit or loss in 
  subsequent periods 
 Gain on exchange differences of translation 
  of foreign operations                                  11,538,310      3,158,328 
 Other comprehensive income that will 
  not be reclassified to profit or 
  loss in subsequent periods 
 Revaluation reserve movements                                    -         21,250 
 Total comprehensive (loss)/Income                     (18,487,066)      5,125,419 
                                                      -------------  ------------- 
 
 Net (loss)/Income for the year attributable 
  to: 
 Shareholders of the parent                            (19,808,620)      7,579,514 
 Non-controlling interest                              (10,216,756)    (5,633,673) 
 Total comprehensive (loss)/Income 
  attributable to: 
 Shareholders of the parent                            (12,308,720)      9,653,677 
 Non-controlling interest                               (6,178,346)    (4,528,258) 
 
 Basic and diluted (loss)/earnings 
  per share                                      13          (0.14)           0.06 
 
 
 See accompanying notes 1 to 20, which are an integral part of 
  these consolidated financial statements. 
 

Consolidated Statement of Cash Flows

For the year ended 31 December 2020

 
                                                         31 Dec 2020         31 Dec 2019 
                                                  Note        US$                US$ 
                                               -------  -------------  ---------------------- 
 Operating activities 
 Net (loss)/ income for the year                         (30,025,376)               1,945,841 
 Items not affecting cash: 
 Depreciation                                     8            39,645                  38,062 
 Change in fair value of equity 
  investments                                     7        41,914,276              14,658,562 
 Dividend income receivable                              (13,258,912)            (20,670,560) 
 Interest income                                          (1,899,468)               (820,588) 
 Foreign exchange (gain)/loss                             (1,157,566)                 383,162 
                                                          (4,387,401)             (4,465,521) 
 
 (Decrease)/increase in accounts 
  receivable and accrued income                           (4,018,460)                  98,064 
 (Increase)/decrease in accounts 
  payable and accrued expenses                                149,086               (136,740) 
 Non- cash movement in amortisation 
  of deferred liability                           14      (1,000,000)             (1,000,000) 
 Dividend income received                                   9,998,244              14,997,092 
 Interest income received                                     160,317                 227,628 
 Net cash flows from operating activities                     901,786               9,720,523 
                                                        -------------  ---------------------- 
 
 Investing activities 
 Purchase of equity investments                   7         (303,175)                       - 
 Purchase of property, plant & equipment          8           (4,897)                (47,893) 
 Loans and lending facilities disbursed                   (6,190,914)             (7,408,813) 
 Loans and lending facilities recovered                     (886,001)               1,777,407 
 Net cash flows from investing activities                 (7,384,987)             (5,679,299) 
                                                        -------------  ---------------------- 
 
 Financing activities 
 Cash distribution to non-controlling 
  interest                                        10      (3,463,951)             (1,786,874) 
 Payment of cash dividends                                          -             (8,560,689) 
 Contributions received from non-controlling 
  interest                                                     84,406                  22,401 
 Net cash flows from financing activities                 (3,379,545)            (10,325,162) 
                                                        -------------  ---------------------- 
 
 Change in cash and cash equivalents                      (9,862,746)             (6,283,938) 
 Cash and cash equivalents at beginning 
  of the period                                            13,102,578              19,814,790 
 Foreign exchange on cash                                   1,031,028               (428,274) 
 Cash and cash equivalents at end 
  of the period                                             4,270,860              13,102,578 
                                                        -------------  ---------------------- 
 

See accompanying notes 1 to 20, which are an integral part of these consolidated financial statements

 
                                                Consolidated Statement of Changes in Equity 
                                                    For the year ended 31 December 2020 
 
                                                    For the year ended 31 December 2019 
                                                                                            Total 
                                                                                            Equity 
                                                                           Other         attributable 
                             Stated     Revaluation      Retained      comprehensive        to the       Non-controlling 
                             Capital      Surplus        Earnings         income            parent           interest       Total Equity 
                    Notes      US$          US$             US$             US$              US$               US$               US$ 
Opening Balance            106,638,023      298,449        96,403,178      2,301,696        205,641,346       55,674,370        261,315,716 
Revaluation 
 of assets 
 / Net other 
 comprehensive 
 income/(loss) 
 to be 
 reclassified 
 to profit 
 or loss in 
 subsequent 
 periods             7,10            -       21,250                 -      2,052,913          2,074,163        1,105,415          3,179,578 
Net income/(loss) 
 for the year        10              -            -         7,579,514              -          7,579,514      (5,633,673)          1,945,841 
Capital increase/ 
 contributions 
 during the 
 period              10              -            -                 -              -                  -           22,401             22,401 
 
  Cash 
  distribution 
  to 
  non-controlling 
  interest           10              -            -                 -              -                  -      (1,841,703)        (1,841,703) 
Payable 
 transferred 
 to 
 non-controlling 
 interests           10              -            -                 -              -                  -           54,829             54,829 
Dividend 
 declared 
 during the 
 year                                -            -       (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 20, which are an integral part of these consolidated financial statements.

 
                                             For the year ended 31 December 2020 
                                                                                   Total Equity 
                                                                        Other      attributable 
                            Stated     Revaluation     Retained     comprehensive     to the     Non-controlling 
                            Capital      Surplus       Earnings        income         parent         interest     Total Equity 
                   Notes      US$          US$            US$            US$           US$             US$             US$ 
Opening Balance           106,638,023      319,699      95,422,003      4,354,609   206,734,334       49,381,639   256,115,973 
Revaluation of 
 assets / Net 
 other 
 comprehensive 
 income/(loss) 
 to be 
 reclassified 
 to profit or 
 loss 
 in subsequent 
 periods          7, 10             -            -               -      7,499,900     7,499,900        4,038,410    11,538,310 
 
  Net loss for 
  the 
  year              10              -            -    (19,808,620)              -  (19,808,620)     (10,216,756)  (30,025,376) 
Capital 
 increase/ 
 contributions 
 during the 
 period             10              -            -               -              -             -           84,406        84,406 
Cash 
 distribution 
 to 
 non-controlling 
 interest           10              -            -               -              -             -      (3,463,951)   (3,463,951) 
Balance at 31 
 December 2020            106,638,023      319,699      75,613,383     11,854,509   194,425,614       39,823,748   234,249,362 
                          -----------  -----------  --------------  -------------  ------------  ---------------  ------------ 
See accompanying notes 1 to 20, which are an integral part of 
 these consolidated financial statements. 
 
 Notes to the Consolidated Financial Statements 
 For the year ended 31 December 2020 
 
   1.                    Corporate information 

These consolidated financial statements for the year ended 31 December 2020 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 Centre, 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 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, where it trades under the symbol "CBA". 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 14).

   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 3.14); 
   b)      That the Group is a Venture Capital Organisation (see note 3.15). 

c) That the functional currency of the parent company (Ceiba Investments Limited) is US$ (see note 3.17)

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, and 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 2020 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.

   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 2020. 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 2020 and 31 December 2019:

 
                                                                                                    Equity interest 
                                                                                                     held indirectly 
                                                                      Country                         by the Group 
                           Entity Name                            of Incorporation                  or holding entity 
                                                                                          31 Dec 2020         31 Dec 
                                                                                                               2019 
 1. CEIBA Property Corporation Limited 
  (a) (i)                                                       Guernsey                     100%              100% 
   1.1. GrandSlam Limited (a) (ii)                              Guernsey                     100%              100% 
   1.2. CEIBA MTC Properties Inc.(a) 
    (iii)                                                        Panama                      100%              100% 
        1.2.1 Inmobiliaria Monte Barreto 
         S.A. (b) (iv)                                            Cuba                        49%              49% 
        1.3. CEIBA Tourism B.V. (a) (viii)                    Netherlands                    100%              100% 
          1.3.1. HOMASI S.A. (a) (iii)                            Spain                       65%               65% 
          1.3.1.1. Miramar S.A. (b) (vi)                          Cuba                        50%               50% 
          1.3.2. Mosaico Hoteles S.A. (a) 
          (iii)                                                Switzerland                    80%               80% 
          1.3.2.1 TosCuba S.A. (b) (vii)                          Cuba                        50%               50% 
          1.3.3. Mosaico B.V. (a) (v)                          Netherlands                    80%               80% 
          1.3.4 Grupo BM Interinvest Technologies 
          Mariel S.L (a) (ix)                                     Spain                       50%                - 
 
   a)          Company consolidated at 31 December 2020 and 31 December 2019. 
   b)          Company accounted at fair value at 31 December 2020 and 31 December 2019. 

(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 Centre 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. Mosaico B.V. is in the process of being liquidated.

(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.

(ix) a Spanish company that is developing an industrial logisitics warehouse project in the Special Development Zone of Mariel, Cuba.

All inter-company transactions, balances, income, expenses and realised 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 2020 were gains of US$ 11,538,310 (2019: gains of US$3,158,328).

The exchange rate used in these consolidated financial statements at 31 December 2020 is 1 Euro = US$1.2271 (2019: 1 Euro = US$1.2030).

3.3 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.

3.4 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.

3.5 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.

3.6 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.

3.7 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 2020 and 31 December 2019 the Group has not established any deferred tax assets or liabilities.

 
 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).

3.8 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.

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.

3.9 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.

3.10 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.

3.11 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.

3.12 Stated capital

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

3.13 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.

3.14 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.

3.15 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.

3.16 Going concern

The Company's only external debt obligations is the Bond Issue completed in March 2021 (see note 20), and the Board does not anticipate the need for further external finance over the next 12 months. The Company also has significant commitments under the Construction Facility extended to TosCuba for the purpose of funding the construction of the Meliã Trinidad Península Hotel (see note 6). The Directors have reviewed cash flow projections that detail the revenue and commitments of the Group taking into account the above. As a result, 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.

3.17 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 is US$.

   4.                    Cash and cash equivalents 
 
                           31 Dec 2020   31 Dec 2019 
                               US$           US$ 
                          ------------  ------------ 
 
 Cash on hand                    5,480        16,183 
 Bank current accounts       4,265,380    13,086,395 
                             4,270,860    13,102,578 
                          ------------  ------------ 
 
   5.                    Accounts receivable and accrued income 
 
                                            31 Dec 2020   31 Dec 2019 
                                                US$           US$ 
                                           ------------  ------------ 
 
 Dividends receivable from Miramar S.A.         312,352             - 
 Dividends receivable from Inmobiliaria 
  Monte Barreto S.A.                          9,871,284     6,922,968 
 Loan interest receivable from TosCuba 
  S.A.                                        1,716,307       633,070 
 TosCuba deposit (i)                          4,000,000             - 
 Other accounts receivable and deposits         449,733       302,278 
                                             16,349,676     7,858,316 
                                           ------------  ------------ 
 
 Current portion                             14,581,229     2,211,832 
                                           ------------  ------------ 
 Non-current portion                          1,768,447     5,646,484 
                                           ------------  ------------ 
 

(i) TosCuba deposit relates to amount held in the bank account of TosCuba on behalf of CEIBA that will be applied against the TosCuba construction facility for the construction of the hotel.

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

 
                               31 Dec 2020   31 Dec 2019 
                                   US$           US$ 
                              ------------  ------------ 
 
  Up to 30 days                    553,216       120,898 
  Between 31 and 90 days           249,214        66,335 
  Between 91 and 180 days        5,336,284     2,010,678 
  Between 181 and 365 days       8,442,515        13,921 
  Over 365 days                  1,768,447     5,646,484 
                              ------------  ------------ 
                                16,349,676     7,858,316 
                              ------------  ------------ 
 

The majority of the balance is made up of dividends receivable. The impairment on the dividends receivable has been assessed as low in terms of 3 stage model per IFRS 9 by assessing the credit risk of the counterparties who declared the dividend (Monte Barretto and Miramar). The overall credit risk for Toscuba has significantly increased from the prior year due to COVID 19 and the resulting prevailing economic conditions. This has resulted in the loan moving from Stage 1 to Stage 2 of the IFRS ECL impairment model which therefore requires management to assess the expected credit loss over the lifetime of the loan. Accordingly management has made an assessment of the expected credit loss over the lifetime of the loan taking into account all reasonable and supportable information that is available that includes both internal and external information and this has resulted in an assessed expected credit loss that is immaterial to the Group. Other accounts receivables and deposits 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. These relate to the receivables of the travel agency activities of GrandSlam, a wholly owned subsidiary of the Group. The overall potential impairment loss on the total balance has been estimated to be immaterial.

   6.                   Loans and lending facilities 
 
                                      31 Dec 2020   31 Dec 2019 
                                          US$           US$ 
                                     ------------  ------------ 
 TosCuba S.A. (i)                      16,106,466     9,915,549 
 Casa Financiera FINTUR S.A. (ii)       2,110,795     3,230,171 
 Miramar Facility (iii)                 2,005,374             - 
                                       20,222,635    13,145,720 
                                     ------------  ------------ 
 
 Current portion                        2,827,292     2,558,018 
                                     ------------  ------------ 
 Non-current portion                   17,395,343    10,587,702 
                                     ------------  ------------ 
 

(i) In April 2018, the Group entered into a construction finance facility 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 Meliã Trinidad Península Hotel. The Construction Facility is in the maximum principal amount of up to 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 Meliã Trinidad Península 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 a security assignment in favour of the Group (in its capacity as Tranche B lender) of all international tourism proceeds generated by the Meliã 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. The credit risk has significantly increased from the prior year due to COVID 19 and the resulting prevailing economic conditions. This has resulted in the loan moving from Stage 1 to Stage 2 of the IFRS ECL impairment model which therefore requires management to assess the expected credit loss over the lifetime of the loan. Accordingly management has made an assessment of the expected credit loss over the lifetime of the loan taking into account all reasonable and supportable information that is available that includes both internal and external information and this has resulted in an assessed expected credit loss that is immaterial to the Group..

(ii) In July 2016, the Group arranged and participated in a EUR24,000,000 (US$29,450,400) syndicated facility provided to Casa Financiera FINTUR S.A. ("FINTUR"). The facility was subsequently amended in May 2019 through the addition of a second tranche in the principal amount of EUR12,000,000 (US$14,725,200). The Group had an initial participation of EUR4,000,000 (US$4,908,400) under the first tranche and a EUR2,000,000 (US$2,454,200) participation under the second tranche. The term of the facility was due to expire in June 2021 but, with the closure of nearly all Cuban hotels as a result of the Covid-19 pandemic, an additional grace period has been granted and the term has been extended to March 2023. In addition, the amounts outstanding under the two existing tranches of the facility were consolidated into a single tranche. The facility has a fixed interest rate of 8%, and under the renegotiated terms interest was accumulated until 31 December 2020 and is then to be paid in quarterly instalments. Eight quarterly principal payments will be due beginning in June 2021 and ending in March 2023. 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. The credit risk has significantly increased from the prior year due to COVID 19 and the resulting prevailing economic conditions. This has resulted in the loan moving from Stage 1 to Stage 2 of the IFRS ECL impairment model which therefore requires management to assess the expected credit loss over the lifetime of the loan. Accordingly management has made an assessment of the expected credit loss over the lifetime of the loan taking into account all reasonable and supportable information that is available that includes both internal and external information and this has resulted in an assessed expected credit loss that is immaterial to the Group.

(iii) 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 is financed in part by a EUR3.5 million credit line received by HOMASI from a Spanish bank for this purpose. The facility is secured by the offshore cash flows generated by the Hotels of Miramar. At 31 December 2020, a total of EUR1,634,238 (US$2,005,374) was disbursed under the facility. The loan is not repayable on demandThe credit risk has significantly increased from the prior year due to COVID 19 and the resulting prevailing economic conditions. This has resulted in the loan moving from Stage 1 to Stage 2 of the IFRS ECL impairment model which therefore requires management to assess the expected credit loss over the lifetime of the loan. Accordingly management has made an assessment of the expected credit loss over the lifetime of the loan taking into account all reasonable and supportable information that is available that includes both internal and external information and this has resulted in an assessed expected credit loss that is immaterial to the Group.

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

 
                               31 Dec 2020   31 Dec 2019 
                                   US$           US$ 
                              ------------  ------------ 
 
  Up to 30 days                    555,101       504,135 
  Between 31 and 90 days         1,365,797       802,882 
  Between 91 and 180 days          404,897       802,882 
  Between 181 and 365 days         501,497       448,119 
  Over 365 days                 17,395,343    10,587,702 
                              ------------  ------------ 
                                20,222,635    13,145,720 
                              ------------  ------------ 
 
   7.                    Equity investments 
 
                                31 Dec 2020   31 Dec 2019 
                                    US$           US$ 
                               ------------  ------------ 
 
 Miramar S.A.                   103,184,163   127,887,983 
 Inmobiliaria Monte Barreto 
  S.A.                           81,433,887    86,702,576 
 TosCuba S.A.                    13,000,000    12,750,000 
 Grupo B.M. I nterinvest T          303,175             - 
  echnologies Mariel S.L. 
                               ------------  ------------ 
                                197,921,225   227,340,559 
                               ------------  ------------ 
 
 
                                                    Monte 
                                     Miramar       Barreto       TosCuba      GBM Mariel       Total 
                                       (i)           US$           (ii)          US$            US$ 
                                       US$                         US$ 
                                 -------------  ------------  -----------  -------------  ------------- 
 
 
 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 
 
 Foreign currency translation 
  reserve                           12,191,767             -            -              -     12,191,767 
 Change in fair value 
  of equity investments           (36,895,587)   (5,268,689)      250,000              -   (41,914,276) 
 Share equity acquired                       -             -            -        303,175        303,175 
 
 Balance at 31 December 
  2020                             103,184,163    81,433,887   13,000,000        303,175    197,921,225 
                                 -------------  ------------  -----------  -------------  ------------- 
 

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 Centre. The Miramar Trade Centre 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 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 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 2020, the amount of Excess Cash that is included in the fair value of Monte Barreto stated in these financial statements is US$2,494,887 (2019: US$1,197,575).

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 2020   31 Dec 2019 
 Discount rate (after tax) (i)                     9.78%         9.75% 
 Occupancy year 1                                  97.3%         100% 
 Average occupancy year 2 to 8                     97.3%         98.9% 
 Occupancy year 8 and subsequent periods           97.5%         97.5% 
 Average rental rates per square meter per       US$27.23      US$28.28 
  month - year 1 to 6 
 Annual increase in rental rates subsequent 
  to year 7 (ii)                                   2.5%          3.0% 
 Capital investments as percentage of rental 
  revenue                                           3%            2% 
 
   (i)          The effective tax rate is estimated to be 19% (2019: 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 in Havana, a 5-star hotel that has 397 rooms. 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 Cubanacán (as to 50%). All decisions at shareholder meetings require the unanimous agreement of the Cuban and foreign shareholders. In 2018, the surface rights for the four hotels of Miramar were extended / granted to 2042.

At 31 December 2020 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 Directors taking into consideration various factors, including estimated future cash flows from the investment in US$, estimated replacement costs, transactions in the private market and other available market evidence to arrive at an appropriate value. The Group also engages an independent valuation firm to perform independent valuations in US$ of the properties held by the joint venture.

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 is 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 2020, the amount of Excess Cash that is included in the fair value of Miramar stated in these financial statements is US$12,984,162 (2019: 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 2020     31 Dec 2019 
 Meliã Habana 
 Discount rate (after tax) (i)                     12.5%           12.5% 
 Average occupancy year 1 to 3                     60.3%           69.3% 
 Occupancy year 4 and subsequent periods           72.2%           71.5% 
 Average daily rate per guest - year 1           US$134.19       US$137.75 
 Average increase in average daily rate 
  per guest - year 2 to 6                          4.9%            7.5% 
 Increase in average daily rate per guest 
  subsequent to year 6 (ii)                        2.5%             3% 
 Capital investments as percentage of total 
  revenue                                           7%              7% 
 
 
                                                 31 Dec 2020     31 Dec 2019 
 Meliã Las Americas 
 Discount rate (after tax) (iii)                   12.9%          12.25% 
 Average occupancy year 1 to 3                      63%             78% 
 Occupancy year 4 and subsequent periods           79.5%           79.5% 
 Average daily rate per guest - year 1           US$110.93       US$145.48 
 Average increase in average daily rate 
  per guest - year 2 to 6                           11%            3.8 % 
 Increase in average daily rate per guest 
  subsequent to year 6 (ii)                        2.5%             3% 
 Capital investments as percentage of total 
  revenue                                           7%              7% 
 
 
                                               31 Dec 2020   31 Dec 2019 
 Meliã Varadero 
 Discount rate (after tax) (iii)                  12.9%        12.25% 
 Average occupancy year 1 to 3                    64.6%         80.2% 
 Occupancy year 4 and subsequent periods          80.3%         80.4% 
 Average daily rate per guest - year 1          US$97.88      US$104.57 
 Average increase in average daily rate 
  per guest - year 2 to 6                          6%            4% 
 Increase in average daily rate per guest 
  subsequent to year 6 (ii)                       2.5%           3% 
 Capital investments as percentage of total 
  revenue                                          7%            7% 
 
 
 Sol Palmeras 
 Discount rate (after tax) (iii)                12.9%      12.25% 
 Average occupancy year 1 to 3                  65.1%      78.9% 
 Occupancy year 4 and subsequent periods        81.8%      80.3% 
 Average daily rate per guest - year 1         US$86.75   US$95.12 
 Increase in average daily rate per guest 
  - year 2                                       12%         5% 
 Average increase in average daily rate 
  per guest - year 3 to 6                         5%         4% 
 Increase in average daily rate per guest 
  subsequent to year 6 (ii)                      2.5%        3% 
 Capital investments as percentage of total 
  revenue                                         7%         7% 
 
   (i)          The effective tax rate is estimated to be 19% (2019: 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% (2019: 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 2020 when applying lower rental rates / average daily rates:

 
                   Financial 
                   statements       -5%          -10%         -15% 
                      US$          US$          US$          US$ 
                 ------------  -----------  -----------  ----------- 
 
 Monte Barreto     81,433,887   77,430,040   73,426,194   69,422,348 
 
 Miramar          103,184,163   99,236,033   95,287,903   91,330,479 
 

The following table details the fair values of the equity investments at 31 December 2020 when applying higher rental rates / average daily rates:

 
                   Financial 
                   statements        +5%          +10%          +15% 
                      US$           US$           US$           US$ 
                 ------------  ------------  ------------  ------------ 
 
 Monte Barreto     81,433,887    85,437,733    89,441,579    93,445,426 
 
 Miramar          103,184,163   107,132,293   111,080,424   115,028,555 
 

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 
 
 

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 2020 when applying lower occupancy rates:

 
                   Financial 
                   statements       -5%          -10%         -15% 
                      US$          US$          US$          US$ 
                 ------------  -----------  -----------  ----------- 
 
 Monte Barreto     81,433,887   77,438,281   73,442,960   69,447,975 
 
 Miramar          103,184,163   98,256,156   93,324,630   88,330,847 
 

The following table details the fair values of the equity investments at 31 December 2020 when applying higher occupancy rates:

 
                       Financial 
                       statements        +5%          +10%          +15% 
                          US$           US$           US$           US$ 
                     ------------  ------------  ------------  ------------ 
 
 Monte Barreto (i)     81,433,887    86,441,244       n/a           n/a 
 
 Miramar              103,184,163   108,112,170   113,040,178   117,968,186 
 
 

(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 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%.

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 2020 when applying lower discount and capitalization rates:

 
                   Financial 
                   statements        -1%           -2%           -3% 
                      US$           US$           US$           US$ 
                 ------------  ------------  ------------  ------------ 
 
 Monte Barreto     81,433,887    92,593,656   107,725,093   129,348,178 
 
 Miramar          103,184,163   113,376,155   125,923,155   141,725,407 
 

The following table details the fair values of the equity investments at 31 December 2020 when applying higher discount and capitalization rates:

 
                   Financial 
                   statements       +1%          +2%          +3% 
                      US$          US$          US$          US$ 
                 ------------  -----------  -----------  ----------- 
 
 Monte Barreto     81,433,887   72,875,764   66,111,224   60,633,360 
 
 Miramar          103,184,163   94,749,345   87,659,357   81,620,744 
 

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 
 
 

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 2020 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     81,433,887    81,195,665     80,957,443     80,719,222 
 
 Miramar          103,184,163   101,161,741     99,139,318     97,116,896 
 

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 
 
 

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 2020 and 2019 the Group owned an indirect 80% interest in Mosaico Hoteles S.A. ("Mosaico Hoteles"), 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. The Group has made capital contributions of US$8,000,000 (2019: US$8,000,000) to TosCuba.

In 2019, 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 are paid from the countervalue fund on behalf of the joint ventures. As of 31 December 2020, TosCuba has received cash grants under the programme totalling US$10,000,000 (2019: 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.

The capital contributions made by the Company plus its share of the cash grants received by TosCuba under the Spanish Cuban Debt Conversion Programme have been determined to be the best observable measure of the Company's interest in the fair value of TosCuba. The Director's have determined that the fair value of TosCuba is reasonable taking into consideration the current percentage of completion of the hotel construction and the estimated cost to completion, the projected value of the hotel upon completion and current debt level of TosCuba.

Dividend income from equity investments

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

 
                  31 Dec 2020   31 Dec 2019 
                      US$           US$ 
                 ------------  ------------ 
 
 Monte Barreto      6,948,316     9,133,233 
 Miramar            6,310,596    11,537,327 
                   13,258,912    20,670,560 
                 ------------  ------------ 
 

Financial information of joint venture companies

The principal financial information of the joint venture companies for the years ended 31 December 2020 and 2019 is as follows:

 
                               Monte Barreto                  Miramar (i)                       TosCuba (ii) 
                                     (i) 
                                           2019           2020           2019                2020          2019 
                                            US$            US$                                US$           US$ 
                            2020            000's                         US$ 
                             US$                          000's                              000's         000's 
                             000's                                       000's 
                          --------                      --------  ---  --------            -------  ---  ------- 
 Cash and equivalents       26,725         19,141         42,908         56,399              4,049         2,407 
 Other current 
  assets                     1,480          2,206         16,943         21,434              3,718         5,483 
 Non-current 
  assets                    46,865         48,507        135,464        138,054             48,459        32,828 
 Current financial 
  liabilities               23,450         18,389         15,659         20,099              1,874         2,554 
 Other current 
  liabilities                    -              -              -              -                  -             - 
 Non-current 
  financial liabilities      3,696          3,687          1,055          1,055             28,352        12,164 
 Other non-current 
  liabilities                    -              -              -              -                  -             - 
 
 Revenue                    23,390         23,867         29,379         85,759                  -             - 
 Interest income                62             31              -              -                  -             - 
 Interest expense                -              -              -              -                  -             - 
 Depreciation 
  and amortisation           1,656          1,658          7,396          6,831                  -             - 
 Taxation                    2,533          2,919              -            263                  -             - 
 Profit (loss) 
  from continuing 
  operations                14,378         13,536        (3,511)         17,872                  -             - 
 Other comprehensive 
  income                         -              -              -              -                  -             - 
 Total comprehensive 
  income (loss)             14,378         13,536        (3,511)         17,872                  -             - 
 
 
   (i)        Figures obtained from financial statements prepared under IFRS. 
   (ii)      Figures obtained from financial statements prepared under Cuban GAAP. 
   8.                    Property, plant and equipment 
 
 
                                                 Office furniture     Works of 
                                Motor vehicles     and equipment        art         Total 
                                     US$                US$             US$          US$ 
                             -----------------  -----------------  -----------  ---------- 
 
 Cost: 
 At 1 January 2019                     330,172            182,324      442,050     954,546 
 Additions                              44,330              3,563            -      47,893 
 Revaluation                                 -                  -       21,250      21,250 
 At 31 December 
  2019                                 374,502            185,887      463,300   1,023,689 
 
 Additions                                   -              4,897            -       4,897 
 Revaluation                                 -                  -            -           - 
 At 31 December 
  2020                                 374,502            190,784      463,300   1,028,586 
 
 
 Accumulated Depreciation: 
 At 1 January 2019                     299,783            117,498            -     417,281 
 Charge                                 20,155             17,907            -      38,062 
 At 31 December 
  2019                                 319,938            135,405            -     455,343 
 
 Charge                                 22,372             17,273                   39,645 
 At 31 December 
  2020                                 342,310            152,678            -     494,988 
 
 Net book value: 
 At 31 December 
  2019                                  54,564             50,482      463,300     568,346 
 At 31 December 
  2020                                  32,192             38,106      463,300     533,598 
 
   9.                    Accounts payable and accrued expenses 
 
                                                  31 Dec 2020        31 Dec 2019 
                                                      US$                US$ 
                                                 ------------       ------------ 
 Due to shareholders                                    5,926              5,399 
  Due to Meliã Hotels International 
   SA (i)                                             176,941            354,581 
 Accrued professional fees                            223,349            586,981 
 Management fees payable (see note 
  14)                                               1,565,065          1,041,950 
 Accrued Directors' fees                                    -              1,617 
 Other accrued expenses                               186,127             57,116 
 Other accounts payable                                57,891             18,569 
                                                 ------------       ------------ 
                                                    2,215,299          2,066,213 
                                                 ------------       ------------ 
 
 Current portion                                    1,085,590          2,066,213 
                                                 ------------       ------------ 
 Non-current portion                                1,129,709                  - 
                                                 ------------       ------------ 
 

(i) 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 2020   31 Dec 2019 
                                  US$           US$ 
                             ------------  ------------ 
 
 Up to 30 days                    179,136       409,709 
 Between 31 and 90 days                 -     1,115,552 
 Between 91 and 180 days          606,842       535,553 
 Between 181 and 365 days         299,612         5,399 
 Greater than 365 days          1,129,709             - 
                                2,215,299     2,066,213 
                             ------------  ------------ 
 
   10.                 Stated capital and net asset value 

Authorised

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

Issued

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

 
                                    Number of    Stated capital 
                                     ordinary          US$ 
                                      shares 
                                  ------------  --------------- 
 Stated capital 
 
 Stated capital at 31 December 
  2019                             137,671,576      106,638,023 
                                  ------------  --------------- 
 
 Stated capital at 31 December 
  2020                             137,671,576      106,638,023 
                                  ------------  --------------- 
 

Net asset value

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

 
                                      31 Dec 2020    31 Dec 2019 
                                           US$            US$ 
                                     -------------  ------------- 
 
 Total assets                          239,297,994    262,015,519 
 Total liabilities                     (5,048,632)    (5,899,546) 
 Less: non-controlling interests      (39,823,748)   (49,381,639) 
                                     -------------  ------------- 
 NAV                                   194,425,614    206,734,334 
 Number of ordinary shares 
  issued                               137,671,576    137,671,576 
 NAV per share                                1.41           1.50 
 

Non-controlling interest

At 31 December 2020, the non-controlling interest corresponds to the 35% participation of Meliã Hotels International S.A. in the equity of HOMASI and the 20% participation of Meliã Hotels International S.A. in the equity of Mosaico Hoteles.

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

 
                                      31 Dec 2020   31 Dec 2019 
                                          US$           US$ 
                                     ------------  ------------ 
 
 Non-controlling interest of 
  HOMASI                               37,235,538    46,878,858 
 Non-controlling interest of 
  Mosaico Hoteles                       2,588,210     2,502,781 
 Total non-controlling interests       39,823,748    49,381,639 
                                     ------------  ------------ 
 

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

 
                                                 31 Dec 2020    31 Dec 2019 
                                                      US$           US$ 
                                                -------------  ------------ 
 
 Initial balance                                   49,381,639    55,674,370 
 Interest of non-controlling interest 
  in net (loss)/income                           (10,216,756)   (5,633,673) 
 Net other comprehensive income/(loss) 
  to be reclassified to profit or loss 
  in subsequent periods                             4,038,410     1,105,415 
 Cash distribution to non-controlling 
  interest                                        (3,463,951)   (1,786,874) 
 Capital contributions from non-controlling 
  interest                                             84,406        22,401 
                                                -------------  ------------ 
 Final balance                                     39,823,748    49,381,639 
                                                -------------  ------------ 
 
 

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

 
                                           31 Dec 2020    31 Dec 2019 
                                                US$           US$ 
                                          -------------  ------------ 
 
 Initial balance                             46,878,858    54,161,837 
 Interest of non-controlling interest 
  in net (loss)/income                     (10,217,779)   (6,546,691) 
 Net other comprehensive income/(loss) 
  to be reclassified to 
 profit or loss in subsequent periods         4,038,410     1,105,415 
 Cash distribution to non-controlling 
  interest                                  (3,463,951)   (1,841,703) 
 
 Final balance                               37,235,538    46,878,858 
                                          -------------  ------------ 
 

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

 
                                                 31 Dec 2020   31 Dec 2019 
                                                     US$           US$ 
                                                ------------  ------------ 
 
 Initial balance                                   2,502,781             - 
 Interest of non-controlling interest 
  in net income                                        1,023       913,019 
 Non-controlling interest transferred 
  from Mosaico B.V.                                        -     1,567,361 
 Capital contributions from non-controlling 
  interest                                            84,406        22,401 
                                                ------------  ------------ 
 Final balance                                     2,588,210     2,502,781 
                                                ------------  ------------ 
 
 

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

 
                                                 31 Dec 2020     31 Dec 2019 
                                                      US$            US$ 
                                                -------------   ------------ 
 
 Initial balance                                             -      1,512,533 
 Interest of non-controlling interest 
  in net loss                                                -            (1) 
 Capital contributions from non-controlling 
  interest                                                  -              - 
 Non-controlling interest transferred 
  to Mosaico Hoteles S.A.                                    -    (1,512,532) 
                                                  ------------   ------------ 
 Final balance                                               -              - 
                                                  ------------   ------------ 
 
 

The principal financial information of HOMASI, Mosaico Hoteles and Mosaico B.V. for the years ended 31 December 2020 and 2019 is as follows:

 
                                                                  Mosaico Hoteles 
                                        HOMASI                          S.A.                   Mosaico BV. 
                             ---------------------------       --------------------       --------------------- 
                                2020             2019             2020       2019           2020          2019 
                                 US$              US$              US$        US$            US$           US$ 
                                000's            000's            000's      000's          000's         000's 
                             ----------  ---  ----------       ---------  ---------       -------  ---  ------- 
 
 Current assets                   3,347            6,316              24        104             -             - 
 Non-current assets             103,184          127,888          13,000     12,750             -             - 
 Current liabilities              (144)            (264)            (83)      (340)             -             - 
 Equity                       (106,387)        (133,940)        (12,941)   (12,514)             -             - 
 
 
 Income                           6,311           11,615             250      4,751             -             - 
 Expenses                      (46,055)         (30,320)           (245)      (186)             -             - 
 Depreciation                         -                -               -          -             -             - 
 Taxation                             -                -               -          -             -             - 
 Net income/(loss) 
  for the year                 (39,744)         (18,705)             (5)      4,565             -           (7) 
 Other comprehensive 
  income                         12,192            3,158               -          -             -             - 
 Total comprehensive 
  income/(loss)                (27,552)         (15,547)             (5)      4,565             -           (7) 
 
   11.                 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 Meliã 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 2020 
                                                                US$ 
                                     ------------------------------------------------------- 
                                       Commercial        Tourism        Other          Total 
                                         property      / Leisure 
 Total assets                          85,371,003    123,678,118   30,248,873    239,297,994 
 Total liabilities                    (1,977,422)    (3,071,210)            -    (5,048,632) 
                                     ------------  -------------  -----------  ------------- 
 Total net assets                      83,393,581    120,606,908   30,248,873    234,249,362 
 
 Dividend income                        6,948,316      6,310,596            -     13,258,912 
 Other income                                  58          6,113    1,899,410      1,905,581 
 Change in fair value of 
  equity investments                  (5,268,689)   (36,645,587)            -   (41,914,276) 
 Allocated expenses                   (1,819,091)    (2,272,417)    (341,651)    (4,433,159) 
 Foreign exchange gain                          -              -    1,157,566      1,157,566 
 Net income                             (139,406)   (32,601,295)    2,715,325   (30,025,376) 
 
   Other comprehensive loss                           11,538,310                  11,538,310 
                                     ------------  -------------  -----------  ------------- 
 Total comprehensive income/(loss)      (139,406)   (21,062,985)    2,715,325   (18,487,066) 
 
 Other segment information: 
 Property, plant and equipment 
  additions                                 4,897                                      4,897 
 Depreciation                              34,305          5,340                      39,645 
 
                                                         31 December 2019 
                                                                US$ 
                                      Commercial      Tourism        Other         Total 
                                        property      / Leisure 
 
 Total assets                          91,969,762    149,273,530   20,772,227    262,015,519 
 Total liabilities                    (2,345,827)    (3,553,719)            -    (5,899,546) 
                                     ------------  -------------  -----------  ------------- 
 Total net assets                      89,623,935    145,719,811   20,772,227    256,115,973 
 
 Dividend income                        9,133,233     11,537,327            -     20,670,560 
 Other income                                   -         15,426      820,588        836,014 
 Change in fair value of 
  equity investments                   10,537,071   (25,195,633)            -   (14,658,562) 
 Allocated expenses                   (2,525,970)    (1,913,614)     (79,425)    (4,519,009) 
 Foreign exchange gain                          -              -    (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 
 
   12.                 Related party disclosures 

Compensation of Directors

Each Director receives a fee of GBP35,0 00 (US$47,628) per annum with the Chairman receiving GBP 40,000 (US$54,432). The Chairman of the Audit Committee also receives an annual fee of GBP40,000 ( US$54,432 ). 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 Directors' fees including the fees of the Chairman, for the year ended 31 December 2020 were US$232,677 (year ended 31 December 2019: US$239,085).

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 2020 amounted to US$24,500 (2019: US$ US$24,500) with an average rental charge per square meter at 31 December 2020 of US$37.64 (2019: US$37.64) plus an administration fee of US$9.75 per square meter. 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.

Transactions with Investment Manager

ASFML is a wholly-owned subsidiary of Standard Life Aberdeen plc which has an interest at 31 December 2020 in 9,747,852 shares of the stated capital (2019: 9,747,852). For further discussion regarding transactions with the Investment Manger see note 14.

Interests of Directors and Executives in the stated capital

At 31 December 2020 John Herring, a Director of CEIBA, had an indirect interest in 40,000 shares (2019: 40,000 shares).

At 31 December 2020 Peter Cornell, a Director of CEIBA, has an indirect interest in 100,000 shares (2019: 100,000 shares).

At 31 December 2020 Trevor Bowen a Director of CEIBA, has an indirect interest in 43,600 shares (2019: 43,600 shares).

At 31 December 2020 Colin Kingsnorth, a Director of CEIBA, is a director and shareholder of Laxey Partners Limited ("Laxey"). Laxey holds 23,736,481 shares (2019: 17,303,252 shares). Funds managed by Laxey hold 7,242,835 shares (2019: 13,676,064 shares) .

At 31 December 2020 Sebastiaan A.C. Berger, the Investment Manager's fund manager and Chief Executive Officer of CEIBA, has an interest in 3,273,081 s hares (2019: 3,273,081 s hares ).

At 31 December 2020 Cameron Young, Chief Operating Officer of CEIBA, has an indirect interest in 4,129,672 shares (2019: 4,129,672 shares).

At 31 December 2020 Paul S. Austin, Chief Financial Officer of CEIBA, has an interest in 144,000 shares (2019: 144,000).

   13.                 Basic and diluted earnings per share 

The earnings (loss) 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.

 
                                                    31 Dec        31 Dec 
                                                     2020           2019 
                                                      US$           US$ 
                                                -------------  ------------ 
 Weighted average of ordinary shares in issue     137,671,576   137,671,576 
 Net (loss)/income for the year attributable 
  to the shareholders                            (19,808,620)     7,579,514 
 Basic and diluted (loss)/earnings per share           (0.14)          0.06 
 
   14.                 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 2020 were US$2,864,518 (2019: US$ 2,985,429 ). In order to assist the Group with its cash flow requirements the Investment Manager has agreed to defer payment of a portion of its fees earned during 2020 totaling US$1,129,709 until 2022 (see note 9).

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 and the original effective interest rate applied in calculating the instruments amortised cost is materially equal to a market interest rate. At 31 December 2020, the amount of the payment recorded as a deferred liability is US$2,833,333 (2019: US$3,833,333) with US$1,000,000 (2019: US$1,000,000) being the current portion and US$1,833,333 (2019: US$2,833,333) being the non-current portion.

For the year ended 31 December 2020, 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 (2019: US$1,000,000):

 
                                          2020          2019 
                                           US$           US$ 
                                      ------------ 
 Management fees earned                  2,864,518     2,985,429 
 Amortisation of deferred liability    (1,000,000)   (1,000,000) 
                                      ------------  ------------ 
 Management fee expense                  1,864,518     1,985,429 
                                      ------------  ------------ 
 
 
   15.                 Commitments and contingencies 

Operating lease commitments

The rental charges paid under operating leases accounted for in operational costs of the statement of comprehensive income for the year ended 31 December 2020 amounted to US$24,500 (2019: US$24,500).

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 Península 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$20,502,533 (2019: US$10,928,702) of which has been advanced as at 31 December 2020. 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. The rights of the Company under these facilities are limited to receiving principal and interest payments (SPPI model). The facilities are fully secured by offshore tourism proceeds from numerous internationally managed hotels.

The Group has a successful 19-year track record of arranging and participating in over EUR150 million of facilities extended to FINTUR, with no defaults occurring during this period.

The Company had a EUR4,000,000 participation in Tranche A as well as a EUR2,000,000 participation in Tranche B of the most recent facility executed in March 2016 and amended in 2019. The total four-year facility had a full principal amount of EUR36,000,000 with an 8% interest rate. The facility was operating successfully without delay or default until March 2020, at which time all Cuban hotels were ordered to be closed as a result of the Covid-19 pandemic. The Company subsequently granted a further grace period to FINTUR and consolidated all amounts then outstanding under the two existing tranches into a new Tranche C. As at 31 December 2020 the principal amount of EUR1,716,667 (US$2,110,795) (2019: EUR2,883,333 (US$3,230,171)) was outstanding under the Company's participation in Tranche C of the facility.

   16.                 Financial risk management 

Introduction

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

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

Market risk

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

(i) Foreign currency risk

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

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

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

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

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

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

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

 
   Effect of the 
  variation in the 
  foreign exchange 
        rate 
         %                 Income (loss)    Income (loss) 
                            31 Dec 2020      31 Dec 2019 
                                US$              US$ 
------------------       ---------------  --------------- 
        +15                 1,202,344        1,882,162 
        +20                  1,603,125        2,509,549 
        -15                 (1,202,344)      (1,882,162) 
        -20                 (1,603,125)      (2,509,549) 
 

(ii) Interest rate risk

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

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

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

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

 
                                                 Fixed          Floating       Non-interest 
                                     Total        rate            rate            bearing 
                                      US$          US$             US$              US$ 
                                  -----------  ----------  ------------------  ------------ 
 
31 December 2020 
Equity investments (US$)          197,921,225           -                   -   197,921,225 
Loans and lending facilities 
 (EUR)                              4,116,169   4,116,169                   -             - 
Loans and lending facilities 
 (US$)                             16,106,466  16,106,466                   -             - 
Accounts receivable and accrued 
 income (US$)                      16,052,751           -                   -    16,052,751 
Accounts receivable and accrued 
 income (EUR)                         296,925           -                   -       296,925 
Cash at bank (EUR)                  3,992,756           -                   -     3,992,756 
Cash at bank (US$)                    210,970           -                   -       210,970 
Cash at bank (GBP)                     61,654           -                   -        61,654 
Cash on hand (GBP)                        272           -                   -           272 
Cash on hand (EUR)                        130           -                   -           130 
Cash on hand (US$)                      1,058           -                   -         1,058 
Cash on hand (CUC)                      4,020           -                   -         4,020 
 
 
                                                 Fixed         Floating       Non-interest 
                                     Total        rate           rate            bearing 
                                      US$         US$             US$              US$ 
                                  -----------  ---------  ------------------  ------------ 
31 December 2019 
Equity investments (US$)          227,340,559          -                   -   227,340,559 
Loans and lending facilities 
 (EUR)                              3,230,171  3,230,171                   -             - 
Loans and lending facilities 
 (US$)                              9,915,549  9,915,549                   -             - 
Accounts receivable and accrued 
 income (US$)                       7,736,695          -                   -     7,736,695 
Accounts receivable and accrued 
 income (EUR)                         121,621          -                   -       121,621 
Cash at bank (EUR)                 11,230,891          -                   -    11,230,891 
Cash at bank (US$)                  1,191,898          -                   -     1,191,898 
Cash at bank (GBP)                    663,606          -                   -       663,606 
Cash on hand (EUR)                        996          -                   -           996 
Cash on hand (US$)                      1,724          -                   -         1,724 
Cash on hand (CUC)                     13,463          -                   -        13,463 
 

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 considers both historical analysis and forward-looking information in determining an expected credit loss. Refer to note 6 for the assessment of the 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 2020   31 Dec 2019 
                                                      US$           US$ 
                                                 ------------  ------------ 
 
 Loans and lending facilities                      20,222,635    13,145,720 
 Future loan commitments (TosCuba Construction 
  Facility) (i)                                    30,997,467    30,584,451 
 Accounts receivable and accrued income            16,349,676     2,142,673 
 Cash and cash equivalents                          4,270,860    13,102,578 
                                                 ------------  ------------ 
 Total maximum exposure to credit risk             71,840,638    58,975,422 
                                                 ------------  ------------ 
 

(i) The TosCuba Construction Facility is secured by future income of the hotel under construction and 50% of the principal construction facility 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 credit risk has significantly changed from the prior year due to COVID 19 and the prevailing economic conditions. As a result of the risk moving from stage 1 to 2 of the IFRS ECL impairment model, management has assessed the expected credit loss over the lifetime of the future loan commitments to be immaterial to the Group.

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 2020   31 Dec 2019 
                                    Rating         US$           US$ 
                                   --------   ------------  ------------ 
 Cash at bank 
 Cuba                                 Caa2         183,540     1,083,763 
 Guernsey                              A2          152,420       725,110 
 Spain                                Ba3        2,956,003     2,678,694 
 Spain                                 A2           20,538        18,913 
 Spain                                Baa2         952,879     8,579,915 
                                                 4,265,380    13,086,395 
                                              ------------  ------------ 
 Cash on hand 
 Spain                                                   -           100 
 Cuba                                                5,480        16,083 
 The Netherlands                                         -             - 
                                              ------------  ------------ 
                                                     5,480        16,183 
                                              ------------  ------------ 
 
 Total cash and cash equivalents                 4,270,680    13,102,578 
                                              ------------  ------------ 
 

At 31 December 2020 and 31 December 2019, 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 Península Hotel (see note 6). The Construction Facility is in the maximum principal amount of US$45,000,000 of which US$20,502,533 was disbursed as at 31 December 2020 (31 December 2019: US$10,928,702 and the participation of the Group was US$16,106,466 (31 December 2019: US$9,915,552). 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 has been affected by the pandemic and consequently the disbursement of the principal under the Construction Facility has been delayed and it is now anticipated that the final disbursement under the Construction Facility will be in July 2022. The Group currently has sufficient cash and cash equivalents to cover the full disbursement of the Construction Facility (see note 20 concerning the Bond Issue).

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

 
                              31 Dec 2020   31 Dec 2019 
                                  US$           US$ 
                             ------------  ------------ 
 
  Between 31 and 90 days          485,606     1,151,827 
  Between 91 and 180 days       3,011,861     1,317,800 
  Between 181 and 1 year       19,000,000     2,400,000 
  Over 365 days                 8,500,000    25,714,823 
                             ------------  ------------ 
                               30,997,467    30,584,450 
                             ------------  ------------ 
 

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 2020 and 2019 to a total of US$ 234,249,362 and US$256,115,973, respectively. The Group is not subject to external capital requirements.

   17.                 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 2020 
                                                US$ 
                          Level 1     Level 2        Level 3         Total 
                        ---------   ---------   ------------  ------------ 
 Financial assets at 
  fair value through 
  profit or loss 
 Equity investments                              197,921,225   197,921,225 
                                                 197,921,225   197,921,225 
     -----------------------------------------  ------------  ------------ 
 
                                         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 
  ----------   ----------  -------------------  ------------  ------------ 
 
 

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 2020    31 Dec 2019 
 Unlisted private equity investments            US$            US$ 
                                           -------------  ------------- 
 
 Initial balance                             227,340,559    238,795,681 
 Total gains recognised in 
  income or loss                            (41,914,276)   (14,658,562) 
 Foreign currency translation 
  reserve                                     12,191,767      3,203,440 
 Acquisitions and capital contributions          303,175              - 
 Final balance                               197,921,225    227,340,559 
                                           -------------  ------------- 
 
 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                               (41,914,276)   (14,658,562) 
                                           -------------  ------------- 
                                            (41,914,276)   (14,658,562) 
                                           -------------  ------------- 
 
   18.                 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 2020 
                                                                US$ 
                                                     Cash and 
                                      Fair value     Financial       Financial 
                                         through       assets       liabilities          Total 
                                       profit or    at amortised    at amortised      carrying 
                              Note          loss        cost            cost            amount 
                                    ------------  --------------  --------------  ------------ 
 
 Cash and cash equivalents     4               -       4,270,860               -     4,270,860 
 Accounts receivable 
  and accrued income           5               -      16,349,676               -    16,349,676 
 Loans and lending 
  facilities                   6               -      20,222,635               -    20,222,635 
 Equity investments            7     197,921,225               -               -   197,921,225 
                                     197,921,225      40,843,171               -   238,764,396 
                                    ------------  --------------  --------------  ------------ 
 
 Accounts payable 
  and accrued expenses         9               -               -       2,215,299     2,215,299 
 Deferred liabilities          14              -               -       2,833,333     2,833,333 
                                               -               -       5,048,632     5,048,632 
                                    ------------  --------------  --------------  ------------ 
 
                                                         31 December 2019 
                                                                US$ 
                                                     Cash and 
                                     Fair value      Financial       Financial 
                                       through         assets       liabilities          Total 
                                      profit or     at amortised    at amortised      carrying 
                              Note       loss           cost            cost            amount 
                                    ------------  --------------  --------------  ------------ 
 
 Cash and cash equivalents     4               -      13,102,578               -    13,102,578 
 Accounts receivable 
  and accrued income           5               -       7,858,316               -     7,858,316 
 Loans and lending 
  facilities                   6               -      13,145,720               -    13,145,720 
 Equity investments            7     227,340,559               -               -   227,340,559 
                                     227,340,559      34,106,614               -   261,447,173 
                                    ------------  --------------  --------------  ------------ 
 
 Accounts payable 
  and accrued expenses         9               -               -       2,066,213     2,066,213 
 Deferred liabilities          14              -               -       3,833,333     3,833,333 
                                               -               -       5,899,546     5,899,546 
                                    ------------  --------------  --------------  ------------ 
 

There were no reclassifications of financial assets during the year ended 31 December 2020 (year ended 31 December 2019: nil).

   19.                 Audit fees 

Audit fees incurred for the period below:

 
                      31 Dec 2020   31 Dec 2019 
                          US$           US$ 
                     ------------  ------------ 
 
 Audit fee expense        270,909       465,514 
                     ------------  ------------ 
 
   20.                 Events after the reporting period 

Cuban Monetary Reforms

On 1 January 2021 new monetary reforms adopted by the Cuban government came into effect. The principal goals of the reforms include: (i) the unification of the two parallel Cuban currencies through the elimination of the Cuban Convertible Peso and the continuation of the Cuban Peso ("CUP"), (ii) the harmonisation of exchange rates at US$1 : CUP24, (iii) the reduction or removal of subsidies in the Cuban economy, and (iv) price and labour (salary, pension and social security) reforms aimed at correcting price levels.

The reforms are directly applicable to foreign investment vehicles operating in the country, including joint venture companies, who will need to convert all of their accounting records to CUP and carry out all local transactions within the economy in CUP going forward. By contrast, all entities operating in the Special Development Zone of Mariel will continue to denominate and carry out their operations exclusively in US$.

The reforms will profoundly affect the pricing and payment of goods and services throughout the economy, including the foreign investment sector, as well as salaries, pension and social security payments. They are expected to remove significant distortions caused in the past by numerous exchange rates.

The Company is presently determining the full impact that the new measures will have on the operations and financial reporting of the joint venture companies in which it participates, but it is likely that the functional currency of the joint venture companies will change from US$ to CUP as a result of the reforms.

Bond Issue

On 31 March 2021, the Company completed the issue of EUR25 million (US$29,312,500) 10.00% senior unsecured convertible Bonds ("Bonds"). The Bonds were listed on The International Stock Exchange (Channel Islands) on 13 April 2021. The Bonds have a term of 5 years expiring on 31 March 2026, an interest rate of 10.00%, payable quarterly, and are convertible at the option of the Bondholder to Ordinary Shares of the Company, at any time, at a conversion price equal to the EURO equivalent of GBP1.043 (at the time of conversion, subject to adjustments). After three years, the Company may redeem the Bonds in advance of their expiry in principal amounts of EUR2,500,000 or multiples thereof. The proceeds of the Bonds will be used by the Company (i) to complete its funding obligations under the Construction Finance Facility relating to the construction of the Meliã Trinidad Península hotel, (ii) to advance the development of the GBM Mariel industrial logistics project, and (iii) for general corporate purposes.

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

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.

The NAV per share was US$1.41 / 103.8p as at 31 December 2020.

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 for the years ending 31 December 2019 and 2020.

 
                                     2020          2019 
 Opening NAV                  206,734,334   205,641,346 
                            -------------  ------------ 
 Dividends paid                         -   (8,560,689) 
                            -------------  ------------ 
 Net comprehensive (loss) 
  / income for the year      (12,308,720)     9,653,677 
                            -------------  ------------ 
 IFRS Closing NAV             194,425,614   206,734,334 
                            -------------  ------------ 
 Non-IFRS adjustment            2,833,333     3,833,333 
                            -------------  ------------ 
 Non-IFRS Closing NAV         197,258,947   210,567,667 
                            -------------  ------------ 
 

Discount to NAV

The discount reflects the amount by which the share price of the Company is below the NAV per share expressed as a percentage of the NAV per share. As at 31 December 2020, the share price was 84.5p / US$1.15 and the net asset value per share was 103.8p / US$1.41, the discount was therefore 18.6%.

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 17 June 2021 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 2020 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 2021. 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 2021

For further information, please contact:

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

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April 28, 2021 02:00 ET (06:00 GMT)

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