Annual Report & Consolidated Financial Statements
For the year ended 31 December 2023
1
TABLE OF CONTENTS
TABLE OF CONTENTS
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94
96
100
DIRECTORS, MANAGEMENT AND ADVISERS
COMPANY OVERVIEW
CHAIRMAN'S STATEMENT
STRATEGIC REPORT
PRINCIPAL RISKS
VIABILITY STATEMENT
MANAGEMENT REVIEW
ENVIRONMENTAL SOCIAL GOVERNANCE (ESG) STRATEGY
THE BOARD OF DIRECTORS
DIRECTORS' REPORT
DIRECTORS' REMUNERATION REPORT
REPORT OF THE AUDIT COMMITEE
STATEMENT OF DIRECTORS' RESPONSIBILITIES
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF CEIBA INVESTMENTS LIMITED
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
CONSOLIDATED STATEMENT OF CASH FLOWS
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
INVESTOR INFORMATION
GLOSSARY OF TERMS AND DEFINITIONS AND ALTERNATIVE PERFORMANCE MEASURES
NOTICE OF ANNUAL GENERAL MEETING
Visit our Website at ceibainvest.com to find out more about CEIBA Investments Limited.
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION.
If you are in any doubt about the action you should take, you are recommended to seek your own independent financial advice
from your stockbroker, bank manager, solicitor, accountant or other financial adviser authorised under the Financial Services
and Markets Act 2000 (as amended by the Financial Services Act 2012) if you are in the United Kingdom or, if not, from another
appropriately authorised financial adviser. If you have sold or otherwise transferred all your Ordinary Shares in CEIBA
Investments Limited, please forward this document, together with the accompanying documents immediately to the purchaser
or transferee, or to the stockbroker, bank or agent through whom the sale or transfer was effected for transmission to the
purchaser or transferee.
2
DIRECTORS (ALL NON-EXECUTIVE)
John Herring (Chairman)
Trevor Bowen
Keith Corbin
Peter Cornell (Senior Independent Director)
Colin Kingsnorth
Jemma Freeman
Andrew Pegge (appointed 16 October 2023)
all of the registered office
ALTERNATIVE INVESTMENT FUND MANAGER
(up to 30 June 2023)
abrdn Fund Managers Limited
280 Bishopsgate
London EC2M 4AG
MANAGEMENT (as from 1 July 2023)
Sebastiaan A.C. Berger – CEO
Cameron Young – COO
Paul Austin – CFO
ADMINISTRATOR, SECRETARY AND RISK MANAGER
NSM Funds Limited
Les Echelons Court, Les Echelons
St Peter Port, Guernsey GY1 1AR
CONSULTANT TO THE SUBSIDIARIES
4K Keys Limited
Les Echelons Court, Les Echelons
St Peter Port
Guernsey GY1 1AR
REGISTRAR
Link Market Services (Guernsey) Limited
Mont Crevelt House, Bulwer Avenue
St Sampson
Guernsey GY2 4LH
BOND REGISTRAR
NSM Funds Limited
Les Echelons Court, Les Echelons
St Peter Port
Guernsey GY1 1AR
REGISTERED OFFICE
CEIBA Investments Limited
FINANCIAL ADVISER & BROKER
Singer Capital Markets Advisory LLP
1 Bartholomew Lane
London EC2N 2AX
ADVOCATES TO THE COMPANY (AS TO GUERNSEY LAW)
Carey Olsen (Guernsey) LLP
Carey House, Les Banques
St. Peter Port, Guernsey GY1 4BZ
SOLICITORS TO THE COMPANY (AS TO ENGLISH LAW)
Gowling WLG (UK) LLP
4 More London Riverside
London SE1 2AU
AUDITOR
Grant Thornton Limited
St James Place, St James Street
St Peter Port,
Guernsey, GY1 2NZ
TRANSFER AGENT
Link Group
10
th
Floor, Central Square
29 Wellington Street
Leeds LS1 4DL
BOND LISTING AGENT
AT THE INTERNATIONAL STOCK EXCHANGE
Carey Olsen Corporate Finance Limited
Carey House, Les Banques
St Peter Port, Guernsey GY1 4BZ
DIRECTORS, MANAGEMENT AND ADVISERS
DIRECTORS, MANAGEMENT AND ADVISERS
3
GENERAL
CEIBA Investments Limited (“CEIBA” or the “Company”) is a Guernsey-incorporated, closed-ended investment company,
with registered number 30083. As at 31 December 2023, the share capital of the Company consists of 137,671,576
ordinary shares (the “Shares”), all listed on the Specialist Fund Segment (“SFS”) of the London Stock Exchange’s Main
Market under the symbol CBA (ISIN: GG00BFMDJH11). In addition, the Company has issued €25,000,000 10% senior
unsecured convertible bonds (the “Bonds”) due 31 March 2026. The Bonds are listed on The International Stock
Exchange, Guernsey under the symbol CEIB1026 (ISIN: GG00BMV37C27). The Company is a self-managed investment
company governed by a Board of non-executive Directors, the majority of whom are independent. Like many other
investment companies, the administration and other corporate functions are outsourced 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 have direct interests
in the underlying properties. The Company also arranges and invests in financial instruments granted in favour of
Cuban borrowers.
FINANCIAL HIGHLIGHTS AS AT 31 DECEMBER 2023 IN £ AND US$ (FOREX: £/US$ = 1.2747)
The Company's share price is quoted in Sterling (£) but the functional currency of the Company is the U.S. Dollar (US$).
As such, the financial highlights of the Group set out below are provided in U.S. Dollars for Net Asset Value ("NAV")
related highlights and Sterling for share price related highlights, applying the applicable exchange rate as at 31
December 2023 of £1:US$1.2747 (2022: £1=US$1.2039).
1 These are considered Alternative Performance Measures. See glossary on page 96 for more information.
MANAGEMENT
During the year under review, the Company became a self-managed alternative investment fund on 1 July 2023. Up to
30 June 2023, abrdn Fund Managers Limited (“AFML”) was the Company’s alternative investment fund manager
providing portfolio and risk management services to the Company. AFML delegated portfolio management to abrdn
Alternative Investments Limited (“AAIL”).
Effective from 1 July 2023, the Company is operating as a self-managed alternative investment fund. Sebastiaan Berger,
Cameron Young and Paul Austin have been engaged by the Group pursuant to Employment and Consulting agreements
and are the principal executives of the Company holding the respective positions of Chief Executive Officer, Chief
Operating Officer and Chief Financial Officer (together the “Executives” or “Management”)
Like many other investment companies, its administration and certain other services have been delegated to third party
providers.
FINANCIAL CALENDAR
COMPANY OVERVIEW
COMPANY OVERVIEW
USD 31 Dec 2023 31 Dec 2022
% change
Total Net Assets (m)
$158.5 $142.1 12%
NAV per Share
1
$1.15 $1.03 12%
Net Profit / (Loss) to Shareholders of the Parent (m)
$14.2
($14.3)
Basic and Diluted Profit / (Loss) per Share
$0.10
($0.10)
GBP 31 Dec 2023 31 Dec 2022 % change
Market Capitalisation (m)
£42.7 £55.8
(24)%
Share price 31.0p 40.5p
(24)%
NAV per Share
1
90.3p
85.7p
5%
Discount
1
(66)% (53)%
Ongoing charges
1
2.38% 3.04%
18 June 2024
Annual General Meeting 2024
30 September 2024 Announcement of half-yearly results for the six months ending 30 June 2024
31 December 2024
Financial year end
4
Over the last year, we have seen Cuba’s economy continue to struggle against some very significant headwinds. The
prime factors are a slow recovery in tourism numbers, the ongoing U.S. sanctions and timid (and largely ineffective)
exchange rate and other financial reforms. Together, these forces have caused a contraction of the economy, a severe
liquidity shortage and banking crisis, high inflation in prices and ongoing shortages of fuel, electricity and other basic
economic inputs. They have also contributed to the continuation of dramatic out-migration from the country.
After forecasting annual growth of the gross domestic product of 3% at the outset of 2023, government estimates at
year-end were that the economy shrank during the year by some 2%. This leaves Cuba’s economy about 10% smaller
than its 2019 level.
While Cuba has been under a U.S. trade embargo for some 60 years, which has been strengthened or weakened in
accordance with the political winds, it is disappointing that the Biden administration has done very little to unwind the
damaging policies implemented by Trump against the island, especially the last-minute designation of Cuba as a state
sponsor of terrorism in the final days of the Trump administration. This very aggressive measure has had a strong
impact on the ability of those dealing with Cuba to obtain basic financial services. With the U.S. presidential election
season well underway, it looks unlikely that the Biden administration will make any significant changes to U.S. Cuba
policy before November 2024.
As I have noted in previous reports, the unification of the two Cuban currencies and other monetary reforms that came
into effect in early 2021 have proved to be very unfortunate timing-wise, taking place in the middle of the Covid-19
pandemic when there was effectively no tourism, which is a prime provider of foreign currency to the country. These
reforms have caused a high degree of uncertainty and disruption in the economy.
Cuba’s liquidity position has continued to deteriorate and there continue to be shortages of critical products, including
food, electricity and fuel. The country also regularly suffers from rolling power cuts, transport problems, and agriculture
production levels are at their lowest levels in many years.
At year-end, the government admitted that the reforms were mostly unsuccessful and would soon be replaced by new
rules, which have not yet been revealed. Subsequently, Alejandro Gil, the Minister of the Economy, has been removed
from his post.
The main impact of the currency and financial reforms on CEIBA continues to be in relation to the Company’s ability to
realise the income generated by the joint venture company Inmobiliaria Monte Barreto S.A. (“Monte Barreto”) in the
form of hard currency dividend payments. This is discussed in further detail below.
2023 Review
While the Company has been trading in this very difficult economic environment, the results of its individual assets have
been resilient. The company’s largest asset is its 49% interest in Monte Barreto, which owns and operates the Miramar
Trade Centre, Havana’s leading mixed-use office and retail real estate complex. The operations remain generally
consistent, with occupancy levels, presently some 96% (2022: 95%), and revenue growing slightly over the prior year.
Operating expenses have risen, resulting in modestly lower net income compared to the prior year.
The overriding issue at Monte Barreto remains the ability to generate dividends in hard currency. While the rents
received are tied to U.S. dollars, they are paid in local currency. Operations are profitable but Monte Barreto is mostly
unable to make international payments of dividends to the Company because of the ongoing weakness of the Cuban
banking and financial system and the country’s poor liquidity position.
Management has been working very hard to realise the cash held by Monte Barreto. These initiatives include making
arrangement to receive rent payments directly from tenants in hard currency, which over 35 tenants have now
embraced. Also, as announced in December 2023, the Company was successful in agreeing the payment of an amount
of US$14.3 million, representing previously impaired dividends receivable, from Monte Barreto to Miramar S.A.
(“Miramar”). It is anticipated that these funds will be used by Miramar over time to carry out part of the local hard
currency components of its extensive capex and investment programs aimed at upgrading and expanding its hotels.
These, alongside other initiatives, will continue to be pursued by the Company.
The hotels, in which the Company has an interest, have performed well against the backdrop of a very slow recovery
from the shutdown caused by the Covid-19 pandemic, with the number of tourists remaining low. Overall, the hotels
have performed ahead of budget but below last year’s results.
CHAIRMAN’S STATEMENT
CHAIRMAN’S STATEMENT
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A significant factor behind the satisfactory results lies in the confirming facility which the Company established some
years ago. This facility allows the hotels to import vital goods from overseas and ensures that all of the hotels are
suitably stocked. This has given our hotels a competitive edge over competing hotels in Cuba and will continue to do so
in the present economic environment.
Opening of Meliá Trinidad Península Hotel
We are very pleased that the Meliá Trinidad Península Hotel (the “Meliá Trinidad Península Hotel” or the “Trinidad
Hotel”) began operations in November 2023. On 14 January 2024, the official opening ceremony of the hotel took place,
presided over by Prime Minister Manuel Marrero and Cuba’s Minister of Tourism. The hotel, in which the Company
holds a 32.5% interest, has 401 rooms and is on a prime six-hectare beachfront property at Playa Maria Aguilar, near the
City of Trinidad, a UNESCO World Heritage Site in central Cuba. Construction began in December 2018 and completion
has been achieved against a backdrop of substantial challenges caused by the Covid-19 pandemic, among and other
factors.
The opening and operation of the hotel (like the construction project before it) will create hundreds of direct and
indirect high-quality new jobs in the area, which will have a very positive impact on the City of Trinidad and on the whole
regional tourism economy.
In parallel with the start-up of operations of the new Trinidad Hotel, the Spanish holding vehicle Mosaico Hoteles S.A.
(“Mosaico Hoteles”) has been merged into HOMASI S.A. (“HOMASI”) in order to streamline operations. As a result, the
interests of the Company in both Miramar and TosCuba are now held through HOMASI.
Internalisation of Management
The internalisation of management which was announced in the first half of 2023 has become fully effective and the
transition has been smooth and seamless. As of 1 July 2023, the Company operates as a self-managed alternative
investment fund, with Sebastiaan Berger and the other members of the management team moving to the Company,
which ensured continuity of service. It is anticipated that the internalisation will result in significant annual cost savings
going forward.
Dividends
In 2020, as the Covid-19 pandemic forced a near-total shut down in Cuba, including most notably in the tourism sector,
the Board decided that it was vital that the Company should retain sufficient cash balances to meet all of its existing and
forecast future undertakings and accordingly took the decision to suspend the Company’s dividend. Among other
things, this prudent policy allowed the completion of the construction of the Trinidad Hotel. No dividend has been paid
since then. Given the liquidity challenges faced by the country and needing to ensure that sufficient funds are available
to meet the repayment of the Company’s convertible Bonds, which fall due in 2026, the payment of dividends to
shareholders currently remains on hold. However, it remains a very high priority of the Board to place the Company in
a position to restart the payment of dividends to shareholders.
Share price and discount to the underlying asset value
The Board is very focused on narrowing the discount to the underlying asset value at which the Shares have traded for
some considerable time. As at 31 December 2023, the discount to the NAV that the Shares were trading at was 65.7%.
Aside from the general market dislocation which continues to weigh on the closed ended funds sector, with alternative
assets being particularly impacted, to a large degree this discount is a reflection of the very difficult macro-economic
challenges faced by Cuba over recent years, which I have outlined above, and a consequence of the ongoing designation
of Cuba by the U.S. as a State Sponsor of Terrorism. Among other challenges, this status severely impacts the
operations of the Company and the attractiveness of Cuba as an investment territory for institutional investors.
Another macro challenge that affects the Company is the difficulty in receiving dividends from Monte Barreto, which in
turn impacts the payment by the Company of dividends to its shareholders. The lack of a dividend is clearly a negative
influence on the share price performance.
Accordingly, the present focus of the Company is to ensure that the underlying assets trade as well as possible, to work
with its Cuban partners to restore the payment of dividends in hard currency from Monte Barreto, and to return funds
to CEIBA shareholders.
CHAIRMAN’S STATEMENT
6
The Board
Colin Kingsnorth and Peter Cornell have informed the Board that they will not be seeking re-election as directors at the
up-coming Annual General Meeting. Colin has been on the Board of the Company for 23 years and has contributed
greatly to it - helping to steer it through many challenging times. Peter joined the Board at the time of its listing on the
London Stock Exchange in 2018 and has acted as the senior independent director since that date. His commitment and
contribution to the Board has also been greatly appreciated.
I am grateful to the Board for their commitment and input during another 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. In this regard, I am pleased to welcome Andrew Pegge
to the Board. Andrew was appointed in October 2023 and is a director of POP Investments, a significant holder of
shares in the Company. He has extensive experience in the management of closed ended funds and the corporate
governance surrounding them and will bring a relevant depth of experience and knowledge, and a fresh perspective to
the Board.
John Herring
Chairman
29 April 2024
CHAIRMAN’S STATEMENT
7
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 Board 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 of 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.
GROUP STRUCTURE
In December 2023, the Spanish holding vehicles HOMASI and Mosaico Hoteles were merged, with HOMASI remaining as
the sole entity owning all of the hotel interests of the Company
STRATEGIC REPORT
STRATEGIC REPORT
8
INVESTMENT RESTRICTIONS
The following investment limits and restrictions as set out in the Company’s Prospectus 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 (see the Management 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 restrictions above apply at the time of investment and 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 Board measures the Company’s economic performance include:
• Total income
• Net income
• Total net assets
• Net asset value per share*
• Net asset value total return*
• Market capitalisation
• Premium / Discount to NAV*
• 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)
• Net income after tax
In the case of hotel properties, other KPIs include:
• Occupancy levels
• Total revenue per room sold (TRevPRS)
• Total revenue per available room (TRevPAR)
• 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 Executives 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.
For an analysis of the Company’s performance with reference to its KPIs, please see the Chairman’s Statement on page
4 and the Management Review on page 19.
STRATEGIC REPORT
9
Introduction
The Company is exposed to a variety of risks and uncertainties. The Board, through the Audit Committee, is responsible
for the management of risk and has put in place a regular and robust process to identify, assess and monitor the
principal risks and uncertainties facing the business. A core element of this process is the Company’s risk register which
identifies the risks facing the Company and identifies 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 also 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
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 the general country risk, the most significant risks faced by the Company during the financial year 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.
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. The operation of key controls in third-
party service providers risk management processes and how these apply to the Company’s business are reviewed
regularly by the Audit Committee.
PRINCIPAL RISKS
PRINCIPAL RISKS
Type of Risk
Description and Possible Impact
Mitigating Action
Trend
Emerging Risks relating to the Cuban Financial System
Cuban Financial Reforms –
Financial Autonomy Rules
During the second half of 2020 and
continuing throughout 2021 and 2022,
the Cuban government adopted a series
of new financial reforms aimed at
creating an objective system for the
allocation of limited liquidity reserves
within the economy and intending to
provide “real financial autonomy” to
Cuban entities, including foreign
investment vehicles such as the joint
venture companies in which the
Company invests. However, the practical
implementation of these measures was
largely unsuccessful. In December 2023,
Cuba’s Prime Minister Manuel Marrero
recognised this failure and announced
that a new set of financial reforms,
including partial dollarisation of the
economy, would be adopted in the near
future to replace the prior system for
allocating liquidity. To date no details of
the new measures have been provided.
As a consequence of this situation, the
Cuban joint venture companies in which
the Company invests presently
experience difficulties in expatriating
dividend payments to the bank accounts
of the Company outside Cuba. It remains
uncertain whether and when the new
financial reforms announced will be
adopted and they may take time to show
the intended effect or may not have the
stated positive impact on the liquidity
position of the country, or their
application may not be fully extended to
all of the joint venture companies in
which the Company has a participation,
all of which may have a negative effect on
the affairs of the Company.
Management closely follows all
developments relating to the adoption
and implementation of Cuban reform
measures, and communicates its
concerns and interacts regularly at all
appropriate levels in order to extend
their application to the operations of
the joint venture companies in which
the Company invests. To the extent
possible, Management negotiates and
implements arrangements involving the
receipt of hard currency income in bank
accounts located outside Cuba from
which payments of dividends can be
made.
In addition, Management, together with
the Cuban partners of the Company,
seeks at all times to adapt operations
and develop creative solutions to deal
with the new circumstances created by
the financial reforms being adopted.
10
Type of Risk
Description and Possible Impact
Mitigating Action
Trend
Emerging Risks relating to the Cuban Financial System (continued)
Currency Devaluation Risk
As part of the 2020-2021 economic
reform package adopted by the Cuban
government in order to continue
modernising the Cuban economy, new
currency reforms aimed at harmonising
exchange rates and eliminating Cuba’s
dual currency system required all foreign
investment vehicles to convert and
denominate their assets and legal
obligations, and to carry out all
transactions previously denominated
and carried out in U.S. dollars, in Cuban
Pesos. At present, the Cuban Peso has a
fixed (non-market) exchange rate of
US$1.00: CUP24, which may be subject
to revaluation or devaluation at the
discretion of the Cuban Central Bank. In
addition, as from the adoption of new
rules for the tourism sector
implemented over 2023, a second official
exchange rate of US$1.00 : CUP120 has
been established for operations in that
sector. Included in the year-end
announcements of Prime Minister
Marrero was an indication that the
Cuban Central Bank will be establishing a
new (presumably devalued) exchange
rate for the CUP. Any future devaluation
of the CUP may have a negative impact
on the assets and operations of the
Cuban joint venture companies in which
the Company invests.
The currency devaluation risk
associated with the imposition of the
CUP as sole currency for operations is
new and significant. It is uncertain
whether this risk will be partially or fully
mitigated by the announced partial
dollarisation of the economy that will
form part of the newly announced
measures.
The cash and currency positions of each
of the joint venture companies in which
the Company invests are continuously
monitored for the purpose of reducing
currency risk to the greatest extent
possible. CUP bank balances of the joint
venture companies are presently valued
by the Company in U.S. dollars using the
US$1.00 : CUP120 exchange rate.
Wherever possible, in order to mitigate
devaluation risk, Management requires
that the joint venture companies in
which the Company has an interest
declare and distribute dividends, on an
interim basis, as frequently as possible.
There are presently no hedging
mechanisms available to mitigate this
new risk.
General Liquidity of the Cuban
Financial System and
Repatriation Risk
The continued high levels of tension
between the United States and Cuba
and the maintenance by the Biden
administration of harsh U.S. sanctions
imposed during the Trump
administration, which have resulted in
steep reductions in U.S. family
remittances and travellers to Cuba, as
well as the global fall in international
tourism and other economic shocks
associated with the Covid-19 pandemic,
together with numerous transitional
difficulties associated with the
implementation of the financial and
currency reform measures described
above, have had strong negative
impacts on the fragile economic and
liquidity positions in Cuba. Throughout
2023 there have been significant delays
in the timing of international bank
transfers from Cuba. The duration of
these negative effects is unknown, and
they may in turn have a continuing
negative impact on the ability of the
joint venture companies in which the
Company has an interest to make
distributions abroad, which in turn may
have a negative impact on the Company.
Management actively monitors and
manages the liquidity position of the
Company, its subsidiaries and the joint
ventures in which it invests to the
greatest extent possible so that
cashflows of the Company are
transferred to bank accounts outside
Cuba. Management has no control or
influence over the execution or timing
of payments to be transferred by Cuban
banks to the Company’s international
bank accounts.
Risks relating to the War in
Ukraine
Cuba maintains strong historical,
political and economic ties to Russia
and to Ukraine. The Russian-Ukrainian
conflict that erupted in February 2022
initially resulted in an abrupt halt to
Russian and Ukrainian tourism to the
island. Further aspects of the Russia-
Cuba and Ukraine-Cuba relationships
may eventually be affected by the
conflict, including Russian and
Ukrainian investments in Cuba, banking
relationships and other areas.
Although the conflict resulted in a sharp
reduction in the number of tourists
travelling from Russia and Ukraine to
Cuba, the operator of the Company’s
tourism assets has refocused its
marketing efforts to attract tourists
from its historical principal tourist
supplier (Canada) and other countries.
PRINCIPAL RISKS
11
PRINCIPAL RISKS
Type of Risk
Description and Possible Impact
Mitigating Action
Trend
Public Health Risk
Global Pandemic Risk
Although the Covid-19 pandemic is now
fully under control in Cuba, the
continued effects of the public health
risks associated with the Covid-19
pandemic (including the arrival of new
variants) or any new pandemic may
have a lasting and as yet unquantifiable
negative impact on the global tourism
industry, the economy of Cuba, and the
operations and performance of the
assets of the Company. Any such
pandemic may directly or indirectly
affect all other risk categories
mentioned in this matrix.
The Board and Management are
conscious of the potential impact that
any future pandemic may have on the
business of the Company and recognise
that the tourism sector was particularly
affected by the various travel
restrictions that were imposed to fight
the Covid-19 pandemic in numerous
countries.
Risks relating to the Company and its Investment Strategy
Investment Strategy and
Objective
The setting of an unattractive strategic
proposition to the market and the
failure to adapt to changes in investor
demand may lead to the Company
becoming unattractive to investors, a
decreased demand for shares and a
widening discount.
The Company’s investment strategy and
objective is subject to regular review to
ensure that it remains attractive to
investors. The Board considers the
investment strategy and objective
regularly and receives strategic updates
from Management, as well as 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
Management and with the Broker, and
the level of discount at which the
Company’s shares trade. In the event
that the Board believes that a majority
of shareholders requires a change in
strategy, it will table a modification of
the investment strategy to the
shareholders.
Investment Restrictions
Investing outside of the investment
restrictions and guidelines set by the
Board could result in poor performance
and inability to meet the Company’s
objectives, as well as a discount.
The Board sets, and monitors, its
investment restrictions and guidelines,
and receives regular reports which
include performance reporting on the
implementation of the investment
policy, the investment process and
application of the guidelines.
Management attends all Board
meetings. The Board monitors the
share price relative to the NAV.
Portfolio and Operational Risks
Joint Venture Risk
The investments of the Group in Cuban
real estate assets are made through
Cuban joint venture companies in
which Cuban government entities hold
an equity interest, giving rise to risks
relating to the liquidity of investments,
government approval, corporate
governance and deadlock
Prior to entering into any agreement to
acquire an investment, Management
will perform or procure the
performance of due diligence on the
proposed acquisition target. The Group
tries to structure its equity investments
in Cuban joint venture companies so as
to include a viable exit strategy.
Management regularly attends the
Board meetings of the joint venture
companies through which Group
interests are held, and actively manages
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.
12
PRINCIPAL RISKS
Type of Risk
Description and Possible Impact
Mitigating Action
Trend
Portfolio and Operational Risks (continued)
Real Estate Risk
As an indirect investor in real estate
assets, the Company is subject to risks
relating to property investments,
including access to capital and finance,
global capital and financial market
conditions, acquisition and
development risk, competition, tenant
risk, environmental risk and others.
The materialisation of these risks could
have a negative effect on specific
properties, development projects or
the Group generally.
Management regularly monitors the
level of real estate risk in the Cuban
market and reports to the Board at each
meeting regarding recent
developments. Management works
closely with the external hotel managers
and the joint venture managers to
identify, monitor and actively manage
local real estate risk.
In the case of Monte Barreto, tenant risk
has generally been augmented by the
fragile liquidity position of the country
and recent financial reform efforts,
which have resulted amongst others in
certain categories of tenants paying
their rents with varying degrees of
liquidity. Management, together with
the management team of Monte
Barreto, now assesses the impact of the
financial autonomy rules in all new
leasing decisions.
Construction Risk
As a developer and investor in new
construction as well as refurbishment
projects, the Company is subject to
risks relating to the planning, execution
and cost of construction works,
including the availability and
transportation of materials and the
cost thereof, inclement weather,
contractor risk, execution risk and the
risk of delay. The materialisation of
these risks could have a negative effect
on the implementation of development
projects of the Group.
Management regularly monitors all
construction and refurbishment
activities carried out within Group
companies and works closely with the
joint venture managers to identify,
monitor and actively manage all
construction risks. Management
reports to the Board at each meeting
regarding recent developments in this
respect. With completion of the
construction of the Trinidad Hotel, the
level of construction risk faced by the
Company will fall and going forward will
be limited to the risk associated with the
ongoing renovation and capital
expenditure programmes of the joint
venture companies.
Tourism Risk
As an indirect investor in hotel assets,
the Company is subject to numerous
risks relating to the tourism sector,
both in outbound and inbound
markets, including the cost and
availability of air travel, the imposition
of travel restrictions by overseas
governments, seasonal variations in
cash flow, demand variations, changes
in or significant disruptions to travel
patterns, risk related to the manager of
the hotel properties, and the
materialisation of these risks could
have a negative impact on specific
properties or the Company generally.
Management regularly monitors the
local and regional tourism markets and
meets regularly with the external hotel
management to identify, monitor and
manage global and local tourism risk
and to develop appropriate strategies
for dealing with changing conditions.
The Company aims to maintain a
diversified portfolio of tourism assets
spanning various hotel categories (city
hotel / beach resort, business / leisure
travel, luxury / family) in numerous
locations across the island.
Valuation Risk
Asset valuations may fluctuate
materially between periods due to
changes in market conditions. The
combined effects of higher levels of risk
associated with financial and monetary
reforms, the continuation under the
Biden administration of an aggressive
U.S. sanction regime and the slower
than expected recovery of the Cuban
tourism market in the face of the Covid-
19 pandemic have resulted in increased
discount rates and lower income
projections, leading to a rise in the
volatility of valuations.
As part of the valuation process, the
Company engages an independent
third-party valuer to provide an
independent valuation report on each
of the indirectly owned real estate
assets of the Group. The valuations are
subject to review by Management and
approval by the Board.
13
PRINCIPAL RISKS
Type of Risk
Description and Possible Impact
Mitigating Action
Trend
Portfolio and Operational Risks (continued)
Dependence on Third Party
Service Providers
The Company is dependent on
numerous third parties for the
provision of all systems and services
relating to its operations and
investments, and any inadequacies in
design or execution thereof, control
failures or other gaps in these systems
and services could result in a loss or
damage to the Company. In addition,
the continued high level of aggression
of U.S. sanctions may limit the pool of
service providers willing or able to work
with the Company.
The Board receives reports from its
service providers on internal controls
and risk management at each Board
meeting. It receives assurance from all
its significant service providers as well
as back-to-back assurances where
activities are themselves sub-delegated
to other third-party providers with
which the Company has no direct
contractual relationship. In the course
of its activities, the Management
Engagement Committee of the Board
reviews the engagements of all third-
party service providers on an annual
basis.
Loss of Key Fund Personnel
The loss of key members of the
Management team managing the
portfolio of investments of the Group
could have a negative impact on
performance of the Company.
Following termination of the
Management Agreement on 30 June
2023, the highly knowledgeable and
experienced Management team has
been internalised and contracted for a
period of four years. In order to
mitigate key manager risk, the Company
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 Economic, Political,
Legal and Financial
Environment within Cuba
The Group’s underlying investments
are situated and operate within a
unique economic and legal market,
with a comparatively high level of
uncertainty, and a sensitive political
environment.
The Company benefits from the services
of its highly experienced on-the-ground
Management team consisting of eight
members. With a well-balanced mix of
Cuban and foreign professionals 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 restrictions
relating to Cuba
Tensions remain high between the
governments of the United States and
Cuba and the U.S. government
maintains numerous legal restrictions
aimed at Cuba, including the inclusion
of Cuba on the U.S. list of state
sponsors of terrorism. Contrary to pre-
election campaign statements and
widely held initial expectations, the
Biden administration has only taken
modest steps to soften or ease the
long-standing restrictions against
Cuba. The rise of further tensions with
the United States or the adoption by
the U.S. government of further
restrictions against Cuba could
negatively impact the operations of the
Company and its access to third-party
service providers, the value of its
investments, the liquidity or tradability
of its shares, or its access to
international capital and financial
markets.
Management closely follows
developments relating to the
relationship between the United States
and Cuba and monitors all new
restrictions adopted by the United
States to measure their possible impact
on the assets of the Group. The Group
has adapted its investment model to the
existing sanctions, but the risk remains
of further sanctions being adopted in
the future.
14
Type of Risk
Description and Possible Impact
Mitigating Action
Trend
Risks relating to Investment in Cuba and the U.S. Embargo (continued)
State Sponsor of Terrorism
Designation
As one of its last foreign policy moves,
the outgoing Trump administration
returned Cuba to the U.S. list of state
sponsors of terrorism just prior to the
inauguration of President Biden.
Contrary to expectation, the Biden
administration has not reversed this
designation, which entails numerous
negative impacts for Cuba and makes it
extremely difficult for the country, as
well as for the Company and all of its
subsidiaries and joint venture
companies, to obtain regular financial
and other administrative services from
international banks, insurance
companies and many other service
providers. The continued designation
of Cuba as a state sponsor of terrorism
may make it increasingly difficult for
the Company, as well as its subsidiaries
and joint venture companies, to receive
basic services in the future.
Management follows all developments
relating to the designation of Cuba as a
state sponsor of terrorism.
Management also structures Group
operations in a manner to minimise the
negative impact of the designation to
the greatest extent possible.
Helms-Burton Risk
On 2 May 2019, Title III of the Helms-
Burton Act was brought fully into force
by the Trump administration following
23 years of successive uninterrupted
suspensions. Numerous legal claims
were subsequently launched before
U.S. courts against U.S. and foreign
investors in Cuba, which has had and
could have a further negative impact on
the foreign investment climate in Cuba
and may hinder the ability of the
Company to access international capital
and financial markets in the future. In
light of the political nature of the
Helms-Burton Act, and the fact that
under Title III of the Act Cuban persons
who were not U.S. Persons at the time
their property was expropriated but
subsequently became U.S. Persons
have the right to make claims, there is
also a risk that legal claims might be
initiated against the Company or its
subsidiaries before U.S. courts. The
Biden administration has not taken any
steps to suspend or repeal Title III of
the Helms-Burton Act.
At the time of acquiring each of its
interests in Cuban joint venture
companies, the Company carried out
extensive due diligence investigations in
order to ensure that no claims existed
under applicable U.S. legislation, and in
particular that there were no claims
certified by the U.S. Foreign Claims
Settlement Commission under its Cuba
claims program with respect to any of
the properties in which the Company
acquired an interest. However, given
the broad definitions and terms of the
Helms-Burton Act and its purpose of
creating legal uncertainty on the part of
investors in Cuba, as well as the
absence of any register of uncertified
claims or case law, there is no certain
way for the Company to verify beyond
doubt whether or not a Helms-Burton
action under Title III could be brought in
respect to a particular property, or
whether the Company may be deemed
to indirectly profit or benefit from
certain activities carried out by other
parties. The Company does not have
any property or assets in the United
States that could be subject to seizure.
Transfer Risk – U.S. Sanctions
Numerous U.S. legal restrictions
contained in the Cuban Assets Control
Regulations and other legal provisions
target financial transactions,
instruments, and other assets in which
there is a Cuban connection. As a
result, U.S. and international banks,
clearing houses, brokers and other
financial intermediaries may refuse to
deal with the Company or may freeze,
block, refuse to honour, reverse or
otherwise impede legitimate
transactions or assets of the Company,
even where no U.S. link is established.
Management is conscious of and closely
follows developments concerning the
U.S. legal restrictions that target
financial transactions and assets. The
Company does not carry out any
international transfers in U.S. Dollars or
through U.S. banks or intermediaries.
Management administers the banking
relationships of the Company and
generally acts at all times so as to
minimise the impact of these legal
provisions on the legitimate
transactions and assets of the
Company.
PRINCIPAL RISKS
15
Type of Risk
Description and Possible Impact
Mitigating Action
Trend
Risks relating to Investment in Cuba and the U.S. Embargo (continued)
Currency Risk
As a result of U.S. sanctions prohibiting
the use of the U.S. dollar, the Group
deals in numerous currencies and
fluctuations in exchange rates can have
a negative impact on the performance
of the Group, as well as the expression
of the Company’s NAV in Sterling and/
or US$.
The risk relating to monetary reforms
recently adopted by the Cuban
government imposing the use of the
CUP are described elsewhere in this
table.
The Company does not hedge its foreign
currency risks.
Risks relating to Regulatory and Tax framework
Regulatory and Tax Risk
Changes in the Group’s regulatory
status or tax treatment in any of the
jurisdictions where it has a presence
may adversely affect the Company or
its shareholders.
Management regularly reviews the
substance, compliance and tax rules
that may affect the operations or
investments of the Company and seeks
to structure the activities of the
Company in the most tax efficient
manner possible. However, the
Company holds investment structures
in numerous jurisdictions arising from
past acquisitions, and the general
direction of change in many
jurisdictions is not favourable.
PRINCIPAL RISKS
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 19 to the consolidated financial statements.
The Board will continue to assess these risks on an ongoing basis and is confident that the procedures that the
Company has put in place are sufficient to ensure that the necessary monitoring of risks and controls has been carried
out throughout the reporting period.
16
The Board considers the Company, with no fixed life, to be a long-term investment vehicle.
The Board continually considers the prospects for the Company over the longer term. Based on the Company’s current
financial position, its operating model and track record, as well as the experience of the Executives from both a Cuban
investment and closed-ended investment company perspective, the Board believes that the Company has a sound basis
upon which to continue to deliver capital growth and returns over the long term.
The Board considers the Company a long-term investment vehicle and has decided that three years is an appropriate
period to consider its viability for this viability statement. The Board considers this an appropriate period for a closed-
end investment company listed on the London Stock Exchange that invests in Cuban real estate assets.
Disbursements under the Company’s current development plans and other commitments fall within this projection
period, including the repayment of the Bonds on 31 March 2026, plus one subsequent year.
In assessing the viability of the Company over the review period, the Directors have conducted a robust review of the
principal risks focusing upon the following factors:
• the principal and emerging risks as detailed in the Principal Risks reported on pages 9 to 15;
• the ongoing relevance of the Company’s investment objective in the current environment;
• the level of income generated by the Company and forecast income; and
• the valuation of the Company’s property portfolio, future portfolio strategy, and market outlook.
When assessing the Company's viability, the Board has considered the ongoing impact of U.S.-Cuban relations and
associated sanctions, the global geopolitical environment, including the Russia-Ukraine conflict, and local conditions in
the Cuban market on the portfolio.
Following their review, the Directors have a reasonable expectation that the Company will be able to continue in
operation and meet its liabilities as they fall due for the period of assessment, which is three years from the date of this
Annual Report. U.S. sanctions and restrictive travel rules, the Russian invasion of Ukraine and numerous internal Cuban
issues have all had a severe impact on tourist arrivals, income numbers and the general state of the Cuban economy
and are expected to continue doing so going forward, albeit to a lesser extent.
In particular, given the fact that the Trinidad Hotel has started operations and TosCuba has started to make payments
under the TosCuba Construction Facility (in February 2024, a prepayment of the payment due in April 2024 was
received), the Directors consider that construction risk is no longer applicable to the Company’s investment in TosCuba,
that the cash position of the Company should continue to improve, and that the Company remains viable.
The abovementioned expectations have been tested under various scenarios, including delays in receiving projected
dividend income. It has been determined that in such circumstances, the Company has at its disposal actions that can
be taken to ensure that sufficient cash resources will be available, if necessary, such that the Company will be able to
continue in operation and meet its liabilities as they fall due for the period under analysis.
In making this assessment, the Board is conscious that a deterioration of Cuba's outlook, the further strengthening of
the U.S. embargo, or changes in investor sentiment could impact the accuracy of its assessment of the Company’s
prospects and viability in the future.
GOING CONCERN
In accordance with the Financial Reporting Council's guidance, the Directors have reviewed the Company's ability to
continue as a going concern.
The Directors are mindful of the principal and emerging risks and uncertainties disclosed on pages 9 to 15 and the
Viability Statement on page 16. The Directors have reviewed cash flow projections that detail revenue and liabilities and
will continue to receive cashflow projections as part of the full-year reporting and monitoring processes. The Directors
believe that the Company has adequate financial resources to continue its operational existence for the foreseeable
future and at least 12 months from the date of the approval of these financial statements.
Accordingly, the Directors believe it is appropriate to continue preparing the financial statements on a going-concern
basis.
VIABILITY STATEMENT
VIABILITY STATEMENT
17
DIRECTORS’ RESPONSIBILITIES
Stakeholder Engagement
Although the Company is domiciled in Guernsey, in accordance with the guidance set out in the AIC Code, the Directors
describe in this annual report how the matters set out in Section 172 of the UK Companies Act 2006 have been
considered in their Board discussions and decision-making. This section therefore serves as the Company’s section 172
statement and explains how the Directors have promoted the success of the Company for the benefit of its
stakeholders as a whole during the financial year to 31 December 2023, taking into account the likely long-term
consequences of decisions, the need to foster relationships with all stakeholders, the desire for high standards of
business conduct, the impact of the Company’s operations on the environment, and the need to act fairly for all
shareholders of the Company.
The Role of the Directors
The Company is a self-managed closed-ended investment company, has no executive directors or direct employees and
is governed by the Board of Directors. Its main stakeholders are shareholders in the Company, the holders of Bonds
issued by the Company (“Bondholders”), investee companies, service providers and the environment and community.
As set out in the Directors’ Report, the Board is responsible for the day-to-day management of the assets with the
assistance of the Executives, the Company has engaged key suppliers to provide services in relation to valuation, legal
and tax requirements, auditing, company secretarial, risk management and share registration, amongst others. All
decisions relating to the Company’s investment policy, investment objective, dividend policy, gearing, corporate
governance and strategy in general are reserved to the Board. The Board meets quarterly and receives full information
on the Company’s performance, financial position and any other relevant information.
The Board regularly reviews the performance of its service providers, to ensure that their continued appointment is in
the best long-term interests of the stakeholders as a whole.
Shareholders and Bondholders
The Board’s primary focus is to promote the long-term success of the Company for the benefit of its stakeholders as a
whole. The Board oversees the delivery of the investment objective, policy and strategy, as agreed by the Company’s
shareholders.
Shareholders and Bondholders are key stakeholders and the Board places great importance on communication with
them. The Board welcomes all shareholder and Bondholder views and aims to act fairly on them. Through investment
in the Company, the Board believes that the Company’s shareholders seek exposure to Cuban real estate assets,
substantial capital growth, a well-executed sustainable investment policy, responsible capital allocation and value for
money.
The Board and the Company’s broker regularly meet with shareholders, and prospective shareholders, to discuss
Company initiatives and seek feedback. The views of shareholders and Bondholders are discussed by the Board at
every Board meeting, and action is taken to address any concerns raised. The Board provide regular updates to
shareholders and Bondholders and the market through the Annual Report, Half-Yearly Report, quarterly Net Asset
Value announcements and its website.
In the event of any changes to strategy, the Board proactively engages with major shareholders to determine their
appetite for any such change. The Chairman offers to meet with key shareholders at least annually, and other Directors
are available to meet shareholders as required. This allows the Board to hear feedback directly from shareholders.
During the financial year to 31 December 2023, the Board members participated in meetings with large shareholders to
provide reports on the progress of the Company and receive feedback, which was then provided to the full Board.
The Company’s AGM provides a forum, both formal and informal, for shareholders to meet and discuss issues with the
Directors of the Company. The Board encourages as many shareholders as possible to attend the Company’s AGM and
to provide feedback on the Company. In the event that any situation should affect plans to hold the AGM on 18 June
2024 the Company will update shareholders through an announcement to the London Stock Exchange and will provide
further details on the Company's website.
Investee Companies
Another key stakeholder group is that of the special purpose vehicles, joint venture vehicles, partnerships, trusts, and
other structures through which the Company invests. Representatives of the Company are appointed to the boards of
the underlying investment vehicles and, acting in the best interests of the Company’s stakeholders, influence
management decisions to ensure that the investee companies are run in accordance with the Company’s expectations.
The Board believes that the companies in which the Company invests would like a positive and trusting working
relationship with the Board, sustainable and long-term investment, positive governance practices, and value creation for
all stakeholders.
VIABILITY STATEMENT
18
Service Providers
The Board seeks to maintain constructive relationships with the Company’s suppliers with regular communications and
meetings. The Board, via the Management Engagement Committee, also ensures that the views of its service providers
are considered and at least annually reviews these relationships in detail. The aim is to ensure that contractual
arrangements remain in line with best practice, services being offered meet the requirements and needs of the
Company and performance is in line with the expectations of the Board, and other relevant stakeholders. Reviews will
include those of the Executives, company secretary, broker, risk manager, share registrar and auditor.
The Community and the Environment
The Board is committed to investing in a responsible manner. There are a number of geopolitical, technological, social
and demographic trends underway that can, and do, influence real estate investments – many of these changes fall
under the umbrella of the Environment and Community, or Environmental, Social and Governance (“ESG”),
considerations.
The Board has instructed the Executives to develop an appropriate ESG Policy and associated operational procedures
and is committed to environmental management in all phases of the investment process. The status of this effort is
described below in the section entitled Environmental Social Governance Strategy. The Company aims to invest
responsibly, to achieve environmental and social benefits alongside returns.
Strategic Activity during the Year
The Chairman’s Statement and Management Review on pages 4 to 6 and pages 19 to 27, respectively, detail the key
decisions and other actions taken by the Company during the year and subsequently. Notable actions taken affecting
the interests of stakeholders include:
• Dividend – with the ongoing inherent uncertainty surrounding the operation of many of the Company’s assets, the
payment of dividends continues to be suspended. The Board views the recommencement of the payment of
dividends as a priority and the policy is kept under constant review.
• Start-up of Operations of the Trinidad Hotel – On 16 November 2023, initial operations of the Trinidad Hotel were
started. After five years of construction in difficult circumstances, this step represents an important milestone for
the Company.
• To streamline operations, Mosaico Hoteles (the Spanish holding vehicle that previously held the interest of the
Company in the Trinidad Hotel) was merged with HOMASI in Spain, with HOMASI. remaining as the surviving entity.
• In a series of transactions agreed with the Cuban partner in Monte Barreto, Management was able to secure the
payment in favour of the Company of a total of US$14,999,014 in dividends receivable owed by Monte Barreto and
previously provisioned as an expected credit loss (see Note 5 of the Financial Statements for further information on
these transactions). As set out above, the Board considers the long-term consequences of its decisions on its
stakeholders to ensure the long-term sustainability of the Company.
VIABILITY STATEMENT
19
2023 PERFORMANCE
2023 has been a year of change for CEIBA Investments Limited (“CEIBA Investments” or the “Company”) and yet
another difficult year for Cuba. Under the circumstances, some satisfactory results were obtained. Additional cost
savings were secured, management was internalised, a spectacular new hotel was opened, US$8.5 million in dividend
income was repatriated, US$15.0 million in previously provisioned dividends were recovered, and in aggregate, the fair
value of the Company’s equity investments increased by US$10.5 million. On the negative side, the discount of share
price to NAV further deteriorated and the Company has not been able to convince the market of the numerous positive
steps forward that it has taken.
We believe that, in particular, the opening of the Trinidad Hotel is a very important accomplishment. It marks the end of
a substantial investment phase, during which the Company was exposed to material development and construction
risks, and the beginning of a new period where the construction finance provided by the Company will be repaid and
the value of this investment, before adjustments for financing – which is presently held approximately 16% below
development costs – is expected to increase.
In numbers
As at 31 December 2023, the NAV of CEIBA Investments was US$158,519,549 (31 December 2022: US$142,078,505) and
the NAV Total Return for the year was 11.6% (2022: -11.4%). The net income for the year attributable to the
Shareholders of the Company rose to US$14,157,795 (compared to a loss in the prior year of US$14,283,029). This
includes income from the recovery of US$15.0 million of previously provisioned dividends owed by the Cuban
commercial real estate joint venture Inmobiliaria Monte Barreto S.A. (“Monte Barreto”) that the Company was able to
unlock by reinvesting proceeds thereof in the amount of US$14.3 million as a capital contribution to the Cuban hotel
real estate joint venture Miramar S.A. (“Miramar”). Although the fair value of the Company’s equity investments
increased by US$10.5 million compared to the prior year, as shown in the consolidated statement of financial position,
the consolidated statement of comprehensive income shows a loss on change in fair value of equity investments during
the year of US$7,528,953 (2022: loss of US$16,098,664), taking into consideration the US$14.3 million capital
contribution made to Miramar by the Group and other adjustments (see note 7). The total dividend income received
from Miramar during 2023 was US$8,532,677 (2022: US$7,694,884). During 2023, Monte Barreto did not declare
dividends as compared to the prior year, when the Group recorded US$8,169,610 in dividend income from the Cuban
joint venture. Interest income earned by the Group during 2023 increased to US$4,516,731, compared to US$2,952,459
in the prior year, due to increases in amounts disbursed under the TosCuba construction loan facility and the Miramar
confirming and discounting facility.
As of 1 July 2023, the Company is no longer externally managed and now operates as a self-managed alternative
investment fund, which will result in significant cost savings. Sebastiaan Berger and the other management team
members have moved to the Company to ensure continuity of service. The agreement to terminate the services of the
Investment Manager included a waiver of the 2023 second quarter management fees of approximately US$325,000 and,
the forgiveness of US$333,333 related to the unamortised portion of the US$5.0 million fee paid in October 2018 for the
acquisition of the management team of the Company (see note 17).
At 31 December 2023, the NAV per Ordinary Share of CEIBA Investments increased to US$1.15 (90.3 pence) from
US$1.03 (85.7 pence) in the prior year. In contrast, the share price of the Company's Ordinary Shares decreased from
40.5 pence to 31 pence, increasing the discount to 65.7% from 52.7%.
At 31 December 2023, the fair values of the hotels of Miramar increased compared to the prior year despite a further
rise in the discount and capitalisation rates applied, except for the Meliá Varadero Hotel, which performed modestly
below expectation and saw its valuation decline. The Trinidad Hotel of the joint venture TosCuba S.A. (“TosCuba”)
celebrated its soft opening in November 2023 and began the decisive change from development project to operational
asset, resulting in an uplift to its fair value despite further increases in the discount and capitalisation rates applied in
valuing the asset. The valuation of Monte Barreto’s Miramar Trade Center, the principal commercial real estate asset in
which CEIBA Investments has an investment, decreased as a result of increased discount and capitalisation rates and an
adjustment to the value of the CUP bank balances of the joint venture so that their resulting translated values would be
equivalent to those obtained by applying an exchange rate of US$1 : CUP120, the same rate used by the tourism sector,
rather than the official US$1 : CUP24 exchange rate, offset in part by higher revenue projections.
Under the current circumstances, the perceived risks of investing in Cuba are considered higher than in previous years
due to the ongoing impact of U.S. sanctions and the continued designation of Cuba as a State Sponsor of Terrorism
(“SST”), the liquidity issues faced by the country, the increased threat of a substantial devaluation of the Cuban Peso, the
unpredictability and lack of effectiveness of monetary reforms, and the ongoing inability of Cuba to honour its financial
obligations and to make international payments. The latter makes it difficult for Cuban companies to pay suppliers and
distribute dividends to overseas shareholders.
MANAGEMENT REVIEW
MANAGEMENT REVIEW
20
These risks are most acute for the Miramar Trade Centre, where a large portion of the total rentable area is leased to
Cuban (national and joint venture) companies, whose rents are collected in Cuban Pesos, while existing monetary
legislation and other circumstances restrict or prevent Cuban Pesos from being transferred abroad in hard currency.
CUBA
Recent Developments
In a surprise cabinet shuffle carried out in February 2024, Alejandro Gil, Cuba’s Minister of Economy and Planning and
Deputy Prime Minister since 2018, the public face and government point man responsible for implementing Cuba’s
complex currency and monetary reforms (the Tarea Ordenamiento) initiated in 2021, was replaced by Cuba’s Central
Bank President, Joaquín Alonso. The Minister of the Food Industry, Manuel Sobrino, was also replaced. It would appear
that the changes were directly related to Cuba’s stagnant economy and failed monetary reforms and mainly triggered
by the angry public response to planned increases to the price of gasoline and other products announced as part of the
year-end speeches outlining painful new reforms.
It is clear that Cuba’s economy and liquidity situation continue to be in a dire state and that the taking of many more
unpopular measures will likely be necessary to battle Cuba’s fiscal deficit and avoid a general collapse of the economy.
The slow pace of recovery of Cuba’s tourism sector, at least partially provoked by the continued U.S. designation of
Cuba as a SST, and the instability and insecurity resulting from past monetary reforms have not been helpful.
Advancing decentralisation, partially dollarizing the economy, and increasing efforts to stimulate and safeguard foreign
direct investment should be high on the agenda and support from Europe, Canada and other countries would be
welcome. In addition, an apparent cybersecurity incident of foreign origin that caused Western Union and other
international remittance providers to temporarily suspend remittances from the U.S. to Cuba at the end of January 2024
has only partially been resolved, and nearly 3 months after the initial event Western Union (citing vague banking
problems in Cuba) has yet to resume its family remittance services, a vital lifeline for many Cuban families.
To combat Cuba’s ongoing economic and liquidity crisis and the continuing crippling deficiency of hard currency
resources to meet international payment obligations of the country and to supply basic inputs to its economy (fuel,
electricity, water, food), various measures were announced at the year-end session of Cuba’s Parliament. During the
session, Prime Minister Marrero announced a series of new measures and financial reforms, including partial
dollarisation of the economy, aimed at re-establishing the conditions for sustained economic growth. Few details of
these reforms have been made available yet, although the most relevant for foreign investors are likely to be:
• the adoption of a new system for allocating liquidity within the economy – the most likely scenario is through the
establishment of “real hard currency accounts”, which are expected to return some (or perhaps all) of the
operations of joint venture companies to a dollarised basis (partial dollarisation);
• a possible devaluation of the official exchange rate of the Cuban Peso (CUP) against the U.S. dollar (US$);
• the adoption of new tariff policies aimed at stimulating national production (and discouraging the import of
finished products) through the decrease of import duties on raw materials and semi-finished products, together
with the increase of import duties on finished products;
• the increase in the CUP price of gasoline (previously highly subsidised) and the sale of gasoline in U.S. dollars (at
special service centres) to tourists, foreign companies and diplomatic missions, and others able to pay in hard
currency.
The new small and medium-sized enterprise (SME) private sector of the Cuban economy continues to develop rapidly
and is already playing an important role in various segments of the Cuban economy, especially food supply, imports,
construction, hospitality and others. However, significant banking and currency exchange difficulties impede their
growth. A small number of well-financed SMEs are beginning to scale their activities to levels that would have been
inconceivable even a year ago. At 31 December 2023, there were over 10,000 SMEs incorporated, which is an
astonishing number given that the legislation permitting their incorporation was only adopted in August 2021.
CUBA
U.S. Embargo, Tourism and Outlook 2024
With respect to the U.S. Cuban embargo, the Biden administration has announced no new measures or actions and
there is a very low expectation that any (positive) change to U.S. policy will be adopted prior to the U.S. presidential
elections in November 2024. The SST designation of Cuba remains a very harsh measure and the fact that people who
have travelled to Cuba in the past cannot benefit from the United States’ ESTA visa waiver program is likely an important
factor in the very slow recovery of European tourist arrivals to Cuba, which unlike Canadian arrivals to the country have
not yet returned to pre-pandemic levels. This may be one of the principal reasons that tourist arrivals and income
during 2023 were below initial expectations.
MANAGEMENT REVIEW
21
In February 2024, the Ministry of Tourism projected 3.2 million tourist arrivals for the present year 2024, still significantly
below pre-pandemic levels (2019: close to 4.5 million) and in stark contrast to similar countries such as the Dominican
Republic, where 2023 tourist arrivals exceeded 2019 levels by 25% (excluding cruise ship arrivals).
Any sustained recovery of the Cuban economy will likely depend on a variety of factors, such as a significant increase in
family and other types of remittances from the United States, increased airlift and continued growth in the number of
international tourists travelling to Cuba, together with internal factors such as an increase in the levels of agricultural
and mining production, rapid acceleration of commercial activities by Cuba’s growing SME sector and the successful
adoption of new reforms. These, in turn, would have a positive knock-on effect on the country’s liquidity position and
lead to further benefits throughout the economy and further future reforms.
For 2024, Cuba’s struggling economy and liquidity are not expected to improve substantially. However, in monetary
terms, the effects of even a small increase in foreign direct investment, tourism or foreign exports would immediately
be felt. It is to be expected that the Cuban government will implement austerity measures (i.e. drastic price increases
and the dollarisation of goods and services) aimed at reducing costs, discontinuing the subsidisation of basic goods and
services such as electricity, gasoline, food, etc., for which the country itself has to make hard currency payments. A
devaluation of the CUP is also expected. Some of these measures may have a negative impact on our assets, in
particular on the profitability of our hotel investments, and will need to be countered by optimising occupancy levels
and RevPAR (Revenue per Available Room) and effectively controlling CPOR (Cost per Occupied Room). In general, the
cash position of the Company is likely to improve during the coming year as a consequence of the start of operations of
the Trinidad Hotel and the resulting regular payments to the Company under the construction facility, as well as
ongoing efforts to increase the offshore collection of dividend income, placing the Company on a stronger footing for
the upcoming expiry of the Bonds in March 2026. The impact of a possible devaluation of the CUP on the Company
should be minimal, since the income of our joint venture companies (office rents, hotel room rates) are tied to hard
currencies.
PORTFOLIO ACTIVITY
The Miramar Trade Centre / Monte Barreto
The largest real estate holding of the Company is its 49% interest in Monte Barreto. This Cuban joint venture company
owns and operates the Miramar Trade Centre, a six-building mixed-use commercial real estate complex comprising
approximately 56,000 square metres of net rentable area that constitutes the core of the new Miramar business district
in Havana.
The fair value of the equity investment in Monte Barreto has been adjusted downward at 31 December 2023 to
US$47,834,256 (2022: US$50,234,789), representing a 4.8% decrease.
Given the fact that Monte Barreto continues to experience significant difficulties in ensuring the distribution of hard
currency dividends to its foreign shareholder and that the tourism and retail sectors have seen an official devaluation of
the CUP, the pre-tax discount and capitalisation rates used to value the future cash flows of the Miramar Trade Centre
were increased to 24% (2022: 23%) and 21% (2022: 20%), respectively. However, the negative impact of these increased
rates was offset by the proven ability of the Miramar Trade Centre to maintain a high occupancy rate despite the
current economic conditions, which resulted in increased income projections compared to the prior year. The net result
was a modest increase in the fair value of the Miramar Trade Center property. In the event of an official devaluation of
the CUP, the rents payable by tenants would automatically be increased to take into account the new exchange rate in
relation to the U.S. dollar, but the (translated) U.S. dollar value of the funds held in CUP in Monte Barreto’s Cuban Peso
bank account would be impacted.
MANAGEMENT REVIEW
View of the Miramar Trade Center commercial real estate complex from 3
rd
Avenue
22
Additional relevant information that impacts the fair values of the equity investments that has not been considered in
the valuations of the underlying properties of the joint venture companies may be taken into account. One such fair
value consideration is cash held by the joint venture in excess of its working capital needs (“Excess Cash”). 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 (see note 7 to the consolidated financial statements).
Notwithstanding the increase in the value of the Miramar Trade Centre property, the fair value of the Company’s equity
investment in Monte Barreto, the joint venture company that owns the property, decreased due to an adjustment made
to the calculation of its Excess Cash balance. The CUP bank balances of Monte Barreto are translated at the official
US$1 : CUP24 exchange rate, but given the present circumstances, it was determined appropriate to make an
adjustment so that their resulting translated values would be equivalent to those obtained by applying the rate of
US$1 : CUP120, the rate used by the tourism sector. If the official US$1 : CUP24 rate was maintained unadjusted, the
fair value of the Company’s equity interest in Monte Barreto would be approximately US$16 million higher (see note 7).
Overall, the performance of the Miramar Trade Centre during 2023 was once again very strong. Occupancy rates are
stable at approximately 96%, with only minor fluctuations relating to tenant turnover. Revenues were slightly higher
than the prior year, but operating expenses increased by 11.5% due to inflation linked to currency issues and monetary
reforms. In December 2023, the joint venture company received compensation from its Cuban shareholder (as
provided under the 2021 monetary reform legislation) in the amount of CUP 238 million (US$9.9 million at US$1 :
CUP24 ). This compensation is related to variances in the translation of the U.S. dollar assets and liabilities of the joint
venture to Cuban Pesos using different exchange rates at the time of the conversion in 2021.
Demand for international-standard office accommodation in Havana remains strong, predominantly from multinational
companies, joint ventures, NGOs and foreign diplomatic missions. In the absence of competing products, Monte
Barreto remains the dominant option in this market segment. Consequently, the outlook for Monte Barreto in 2024
remains encouraging, as we expect occupancy levels to remain in the mid to high nineties throughout the year.
Given the present limited financial autonomy of Monte Barreto, in combination with the current economic situation and
liquidity difficulties faced by the country, the joint venture company has experienced significant difficulties in executing
external dividend payments to the Group (its foreign shareholder) in recent years. However, Management has
successfully negotiated with the joint venture company and the Cuban shareholder numerous transactions carried out
in recent years that have collectively resulted in the receipt and reinvestment of over US$20 million in previously
declared dividends that were owed to the Company and had been previously provisioned. These transactions varied in
nature and included the prepayment of local expenses, disbursements under the TosCuba construction facility used to
construct the Trinidad Hotel, and capital contributions to Miramar that will result in the extension of surface rights and
be used to make capital improvements to its hotel properties. In May 2023, arrangements were made with certain
tenants of the Miramar Trade Centre to make their rental payments to a bank account in the name of a Group company
outside of Cuba. The Company has committed to reinvesting the funds received in financing transactions related to the
purchase of food products for the Cuban population. At 31 December 2023, an amount of US$4,046,027 (50% is
presently provisioned) remained owing to the Company by Monte Barreto for outstanding dividends receivable
declared before April 2022. Monte Barreto has not made any dividend declarations relating to periods subsequent to
April 2022. The dividend income declared by Monte Barreto during 2022 and recorded as dividend income by the
Company was US$8,169,610.
Management expects that under the present circumstances, and unless Cuba’s economy and liquidity position improve
substantially, receiving cash dividends from Monte Barreto outside Cuba will remain extremely challenging. This may
prompt the Company to consider further transactions aimed at receiving a portion of dividends owed to the Company
inside Cuba and/or through the pursuit of new reinvestment opportunities.
Management welcomes the announcement made by Prime Minister Manuel Marrero in December 2023 that new rules
for the allocation of hard currency liquidity in the economy, including partial dollarisation, will be adopted to replace the
present failed system set out in the 2021 general monetary reforms. This may increase the likelihood that dividends of
joint venture companies and other foreign direct investment vehicles can be freely repatriated abroad in hard currency
(as guaranteed by Article 9 of Cuba’s Foreign Investment Act).
MANAGEMENT REVIEW
23
The Hotels
CEIBA Investments has a 32.5% interest in five hotels in Cuba: one hotel in Havana, three hotels in Varadero, Cuba’s
principal beach resort destination, and one hotel located near the historic City of Trinidad, on Cuba’s south coast
(collectively the “Hotels”).
The Meliá Habana Hotel is a 397-room international-category 5-star business hotel located on prime ocean-front
property in Havana (directly opposite the Miramar Trade Center).
The Varadero Hotels are all located on a 28-hectare plot of land next to Cuba’s only 18-hole golf course. The Meliá Las
Américas Hotel is a 340-room international-category 5-star beach resort hotel located next to Mansión Xanadú and the
clubhouse of the Varadero Golf Club, which is extremely popular with golfers from Canada and Europe. The Meliá
Varadero Hotel is a 490-room international-category 5-star beach resort hotel catering primarily to families. The Sol
Palmeras Hotel is a 607-room international-category 4-star beach resort hotel, including 200 bungalows.
The Meliá Trinidad Península is a 401-room, 5-star hotel located on a beachfront property at Playa Maria Aguilar, near
the City of Trinidad, a UNESCO World Heritage Site in central Cuba.
The interests in the hotels are held through the Company’s 65% interest in HOMASI, which in turn has a 50% interest in
the joint venture companies Miramar S.A. (“Miramar”) and TosCuba S.A. (“TosCuba”).
The interest of HOMASI in the Meliá Habana Hotel and the Varadero Hotels is held through its 50% interest in Miramar,
owner of these hotels. HOMASI's interest in the Trinidad Hotel is held through its 50% interest in TosCuba. Previously,
the ownership interest of the Group in the Trinidad Hotel was held through a Spanish holding vehicle, Mosaico Hoteles
S.A. Mosaico Hoteles and HOMASI were merged in December 2023, with HOMASI remaining as the post-merger holding
vehicle. The 50% Cuban shareholder in Miramar and TosCuba is Cubanacán, Cuba’s second-largest hotel company.
The Hotels are operated by Meliá Hotels International S.A. (“Meliá Hotels International”), which has a 35% equity
interest in HOMASI (which equates to a 17.5% indirect interest in Miramar and TosCuba). Meliá Hotels International is
the largest hotel operator in Spain and the leading international operator in Cuba (with 34 hotels currently under
management, comprising more than 12,500 rooms).
The only hotels in Cuba in which Meliá Hotels International holds an equity ownership interest (in addition to a hotel
management agreement) are the Hotels of the Group.
MANAGEMENT REVIEW
24
Performance of the Hotels
The fair value of the Company’s equity interest in Miramar at 31 December 2023 was US$110,099,079 (2022:
US$98,637,088), representing an 11.6% increase compared to the prior year. This was driven mainly by increased cash
flow projections, partially offset by increased discount rates used in the discounted cash flow models used to estimate
the fair values.
Discount and Cap Rates and Holding Values
The pre-tax discount rates applied by the independent valuer Abacus and by the Company to the discounted cash flow
models with respect to the valuations of the hotels located in Havana and Varadero (1,831 rooms in total) increased
compared to the prior year. In the case of the Meliá Habana Hotel the pre-tax discount rate applied was 20.0% (2022:
19.3%), in the case of the Meliá Las Américas Hotel 20.0% (2022: 19.0%) and in the case of the Meliá Varadero and Sol
Palmeras Hotels 20.8% (2022: 19.0%).
Due in part to the increase in discount and capitalisation rates applied and the slow recovery of the Cuban tourism
industry following the Covid-19 pandemic, the average fair value per room of the Miramar Hotels was lowered from
US$145,000 at 31 December 2018 to US$104,000 at 31 December 2023.
Every six months, Abacus and the Company estimate the fair values of the underlying hotel properties owned by
Miramar, which is held as an equity investment. The charts below show the movements from 2018 to the present in the
fair values of the hotel properties (100% interest) compared to the movements in the related pre-tax discount and
capitalisation rates.
MANAGEMENT REVIEW
Miramar Hotels views (Clockwise from top left: Meliá Habana, Meliá Las Américas, Sol Palmeras and Meliá Varadero Hotels)
Hotel
Number of Rooms
Value/Room
31/12/2018
Value/Room
31/12/2023
Variation
(%)
Meliá Habana
397
US$217,000 US$125,000
-42.4%
Meliá Las Américas
340
US$161,000 US$142,000
-11.8%
Meliá Varadero
490
US$123,000 US$94,000
-23.6%
Sol Palmeras
604
US$107,000 US$76,000
-29.0%
Weighted-average
US$145,000 US$104,000
-28.3%
25
Miramar distributed modestly higher dividends to the Company during the year of US$8,532,677 compared to
US$7,694,884 in the prior year. The 2023 dividend income from Miramar was received in hard currency outside of
Cuba.
1 Total revenue per room sold is defined as the total revenue attributable to the hotel property divided by the number of room
nights sold during the period.
2 Total revenue per available room is defined as the total revenue attributable to the hotel property divided by the number of
available room nights during the period.
The tourism industry in Cuba has not yet recovered to pre-pandemic levels and continues to struggle. However, the
Miramar Hotels lead the rankings within their respective market segments due to superior food, beverage and other
inputs compared to competing Cuban hotels due to the Miramar confirming and discounting facility, a stable financial
arrangement put in place by the Company to ensure that the Miramar Hotels have the ability to import supplies.
Although the Meliá Habana Hotel performed above budget, it performed below the prior year's results. This is due to
weaker demand and increased competition from new hotels in Havana. However, the Meliá Habana has been
outperforming its competition as it has a significant advantage due to its ability to import supplies. Management
expects the Havana hotel market in which the Meliá Habana Hotel competes to be more competitive in the coming
period than in the past as new hotel room inventory continues to come online.
In addition to the current market conditions, the weaker performance of the Meliá Varadero and Sol Palmeras Hotels
results from the fact that at the start of 2023, their client mix included many Cuban nationals (paying in local instead of
hard currency). The hotels also had a large percentage of foreign clients that were priced noticeably below the
Canadian and European markets. A new General Manager has recently been put in place at the Meliá Varadero Hotel
and efforts are now underway at both hotels to limit the number of guests who pay in Cuban pesos and to attract new
foreign markets with higher rates. Significant room refurbishment is also planned for the Meliá Varadero and Sol
Palmeras Hotels in 2024.
MANAGEMENT REVIEW
2022 2023
Room
Occupancy
TRevPRS
1
TRevPAR
2
Room
Occupancy
TrevPRS
1
TRevPAR
2
Meliá Habana
63.4%
US$237.24 US$150.46
57.5%
US$160.56 US$92.24
Meliá Las Américas
69.7%
US$206.11 US$143.62
85.7%
US$177.55 US$152.16
Meliá Varadero
47.6%
US$202.20 US$96.18
63.7%
US$117.46 US$74.77
Sol Palmeras
47.7%
US$176.09 US$84.01
63.9%
US$116.18 US$74.26
26
During 2024, it is anticipated that Miramar will continue to distribute dividends to the Company offshore in hard
currency under the current liquidity rules. However, potential new legislation regarding the allocation of hard currency
liquidity in the economy, increases in the prices of electricity, gasoline, labour and food products and a possible
devaluation of the official exchange rate of the Cuban Peso could negatively affect the profitability of the Hotels in the
coming year.
On 16 November 2023, the Trinidad Hotel began limited operations as part of its start-up plan. At 31 December 2023,
the Trinidad Hotel had 195 rooms available, with all 401 rooms expected to be fully operational by 30 April 2024.
Occupancy was modest during the first six weeks of operation. However, occupancy is expected to rise as operations
ramp up to full capacity during 2024. The hotel has received numerous excellent international reviews and
commentary.
The official opening ceremony of the Trinidad Hotel took place on 14 January 2024, presided over by Prime Minister
Manuel Marrero, Minister of Tourism Carlos Garcia and President of Meliá Hotels International S.A. Gabriel Escarrer.
The Company arranged a US$51.5 million construction finance facility, disbursed under two tranches of US$22.5 million
and US$29 million, respectively. At 31 December 2023, the construction facility was fully disbursed. The Company had
participations of US$14.625 million under Tranche A and US$29 million under Tranche B, of which US$21.5 million was a
direct participation and US$7.5 million represents the participation of the Company’s subsidiary, HOMASI, in which the
Company has a 65% interest. Repayment of the construction facility is secured by the future income of the hotel, and
repayment of Tranche B has also been guaranteed by Cubanacán (the Cuban shareholder in the joint venture company)
and is further secured by Cubanacán’s dividend entitlements in Miramar.
At 31 December 2023, the estimated fair value of the Trinidad Hotel is below the construction cost. This is primarily due
to the time required for operations to ramp up during the first years of operation. Given that Trinidad is a relatively
unknown tourism destination in Cuba, having never had a hotel of the size of the Trinidad Hotel, the operator and the
joint venture company have few benchmarks to aid in projecting the future occupancy and room rate levels and the
growth thereof.
MANAGEMENT REVIEW
Clockwise from top: Meliá Trinidad Península Hotel lodging block at night, Cape Nao restaurant, beach deck
27
GBM Interinvest Technologies Mariel S.L.
The Company holds a 50% interest in GBM Interinvest Technologies Mariel S.L. (“GBM Mariel”). This Spanish company is
developing a multi-phase industrial park real estate project in the Special Development Zone of Mariel, Cuba. The
Company paid an initial amount of US$303,175 for a 50% equity interest in GBM Mariel and subsequently executed a
convertible loan agreement in the principal amount of €500,000 (US$552,500). The full investment of the Company in
this project is expected to be approximately US$1.5 million.
At 31 December 2023, the Company’s 50% equity interest in GBM Mariel was held at US$206,259 (2022: US$113,507).
The convertible loan due from GBM Mariel, including accrued interest up to 31 December 2023, was $625,246 (2022:
US$576,482).
Groundworks on the 11.3-hectare site for the construction of the first four warehouses of the project were completed in
June 2021. The project became dormant in 2022 and the timing of a potential restart is uncertain as it depends on
securing tenants for the warehouses to be built on the plot of land on which groundwork has been executed.
Given that the project is currently dormant and the timing of a potential restart is uncertain because it depends on
securing tenants for the warehouses that will be built, a 50% provision has been taken against the loan and interest
receivable from GBM Mariel at 31 December 2023.
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 €24 million and subsequently amended in
2019 through the addition of a second tranche in the principal amount of €12 million, the Company initially held a €4
million participation under Tranche A and a €2 million participation under Tranche B (Tranches A and B were
subsequently combined into a single Tranche C). The Facility generated an 8.00% interest rate and was repaid in full in
August 2023.
OUTLOOK
We expect that the difficult economic circumstances faced by Cuba during 2023 will continue throughout 2024 and that
the local market conditions in which the Company and its subsidiaries operate will remain very challenging.
The very tight liquidity position of the Cuban economy resulting from the slow recovery of the Cuban tourism sector
following the disruption caused by the Covid-19 pandemic, the continued high level of U.S. sanctions aimed at the
country, increased transport and other import costs, widespread inflation and the ongoing difficulties associated with
largely unsuccessful monetary and economic reforms adopted by the Cuban government in recent years will likely
continue to impact negatively on the timing of dividend and other payments to the Company in the short term,
especially from Monte Barreto.
In the coming year, all of the properties owned by the joint venture equity investments of the Company are likely to
continue generating stable profits as they have in the past, and the addition of a fifth operational hotel to the portfolio
of the Company will bring a welcome addition to the income and cash flow of the Company. In particular, the
scheduled external payments to the Company under the TosCuba Construction Facility should contribute significantly to
the Company's cash flow as operations of the new Trinidad Hotel gradually ramp up and stabilise. In addition,
Management is confident it will be able to continue negotiating new arrangements to minimise further the difficult issue
of profits generated within the joint ventures that cannot be distributed to the Company because of problems
impacting the Cuban financial system.
Sebastiaan A.C. Berger
Chief Executive Officer
29 April 2024
Conceptual rendering of the GBM Mariel Project
MANAGEMENT REVIEW
28
The Executive Team is committed to the development of a comprehensive Environmental Social Governance (ESG)
Strategy, to be updated regularly and fully implemented by the Company across all of its activities. In recent years,
formal strategic thinking in this area and the development of a complete ESG policy was delayed by the Covid-19
pandemic, with the resulting world-wide travel restrictions and the closing of Cuba’s international borders, as well as by
the ongoing economic and liquidity problems faced by the country (and by extension also by the Company).
However, as an investment company with participations in real estate development projects, CEIBA has long
demonstrated a strong commitment to the incorporation of ESG principles to its investment program and continues to
integrate ESG principles into its daily decisions, at all levels. This dedication is most visible in the case of the Trinidad
Hotel, the most significant large-scale new investment made by the Company in recent years. Throughout the
development of this state-of-the-art hotel, the Company has ensured that the design, construction and future
operations of the hotel conform to industry-leading practices in the leisure sector, all aimed at being a first mover and
market leader in the Cuban sustainable tourism segment. Some of the measures taken in developing this project
include:
• Self-generation and management of a significant part of the energy to be consumed through the large-scale
installation of solar panels and integrated battery systems
• Installation of energy efficient backup generators
• Generation of hot water by solar energy
• Smart management of energy resources of the hotel (solar panels, batteries, grid, generators)
• Adoption of new offers made by the Cuban grid to acquire green energy
• Highly efficient water-based air conditioning systems
• Efficient water management systems
• Use of natural materials and elimination of plastics to the greatest extent possible
• Smart management of integrated climate, illumination, gardening/watering and other systems
• Use of recycled water for gardening/watering
• Energy efficient computer, TV and telecommunications networks
• Zero-paper hotel management system
• Hotel management systems aiming for prioritised use of durable and recyclable materials and elimination of single-
use and petroleum products
Now that the hotel has begun operations, the hotel manager, together with the Company, are closely monitoring the
performance of the hotel and the success of these actions to determine the extent and manner in which they should be
applied to the other investments of the Company.
Similarly, through its participation in the governing bodies of the joint venture companies and in regular management
and other meetings with the hotel operator and management team of the Miramar Trade Center, the Executive Team
integrates its ESG focus into the management and corporate governance structures of the joint venture companies in
which it has invested. In addition to the environmental component, which is central to the Company’s real estate
development and ownership activities, the Executive Team also regularly engages its counterparts on other ESG
priorities, such as financial and social inclusion, diversity and human development.
Going forward, as part of the formal ESG policy being prepared for adoption by shareholders, the Company will be
moving towards a more data-driven approach in an effort to increase available information and provide a path to
improved outcomes. The Company views the implementation of these and similar initiatives in each of its existing and
new investments as a fundamental component of the success of its ESG commitment and one of the main drivers of
long-term sustainable financial returns going forward. In addition, the Board remains fully dedicated to its stated
undertaking of adding further strategic goals encompassing other ESG factors and topics for focus in the future and
presenting a comprehensive ESG policy to Shareholders in the future.
ENVIRONMENTAL SOCIAL GOVERNANCE (ESG) STRATEGY
ENVIRONMENTAL SOCIAL GOVERNANCE (ESG) STRATEGY
29
Cuba and ESG Strategy
In order to set the ESG policy and approach for the Company, it is important to understand the backdrop of ESG issues
within Cuba and its current legislative framework and how they might impact the investments of the Company, now and
in the future. It will also enable both the Company and its shareholders to understand the ESG performance within
Cuba and align the ESG approach with both the wider context and the Executive Team’s best practice approach.
In past reports, a summary overview of Cuba’s performance in different ESG areas was presented. As in prior years, our
general conclusion today is that there are a large number of areas in which Cuba’s performance stands out in a positive
way, especially compared to other Latin American and Caribbean countries, but there are other areas where its ESG
results are weaker, particularly in respect of the country’s single-party political system and its low score on political
rights and civil liberties.
ENVIRONMENTAL SOCIAL GOVERNANCE (ESG) STRATEGY
30
The current Directors’ details are set out below. All of the Directors are non-executive and the majority of them are
independent. The Directors supervise the management of the Company and represent the interests of shareholders.
JOHN HERRING
Status: Non-Executive Chairman of the Board, Chairman of the Management Engagement Committee
Length of service: 14 years, appointed on 12 November 2009
Experience: John qualified as a Chartered Accountant in 1982. In 1986, John joined the corporate finance department
of Kleinwort Benson, where he was involved in the IPOs on the LSE for several companies. In 1996 he established his
own private equity advisory business and joined the boards of a number of public and private companies including JD
Wetherspoon plc where he became deputy chairman and served as a non-executive director for 14 years.
Last re-elected to the Board: 16 June 2022
Committee membership: Management Engagement Committee (Chairman)
Remuneration: £40,000 (US$50,988) per annum
All other public company directorships: None
Shared Directorships with any other Directors: None
Shareholding in Company: 40,000 Ordinary Shares, held indirectly, representing 0.03 per cent. of the existing issued
share capital of the Company. John also acts as a Consultant to Northview Investments Ltd., which currently owns
37,862,018 Ordinary Shares representing 27.50 per cent. of the existing issued share capital of the Company.
Contribution: The Board has reviewed John’s contribution in light of his proposed re-election as a Director at the AGM,
and the Board has concluded that John remains a good and effective Chairman, with extensive knowledge of the
Company and Cuba that is invaluable in determining the strategy of the Company, and helps foster a collaborative spirit
between the Board and other service providers, whilst ensuring that meetings remain focused on key areas of
stakeholder relevance.
TREVOR BOWEN
Status: Independent Non-Executive Director, Chairman of the Audit Committee
Length of service: 5 years and 10 months, appointed on 18 June 2018
Experience: Trevor has over 30 years’ experience spanning a variety of industries. Trevor spent 11 years as a partner
of KPMG and 17 years as a partner of Principle Management managing artists in the music industry. Trevor has acted
as a non-executive director on a number of boards, most notably as a director on the board of Ulster Bank for nine
years, which included six years as the Chairman of its Audit Committee. He is an Irish national and a Chartered
Accountant.
Last re-elected to the Board: 16 June 2022
Committee membership: Management Engagement Committee, Nomination Committee and Audit Committee
(Chairman)
Remuneration: £40,000 (US$50,988) per annum
All other public company directorships: Kennedy Wilson Inc.
Shared Directorships with any other Directors: None
Shareholding in Company: 43,600 Ordinary Shares held indirectly representing 0.03 per cent. of the existing issued
share capital of the Company.
Contribution: The Board has reviewed Trevor’s contribution in light of his proposed re-election as a Director at the
AGM. The Board has concluded that Trevor has chaired the Audit Committee effectively and continues to provide
significant financial and risk management insight to Board discussions.
THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS
31
KEITH CORBIN
Status: Independent Non-Executive Director, Chairman of the Nomination Committee
Length of service: 5 years and 10 months, appointed on 18 June 2018
Experience: Keith is Executive Chairman of Nerine International Holdings Limited, a network of trust and fiduciary
services companies which is a wholly owned subsidiary of PraxisIFM Group Limited, and serves as a director of a
number of regulated financial services companies. Keith is an Associate of the Chartered Institute of Bankers (ACIB) and
a Member of the Society of Trust and Estate Practitioners (STEP).
Last re-elected to the Board: 16 June 2022
Committee membership: Management Engagement Committee, Nomination Committee (Chairman) and Audit
Committee
Remuneration: £35,000 (US$44,614) per annum
All other public company directorships: None
Shared Directorships with any other Directors: None
Shareholding in Company: None
Contribution: The Board has reviewed Keith’s contribution in light of his proposed re-election as a Director at the AGM.
The Board has concluded that Keith continues to provide significant insight to the Board and knowledge of the
investment management sector and continues to chair the Nomination Committee effectively.
PETER CORNELL
Status: Senior Independent Director – Non-Executive
Length of service: 5 years and 10 months, appointed on 18 June 2018
Experience: Peter was Global Managing Partner of Clifford Chance until 2006. During his tenure with Clifford Chance
his roles also included managing partner for Singapore, Spain and Continental Europe. He then became managing
director of Terra Firma, a European private equity firm until 2011. Peter is a founding partner of Metric Capital, a pan-
European special situations fund.He is also president of Delta Capital, a U.S. based litigation finance firm.
Last re-elected to the Board: 16 June 2022
Committee membership: Management Engagement Committee and Nomination Committee
Remuneration: £35,000 (US$44,614) per annum
All other public company directorships: None
Shared Directorships with any other Directors: None
Shareholding in Company: 100,000 Ordinary Shares held indirectly representing 0.07 per cent of the existing issued
share capital of the Company.
Peter has advised that he will not be seeking re-election as a Director and will retire from the Board at the conclusion of
the Annual General Meeting.
COLIN KINGSNORTH
Status: Non-Executive Director
Length of service: 22 years, appointed on 10 October 2001
Experience: Colin previously worked for Robert Fleming Asset Management, headed the investment trust research at
Olliff & Partners and managed the emerging markets fund of Buchanan Partners Limited. In 1995, Colin co-founded
Regent Kingpin Capital Management. In 1997, he founded Laxey Partners Ltd. Colin holds a BSc in Economics and is a
CFA Charterholder.
Last re-elected to the Board: 16 June 2022
Committee membership: Management Engagement Committee
THE BOARD OF DIRECTORS
32
Remuneration: £35,000 (US$44,614) per annum
All other public company directorships: None
Shared Directorships with any other Directors: None
Shareholding in Company: Colin is a director and owner of Ursus Capital Limited which owns 13,799,197 Ordinary
Shares representing 10.02 per cent of the issued share capital of the Company.
Colin has advised that he will not be seeking re-election as a Director and will retire from the Board at the conclusion of
the Annual General Meeting.
JEMMA FREEMAN
Status: Independent Non-Executive Director
Length of service: 2 years and 7 months, appointed on 1 October 2021
Experience: Jemma is the Executive Chair of Hunters & Frankau Limited, the appointed distributor for Habanos S.A.’s
cigar portfolio in the United Kingdom. She joined the business of Hunters & Frankau in 2002, was appointed Managing
Director in 2008 and Executive Chair in 2019. Before going into the cigar business Jemma was a Strategic Planner in the
advertising industry. She currently holds the position of Vice Chair of ITPAC, an Advisory Council established to support
the tobacco trade in the United Kingdom. In 2013, Jemma was named “Habanos Man of the Year”, one of the most
prestigious and illustrious prizes in the cigar world. Jemma also acts as a Trustee of a Cancer charity focused on
immunotherapy research.
Appointed to the Board: 1 October 2021
Committee membership: Management Engagement Committee, Nomination Committee and Audit Committee
Remuneration: £35,000 (US$44,614) per annum
All other public company directorships: None
Shared Directorships with any other Directors: None
Shareholding in Company: None
Contribution: The Board has reviewed Jemma’s contribution in light of her proposed re-election as a Director at the
AGM. The Board has concluded that Jemma continues to bring a wealth of experience, skills and diversity to the Board,
complementing those of the existing directors.
ANDREW PEGGE
Status: Non-Executive Director
Length of service: 7 months, appointed on 16 October 2023
Experience: After obtaining a BA in Social Psychology and Cognitive Studies, Andrew started his career in the
investment department of Laurentian Life. He then moved to Buchanan Partners where he analysed and managed
closed end funds and similar structures for the Emerging Markets and other funds. During this time, he completed the
3 year CFA program and a 2 year executive MBA. In 1995, Andrew co-founded Regent Kingpin Capital Management,
then after a brief stint as a consultant at the Isle of Man regulator, he co-founded Laxey Partners in 1997. He now
manages his family office, POP Investments, which is a circa 10 per cent shareholder in the Company.
Appointed to the Board: 16 October 2023
Committee membership: Management Engagement Committee
Remuneration: £35,000 (US$44,614) per annum
All other public company directorships: None
Shared Directorships with any other Directors: None
Shareholding in Company: Andrew is a director and owner of POP Investments Limited which owns 13,881,374
Ordinary Shares representing 10.08 per cent of the issued share capital of the Company.
Contribution: The Board considers that Andrew brings a relevant depth of experience and knowledge and fresh
perspective to the Board. Andrew will also contribute the valuable perspective of an institutional investor as the Board
oversees the execution of the Company's strategy.
THE BOARD OF DIRECTORS
33
The Directors present their Report and the audited Consolidated Financial Statements for the year ended 31 December
2023.
The investment objective and purpose of the Company is to provide a regular level of income and substantial capital
growth. The Company is a country fund with a primary focus on Cuban real estate assets. The Company seeks to
deliver the investment objective primarily through investment in, and management of, a portfolio of Cuban real estate
assets, with a focus on the tourism-related and commercial property sectors. A description of the activities for the
Company for the year under review is provided in the Chairman’s Statement on pages 4 to 6 and the Management
Review on pages 19 to 27.
STATUS
The Company is a Guernsey company which was incorporated on 10 October 1995 with registered number 30083. With
effect from 11 September 2018, the Company became a Registered Closed-ended Collective Investment Scheme
pursuant to The Protection of Investors (Bailiwick of Guernsey) Law, 2020, as amended and the Registered Collective
Investment Schemes Rules 2021 issued by the Guernsey Financial Services Commission.
From 1 July 2023, the Board completed the process for the Company to internalise its investment management
arrangements and the Company is now a self-managed alternative investment company.
The Company invests either directly or through holdings in special purpose vehicles, joint venture vehicles, partnerships,
trusts or other structures. As at 31 December 2023, the Group held the following interests in joint venture companies
and other investments in Cuba:
• an indirect 49% interest in Inmobiliaria Monte Barreto S.A., which is the Cuban joint venture company that owns
and operates the Miramar Trade Centre, a 56,000m
2
mixed-use office and retail complex in Havana;
• an indirect 32.5% interest in Miramar S.A., which is the Cuban joint venture company that owns the Meliá Habana
Hotel and the Varadero Hotels;
• an indirect 32.5% interest in TosCuba S.A., which is the Cuban joint venture company that owns the Trinidad Hotel;
and
• an indirect 50% interest in Grupo B.M. Interinvest Technologies Mariel S.A., a Spanish company that is developing
the industrial logistics project in the Special Development Zone of Mariel.
The Directors are of the opinion that the Company has conducted its affairs from 1 January 2023 to 31 December 2023
as a registered collective investment scheme so as to comply with the Registered Collective Investment Scheme Rules
2021.
The Directors, having considered the Group’s objectives and available resources along with its projected income and
expenditure, are satisfied that the Group has adequate resources to continue in operational existence for the
foreseeable future. The Directors continue to monitor market developments relating to the Cuban economy and
liquidity position, ongoing economic reforms, U.S. sanctions and restrictive travel rules, the Russia-Ukraine conflict and
any possible future impact thereof on the Group’s investment portfolio and financing arrangements. Following
enquiries with the Group’s advisors, the Directors remain confident that the going concern basis remains appropriate in
preparing the consolidated financial statements.
RESULTS
Details of the Company’s results are shown on pages 51 to 54 of this Report.
CAPITAL STRUCTURE AND ISSUANCE
The Company’s capital structure is summarised in note 13 to the financial statements.
At 31 December 2023, there were 137,671,576 fully paid Ordinary Shares (2022: 137,671,576) in issue.
On 31 March 2021, the Company completed the issue of €25,000,000 10% senior unsecured convertible bonds due 2026
(“Bonds”). The Bonds were listed on The International Stock Exchange (Channel Islands) on 13 April 2021. Interest
payments on the Bonds take place on a quarterly basis and early redemption of the Bonds by the Company, in whole or
in part, is possible in principal amounts of €2,500,000 as from the third anniversary of the issue date. The Bonds are
repayable in full on 31 March 2026.
DIRECTORS’ REPORT
DIRECTORS’ REPORT
34
VOTING RIGHTS
Shareholders are entitled to vote on all resolutions which are proposed at general meetings of the Company. The
Ordinary Shares carry a right to receive dividends. On a winding up, after meeting the liabilities of the Company, the
surplus assets will be paid to shareholders in proportion to their shareholdings.
Holders of the Bonds are not entitled to attend or vote at meetings of the Company.
MANAGEMENT AGREEMENT
On 31 May 2018, the Company entered into the Management Agreement under which AFML was appointed as the
Company’s alternative investment fund manager to provide portfolio and risk management services to the Company.
The Management Agreement took effect on 1 November 2018. On 30 June 2023 AFML ceased to be the investment
manager and the Company became self-managed on 1 July 2023.
Until 30 June 2023, under the terms of the Management Agreement, AFML were entitled to receive an annual
management fee at the rate of 1.5 per cent. of Total Assets (as defined therein). In addition, AFML was entitled to
reimbursement for all costs and expenses properly incurred in the performance of its duties under the Management
Agreement.
In order to assist the Group with its cash flow requirements the AFML agreed to defer payment of a portion of its fees to
be paid gradually between January 2024 and April 2026.
On 28 June 2023 the Company entered into the Overarching Framework Agreement under which the Executives shall be
responsible for the day-to-day management of the portfolio of investments of the Company.
POLITICAL AND CHARITABLE DONATIONS
The Company does not make political donations and has not made any charitable donations during 2023 (2022: Nil).
RISK MANAGEMENT
Details of the financial risk management policies and objectives relative to the use of financial instruments by the
Company are set out in note 19 to the consolidated financial statements.
THE BOARD
The names and short biographies of the Directors of the Company, all of whom are non-executive, at the date of this
report are shown on pages 30 to 32. John Herring is the Chairman and Peter Cornell is the Senior Independent
Director. Trevor Bowen, Keith Corbin, Peter Cornell and Jemma Freeman are considered independent non-executive
Directors. John Herring, Colin Kingsnorth and Andrew Pegge are not considered to be independent in accordance with
the AIC Code of Corporate Governance (published in February 2019) (the “AIC Code”).
The Board, which comprises seven directors, regularly reviews the composition of the Board and succession planning
through the Nomination Committee. The Board recognises the importance of having a range of skilled, experienced
individuals represented on the Board to allow it to fulfil its obligations. When considering the composition of the Board,
the Board will be mindful of the Listing Rules diversity targets, inclusiveness and meritocracy. Whilst the Board agrees
that it is entirely appropriate that it should seek diversity, it does not consider that this can be best achieved by
establishing specific quotas and targets and appointments will continue to be made based primarily on merit. The
Board’s overriding priority in appointing new directors to the Board is to identify the candidate with the best range of
skills and experience to complement those of existing Directors.
The Board voluntarily discloses the following information in relation to diversity. The Board has decided that the
Company’s financial year end date be the most appropriate date for disclosure purposes. The following information
has been provided by each Director and there have been no changes since the 31 December 2023 and the signing date
of this financial report.
DIRECTORS’ REPORT
Number of Board Members Percentage of the Board Number of senior positions
on the Board
(CEO, CFO, SID and chair)
Men
6 86%
N/A - see note*
Women 1
14%
Prefer not to say
- -
35
* This column is inapplicable as the Company does not have a CEO or CFO on the Board. The Company considers that the
role of chair and SID are senior positions. Of these roles, both are performed by men.
ROLE OF THE CHAIRMAN AND SENIOR INDEPENDENT DIRECTOR
The Chairman is responsible for providing effective leadership to the Board, demonstrating objective judgement and
promoting a culture of openness and debate. The Chairman facilitates the effective contribution, and encourages active
engagement, by each Director. In conjunction with the Company Secretary, the Chairman ensures that Directors receive
accurate, timely and clear information to assist them with effective decision-making. The Chairman leads the evaluation
of the Board and individual Directors and acts upon the results of the evaluation process by recognising strengths and
addressing any weaknesses. The Chairman also engages with major shareholders and ensures that all Directors
understand shareholders’ views.
The Senior Independent Director acts as a sounding board for the Chairman and acts as an intermediary for other
directors, when necessary. Working closely with the Nomination Committee, the Senior Independent Director takes
responsibility for an orderly succession process for the Chairman and leads the annual appraisal of the Chairman’s
performance. The Senior Independent Director is also available to shareholders to discuss any concerns they may have.
ELECTION OF THE BOARD
In accordance with corporate governance best practice, the Board has agreed that all Directors will retire annually and,
if appropriate, will seek re-election at the annual general meeting of the Company. Colin Kingsnorth and Peter Cornell
have advised that they will not be seeking re-election as Directors and will retire from the Board at the conclusion of the
Annual General Meeting. All other Directors will stand for re-election at the forthcoming Annual General Meeting.
The Board has reviewed the skills and experience of each Director and believes that each contributes to the long-term
sustainable success of the Company. The Board has no hesitation in recommending their re-election, or election, to
shareholders.
CORPORATE GOVERNANCE
The Company is committed to high standards of corporate governance. As the Company is listed on the SFS, the
Company has voluntarily undertaken to comply with provision 9.8 of Chapter 9 of the Listing Rules regarding corporate
governance and the principles and provisions of the AIC Code for the year ended 31 December 2023.
The AIC Code addresses all the principles and provisions set out in the UK Corporate Governance Code, as well as
setting out additional principles and provisions on issues that are of specific relevance to investment companies. The
Board considers that reporting in accordance with the principles and provisions of the AIC Code provides more relevant
and comprehensive information to shareholders. The AIC Code is available on the AIC website at: https://
www.theaic.co.uk.
The Company has complied throughout the accounting period with the relevant provisions contained within the AIC
Code, except provisions relating to:
• the independence and tenure of the chairman (provisions 11 and 12); and
• executive directors’ remuneration and establishment of a remuneration committee (provisions 37, 38 and 42).
The Board considers that provisions 37, 38 and 42 are not relevant to the Company. The Company does not have any
direct employees, and the Board is comprised of non-executive Directors. As set out on page 36, the Board has not
established a separate Remuneration Committee given the size and nature of the Company. In addition, as set out
above, the Board has not complied with provisions 11 and 12 and, with support from the Nomination Committee, has
resolved that John remains a good and effective Chairman, with extensive / detailed knowledge of the Company and
Cuba that is invaluable in determining the strategy of the Company and therefore given the current economic
conditions, John’s continued appointment as Chairman is in the best interests of the Company and shareholders as a
whole. The Board evaluates appointments, including the Chairman, on an annual basis.
DIRECTORS’ REPORT
Number of Board Members Percentage of the Board Number of senior positions
on the Board
(CEO, CFO, SID and chair)
White British or Other White
(including minority-white
groups)
7
100%
N/A - see note*
Prefer not to say
- -
36
Directors have attended the following scheduled meetings during the year ended 31 December 2023.
* Andrew Pegge was appointed as a director on 16 October 2023
The Board meets more frequently when business needs require.
Policy on Tenure
The Board’s policy on tenure is that Directors need not serve on the Board for a limited period of time only. The Board
does not consider that the length of service of a Director is as important as the contribution he or she has to make, and
therefore the length of service will be determined on a case-by-case basis. The Board strives to ensure that any changes
to its composition, including succession planning for Directors, be managed without undue disruption to the Company’s
operations. Directors are able and encouraged to provide statements to the Board of their concerns and ensure that
any items of concern are recorded in the Board minutes and the Chairman encourages all Directors to present their
views on matters in an open forum.
The Board notes that some shareholders may see longevity on the Board as a negative. The Board has a mix of longer
serving and more recently appointed Directors and the Board believes that the experience of the longer-serving
Directors has served the Company well through numerous investment cycles and is valued by the Board as a whole.
The Board has a schedule of matters reserved to it for decision. Such matters include strategy, gearing, treasury and
the Company’s dividend policy. Full and timely information is provided to the Board to enable the Directors to function
effectively and to discharge their responsibilities. The Board also reviews the financial statements, performance and
revenue budgets.
There is an agreed procedure for Directors to take independent professional advice if necessary, at the Company’s
expense. This is in addition to the access which every Director has to the advice and services of the Company Secretary,
which is responsible to the Board for ensuring that Board procedures are followed and that applicable rules and
regulations are complied with.
Board and Committee Evaluation
Each year, the Company undertakes a performance evaluation of the Board and its committees as a whole as well as an
appraisal of the Chairman and a Director’s self-evaluation as required by the AIC Code.
The Board last performed an internal evaluation of itself, its committees and each of the Directors in the financial year
ended 31 December 2022.
In December 2023, the Board engaged an external facilitator, CoSteer Limited, which has no connection with the
Company, to lead a performance evaluation of the Board, its committees and each of the Directors. As part of this
process, the external facilitator will provide each director with an online data driven survey to complete and will analyse
the results, looking in particular at the key elements of Board oversight, ethical culture and operational control.
At the conclusion of the evaluation, the facilitator will provide the Board with a written report of its findings, including
any suggestions for improvements thereon, for further consideration by the Board.
Board Committees
The Board has established an Audit Committee, a Management Engagement Committee and a Nomination Committee.
These committees undertake specific activities through delegated authority from the Board. Terms of reference for
each committee may be found on the Company’s website (ceibainvest.com) and copies are available from the Company
Secretary upon request. The terms of reference are reviewed and re-assessed by the Board for their adequacy on an
annual basis.
The Board has not appointed a separate remuneration committee but, as set out below, delegates the consideration of
the remuneration of the Directors to the Nomination Committee.
DIRECTORS’ REPORT
Director
Nº of Board Meetings
Attended
Nº of Audit Committee
Meetings Attended
Nº of Nomination Committee
Meetings Attended
John Herring
4 of 4
n/a n/a
Keith Corbin
4 of 4 3 of 3 1 of 1
Trevor Bowen
4 of 4 3 of 3 1 of 1
Peter Cornell
4 of 4
n/a
1 of 1
Colin Kingsnorth
4 of 4
n/a n/a
Jemma Freeman
3 of 4 2 of 3 1 of 1
Andrew Pegge
1 of 4*
n/a n/a
37
Details of the activities of each of the committees are set out below.
Audit Committee
Information regarding the composition, responsibilities and activities of the Audit Committee is detailed in the Report of
the Audit Committee on pages 43 to 45 of this Annual Report.
Nomination Committee
All appointments to the Board are considered by the Nomination Committee, which is chaired by Keith Corbin. All of
the independent non-executive Directors are members. The function of the Nomination Committee is to ensure that
the Company undertakes a formal process of reviewing the structure, size and composition (including the skills,
knowledge, experience and diversity) of the Board, identifying the experience and skills which may be needed and those
individuals who might best provide them and to ensure that the individual has sufficient available time to undertake his
or her responsibilities as a Director. Once appointed, the successful candidate will receive a formal and tailored
induction.
The remuneration of the Directors is reviewed on an annual basis by the Nomination Committee and compared with
the level of remuneration for directorships of other similar companies. All Directors receive an annual fee and there are
no share options or other performance-related benefits available to them. The remuneration of the Directors has been
set in order to attract individuals of a calibre appropriate to the future development of the Company. The Company’s
policy on Directors’ remuneration, together with details of the remuneration of each Director, is detailed in the
Directors’ Remuneration Report on pages 40 to 42.
The Nomination Committee meets at least once per year and otherwise as required. The outside directorships and
broader commitments of Directors are also monitored by the Nomination Committee.
During the year the Nomination Committee met once, matters considered were Board evaluation, Board succession
planning and Director’s remuneration.
Management Engagement Committee
The Management Engagement Committee comprises the entire Board of Directors and is chaired by John Herring.
Following the internalisation of the Company’s management on 1 July 2023, the principal duties of the Management
Engagement Committee will be to review the performance of the Executives and their compliance with the terms of the
Overarching Framework Agreement.
The Management Engagement Committee also reviews the terms of appointment of other key service providers to the
Company.
The Management Engagement Committee usually meets at least once per year and otherwise as required. Due to the
change of administrator, company secretary and Bond Registrar on 1 December 2022 and the internalisation of the
Company’s management on 1 July 2023, the Board agreed that there was no requirement for the Management
Engagement Committee to meet during the financial year ended 31 December 2023.
A Management Engagement Committee meeting has been scheduled for December 2024 at which the committee will
consider the performance of, and the contractual arrangements with, the key service providers of the Company,
including the Executives, the Company Secretary, and the Administrator.
INTERNAL CONTROL AND RISK MANAGEMENT
The Board is ultimately responsible for the Company’s system of internal control and for reviewing its effectiveness and
confirms that there is an ongoing process for identifying, evaluating, and managing the significant risks faced by the
Company. This process has been in place during the year under review and up to the date of approval of this Annual
Report. It is regularly reviewed by the Board and accords with the Financial Reporting Council Guidance.
The Board has reviewed the effectiveness of the system of internal control focussing in particular on the process for
identifying and evaluating the principal risks affecting the Company and policies by which these risks are managed.
Pursuant to the Overarching Framework Agreement dated 28 June 2023 and related consulting and employment
arrangements, the Directors have delegated the day-to-day management of the portfolio of investments of the
Company to the Executives within overall guidelines, and this embraces implementation of the system of internal
control, including financial, operational and compliance controls and risk management.
On 30 August 2023, NSM Funds Limited were appointed as Risk Manager to the Company, to provide the Board with
assistance regarding the provision of risk management services. The Risk Manager provides oversight on a number of
areas for the Board particularly focusing on identifying risks and oversight over a risk governance framework,
monitoring investment restrictions, pricing policy, confirmation of ownership title review, assisting the Executives to
ensure compliance with applicable standards and ensures that recommendations to improve controls are
implemented.
DIRECTORS’ REPORT
38
Risks are identified and documented through a risk governance framework. Risks that are identified and monitored
include strategic, governance and regulatory, portfolio, operational, reputational, and country risk. This framework
seeks to identify any risks that need to be reviewed, and any weaknesses identified are reported to the Board, with
timetables to be agreed for implementing improvements to systems to mitigate against such risks. The implementation
of any remedial action required is monitored and feedback would be provided to the Board.
The principal and emerging risks and uncertainties faced by the Company are detailed on pages 9 to 15.
The key components of the process designed by the Directors to provide effective internal control are outlined below:
• the Executives prepare forecasts and management accounts which allow the Board to assess the Company’s
activities and review its performance;
• the Board has agreed clearly defined investment criteria, specified levels of authority and exposure limits. Reports
on these issues, including performance statistics and investment valuations, are regularly submitted to the Board
and there are meetings with the Executives as appropriate;
• the Risk Manager continually reviews and monitors the risk governance framework in conjunction with the
Executives and reports to the Audit Committee on a six-monthly basis;
• written agreements are in place which specifically define the roles and responsibilities of the Executives, Risk
Manager and other third-party service providers and, where relevant, ISAE3402 Reports, a global assurance
standard for reporting on internal controls for service organisations, or their equivalents are reviewed;
• the Audit Committee carried out an annual assessment of internal controls for the year ended 31 December 2023
by considering documentation from the Executives, the Risk Manager and other third-party service providers,
including where applicable their internal audit and compliance functions and taking account of events since 31
December 2022. The results of the assessment, that internal controls are satisfactory, will be reported to the Board
at the next Board meeting.
• Internal control systems are designed to meet the Company’s particular needs and the risks to which it is exposed.
Accordingly, the internal control systems are designed to manage rather than eliminate the risk of failure to achieve
business objectives and by their nature can only provide reasonable and not absolute assurance against
misstatement and loss.
MANAGEMENT OF CONFLICTS OF INTEREST
The Board has a procedure in place to deal with a situation where a Director has a conflict of interest. As part of this
process, the Directors prepare a list of other positions held and all other conflict situations that may need to be
authorised either in relation to the Director concerned or his connected persons. The Board considers each Director’s
situation and decides whether to approve any conflict, taking into consideration what is in the best interests of the
Company and whether the Director’s ability to act in accordance with his wider duties is affected. Each Director is
required to notify the Company’s Secretary of any potential, or actual, conflict situations that will need authorising by
the Board. Authorisations given by the Board are reviewed at each Board meeting. No Director has a service contract
with the Company although Directors are issued with letters of appointment upon appointment. The Directors’
interests in contractual arrangements with the Company are as shown in note 15 to the financial statements. No
Directors had any interest in contracts with the Company during the period or subsequently. The conflicts of the non-
independent directors are well known to the Board and reviewed regularly.
The Board has adopted appropriate procedures designed to prevent bribery. The Company receives periodic reports
from its service providers on the anti-bribery policies of these third parties. It also receives regular compliance reports
from the Administrator.
The Criminal Finances Act 2017 has introduced a new corporate criminal offence of “failing to take reasonable steps to
prevent the facilitation of tax evasion”. The Board has confirmed that it is the Company’s policy to conduct all of its
business in an honest and ethical manner. The Board takes a zero-tolerance approach to facilitation of tax evasion,
whether under Guernsey law or under the law of any foreign country.
DIRECTORS’ REPORT
39
SUBSTANTIAL INTERESTS
The Company has been advised that the following shareholders owned 5% or more of the issued Ordinary share capital
of the Company at 31 December 2023:
There have been no significant changes notified in respect of shareholdings between 31 December 2023 and 29 April
2024.
ANNUAL GENERAL MEETING
The Notice of the Annual General Meeting (“AGM”) is included within this Annual Report and Consolidated Financial
Statements. The AGM will take place at the registered office of the Company, Les Echelons Court, Les Echelons, St Peter
Port, Guernsey, GY1 1AR Channel Islands on 18 June 2024 at 12.30 p.m. An explanation of each resolution to be
proposed at the AGM is included in the Letter from the Chairman on page 101. All shareholders will have the
opportunity to put questions to the Board 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 by emailing
fundoperations@nsm.group.
The Company Secretary is also available to answer general shareholder queries at any time throughout the year.
RELATIONS WITH STAKEHOLDERS
The Directors place a great deal of importance on communication with shareholders. The Board welcomes feedback
from all shareholders. The Chairman meets periodically with the largest shareholders to discuss the Company. Any
correspondence from shareholders to the Board is typically circulated to all Directors and included in the next available
Board papers. Shareholders can contact the Board by email to fundoperations@nsm.group. The Annual Report and
Consolidated Financial Statements are widely distributed to other parties who have an interest in the Company’s
performance. Shareholders may obtain up to date information on the Company through the Company’s website
ceibainvest.com.
The Board’s policy is to communicate directly with shareholders and their representative bodies in situations where
direct communication is required and usually a representative from the Board is available to meet with major
shareholders on an annual basis in order to gauge their views.
Approved by the Board of Directors on 29 April 2024 and signed on its behalf:
Keith Corbin
Director
DIRECTORS’ REPORT
Shareholder
Number of shares held
% held
Northview Investments Ltd
37,764,018
27.43
POP Investments Limited
13,881,374
10.08
Ursus Capital Limited
13,799,197
10.02
abrdn plc
9,388,532
6.82
Citco Global Custody NV
8,373,144
6.08
40
As the Company is listed on the SFS, the Board has prepared this remuneration report on a voluntary basis.
The Company’s auditor has not audited any of the disclosures provided in this Directors’ Remuneration Report.
REMUNERATION POLICY
This part of the Remuneration Report provides details of the Company’s Remuneration Policy for Directors of the
Company. As the Board is comprised wholly of non-executive Directors and given the size and nature of the Company,
the Board has not established a separate Remuneration Committee. Directors’ remuneration is determined by the
Board as a whole.
The Directors are non-executive and the Company’s Articles limit the annual aggregate fees payable to the Board of
Directors to no more than £500,000 (US$637,350) per annum. The aggregate level of the fees payable to the Directors
may only be increased by way of shareholder resolution. Subject to this overall limit, the Board’s policy is that the
remuneration of non-executive Directors should reflect the nature of their duties, responsibilities and the value of their
time spent and be fair and comparable to that of other investment companies that are similar in size, have a similar
capital structure and have a similar investment objective. Fees are reviewed annually against the Company’s peer group
and increased accordingly if considered appropriate. There have been no changes to the Directors’ Remuneration
Policy since 2018 nor are there any proposals for changes in the foreseeable future. In the past year, aggregate fees of
£227,228 were paid to the Directors. The table below shows the fees agreed per annum.
APPOINTMENT
• The Company only intends to appoint non-executive Directors.
• All the Directors are non-executive appointed under the terms of Letters of Appointment.
• Directors must retire and be subject to re-election at each annual general meeting.
• New appointments to the Board will be placed on the fee applicable to all Directors at the time of appointment
(currently £35,000 per annum).
• No incentive or introductory fees will be paid to encourage a Directorship.
• The Directors are not eligible for bonuses, pension benefits, share options, long term incentive schemes or other
benefits.
• Directors are entitled to re-imbursement of out-of-pocket expenses incurred in connection with the performance of
their duties, including travel expenses.
• The Company indemnifies its Directors for all costs, charges, losses, expenses and liabilities which may be incurred
in the discharge of their duties as a Director of the Company.
DIRECTORS’ REMUNERATION REPORT
DIRECTORS’ REMUNERATION REPORT
31 Dec 2023
(£)
31 Dec 2022
(£)
Chairman
40,000 40,000
Chairman of Audit Committee
40,000 40,000
Director
35,000 35,000
41
PERFORMANCE AND SERVICE CONTRACTS
• The Directors’ remuneration is not subject to any performance-related fee.
• No Director has a service contract.
• Although John Herring, Colin Kingsnorth and Andrew Pegge are linked to large shareholders of the Company, no
Director had an interest in any contracts with the Company during the period or subsequently.
• The terms of appointment provide that a Director may be removed subject to three months’ notice.
• Compensation will not be due upon leaving office.
• No Director is entitled to any other monetary payment or to any assets of the Company.
Directors’ and Officers’ liability insurance cover is maintained by the Company on behalf of the Directors. Under the
Articles, the Company indemnifies each of the Directors out of the assets of the Company against any liability incurred
by them as a Director in defending proceedings or in connection with any application to the Court in which relief is
granted and separate deeds of indemnity exist in this regard between the Company and each Director.
IMPLEMENTATION REPORT
Directors’ Fees
In June 2023 the Nomination Committee reviewed the Directors’ fees and agreed that no changes were required for the
financial year ended 31 December 2023 but will keep this under review. There are no further fees to disclose as the
Company has no direct employees or executive directors.
The total fees paid to, and received by, the Directors for the financial years to 31 December 2023 and 31 December 2022
are shown below.
Sums Paid to Third Parties
No fees were paid to third parties for services as non-executive Directors.
DIRECTORS’ REMUNERATION REPORT
Director 2023
£
2023
US$
2022
£
2022
US$
John Herring
40,000 50,988
40,000
48,156
Keith Corbin
35,000 44,614
35,000
42,137
Peter Cornell
35,000
44,614
35,000
42,137
Trevor Bowen
40,000 50,988 40,000
48,156
Colin Kingsnorth
35,000
44,614
35,000
42,137
Jemma Freeman
35,000
44,614
35,000
42,137
Andrew Pegge
7,228
9,214
- -
Total
227,228 289,646
220,000 264,860
42
Directors’ Interests in the Company
The Directors are not required to have a shareholding in the Company. The Directors’ interests in contractual
arrangements with the Company are as shown in note 15 to the financial statements. The Directors and their
respective interests (including connected persons) at the respective year ends are shown in the table below.
1 At 31 December 2023 Colin Kingsnorth is a director and shareholder of Ursus Capital Limited.Ursus holds 13,799,197 shares.
2 At 31 December 2023 Andrew Pegge is a director and shareholder of POP Investments Limited.POP holds 13,881,374 shares.
The above interests are unchanged at 29 April 2024, being the nearest practicable date prior to the signing of this
Report.
ANNUAL STATEMENT
On behalf of the Board, I confirm that the above Report on Remuneration Policy and Remuneration Implementation
summarises, as applicable, for the year ended 31 December 2023:
• the major decisions on Directors’ remuneration;
• any substantial changes relating to Directors’ remuneration made during the year; and
• the context in which the changes occurred and in which decisions have been taken.
For and on behalf of the Board,
Keith Corbin
Director
29 April 2024
Director 31 December 2023
Ordinary Shares
31 December 2022
Ordinary Shares
John Herring
40,000 40,000
Keith Corbin - -
Peter Cornell
100,000 100,000
Trevor Bowen
43,600 43,600
Colin Kingsnorth
1
13,799,197 12,252,338
Jemma Freeman
- -
Andrew Pegge
2
13,881,374
n/a
DIRECTORS’ REMUNERATION REPORT
43
COMMITTEE COMPOSITION
The Audit Committee (the “Committee”) presents its report for the year ended 31 December 2023.
The Committee is comprised of Trevor Bowen as Chairman, Keith Corbin and Jemma Freeman.
The Committee have satisfied themselves that at least one of the Committee’s members has recent and relevant
financial experience. Trevor Bowen is a Chartered Accountant and previously spent 11 years as a partner at KPMG and
has recent and relevant financial experience. The Committee is also considered, as a whole, to have competence
relevant to this sector. The Committee continues to consider that the Company does not require an internal audit
function of its own as it delegates its day-to-day operations to third parties from whom it receives regular internal
controls reports.
FUNCTIONS OF THE COMMITTEE
The principal function of the Committee is to assist the Board in relation to the reporting of financial information, and to
ensure that the internal control procedures are robust and that risk management processes are appropriate.
The Committee has defined terms of reference which will be reviewed and re-assessed for their adequacy on an annual
basis. Copies of the terms of reference are published on the Company’s website.
The Committee’s main audit review functions are:
• to monitor the integrity of the consolidated financial statements of the Company, including its annual and half-
yearly reports and any other formal announcement relating to its financial performance, reviewing significant
financial reporting issues and judgements which they contain;
• to review the content of the annual financial report and advise the Board on whether, taken as a whole, it is fair,
balanced and understandable and provides the information necessary for shareholders to assess the Company’s
position and performance, business model and strategy;
• to review the adequacy and effectiveness of the Company’s internal financial controls and risk management
systems, for example including the risks of misappropriation or loss of assets, of misstatement of accounting
records or of non-compliance with accounting standards, and monitor the proposed implementation of such
controls;
• to review the Company’s procedures for detecting fraud, the systems and controls in place for prevention of
bribery, the adequacy of the Company’s anti-money laundering systems and controls and the Company’s
compliance function;
• to monitor and review whether an internal audit function is required;
• to oversee the relationship with the external auditor and review the effectiveness of the external audit process,
including the remuneration of the auditor as well as their independence and any non-audit services provided by
them. The Committee will monitor the performance of the auditor with the aim of ensuring a high quality and
effective audit;
• to develop and implement policy on the engagement of the auditor to supply non-audit services. No non-audit
fees were paid to the auditor during the year under review;
• to make recommendations to the Board, to be put to shareholders for approval in general meeting, in relation to
the appointment, re-appointment and removal of the Company’s external auditor;
• to develop and oversee the selection process for new external auditors and if an external auditor resigns,
investigate the issues leading to this and decide whether any action is required; and
• to ensure that at least once every ten years the audit services contract is put out to tender to enable the Committee
to compare the quality and effectiveness of the services provided by the incumbent auditor with those of other
audit firms and, in respect of such tender, oversee the selection process and ensure that all tendering firms have
such access as is necessary to information and individuals during the tendering process.
REPORT OF THE AUDIT COMMITTEE
REPORT OF THE AUDIT COMMITTEE
44
FREQUENCY OF MEETINGS DURING THE YEAR
The Committee meets at least twice a year at appropriate times in the Company’s reporting and audit cycle and
otherwise as required.
ACTIVITIES DURING THE YEAR
The Committee met three times during the last year and reported to the Board on its activities and on matters of
particular relevance to the Board.
The Committee also undertook a review of the Company’s Auditor during the year. More details on this are set out in
the Tenure of the Auditor section.
The Committee also assisted the Board in carrying out its responsibilities in relation to financial reporting requirements.
REVIEW OF INTERNAL CONTROL SYSTEMS AND RISK
At its meeting on 16 April 2024, the Committee reviewed the internal control systems and considered the Company’s
principal and emerging risks. The Committee will consider the internal control systems and a matrix of risks at each of
its meetings.
FINANCIAL STATEMENTS AND SIGNIFICANT ISSUES
During its review of the Company’s financial statements for the year ended 31 December 2023, the Committee
considered the following significant issues, including, in particular, those communicated by the Auditor as key areas of
audit emphasis during their planning and reporting of the year end audit.
Valuation of Equity Investments
The fair value of the equity investments, driven by underlying investment property valuations, are the most substantial
figures on the Consolidated Statement of Financial Position. The valuations of the underlying investment properties
require significant judgements and estimates to be made. This is a key risk that requires the attention of the Audit
Committee.
The fair values of the equity investments of the Company are determined by the Board primarily on the basis of the
valuation reports prepared by Arlington Consulting – Consultadoria Imobiliaria Limitada, trading as “Abacus”, and
subsequently reviewed in detail and challenged by the Audit Committee. The valuation reports were prepared in
accordance with RICS Valuation – Global Standards 2017 and are reviewed by the Committee on a six-monthly basis and
by the Auditor at least annually.
In determining the fair value of each equity investment, the Directors with assistance from the Executives, may also take
into account additional relevant information that impacts the fair value of the relevant joint venture company that has
not been considered in the valuation report 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 of the property, the
existence of any Excess Cash needs to be included as an additional component of the fair value of the joint venture
company. To determine the amount of Excess Cash, the Directors, with assistance from the Executives estimate the
amount of cash required by the property for working capital needs and deduct this amount from the cash and cash
equivalents held by the joint venture. The above estimates are also reviewed by the Committee.
Revenue Recognition
As dividend income is the Company’s major source of income and a significant item on the Consolidated Statement of
Comprehensive Income, the recognition of dividend income from the underlying equity investments is another key risk
considered by the Committee. The Company’s policy is that dividend income arising from equity investments is
recognised when the Company’s right to receive payment of the dividend is established or cash amounts have been
received. The Committee reviewed the controls put in place by the Executives in respect of recognition of dividend
income and intends to do so at least every six months.
Consideration and Approval of Principal Risks & Uncertainties
The Audit Committee considered, in detail, the principal risks & uncertainties, and emerging risks, facing the Company,
particularly in light of the volatility impacting the economy and tourism industry in Cuba, as well as the ongoing U.S.
sanctions. The Audit Committee considered emerging risks relating to the Cuban financial system, public health risk,
risks relating to the Company and its investment strategy, portfolio and operational risks, risks relating to investment in
Cuba and the U.S. Embargo and risks relating to regulatory and tax framework, and the disclosure of these risks in the
Annual Report. The output from the risk assessment is set out in the Principal Risks & Uncertainties section on pages 9
to 15. The Committee will review the matrix of risks at each committee meeting.
REPORT OF THE AUDIT COMMITTEE
45
REVIEW OF ANNUAL REPORT AND CONSOLIDATED FINANCIAL STATEMENTS
The Committee is responsible for the preparation of the Company’s Annual Report. The process is extensive, requiring
input from a number of different third-party service providers. The Committee reports to the Board on whether, taken
as a whole, the Annual Report and Consolidated Financial Statements are fair, balanced, and understandable. In so
doing, the Committee has considered the following matters:
• the existence of a comprehensive control framework surrounding the production of the Annual Report and
Consolidated Financial Statements which includes a number of different checking processes;
• the existence of extensive levels of reviews as part of the production process involving the Executives, the
Administrator, the Company Secretary and the auditor as well as the Committee’s own expertise;
• the controls in place within the various third-party service providers to ensure the completeness and accuracy of the
financial records and the security of the Company’s assets.
The Committee has reviewed the Annual Report and the work undertaken by the third-party service providers and is
satisfied that, taken as a whole, the Annual Report and Consolidated Financial Statements are fair, balanced, and
understandable. In reaching this conclusion, the Committee has assumed that the reader of the Annual Report would
have a reasonable level of knowledge of the investment industry in general. The Committee has reported its findings to
the Board which in turn has made its own statement in this regard in the Directors’ Responsibility Statement on page 46.
REVIEW OF AUDITOR
The Committee has reviewed the effectiveness of the auditor including:
• Independence: the Committee ensures that there is a discussion with the auditor, at least annually, in regard to the
steps it takes to ensure its independence and objectivity and to make the Committee aware of any potential issues,
explaining all relevant safeguards;
• Quality of audit work: (i) the ability to resolve issues in a timely manner – the Committee is confident that identified
issues are satisfactorily and promptly resolved; (ii) its communications/presentation of outputs – the Committee is
satisfied that the explanation of the audit plan, any deviations from it and the subsequent audit findings are
comprehensive and comprehensible; and (iii) working relationship with management – the Committee is satisfied
that the auditor has a constructive working relationship with the Executives and Administrator; and,
• Quality of people and service including continuity and succession plans: the Committee is satisfied that the audit
team is made up of sufficient, suitably experienced staff with provision made for knowledge of the investment trust
sector and retention on rotation of the partner.
TENURE OF THE AUDITOR
Grant Thornton Limited has been the Company’s external auditor since 3 December 2019 and its appointment has been
approved by shareholders each year, the last time being at the Annual General Meeting on 28 June 2023. The current
audit partner has been in place since 3 December 2019.
The Audit Committee performed a review of the external audit processes provided by the Auditor during the last year
and can confirm that they are satisfied that Grant Thornton Limited is a suitable independent Auditor and therefore
supports the recommendation to the Board that the re-appointment of Grant Thornton Limited be put to shareholders
for approval at the Annual General Meeting. The Committee is mindful of the EU audit legislation which requires the
rotation of long-serving auditors. The Company will be required to put its audit contract out to tender again by no later
than 2029.
ACCOUNTABILITY AND AUDIT
Each member of the Committee confirms that, so far as they are aware, there is no relevant audit information of which
the Company’s Auditor is unaware, and that they have taken all the steps that they ought to have taken as a Director in
order to make themselves aware of any relevant audit information and to establish that the Company’s Auditor is aware
of that information. Additionally, there are no important events since the period end other than as disclosed in the
notes to the financial statements.
The Committee has reviewed the level of non-audit services provided by the Company’s Auditor during the year and
remains satisfied that the Auditor’s objectivity and independence is being safeguarded.
Trevor Bowen
Audit Committee Chairman
29 April 2024
REPORT OF THE AUDIT COMMITTEE
46
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 as issued by the IASB. 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 Group and of the
profit or loss of the Group 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 its 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 on page 30 to 32, 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;
• 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;
• 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;
and
• there is no additional information of which the Company’s Auditor is not aware.
For CEIBA Investments Limited
Keith Corbin
Director
29 April 2024
STATEMENT OF DIRECTORS' RESPONSIBILITIES
STATEMENT OF DIRECTORS' RESPONSIBILITIES
47
Opinion
We have audited the consolidated financial statements of CEIBA Investments Limited and its subsidiaries (the “Group”),
which comprise the Consolidated Statement of Financial Position as at December 31, 2023, the Consolidated Statement
of Comprehensive Income, the Consolidated Statement of Cash Flows, the Consolidated Statement of Changes in Equity
for the year then ended, and notes to the consolidated financial statements, including material accounting policy
information.
In our opinion, the accompanying consolidated financial statements:
• give a true and fair view of the financial position of the Group as at December 31, 2023, and of its consolidated
financial performance and its consolidated cashflows for the year then ended;
• are in accordance with IFRS Accounting Standards (IFRS) as issued by the International Accounting Standards Board
(IASB); and
• comply with the Companies (Guernsey) Law, 2008.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs) and applicable law. Our
responsibilities under those standards are further described in the ‘Auditor’s Responsibilities for the Audit of the
Consolidated Financial Statements’ section of our report. We are independent of the Group in accordance with the
International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants
(including International Independence Standards) (IESBA Code), together with the ethical requirements that are relevant
to our audit of the consolidated financial statements in Guernsey, and we have fulfilled our other ethical responsibilities
in accordance with these requirements and the IESBA Code. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
consolidated financial statements of the current period. These matters were addressed in the context of our audit of
the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters.
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF CEIBA INVESTMENTS LIMITED
The key audit matter How the matter was addressed in our audit
Fair value of equity investments (2023: $164,763,693,
2022: US$154,221,877)
As at 31 December 2023, the Group had equity
investments in joint venture companies which represents
majority of the total assets of the Group. The valuation of
the equity investments comprises the value of the
underlying Cuban real estate assets plus the working
capital in excess of operating requirements (excess cash)
held within the joint ventures.
We identified the fair value of equity investments as one
of the accounts that has a significant risk of material
misstatement due to fraud and error.
The Group’s equity investments are measured at fair
value through profit or loss for which the key driver is the
fair value of the underlying Cuban real estate assets and
excess cash of the joint ventures. The fair value of the
equity investments is determined using a valuation
methodology which involves a high degree of
management judgment and estimates. The valuation of
the underlying Cuban real estate assets has been
prepared during a period of high inflation, ongoing
market instability due to slower than expected post
Covid-19 recovery of Cuba’s tourism sector, continuing
US-Cuba sanctions, the designation of Cuba as a State
Sponsor of Terrorism and Cuba’s ongoing liquidity crises.
All the above factors added complexity in valuing the
underlying Cuban real estate assets.
Our audit work included, but was not restricted to the
following:
• Updated our understanding of the valuation
processes, policies and methodologies and controls
in relation to the valuation and measurement of
equity investments and performed walkthrough tests
to assess the design and implementation of key
controls;
• Obtained a copy of the underlying Cuban real estate
asset valuation reports (including the related
valuations models) prepared by the Group’s
independent valuation expert and confirmed that
the report was checked by by management through
our inspection of board minutes;
• Assessed the independence, competence, and
objectivity of the Group’s independent valuation
expert;
• Obtained and assessed the valuation models. We
requested corroborating evidence, supporting data
(detailed below) and held necessary discussions with
management and the Group’s external valuation
expert;
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF CEIBA INVESTMENTS LIMITED
48
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF CEIBA INVESTMENTS LIMITED
The key audit matter (continued) How the matter was addressed in our audit (continued)
As a result of the above, there is a risk that the fair value
of the equity investments may be materially misstated
due to the use of incorrect or inappropriate judgments,
estimates and assumptions in determining the fair value
of the underlying Cuban real estate assets that could
have a significant impact on the Group’s net asset value
and net income, which are key performance indicators
used by management and on the actual return generated
for the shareholders.
Refer to the Audit Committee Report (pages 43-45);
Accounting policies in pages 58-64, Note 2.3, Use of
estimates and judgements, and Note 7, Equity
investments, to the Consolidated Financial Statements.
• Assesesed and corroborated significant inputs to the
discounted cash flow calculations that do not require
our real estate valuation expert’s involvement by
gathering information about the Cuban market,
agreeing amounts to audited financial information,
and other independent searches to challenge
management’s valuation workings.
• Asssessed the reasonableness of the excess cash
calculation by verifying the balances to audited
financial statements, bank confirmations and other
supporting documents (including bank statements
and dividend arrangement approvals);
• Engaged our real estate valuation expert to perform
the below procedures:
– Held discussions with CEIBA management and
the Group’s external valuation expert to obtain
an understanding of the significant inputs and
assumptions (e.g. discount rates, occupancy
rates, growth rates, capex rates, inflation rates
and other market related inputs) applied to the
valuations considering the economic climate
when the valuation was prepared;
– Inspected and assessed the valuation reports,
the methodology and associated cash flow
statements and determined if the significant
inputs and assumptions, as mentioned above,
used in the valuations are reasonable and that
the fair value of the underlying real estate assets
have been appropriately calculated;
– Assessed and corroborated management’s
valuation by deriving a mark to market valuation
based on inputs for comparable real estate
assets;
– Assessed whether the fair values of the
underlying Cuban real estate assets are deemed
satisfactory in accordance with the Royal
Institution of Chartered Surveyors (RICS)
Valuation Global Standards 2022 based on their
knowledge and experience and the result of
their independent evaluation of the valuation;
• Performed a sensitivity analysis on the inputs (i.e.,
discount rate, occupancy rates, rental daily rates and
excess cash) used in the valuation to understand the
impact on the fair value of the equity investments;
• Evaluated the reasonableness of the relevant
valuation disclosures and notes to the consolidated
financial statements, including the adequacy of the
required disclosures (i.e., summarised financial
information) for interests in joint venture companies;
and
• Examined management’s assessment for measuring
its equity investments at fair value in accordance
with the exception for venture capital entities under
International Accounting Standard 28 (IAS 28) -
Investments in Associates and Joint Ventures; and
• Evaluated whether the fair value disclosures in the
financial statements are appropriate, complete and
in accordance with the requirements of IFRS 13 – Fair
value measurement.
49
Other information
The Directors are responsible for the other information. The other information comprises the information included in
the Annual Report and Consolidated Financial Statements but does not include the consolidated financial statements
and our auditor’s report thereon.
Our opinion on the consolidated financial statements does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial
statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the
work we have performed, we conclude that there is a material misstatement of this other information, we are required
to report that fact.
We have nothing to report in this regard.
Responsibilities of the directors for the consolidated financial statements
As explained more fully in the directors’ responsibilities statement set out on page 46, the Directors are responsible for
the preparation of the consolidated financial statements that give a true and fair view in accordance with IFRS
Accounting Standards as issued by the International Accounting Standards Board (IASB), and for such internal control as
the Directors determine is necessary to enable the preparation of consolidated financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, the Directors are responsible for assessing the Group’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern
basis of accounting unless the Directors either intend to liquidate the Group or to cease operations, or have no realistic
alternative but to do so.
Auditor’s responsibilities for the audit of the consolidated financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism
throughout the audit. We also:
• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
Group’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by the Directors.
• Conclude on the appropriateness of the Directors’ use of the going concern basis of accounting and, based on the
audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast
significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated
financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on
the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause
the Group to cease to continue as a going concern.
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF CEIBA INVESTMENTS LIMITED
How the matter was addressed in our audit (continued)
Our result
Based on our work, we did not identify any material
misstatement of the fair value of the equity investments.
The assumptions and estimates used were reasonable in
the circumstance and the Group’s disclosures were
adequate.
50
• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the
disclosures, and whether the consolidated financial statements represent the underlying transactions and events in
a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities
within the Group to express an opinion on the consolidated financial statements. We are responsible for the
direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships and other matters that may reasonably be thought to
bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.
From the matters communicated with the directors, we determine those matters that were of most significance in the
audit of the consolidated financial statements of the current period and are therefore the key audit matters. We
describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because
the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such
communication.
Use of our report
This report is made solely to the Company’s members, as a body, in accordance with section 262 of the Companies
(Guernsey) Law, 2008. Our audit work has been undertaken so that we might state to the Company’s members those
matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s
members as a body, for our audit work, for this report, or for the opinions we have formed.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters in relation to which the Companies (Guernsey) Law, 2008
requires us to report to you if, in our opinion:
• proper accounting records have not been kept by the Company; or
• the consolidated financial statements are not in agreement with the accounting records; or
• we have not obtained all the information and explanations, which to the best of our knowledge and belief, are
necessary for the purposes of our audit.
Cyril Swale
For and on behalf of Grant Thornton Limited
Chartered Accountants
St Peter Port
Guernsey
Date: 29 April 2024
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF CEIBA INVESTMENTS LIMITED
51
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December 2023
31 Dec 2023 | 31 Dec 2022 | ||
| Note | US$ | US$ | |
| Assets | |||
| Current assets | |||
| Cash and cash equivalents | 4 | ||
| Accounts receivable and accrued income | 5 | ||
| Loans and lending facilities | 6 | ||
| Total current assets | |||
| Non-current assets | |||
| Accounts receivable and accrued income | 5 | ||
| Loans and lending facilities | 6 | ||
| Equity investments | 7 | ||
| Investment in associate | 8 | ||
| Property, plant and equipment | 9 | ||
| Total non-current assets | |||
| Total assets | |||
| Liabilities | |||
| Current liabilities | |||
| Accounts payable and accrued expenses | 10 | ||
| Short-term borrowings | 11 | ||
| Deferred liabilities | 17 | ||
| Total current liabilities | |||
| Non-current liabilities | |||
| Convertible bonds | 12 | ||
| Accounts payable and accrued expenses | 10 | ||
| Total non-current liabilities | |||
| Total liabilities | |||
| Equity | |||
| Stated capital | 13 | ||
| Revaluation surplus | |||
| Retained earnings | |||
| Accumulated other comprehensive income | |||
| Equity attributable to the shareholders of the parent | |||
| Non-controlling interest | 13 | ||
| Total equity | |||
| Total liabilities and equity | |||
| NAV | 13 | ||
| NAV per share | 13 |
See accompanying notes 1 to 23, which are an integral part of these consolidated financial statements
52
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2023
31 Dec 2023 | 31 Dec 2022 | ||
| Note | US$ | US$ | |
| Income | |||
| Dividend income | 7 | ||
| Interest income | 6 | ||
| Other income | |||
| Travel agency commissions | |||
| Reversal of expected credit losses | 5 | ||
| Foreign exchange gain | |||
| Share of income of associate | 8 | ||
| Expenses | |||
| Realised loss on equity investments | ( | ||
| Foreign exchange loss | ( | ||
| Interest expense on bonds | 12 | ( | ( |
| Loss on change in fair value of equity investments | 7 | ( | ( |
| Share of loss of associate | 8 | ( | |
| Expected credit losses | 6 | ( | ( |
| Management fees | 17 | ( | ( |
| Other staff costs | ( | ( | |
| Travel | ( | ( | |
| Operational costs | ( | ( | |
| Legal and professional fees | ( | ( | |
| Administration fees and expenses | ( | ( | |
| Audit fees | 22 | ( | ( |
| Miscellaneous expenses | ( | ( | |
| Directors’ fees and expenses | 15 | ( | ( |
| Depreciation | 9 | ( | ( |
| ( | ( | ||
| Net profit / (loss) before taxation | ( | ||
| Income taxes | 3.7 | ||
| Net profit / (loss) for the year | ( | ||
| Other comprehensive profit / (loss) | |||
| to be reclassified to profit or loss in subsequent periods | |||
| Profit / (loss) on exchange differences | |||
| of translation of foreign operations | ( | ||
| Total comprehensive profit / (loss) | ( | ||
| Net profit / (loss) for the year attributable to: | |||
| Shareholders of the parent | ( | ||
| Non-controlling interest | |||
| Total comprehensive gain / (loss) attributable to: | |||
| Shareholders of the parent | ( | ||
| Non-controlling interest | |||
| Basic and diluted profit / (loss) per share | 16 | ( |
See accompanying notes 1 to 23, which are an integral part of these consolidated financial statements.
53
CONSOLIDATED STATEMENT OF CASH FLOWS
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 December 2023
31 Dec 2023 | 31 Dec 2022 | ||
| Note | US$ | US$ | |
| Operating activities | |||
| Net profit / (loss) for the year | ( | ||
| Items not affecting cash: | |||
| Depreciation | 9 | ||
| Expected credit losses | 5 | ||
| Change in fair value of equity investments | 7 | ||
| Share of (income) / loss of associate | 8 | ( | |
| Dividend income | ( | ( | |
| Interest income | 6 | ( | ( |
| Other income | ( | ||
| Reversal of expected credit losses | 5 | ( | |
| Realised loss on equity investments | |||
| Interest expense | |||
| Foreign exchange loss / (gain) | ( | ||
| ( | ( | ||
| Increase in accounts receivable and accrued income | ( | ( | |
| (Decrease)/increase in accounts payable and accrued expenses | ( | ||
| Non-cash movement in amortisation of deferred liability | 17 | ( | ( |
| Dividend income received | |||
| Interest income received | |||
| Net cash flows from operating activities | |||
| Investing activities | |||
| Purchase of property, plant & equipment | 9 | ( | ( |
| Proceeds from sale of equity interest in Mosaico Hoteles | 5 | ||
| Loans and lending facilities disbursed | ( | ( | |
| Loans and lending facilities recovered | |||
| Net cash flows from investing activities | ( | ( | |
| Financing activities | |||
| Short term borrowings received | |||
| Interest paid on convertible bonds | ( | ( | |
| Cash contribution from non-controlling interest | 13 | ||
| Cash distribution to non-controlling interest | 13 | ( | |
| Net cash flows from financing activities | ( | ||
| Change in cash and cash equivalents | ( | ( | |
| Cash and cash equivalents at beginning of the period | |||
| Foreign exchange on cash | ( | ||
| Cash and cash equivalents at end of the period |
See accompanying notes 1 to 23, which are an integral part of these consolidated financial statements.
54
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2023
| Revaluation | Retained | Other comprehensive | Total Equity attributable | Non-controlling | ||||
| FOR THE YEAR ENDED | Stated Capital | Surplus | Earnings | income | to the parent | interest | Total Equity | |
31 DECEMBER 2022 | Notes | US$ | US$ | US$ | US$ | US$ | US$ | US$ |
| Opening Balance | ||||||||
Revaluation of assets / Net other comprehensive income/(loss) to be reclassified to profit or loss in subsequent periods | 7, 13 | ( | ( | ( | ( | |||
| Net loss for the year | 13 | ( | ( | ( | ||||
| Capital increase/contributions | ||||||||
| during the period | 13 | |||||||
| Balance at 31 December 2022 |
1
1 Relates to exchange differences on translation of foreign operations.
See accompanying notes 1 to 23, which are an integral part of these consolidated financial statements.
| Revaluation | Retained | Other comprehensive | Total Equity attributable | Non-controlling | ||||
| FOR THE YEAR ENDED | Stated Capital | Surplus | Earnings | income | to the parent | interest | Total Equity | |
31 DECEMBER 2023 | Notes | US$ | US$ | US$ | US$ | US$ | US$ | US$ |
| Opening Balance | ||||||||
Revaluation of assets / Net other comprehensive income/(loss) to be reclassified to profit or loss in subsequent periods | 7, 13 | |||||||
| Net profit for the year | 13 | |||||||
Contribution from non-controlling interest | 13 | |||||||
Distribution to non-controlling interest | 13 | ( | ( | |||||
| Balance at 31 December 2023 |
1
55
1. CORPORATE INFORMATION
These consolidated financial statements for the year ended 31 December 2023 include the accounts of CEIBA
CEIBA was incorporated in 1995 in Guernsey
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,
2020 as amended. The registered office of CEIBA is located at Les Echelons Court, Les Echelons, St Peter Port, Guernsey,
GY1 1AR.
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, 5ta Avenida, esq. a 76, Miramar, Playa, La Habana, 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.
The ordinary shares (“Shares”) of CEIBA are listed on the Specialist Fund Segment of the London Stock Exchange, where
it trades under the symbol “CBA”.
From 1 November 2018 to 30 June 2023 the Group appointed abrdn Fund Managers Limited (“AFML””) as the Group’s
alternative investment fund manager to provide portfolio and risk management services to the Group. AFML delegated
portfolio management to abrdn Alternative Investments Limited (“AAIL”). Both the AFML and AAIL are wholly-owned
subsidiaries of abrdn PLC (see note 17). On 30 June 2023, AFML ceased to be the investment manager and the Company
became self-managed beginning 1 July 2023.
2. BASIS OF PREPARATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
56
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
57
2.8. Convertible Bonds
The 10% unsecured convertible bonds 2026 (the “Bonds”) issued by the Company have been classified as a liability as
per IAS 32. The Bonds were initially recognised at fair value and are subsequently measured at amortised cost using the
effective interest rate methodology.
2.9. 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 perfo