Annual Report & Consolidated Financial Statements
For the year ended 31 December 2022
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TABLE OF CONTENTS
TABLE OF CONTENTS
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93
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DIRECTORS, MANAGEMENT AND ADVISERS
COMPANY OVERVIEW
CHAIRMAN'S STATEMENT
STRATEGIC REPORT
PRINCIPAL RISKS
VIABILITY STATEMENT
INVESTMENT MANAGER'S REVIEW
ENVIRONMENTAL, SOCIAL, GOVERNANCE (ESG) STRATEGY
THE BOARD OF DIRECTORS
DIRECTOR'S REPORT
DIRECTOR'S 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 www.ceibalimited.co.uk 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.
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DIRECTORS (ALL NON-EXECUTIVE)
John Herring (Chairman)
Trevor Bowen
Keith Corbin
Peter Cornell (Senior Independent Director)
Colin Kingsnorth
Jemma Freeman
all of the registered office
Alternative Investment Fund Manager (“AIFM”)
abrdn Fund Managers Limited
280 Bishopsgate
London EC2M 4AG
ADMINISTRATOR AND SECRETARY
NSM Funds 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
AUDITOR
Grant Thornton Limited
St James Place, St James Street
St Peter Port, Guernsey, GY1 2NZ
ADVOCATES TO THE COMPANY
(AS TO GUERNSEY LAW)
Carey Olsen (Guernsey) LLP
Carey House, Les Banques
St. Peter Port, Guernsey GY1 4BZ
BOND REGISTRAR
NSM Funds Limited
Les Echelons Court, Les Echelons
St Peter Port
Guernsey GY1 1AR
REGISTERED OFFICE
CEIBA Investments Limited
INVESTMENT MANAGER
abrdn Alternative Investments Limited
280 Bishopsgate
London EC2M 4AG
DEPOSITARY
NSM Funds Limited
Les Echelons Court, Les Echelons
St Peter Port
Guernsey GY1 1AR
TRANSFER AGENT
Link Group
10
th
Floor, Central Square
29 Wellington Street
Leeds LS1 4DL
FINANCIAL ADVISER & BROKER
Singer Capital Markets Advisory LLP
1 Bartholomew Lane
London EC2N 2AX
SOLICITORS TO THE COMPANY
(AS TO ENGLISH LAW)
Gowling WLG (UK) LLP
4 More London Riverside
London SE1 2AU
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
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GENERAL
CEIBA Investments Limited (“CEIBA” or the “Company”) is a Guernsey-incorporated, closed-ended investment company,
with registered number 30083. The Ordinary Shares of the Company are listed on the Specialist Fund Segment (“SFS”)
of the London Stock Exchange’s Main Market under the symbol CBA (ISIN: GG00BFMDJH11). The Company’s Bonds are
listed on The International Stock Exchange, Guernsey under the symbol CEIB1026 (ISIN: GG00BMV37C27). The
Company is an investment company and is governed by a Board of non-executive Directors, the majority of whom are
independent, and has no employees. Like many other investment companies, the investment management and
administration 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 2022 IN £ AND US$ (FOREX: £/US$ = 1.2039)
The Company’s Net Asset Value (“NAV”) and share price are 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 being provided in U.S.
Dollar for NAV related highlights and Sterling for share price related highlights, applying the applicable exchange rate as
at 31 December 2022 of £1:US$1.2039 (2021: £1=US$1.3477).
1 These are considered Alternative Performance Measures. See glossary on page 95 for more information.
2 The impact of the weakening of Sterling relative to the U.S. Dollar during the year under review translates to a smaller
decrease in the net assets in Sterling terms than in U.S. Dollar terms.
MANAGEMENT
abrdn Fund Managers Limited (previously called Aberdeen Standard Fund Managers Limited) (“AFML” or the “AIFM”)
acted as the Company’s alternative investment fund manager to provide portfolio and risk management services during
the financial year. The AIFM has delegated portfolio management to abrdn Alternative Investments Limited (previously
called Aberdeen Asset Investments Limited) (“AAIL” or the “Investment Manager”). Both AFML and AAIL are wholly
owned subsidiaries of abrdn plc (“abrdn”), a publicly quoted company on the London Stock Exchange. References
throughout this document to abrdn refer to both the AIFM and the Investment Manager.
FINANCIAL CALENDAR
COMPANY OVERVIEW
COMPANY OVERVIEW
USD
2
31 Dec 2022 31 Dec 2021
% change
Total Net Assets (m)
$142.1 $160.3
(11.4)%
NAV per Share
1
$1.03 $1.16
(11.4)%
Net Loss to shareholders of the Parent (m) ($14.3) ($28.8)
50.3%
Basic and Diluted Loss per Share
($0.10) ($0.21)
50.3%
GBP 31 Dec 2022 31 Dec 2021 % change
Market Capitalisation (m)
£55.8 £88.1
(36.7)%
Share price 40.5p 64.0p
(36.7)%
NAV per Share
1, 2
85.7p 86.4p
(0.8)%
Discount
1
(52.7)% (25.9)%
Ongoing charges
1
3.04% 2.80%
28 June 2023
Annual General Meeting 2023
30 September 2023 Announcement of half-yearly results for the six months ending 30 June 2023
31 December 2023
Financial year end
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During 2022, as Cuba moved out of the Covid-19 pandemic, it was hit by a succession of very unfortunate events,
including a large explosion at Havana’s Saratoga Hotel in May, causing significant loss of life, as well as a catastrophic
fire at the Matanzas oil facilities in early August, leading to regular subsequent power blackouts across the island. This
was then followed in late September by Hurricane Ian, which swept through the Pinar del Rio province in western Cuba,
causing damage to over 100,000 homes, multiple power networks as well as to standing crops and in particular to the
tobacco crop, one of the country’s major exports.
While the consequent frequent energy blackouts throughout the country have now significantly decreased, the country
has also experienced a significant exodus of more than 2% of the population during 2022 – around 250,000 persons –
most of who have emigrated to the US, primarily young people and professionals. This has also had a negative impact
on a country seeking to drive growth and development.
Given this backdrop the economy has understandably not performed well in 2022, with the GDP growing at some 2%,
while the forecast for 2023 is a little higher at 3%. These growth rates, although comparable to some developed
economies, have not yet been strong enough to bring Cuba back to its pre-pandemic position.
Tourism, which is amongst Cuba’s main sources of foreign currency, continued to pick up through 2022, although not at
the rate forecast early in the year. In 2022, there were some 1.6 million tourist arrivals, significantly lower than the
initial forecast of 2.5 million and the 4.6 million who visited Cuba in 2019. There are good indications that a
continuation of growth in Cuba’s tourism industry can be expected in 2023, although this does very much depend upon
a further improvement in the number of flights into the country. Current forecasts are for tourist numbers to increase
to 3.5 million in 2023, but this is still materially below pre-pandemic levels.
Monetary reforms
As has been noted in previous reports, the unification of the two Cuban currencies and other 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 always one of the prime providers of foreign currency to the
country. Since then, the liquidity position of the country has continued to deteriorate and there are ongoing shortages
of vital imported products, a very high inflation rate and a material devaluation of the street value of the Cuban Peso.
These issues have unquestionably played a role in the recent surge in emigration.
The main impact of these reforms on CEIBA continues to be in relation to the Company’s ability to realise the income
generated by Inmobiliaria Monte Barreto S.A. (“Monte Barreto”) in the form of hard currency dividend payments.
Relations with the United States
In the first two years of the Biden administration, there was disappointment in Cuba that the promises made in his
election campaign to reverse the damaging Cuban policies enacted by the Trump administration, aimed at foreign
investment and trade, tourism and remittances, did not get addressed. However, since May 2022 there have been
some modest positive moves, with the $1,000 per quarter limit of remittances being removed as well as the resumption
of charter and commercial flights to airports outside of Havana.
In October, U.S. Secretary of State Antony Blinken said that the U.S. was also willing to review whether Cuba deserves to
remain on the list of countries that sponsor terrorism, which is a very damaging status for Cuba’s economy and the
removal of which would be hugely important to Cuba’s standing in the world.
It is hoped that now that the mid-term elections are out of the way in the U.S. that further measures to open up
relations will be seen.
Trading review
In spite of the very challenging conditions, CEIBA’s assets continue to trade as well as could be exptected and this is
illustrated by the over five-fold increase to $15.8m in the dividend income receivable by the Company. The comparative
figure of $3.1m was materially affected by the impact of the Covid-19 pandemic, but nonetheless the income is close to
the amounts generated in 2018. While this is evidence of significant improvements in the tourism market in Cuba, for
Monte Barreto the issues with distributing dividend income received in Cuban Pesos (“CUP”) remain.
The largest individual asset in the portfolio is the 49% interest in Monte Barreto, which owns the Miramar Trade Centre.
Occupancy has fallen very modestly but remains at almost 95% and profitability remains near the record levels achieved
in 2020 and 2021.
However, the prime challenge, and the main uncertainty for the Company, is the difficulty that Monte Barreto has in
distributing the income generated from the property in the form of hard currency dividend payments to the Company.
Over the course of the year, with the present liquidity crisis in the Cuban banking system, Monte Barreto has not been
able to transfer significant dividends outside the country.
CHAIRMAN’S STATEMENT
CHAIRMAN’S STATEMENT
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The Company continues to discuss solutions to this problem with its Cuban counterparts in order to alleviate this issue,
including receiving some dividends in local currency, which can be applied against locally incurred costs.
While this uncertainty remains, the discount rates applied to future cash flows for the purpose of arriving at a valuation
for Monte Barreto have increased further, resulting in a lower valuation for CEIBA’s present interest and accordingly the
valuation of the participation in Monte Barreto has been reduced to US$50.2 million, which compares to US$67.7 million
as at 31 December 2021, largely as a result of a high discount rate of 18.2% (2021 – 12.8%) being applied to future
forecast post-tax earnings.
CEIBA’s main hotel interests are held through its 32.5% interest in the Cuban joint venture company Miramar S.A.
(“Miramar”). Miramar owns three hotels in Varadero and one hotel in Havana. In spite of the slow build up in tourist
numbers outlined above, trading at each of the four hotels has been very robust. All four hotels were reopened by early
2022 and have achieved significantly better results than was budgeted. Furthermore, as the hotels generate external
revenue in hard currency, the liquidity constraints affecting the country’s financial and banking system are less
impactful and the Company has been able to receive its dividends in hard currency throughout the year and this should
continue to be the case. The high season is from November through to the end of March and the results have been
very promising.
CEIBA’s other hotel interest is in the Cuban joint venture company TosCuba S.A. (“TosCuba”), which is very close to
finalising the construction of the 401 room Meliã Trinidad Península Hotel. In September 2022, the Company sold a
7.5% interest in Toscuba to Meliã Hotels International (together with a corresponding participation in Tranche A of the
construction finance facility), which brought its interest in the project down to 32.5%, with the proceeds applied towards
the completion of the hotel. This hotel is situated on the south coast of Cuba close to the historic city of Trinidad, a
UNESCO world heritage site, and will be the first modern international-standard luxury beach resort hotel in the area.
Despite the challenging backdrop, the hotel construction has proceeded very well over the last year and the hotel is
nearing completion, expected to take place during the next few months. Following soft opening activities, the hotel will
subsequently be fully operational for Cuba’s coming high season.
Dividends
Since the onset of the Covid-19 pandemic in 2020, the revenues generated by the Company’s hotel interests have been
severely impacted by the absence of tourists on the island and, as described above, have only recently begun to return
to good profitability. In 2020, the Board agreed that it was vital that CEIBA 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. No dividend has been paid since then. It is a high priority of the Board to reinstate the payment of dividends
to the Company’s shareholders, but this is unlikely in the short to medium term given the economic challenges facing
the country. In addition, the Board needs to ensure that sufficient funds are available to meet the repayment of the
convertible bond, which falls due in 2026. Accordingly, while it remains a very high priority to place the Company in a
position to restart the payment of dividends, the Board is not declaring a dividend for the year and it is presently not
envisaged that any dividends will be paid in respect of the 2023 financial year.
Share price
The Board is acutely aware of the poor share price performance since the Company gained its listing on the London
Stock Exchange in 2018. As at 31 December 2022, the level of discount to the underlying NAV that the shares were
trading at reached a level of 52.7%. In many respects, this share price performance is a reflection of the very difficult
macro environment in which the Company has been trading and the particular challenges which Cuba has faced.
While the normal approach of the Board of an investment trust to a persistently wide discount would be to look at
buying back some of its shares in order to try to correct the imbalance in the demand and supply of the Company’s
shares, and / or realising certain assets, however, this is much easier to do when (a) the assets of the company are liquid
and (b) easily divisible. This is more problematic when the assets, as is the case with CEIBA, are illiquid and lumpy. The
Directors, most of whom are also shareholders, recognise that the situation is extremely uncomfortable, but believe
that CEIBA is at, or is close to the eye of the perfect storm, and that the focus of the Company needs to be on re-
establishing the profitability of the Company and working with its Cuban partners to restore the payment of dividends
from Monte Barreto.
NSM Funds Limited
I announced in the 2022 Interim Report that the Company was in in the process of appointing NSM Funds Limited
(“NSM”) as its Administrator, Company Secretary, Depositary and Bond Registrar. The Company’s Registered Office has
also moved to NSM’s office. The process was completed on 1 December 2022. I would like to thank the team at NSM for
the efficient way in which the transfer of responsibilities was undertaken and look forward to working with NSM. I also
extend my thanks to JTC Fund Solutions (Guernsey) Limited, the outgoing service provider, for their years of dedication.
Internalisation of Management
Your Board has recently made the decision to bring the management of the Company in-house. abrdn Fund Managers
Limited, a wholly owned subsidiary of abrdn plc, has acted as alternative investment fund manager of the Group’s
portfolio of assets since the Company listed in 2018 and it will be stepping down from this role on or before 30 June
2023. There will however be no change in the underlying key operational management personnel of the Company and
CHAIRMAN’S STATEMENT
6
this team continues to be headed by Sebastiaan Berger, who is exclusively focused on the Company’s assets and
business and has acted in this role for some 20 years. He will become a full-time employee of the Company. In
addition, there will be no change to the team in Cuba and overall, the Board feels that the transition should prove to be
relatively seamless. 4K Keys Limited, which in the past provided consultancy services to AAIL regarding local market
knowledge and expertise on the ground in Cuba in respect to the investment portfolio, will continue to provide these
services. The Board have approved an incentive scheme that is based on the Company making future distributions to
Shareholders, which we believe will increase the appeal of the Company to the market and which should gradually, and
over time, help increase demand and thereby reduce the discount.
This decision has been made after lengthy discussions with AFML and it is considered to be in the interests of both
parties. As regards the Company, it will result in an immediate savings in management costs of approximately $1.2
million per annum.
The Board would like to extend its sincere thanks to the Investment Manager for its work and support to the Company
since 2018 in what have often proved to be very difficult times.
Board
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 an appropriate mix of relevant experience and
skills to ensure the effective overall operation of the Company.
John Herring
Chairman
26 April 2023
CHAIRMAN’S STATEMENT
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INVESTMENT OBJECTIVE
The investment objective of the Company is to provide a regular level of income and substantial capital growth.
INVESTMENT POLICY
The Company is a country fund with a primary focus on Cuban real estate assets. The Company seeks to deliver the
investment objective primarily through investment in, and management of, a portfolio of Cuban real estate assets, with
a focus on the tourism and commercial property sectors. Cuban real estate assets may also include infrastructure,
industrial, retail, logistics, residential and mixed-use assets (including development projects).
The Company may also invest in any type of financial instrument or credit facility secured by Cuba-related cash flows.
In addition, subject to the investment restrictions set out below, the Company may invest in other Cuba-related
businesses, where such are considered by the Investment Manager to be complementary to the Company’s core
portfolio (“Other Cuban Assets”). Other Cuban Assets may include, but are not limited to, Cuba-related businesses in
the construction or construction supply, logistics, energy, technology and light or heavy industrial sectors.
Investments may be made through equity investments, debt instruments or a combination of both.
The Company will invest either directly or through holdings in special purpose vehicles (“SPVs”), joint venture vehicles,
partnerships, trusts or other structures. The Cuban Foreign Investment Act (Law 118 / 2014) guarantees that the
holders of interests in Cuban joint venture companies may transfer their interests, subject always to agreement
between the parties and the approval of the Cuban government.
GROUP STRUCTURE
STRATEGIC REPORT
STRATEGIC REPORT
8
INVESTMENT RESTRICTIONS
The following investment limits and restrictions apply to the Company and its business which, where appropriate, will
be measured at the time of investment:
• the Company will not knowingly or intentionally use or benefit from confiscated property to which a claim is held
by a person subject to U.S. jurisdiction;
• the Company may invest in Cuban and non-Cuban companies, joint ventures and other entities that earn all or a
substantial part of their revenues from activities outside Cuba, although such investments will, in aggregate, be
limited to less than 10% of the Gross Asset Value;
• save for Monte Barreto (see the Investment Manager’s Review for more information on this asset), the Company’s
maximum exposure to any one asset will not exceed 30 per cent. of the Gross Asset Value;
• no more than 20 per cent. of the Gross Asset Value will be invested in Other Cuban Assets; and
• no more than 20 per cent. of the Gross Asset Value will be exposed to “greenfield” real estate development
projects, being new-build construction projects carried out on undeveloped land.
The 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 Investment Manager seek to influence the management decisions
of the Cuban joint venture companies through representation on their corporate bodies with the objective of
generating reliable and growing cash flow for the Cuban joint venture companies, which in turn will be reflected in
reliable and growing dividend streams in favour of the Company.
For an analysis of the Company’s performance against it’s KPIs, please see the Chairman’s Statement on page 4 and the
Investment Manager’s Report on page 20.
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 the
Investment Manager’s and other third-party service providers risk management processes and how these apply to the
Company’s business are reviewed regularly by the Audit Committee along with internal control reports from these
entities.
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 new
financial reforms aimed at creating a
new 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,
these measures have not been
successfully implemented in full and do
not at present apply to all economic
sectors or to all joint venture
companies. As a result, Monte Barreto
(in which the Company has a 49%
interest) remains almost fully
dependent on centrally assigned
liquidity for its international payments.
In addition, an exception to the general
rules has been adopted for the tourism
sector and is presently being
implemented. It remains uncertain
whether the financial reforms will be
fully implemented or whether new
measures will be adopted which modify
them. 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
of the affairs of the Company.
The Investment Manager has closely
followed all developments relating to
the adoption and implementation of
these new 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 has a participation.
The Investment Manager, together with
its Cuban partners, 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 US$ in Cuban Pesos
(“CUP”). The Cuban Peso has a fixed
(non-market) exchange rate of
US$1.00:CUP24, which may be subject
to further devaluation at the discretion
of the Cuban Central Bank. As from the
adoption of new rules for the tourism
sector presently being implemented, a
second exchange rate of
US$1.00:CUP120 has been established,
thereby providing a first indication that
a more general devaluation may
follow. Any future devaluation of the
CUP might have a negative impact on
the assets and operations of the Cuban
joint venture companies in which the
Company has an interest.
The currency devaluation risk
associated with the imposition of the
CUP as sole currency for operations is
new and significant. The cash and
currency positions of each of the joint
venture companies in which the
Company has a participation are
continuously monitored for the purpose
of reducing currency risk to the greatest
extent possible.
Wherever possible, in order to mitigate
devaluation risk, the Investment
Manager 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
2022 there have been significant delays
in the timing of international 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 ability of
the Company to carry out its
investment programme.
The Investment Manager 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. The Investment
Manager 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
resulted in an abrupt halt in Russian
and Ukrainian tourism to the island.
Further aspects of the Russia-Cuba
relationship may eventually be affected
by the conflict, including Russian
investments in Cuba, banking
relationships and other areas.
Although the conflict resulted in an
abrupt halt of the tourists travelling
from Russia and Ukraine to Cuba, the
operator of the Company’s tourism
assets has ensured that the focus of its
marketing efforts is on attracting
tourists from its historical principal
tourist suppliers (Canada and Europe)
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, 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. The pandemic may directly
or indirectly affect all other risk
categories mentioned in this matrix.
The Board discusses current issues with
the Investment Manager to limit the
impact of the Covid-19 pandemic on the
business of the Company and
recognises that the tourism sector is
particularly affected by the various
travel restrictions that have been
imposed to fight the Covid-19 pandemic
in numerous countries and that such
restrictions may re-emerge in the
future.
The Board’s actions are targeted at (i)
protecting the welfare of the various
teams involved in the affairs of the
Company, (ii) ensuring operations are
maintained to the extent possible and
to protect and support the assets of the
Company for the duration of any future
crisis, and (iii) to mitigate insofar as
possible the longer-term negative
impact of economic and operational
disruption caused by this and future
pandemics.
Risks relating to the Company and its Investment Strategy
Investment Strategy and
Objective
The setting of an unattractive strategic
proposition to the market and the
failure to adapt to changes in investor
demand may lead to the Company
becoming unattractive to investors, a
decreased demand for shares and a
widening discount.
The Company’s investment strategy and
objective is subject to regular review to
ensure that it remains attractive to
investors. The Board considers strategy
regularly and receives strategic updates
from the Investment Manager, 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 the Investment Manager
and 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 modify its
investment strategy accordingly.
Investment Restrictions
Investing outside of the investment
restrictions and guidelines set by the
Board could result in poor performance
and inability to meet the Company’s
objectives, as well as a discount.
The Board sets, and monitors, its
investment restrictions and guidelines,
and receives regular reports which
include performance reporting on the
implementation of the investment
policy, the investment process and
application of the guidelines. The
Investment Manager attends all Board
meetings. The Board monitors the
share price relative to the NAV.
12
PRINCIPAL RISKS
Type of Risk
Description and Possible Impact
Mitigating Action
Trend
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, the Investment
Manager will perform or procure the
performance of due diligence on the
proposed acquisition target. The Group
tries to structure its equity investments
in Cuban joint venture companies so as
to include a viable exit strategy. The
Investment Manager, or the members
of the on-the-ground team, regularly
attend the Board meetings of the joint
venture companies through which
Group interests are held, and actively
manage relations with the management
teams of each joint venture company,
the relevant Cuban shareholders and
relevant third parties to ensure that
Group interests are enhanced.
Real Estate 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, and
the materialisation of these risks could
have a negative effect on specific
properties, development projects or
the Group generally.
The Investment Manager regularly
monitors the level of real estate risk in
the Cuban market and reports to the
Board at each meeting regarding recent
developments. The Investment Manager
works closely with the on-the-ground
team, the external hotel managers and
the joint venture managers to identify,
monitor and actively manage local real
estate risk.
In the case of Monte Barreto, tenant risk
has been augmented by the new
financial autonomy rules, which result
amongst others in certain categories of
tenants paying their rents with varying
degrees of liquidity. The Investment
Manager, together with the
management team of Monte Barreto,
now assesses the impact of the new
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.
The Investment Manager regularly
monitors all construction and
refurbishment activities carried out
within Group companies and works
closely with the on-the-ground
management team and the joint
venture managers to identify, monitor
and actively manage all construction
risks. The Investment Manager reports
to the Board at each meeting regarding
recent developments in this respect. In
the construction context, the availability
and transportation of construction
materials have been significantly
affected by the Covid-19 pandemic
worldwide, thereby increasing
construction costs.
13
PRINCIPAL RISKS
Type of Risk
Description and Possible Impact
Mitigating Action
Trend
Portfolio and Operational Risks (continued)
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.
The Investment Manager regularly
monitors the local and regional tourism
markets and meets regularly with the
external hotel management to identify,
monitor and manage global and local
tourism risk and to develop appropriate
strategies for dealing with changing
conditions. The Company aims to
maintain a diversified portfolio of
tourism assets spanning various hotel
categories (city hotel / beach resort,
business / leisure travel, luxury / family)
in numerous locations across the
island. As the world re-emerges from
the Covid-19 pandemic the Investment
Manager is working closely with the
external hotel management to optimise
the resumption of full-scale operations
at the hotels in which the Company has
an interest.
Insurance Risk
The Company invests in real estate
assets in Cuba through Cuban joint
venture companies and as a
consequence of U.S. sanctions the
Cuban joint venture companies have
not been successful in obtaining
adequate hard currency insurance
coverage for their real estate assets,
which may in turn have a negative
impact on the Company in the case of
occurrence of insured events.
The Investment Manager regularly
monitors the availability of local and
international hard currency insurance
coverage for the Cuban joint venture
companies in which it has an interest.
Valuation Risk
In the absence of regular market
indicators regarding the pricing of real
estate assets, the independent third-
party RICS valuers of the assets of the
Company determine the values of the
assets in which the Company holds an
interest on the basis of discounted cash
flow projections, which under the
present circumstances and in an
unpredictable future may provide less
accurate and highly volatile results.
As part of the valuation process, the
Investment Manager 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 also subject to review by
the executive management team, the
Investment Manager’s Alternatives
Pricing Committee, the Board and the
auditors of the Company.
Dependence on Third Party
Service Providers
The Company is dependent on the
Investment Manager and other third
parties for the provision of all systems
and services relating to its operations
and investments, and any inadequacies
in design or execution thereof, control
failures or other gaps in these systems
and services could result in a loss or
damage to the Company. 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. Further details of the internal
controls which are in place are set out in
the Directors’ Report on pages 32 to 38.
Loss of Key Fund Personnel
The loss of key managers contracted by
the Investment Manager to manage the
portfolio of investments of the Group
could impact performance of the
Company.
Under the Management Agreement, the
Investment Manager has the obligation
to provide at all times personnel with
adequate knowledge, experience and
contacts in the Cuban market. In order
to mitigate key manager risk, the
Investment Manager makes every effort
to spread knowledge and experience of
the Cuban market within the
organisation so as to reduce reliance on
a small team of individuals.
14
Type of Risk
Description and Possible Impact
Mitigating Action
Trend
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
restrictions against Cuba, although it is
possible that it might accelerate efforts
to do so in the future. 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.
The Investment Manager closely follows
developments relating to the
relationship between the United States
and Cuba and monitors all new
restrictions adopted by the United
States to measure their possible impact
on the assets of the Group. The Group
has adapted its investment model to the
existing sanctions, but the risk remains
of further sanctions being adopted in
the future.
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.
The Investment Manager follows all
developments relating to the
designation of Cuba as a state sponsor
of terrorism and remains moderately
optimistic that domestic and
international pressure will lead to a
reversal of this nakedly political
designation in the coming period. The
Investment Manager also structures
group operations in a manner to
minimise the negative impact of the
designation to the greatest extent
possible.
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)
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, although it is
possible that it might do so in the
future.
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.
The Investment Manager 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. The Investment
Manager manages 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.
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 USD.
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 due to difficulties in
agreeing hedging arrangements with
third parties.
PRINCIPAL RISKS
16
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.
Type of Risk
Description and Possible Impact
Mitigating Action
Trend
Risks relating to Regulatory and Tax Framework
Tax Risk
Changes in the Group’s tax status or tax
treatment in any of the jurisdictions
where it has a presence may adversely
affect the Company or its shareholders.
The Investment Manager regularly
reviews the tax rules that may affect the
operations or investments of the
Company and seeks to structure the
activities of the Company in the most
tax efficient manner possible. However,
the Company holds investment
structures in numerous jurisdictions
arising from past acquisitions, and the
general direction of change in many
jurisdictions is not favourable.
17
The Board considers the Company, with no fixed life, to be a long-term investment vehicle.
The Board continually considers the prospects for the Company over the longer term. Based on the Company’s current
financial position, its operating model and track record, as well as the experience of the Investment Manager from both
a Cuban investment and closed-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 that the Company is a long-term investment vehicle and, for the purposes of this viability
statement, has decided that a period of four years is an appropriate period over which to consider its viability. The
Board considers this to be an appropriate period for a closed-end investment company, listed on the London Stock
Exchange, which 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 16;
• 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, the Investment Manager’s portfolio strategy for the future and
the market outlook.
The Board has considered the ongoing impact of US-Cuban relations and associated sanctions, the global geopolitical
environment including the Russia-Ukraine conflict, local conditions in the Cuban market and the long-term effects of the
Covid-19 pandemic on the portfolio when assessing the viability of the Company and, in particular, considered:
• The impact on the general liquidity position of Cuba and the ability of Miramar and Monte Barreto to distribute
dividends to their shareholders, including the Group;
• The impact on the Cuban tourism industry and the financial results of Miramar; and
• The impact on the timing of construction of the TosCuba Project due in part to delays in the receipt of construction
imports from Europe.
Following 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 four years from the date of this Annual
Report. While US-Cuban relations, Covid-19 related travel restrictions and the Russian invasion of Ukraine have had an
impact on tourist numbers and are expected to continue doing so going forward, to a lesser extent, the first quarter
2023 results of the Hotels are above budget and the Trinidad hotel is expected to begin making payments under the
TosCuba Construction Facility in early 2024, so the Directors are confident that the Company remains viable. In
addition, the above expectation has been tested under a variety of scenarios, including delays in the receipt of projected
dividend income, and 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 the prolongation or escalation of the Russia-Ukraine conflict, a deterioration of
the outlook for Cuba, the further strengthening of the U.S embargo, the resurgence of health and economic impacts of
the pandemic, or changes in investor sentiment could have an impact on the accuracy of its assessment of the
Company’s prospects and viability in the future.
GOING CONCERN
In accordance with the guidance of the Financial Reporting Council, the Directors have 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 16 and the
Viability Statement on page 17. 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 that it is appropriate to continue to adopt the going concern basis in preparing the
financial statements.
VIABILITY STATEMENT
VIABILITY STATEMENT
18
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 2022, 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 as between
shareholders of the Company.
The Role of the Directors
The Company is a closed-ended investment company, has no executive directors or direct employees and is governed
by the Board of Directors. Its main stakeholders are shareholders in the Company, the holders of Bonds issued by the
Company (“Bondholders”), the Investment Manager, investee companies, service providers and the environment and
community.
As set out in the Directors’ Report, the Board has delegated day-to-day management of the assets to the Investment
Manager and, either directly or through the Investment Manager, the Company has engaged key suppliers to provide
services in relation to valuation, legal and tax requirements, auditing, company secretarial, depositary obligations and
share registration, amongst others. All decisions relating to the Company’s investment policy, investment objective,
dividend policy, gearing, corporate governance and strategy in general are reserved to the Board. The Board meets
quarterly and receives full information on the Company’s performance, financial position and any other relevant
information. At least once a year, the Board also holds a meeting specifically to review the Group’s strategy.
The Board regularly reviews the performance of the Investment Manager, and its other service providers, to ensure they
manage the Company, and its relations with its stakeholders, effectively and that their continued appointment is in the
best long-term interests of the stakeholders as a whole.
Shareholders 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 Investment Manager and the Company’s broker regularly meet with shareholders, and prospective shareholders, to
discuss Company initiatives and seek feedback. The views of shareholders and Bondholders are discussed by the Board
at every Board meeting, and action is taken to address any concerns raised. The Board and the Investment Manager
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 will proactively engage with major shareholders to determine their
appetite for any such change. The Chairman offers to meet with key shareholders at least annually, and other Directors
are available to meet shareholders as required. This allows the Board to hear feedback directly from shareholders.
During the financial year to 31 December 2022, the Board members, and the Investment Manager, 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 and Investment Manager of the Company. The Board encourages as many shareholders as possible to attend
the Company’s AGM and to provide feedback on the Company. In the event that any situation should affect plans to
hold the AGM on 28 June 2023 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.
VIABILITY STATEMENT
19
The Board believes that the companies in which the Company invests would like a positive and trusting working
relationship with the Investment Manager and the Board, sustainable and long-term investment, positive governance
practices, and value creation for all stakeholders.
In addition to engagement with the investee companies, the Investment Manager works closely with the external hotel
managers and managers of office complexes who are responsible for running the Company’s properties. This allows
the Investment Manager to fully understand the operational risks associated with the management of the Company’s
underlying assets. The Board oversees the Investment Manager’s interactions with the investee companies and receives
reports on engagement, interaction and revenue streams at every Board meeting.
Investment Manager
The Investment Manager’s Report on pages 20 to 26 details the key investment decisions taken during the year and
subsequently. The Investment Manager has continued to manage the Company’s assets in accordance with the
mandate provided by shareholders, with the oversight of the Board. The Board receives presentations from the
Investment Manager at every Board meeting to help it to exercise effective oversight of the Investment Manager and
the Company’s strategy. The Board formally reviews the performance of the Investment Manager, and the fees it
receives, at least annually. More details on the conclusions from the Board’s review are set out on page 33.
Other Service Providers
The Board seeks to maintain constructive relationships with the Company’s suppliers, either directly or through the
Investment Manager, with regular communications and meetings. The Board, via the Management Engagement
Committee, also ensures that the views of its service providers are considered and at least annually reviews these
relationships in detail. The aim is to ensure that contractual arrangements remain in line with best practice, services
being offered meet the requirements and needs of the Company and performance is in line with the expectations of the
Board, Investment Manager and other relevant stakeholders. Reviews will include those of the company secretary,
broker, share registrar and auditor.
The Community and the Environment
The Board and the Investment Manager are committed to investing in a responsible manner. There are a number of
geopolitical, technological, social and demographic trends underway that can, and do, influence real estate investments
– many of these changes fall under the umbrella of the Environment and Community, or Environmental, Social and
Governance (“ESG”), considerations. As a result, the Investment Manager will integrate ESG factors into its investment
decision-making and governance process.
The Board has instructed the Investment Manager 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 Investment Manager’s Report on pages 4 to 6 and pages 20 to 26, respectively, detail the
key decisions taken during the year and subsequently. Notable actions where the interests of stakeholders were
actively considered 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.
• Construction of TosCuba Project – the principal investment activity of the Company during the year was the
ongoing construction of the Meliã Trinidad Península Hotel. Following the termination of the original turn-key
construction contract in 2021 (as a result of non-compliance by the constructor), the joint venture company took
full direct control over the construction process and all purchasing decisions. Construction continued throughout
2022 at full pace and the Hotel is expected to be completed during the summer of 2023.
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
20
2022 PERFORMANCE
As at 31 December 2022, the total Net Asset Value of CEIBA Investments Limited (“CEIBA Investments” or the
“Company”) was US$142,078,505 (31 December 2021: US$160,322,589) and the NAV Total Return for the year was
-11.4% (2021: -17.5%). The total income of the Company for 2022 rose to US$19,095,234 from the prior year figure of
US$4,981,763, primarily as a result of higher dividends from Miramar S.A. The total dividend income from the Cuban
joint venture companies during 2022 was US$15,864,494 (2021: US$ US$3,050,124). The loss on the change in the fair
value of the equity investments during the year was US$16,098,664 (2021: loss of US$13,843,717). The net loss of the
Company attributable to the shareholders for 2022 was US$14,283,039 (2021: loss of US$28,811,901). The decrease in
the net loss compared to the prior year is primarily attributable to the increase in dividend income and lower expected
credit loss expense in 2022 related to the dividends receivable from Immobiliaria Monte Barreto S.A.
During the year, the NAV per Ordinary Share of CEIBA Investments decreased from 86.4 pence to 85.7 pence. In
contrast, the share price of the Ordinary Shares of the Company decreased from 64.0 pence to 40.5 pence, increasing
the discount from 25.9% to 52.7%.
As at 31 December 2022, the valuations of the Havana and Varadero hotels in which the Company has an interest
increased despite a small increase in the discount and capitalization rates that were applied in connection with these
assets. By contrast, the fair value of the Miramar Trade Center, the principal commercial real estate asset in which
CEIBA Investments has a holding, and the investment in the new hotel construction project in Trinidad, decreased
substantially. In both cases this was the result of a larger increase in the discount and capitalization rates, reflecting not
only the higher levels of perceived risks in respect of the country in general, but also of these assets in particular. In
addition, in the case of the Trinidad hotel, the decrease was magnified by the fact that in valuing the asset, with
construction now nearly complete, the Company has started to apply the fair value method (instead of holding this
asset at cost as was previously the case). Projected income levels are expected to be relatively low during the first start-
up period of operations.
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 designation of Cuba as a State Sponsor of Terrorism, the liquidity
issues faced by the country, the increased threat of a substantial devaluation of Cuba’s official currency, the
unpredictability and lack of effectiveness of monetary reforms, and the ongoing inability of Cuba to honour its own
financial obligations and to execute international bank transfers. The latter makes it very difficult for Cuban companies
to pay suppliers and distribute dividends to overseas shareholders. These risks are most acute for the Miramar Trade
Centre, where a large part of the total rentable area is leased to Cuban (national and joint venture) companies, those
rents are collected in Cuban Pesos, and existing monetary legislation restricts Cuban commercial real estate companies
from generating Cuban Pesos that may be exchanged for, or transferred abroad as, hard currency.
Reaching bottom - the only way to go from here seems to be up
It is important to acknowledge the past to understand the present better and to form a balanced opinion of the future –
the future of Cuba and by extension the future of CEIBA Investments as a foreign investor in the country.
Between 2018 and 2023, Cuba experienced an extremely challenging geopolitical and macro-economic environment,
which included a strengthened U.S. Cuban embargo, the Covid-19 pandemic, a tourism recovery hindered by the
designation of Cuba as a State Sponsor of Terrorism (SST), badly timed and poorly executed monetary reforms, and a
mass exodus triggered by political and economic considerations. These in turn all led to significant economic decline
and a reduction in much-needed foreign aid and investment.
As a country fund, CEIBA Investments has suffered the consequences of this unfortunate mix of circumstances. Not only
has the performance of the Company’s assets been affected, but so have the Company’s day-to-day operations with
banks, insurance companies and other service providers. Even shareholders have faced numerous challenges trading
and holding shares in the Company. Most importantly, these events affecting the country have caused a steady
increase in the levels of perceived risk and a corresponding decline in Company asset valuations over recent years,
triggered by repeated increases to the discount rates used in the calculation of the present value of future cash flows of
the Company.
Without doubt 2022 was another extremely challenging year for Cuba and also for the Company. It is the year in which I
believe Cuba hit bottom.
INVESTMENT MANAGER’S REVIEW
INVESTMENT MANAGER’S REVIEW
21
Cuba remains hindered by U.S. foreign policy and by U.S. domestic politics
Throughout the Trump administration, the United States steadily reversed the normalization steps previously taken by
President Obama and returned to a very aggressive policy towards Cuba. This included the creation of new sanctions
lists aimed at penalizing military entities, the imposition of new travel and remittance restrictions, the activation of Title
III of the Helms Burton Act and finally, less than two weeks before the inauguration of President Biden (and without any
sort of formal review), the reinstatement of Cuba to the U.S. list of State Sponsors of Terrorism (SST). Of all the U.S.
restrictions that are presently in place, the inclusion of Cuba on the SST list (together with Iran, North Korea and Syria) is
surely the most aggressive and disproportionate measure, imposing extreme negative consequences on the country, its
people, and anyone doing business or otherwise interacting with Cuba. As a consequence of the designation, given its
extended reach and implications, Cuban entities and foreign investors face substantial difficulties in obtaining standard
banking, insurance and other international financial services necessary for regular operations. The operations of the
Company have been seriously impacted by the SST designation and this is likely to continue until the country is
removed from the SST list once again.
Following president Biden’s election in 2021, it was generally assumed that Cuba’s relationship with the U.S. would
rapidly improve, since Biden’s campaign promises included the commitment that his administration would “immediately
reverse the failed Trump Cuba policies” and reinstate the Obama-era policies of engagement with Cuba. Instead,
President Biden has so far left in place nearly all of the amplified Trump sanctions against Cuba and even added a new
one – directly related to Cuba’s SST designation – prohibiting European and other travelers who have visited Cuba since
2021 from applying electronically for (ESTA) visas under the U.S. Visa Waiver Program.
In mid-May 2022, the Biden administration finally began easing certain measures that restricted travel from the U.S. to
Cuba and re-allowed the sending of remittances to Cuba. However, to date these steps have not included removing
Cuba from the SST list or suspending Title III of the Helms Burton Act.
Outlook Cuba 2023 – A mixed bag
Any sustained recovery of the Cuban economy will likely depend primarily on a significant increase in remittances to
Cuban citizens from their families based in the U.S. and other remittances, 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 nascent SME sector and the
successful adoption of new reforms. That in turn, will have a direct effect on the country’s liquidity position and the
successful implementation of monetary and other reform efforts.
A number of these important factors now appear poised and ready, although not yet fully implemented or felt. The
Biden administration has begun relaxing the prohibitions against U.S. remittances and taking other tentative steps, the
tourism industry is recovering slowly but steadily, monetary and other reforms continue to be adopted and thousands
of new SMEs have been incorporated and have started up operations over the course of last year. It is to be hoped that
positive winds will now blow on all of these initiatives.
In the meantime, the liquidity position of the country remains extremely fragile and the risk of further devaluation of
the Cuban Peso remains very high. The Cuban banking system, the electricity grid and other key infrastructure are
extremely feeble and may easily fall into further crisis if the above positive forces do not successfully move the country
forward quickly, which may compound existing problems. Add to the above uncertainties from the war in Ukraine, the
continuing support of the Cuban government from Russia and China, the growing rapprochement between Venezuela
and the U.S., the apparent necessity of Brazil’s president Lula to establish good relations with the U.S. and other
geopolitical factors, and one will understand that it is far from easy to predict how 2023 will turn out for Cuba.
In my view, the most likely scenario for 2023 will include: improved U.S.-Cuba relations and some good news from the
Biden administration, a slowing of emigration, continued recovery of Cuba’s tourism sector, an official but possibly
modest devaluation of the Cuban Peso, a slow improvement of Cuba’s liquidity situation, and the continuation of
monetary reforms that will continue to feel chaotic until the country’s liquidity position is improved.
Under such a scenario, with completion of the Meliá Trinidad Península hotel expected during the summer, the
Company’s four existing hotels in Varadero and in Havana maintaining and further increasing their profit margins and
the Miramar Trade Centre resuming the distribution of cash dividends to its shareholders, the future would look a lot
better than the recent past!
INVESTMENT MANAGER’S REVIEW
22
PORTFOLIO ACTIVITY
The Miramar Trade Centre / Monte Barreto
The largest real estate holding of the Company is its 49% interest in Inmobiliaria Monte Barreto S.A. (“Monte Barreto”),
the Cuban joint venture company that 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 valuation of Monte Barreto has been adjusted downwards at 31 December 2022 by US$17.5 million, representing a
25.8% decline as compared with the December 2021 valuation. This was driven not by a fall in performance but mainly
by a further increase of 5.3% in the discount rate applied to the discounted cash flow model of Monte Barreto in order
to take into account the present state of the Cuban economy and the increased transfer and currency risk faced by
Monte Barreto and its shareholders.
Overall, the performance of the Miramar Trade Centre during 2022 remained strong with only a modest decrease in
occupancy rates that remained in the mid to high nineties throughout the year. It was also able to obtain a slight
increase in average monthly rent per square meter of US$26.17, compared to US$25.95 in the prior year. Monte
Barreto registered net income after tax of US$14.7 million for 2022 (2021: US$15.6 million), representing a 5.8%
decrease as compared to the prior year. The decrease was due primarily to a one-time gain recorded in the prior year
of US$734 thousand as a result of changes in the Cuban monetary system.
Demand for international-standard office accommodation in Havana remains strong, predominantly from multinational
companies, joint ventures, NGOs and foreign diplomatic missions. Monte Barreto remains the dominant option in this
market segment. As a consequence, the outlook for Monte Barreto in 2023 remains encouraging, as we expect
occupancy levels to remain in the mid to high nineties throughout the year. However, in light of the present market
conditions, the joint venture has temporarily halted its general strategy of rental increases when leases are being
renewed.
In accordance with the provisions of Ministry of Economy and Planning Resolution 115 dealing with financial autonomy
and the allocation of hard currency resources, commercial real estate activities have been excluded from some of the
general rules relating to “liquid” payments (the ability to transfer funds abroad on an autonomous basis, without foreign
exchange controls), and consequently the local currency payments of many tenants of the joint venture are not easily
converted into foreign currency for payment abroad.
Given the present limited financial autonomy of Monte Barreto, in combination with the current economic situation and
liquidity difficulties faced by the country, we do not expect that the presently outstanding dividends will be paid during
the current year. Nevertheless, we expect that the pace of distribution of dividends will pick up when the country re-
emerges from the present difficulties. Although outstanding dividends owed to the Company have been fully
provisioned, over the course of the year management has held numerous discussions with the Cuban shareholder in
the joint venture company in order to find alternative ways to unlock payments due to the Company. These discussions
are ongoing and the outcome is uncertain. Dividend income recognised by the Company from Monte Barreto during
the year was US$8.2 million, compared to US$2.6 million in 2021.
INVESTMENT MANAGER’S REVIEW
3
rd
Avenue in the Miramar neighbourhood: Miramar Trade Center 6-building complex on the right, Meliã Habana Hotel on the left.
23
The Hotels of Miramar
Through its indirect ownership of a 65% interest in HOMASI S.A. (“HOMASI”), which in turns has a 50% interest in
Miramar S.A.(“Miramar”), the Group has a 32.5% interest in the following hotels (collectively “the Hotels”):
• the Meliã Habana Hotel, a 397-room international-category 5-star business hotel located on prime ocean-front
property in Havana (directly opposite the Miramar Trade Center);
• the Meliã Las Americas Hotel, a 340-room international-category 5-star beach resort hotel located in Varadero;
• the Meliã Varadero Hotel, a 490-room international-category 5-star beach resort hotel located in Varadero; and
• the Sol Palmeras Hotel, a 607-room international-category 4-star beach resort hotel located in Varadero.
The Hotels are operated by Meliã Hotels International S.A. (“Meliã Hotels International”), which also has a 35% equity
interest in HOMASI (which translates to a 17.5% interest in Miramar).
Performance of the Hotels
The valuation of Miramar and its four hotels has been adjusted upwards at 31 December 2022 by US$4.1 million,
representing a 4.4% increase as compared with the December 2021 valuation. This was driven mainly by increased cash
flow projections, offset by a 1.4% increase in the discount rate applied to the discounted cash flow model of Miramar.
As a result of the Covid-19 pandemic and the resulting collapse of the worldwide travel industry, the Hotels faced an
extremely challenging business environment during 2020 and 2021, but they recovered extremely well during 2022.
With all four hotels fully operational throughout the financial year and benefitting from reduced operational costs and
other financial advantages resulting from the monetary reforms implemented during the prior year, and with
occupancy levels largely recovered from pandemic lows at two of the Hotels (the Meliá Habana and Meliá las Américas
hotels), Miramar delivered substantially higher income than in the prior year. The average room occupancy of the four
hotels in 2022 rose to 55%, compared to 20% in 2021. The four hotels on average recorded a substantial increase in
total revenue per room sold in 2022 of US$204.38, compared to US$150.39 in 2021, and total revenue per available
room of US$112.70, compared to US$90.73 in the prior year.
The net income after tax of Miramar was US$18.6 million (2021: net loss US$9.6 million), resulting in higher dividend
income earned by the Company from Miramar during the year of US$7.7 million, compared to US$500 thousand in the
prior year. During 2022, HOMASI received a total amount of US$8.0 million in dividend payments from Miramar outside
Cuba, the bulk of which related to the year 2022 and a smaller portion of dividends receivable from the prior year.
Although the timing of dividend payments varies and does not exactly coincide with the hotel results during the
financial year, the dividend payments received in 2022 as a percentage of the present holding value of the Miramar was
8.1%.
Notwithstanding the fact that there are numerous new hotels opening, especially in Havana, and others that were
closed as a result of the Covid-19 pandemic reopening, we expect that performance will continue at these positive levels
throughout 2023, subject to the possibility that some of the monetary reform benefits presently favouring the
operations of Miramar will be scaled back by the Cuban authorities, with the result that the present high levels of
profitability may be lower in the future.
INVESTMENT MANAGER’S REVIEW
Miramar Hotels views (Clockwise from top left: Meliã Habana, Meliã Las Americas, Sol Palmeras and Meliã Varadero Hotels)
24
We expect the income directly generated by the operations of Miramar under the current liquidity rules, under which
international tourism income is treated as direct export income (of which 70-80% of the liquidity can be retained by the
joint venture) to be sufficient to allow Miramar to distribute all profits to be generated during the year. However, the
need to increase the salaries of the employees of Miramar, as a result of local inflation which reached 39% in 2022
according to official statements, and a possible devaluation of the official foreign exchange rate of the Cuban Peso as
well as a possible roll-back of some of the monetary reform measures that are presently benefitting the joint venture,
could negatively affect the profitability of the Hotels in 2023.
The TosCuba Project
During the year, CEIBA Tourism B.V. (a subsidiary of the Company) sold a 15% equity holding in Mosaico Hoteles S.A.
(“Mosaico Hoteles”), representing a 7.5% indirect interest in TosCuba, the Cuban joint venture company that is
constructing the 401 room Meliã Trinidad Península Hotel, to Meliã Hotels International. The purpose of the transaction
was to secure the full funding for the construction of the hotel and to align the shareholdings of the Company and Meliã
Hotels International in TosCuba with their shareholdings in Miramar. As a result, the Company now has a 65% (formerly
80%) interest in Mosaico Hoteles, representing a 32.5% indirect interest in TosCuba. Similarly, the Company sold a
corresponding 15% participation in Tranche A of the construction finance facility to Meliã Hotels International.
As at 31 December 2022, all structural works had been completed and the project is almost complete. The project
progressed slowly during the Covid-19 pandemic but returned to a normal rate of construction towards the end of 2021
and throughout 2022. Present works are now focused on the completion of mechanical systems and interior finishing
works, as well as the supply of startup consumables and the training of staff, etc. It is now estimated that completion of
construction of the hotel will take place during the summer of 2023. Following soft opening activities, the full ramp-up
of operations is expected prior to the start of the 2023-2024 high season.
The Company arranged and executed a US$51.5 million construction finance facility to be disbursed under two tranches
of US$22.5 million and US$29 million, respectively. At 31 December 2022, the amount disbursed under the Company’s
participation in Tranche A was US$18 million. The amount disbursed under the Company’s participation in Tranche B of
the facility was US$20.9 million, of which US$15.7 was a direct participation and US$5.2 million represents its interest in
the participation of HOMASI, in which the Company has an indirect 65% participation.
The increased principal of Tranche B includes an amount that may be used for the purchase and installation of solar
panels to limit the hotel’s dependence on electricity from the national grid and contribute to CEIBA’s strategic ESG goals.
Repayment of the amended 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.
INVESTMENT MANAGER’S REVIEW
Clockwise from top: Meliã Trinidad Península Hotel South courtyard, rooftop climate control systems and solar arrays, main entrance.
25
During the year, Homasi took a $5.2 million participation in Tranche B of the construction finance facility, representing
an 18% interest therein. The participation of Homasi has been fully disbursed.
The total cost of the project – including incorporation of the joint venture company, acquisition of surface rights,
construction of the hotel and pre-construction expenditures – is currently estimated at US$78.7 million. Of this amount,
US$16 million represents the share capital invested in TosCuba by the shareholders, of which the Company contributed
US$5.2 million (32.5%), and US$11.2 million represents grants received under the Spanish Cuban Debt Conversion
Programme. The remaining funds necessary to complete the project will be disbursed under the construction finance
facility.
Given that construction works are nearing completion and the start-up of operations of the hotel during the current
year is highly probable, the Company has changed the methodology of valuing its equity interest in this asset from cost
to fair value. The result of this change is that at 31 December 2022, the holding value of the equity interest has
decreased substantially. Expressed in amounts invested, granted and financed, the cost of the Company’s investment
in TosCuba is US$78.7 million. The fair value of the equity interest in TosCuba was determined by first estimating the
value of the completed hotel as at 1 July 2023 and discounting that value to 31 December 2022. Then from this value the
amount of loans extended to TosCuba and the estimated remaining cost to complete the hotel at 31 December 2022
were deducted. The resulting value of the equity interest in TosCuba in the financial statements at 31 December 2022 is
US$5.4 million, compared to US$13.6 million in the prior year.
On 27 March 2023, the Provincial Court of Sancti Spiritus Province rejected the appeal of the constructor under the
original 2018 turnkey construction contract for construction of the Meliã Trinidad Península Hotel and upheld in full the
earlier decision by the Municipal Court of Sancti Spiritus Province dated 30 November 2022 awarding damages in favour
of TosCuba in the amount of US$8,811,969 in connection with the termination of the turnkey construction contract in
2021. This decision fully vindicates the position taken by TosCuba in deciding to terminate the contract. Due to
uncertainty regarding the timing of payment of this award, there will be no immediate impact on the financial position
of the joint venture.
GBM Interinvest Technologies Mariel S.L.
The Company holds a 50% interest in GBM Interinvest Technologies Mariel S.L., a Spanish company that is developing a
new 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 its 50% interest and subsequently executed a convertible loan agreement and
disbursed the principal amount of €500,000 (US$533,300). The full investment of the Company in this project is
expected to be approximately US$1.5 million.
Groundworks on the 11.3-hectare site for the construction of the first four warehouses of the project were completed in
June 2021. This project is presently on hold, awaiting the completion of discussions with potential tenants with a view to
coordinating the start of construction works with the existence of real demand.
INVESTMENT MANAGER’S REVIEW
Renderings of the GBM Mariel Project
26
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).
This facility generates an 8.00% interest rate and operated successfully without delay or default until the closure of all
Cuban hotels in March 2020 following the outbreak of the Covid-19 pandemic. At that time, the income from the hotels
that serve as the basis for payments under the FINTUR facility ceased. In the face of the difficulties caused by the
pandemic, the payment schedule was amended and the borrower was granted certain grace periods affecting principal
and interest until recovery of the hotel payment streams. By 31 December 2022, operations under the facility were fully
returned to normal and payments of both principal and interest are up-to-date.
Only two of the hotels originally granted as security for the repayment of the FINTUR facility are currently open, and
discussions are presently ongoing with FINTUR to determine whether this income is deemed sufficient to meet all
remaining obligations under the facility, which is scheduled to be repaid in full by September 2023, or whether
additional security should be granted. The Investment Manager meets regularly with FINTUR in order to gauge the
performance of the cash flows serving as security for the facility.
As at 31 December 2022, the principal amount of US$1,295,693 (2021: US$1,943,760) was outstanding under the
Company’s participation in the Facility.
OUTLOOK
We expect that the very difficult economic circumstances faced by Cuba during 2022 will continue throughout 2023, and
that the local market conditions in which the Company and its subsidiaries operate will remain very challenging.
Liquidity and cash flows are closely monitored in order to ensure full compliance with operational obligations while in
parallel finalising construction of the Meliá Trinidad Península Hotel so that it becomes an income-generating asset as
soon as possible.
The very tight liquidity position of the Cuban economy resulting from 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 transitional effects of monetary and economic reforms being adopted by the Cuban
government will likely continue to impact negatively on the timing of dividend and other payments to the Company in
the short term.
In that respect, the savings in management costs of approximately US$1.2million per annum as a result of the
internalisation of management of the Company is very welcome. In addition, as Cuba’s liquidity position improves, we
expect that the office complex of Monte Barreto, all four of the Miramar hotels, and the TosCuba hotel in Trinidad
(following its opening) will benefit from the improved market conditions, both in terms of revenue generation and
valuations.
Sebastiaan A.C. Berger
abrdn Alternative Investments Limited
26 April 2023
INVESTMENT MANAGER’S REVIEW
27
The Investment Manager 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 liquidity problems faced by the country (and by extension also by the Company).
However, as a real estate development company, 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 Meliã Trinidad Península Hotel project, the most
significant large-scale new investment made by the Company in recent years. Throughout the project, the Company has
ensured that the design, construction and future operations of the hotel conform to industry-leading practices in the
hotel development sector, all aimed at being a first mover and market leader in the Cuban sustainable tourism
segment. Some of the measures taken in 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
The hotel manager, together with the Company, will closely monitor 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.
The Company views the implementation of these and similar initiatives in each of its 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 coming year.
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 Investment Manager’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
ENVIRONMENTAL SOCIAL GOVERNANCE (ESG) STRATEGY
28
At present, notwithstanding the profound disruption to all aspects of the Cuban economy resulting from the Covid-19
pandemic and the maintenance of a very aggressive sanctions regime against Cuba by the United States, Cuba appears
to be accelerating its steps forward in areas of general ESG concern. In the last three years, the country has adopted
numerous measures aimed at advancing its own ESG goals, including the adoption of a new Constitution, new Family
and Penal Codes recognizing same-sex marriage and other new social arrangements and prohibiting gender-based
violence, the introduction of new legislation that regulates ongoing reforms, small private enterprise (and the
subsequent approval of thousands of new private companies thereunder), large-scale monetary and other economic
reforms (including currency unification), the sustained roll out of internet services to the population, the allowance of
hard currency bank accounts and the slow development of digital means of payment, as well as private import-export
rights. At the beginning of 2022, Cuba opened its first two hotels that are specifically geared toward members of the
LGBTQ+ community.
Other recent measures encourage and incentivize the import and use of electric vehicles, the development of
sustainable energy resources and other public policies aimed at climate mitigation and sustainable development of the
economy. In 2020 Cuba was the 13th country to submit its nationally determined contribution (“NDC”). The updated
NDC, which has a ten-year time frame from 2020-2030, outlines Cuba’s strengthened climate change mitigation and
adaptation policies and actions. The NDC prioritizes the energy and the Agriculture, Forestry, and Other Land Use
(“AFOLU”) sectors, and notes that mitigation actions will require financial support in technology transfer and capacity
building. The NDC builds on Cuba’s 2017 state plan to confront climate change, known as the 100-year plan, ‘Tarea
Vida’ (Life Task) – a roadmap that includes a ban on new home construction in potential flood zones, the introduction of
heat-tolerant crops to cushion food supplies from droughts, and the restoration of Cuba’s sandy beaches to help
protect the country against coastal erosion. It also notes that Cuba’s Constitution of 2019 explicitly mentions the goal of
responding to climate change through, among others, “the eradication of irrational patterns of production and
consumption.” Although the updated NDC still lacks a binding greenhouse gas (GHG) emission reduction target, in the
energy sector, Cuba commits to:
• generate 24% of electricity from renewable sources by 2030, to avoid the emission of an estimated 30.6 million
kilotons of carbon dioxide equivalent (ktCO2eq);
• to increase energy efficiency in commercial, institutional, residential, and agriculture sectors, to avoid the emission
of an estimated 700,000 ktCO2eq; and
• to reduce carbon-intensive ground transportation, to avoid the emission of an estimated one million ktCO2eq
annually, by cutting fossil fuel consumption in vehicles by 50% by 2030.
In the AFOLU sector, Cuba has committed itself, inter alia, to increase its forest coverage to 33%, or by 165,000 hectares,
in the period 2019-2030, removing 169.9 million tons of atmospheric CO2. In the agricultural sector, Cuba plans to
install 5,000 solar pumping systems by 2030 for livestock and irrigation. In the swine sector, Cuba commits to 100%
treatment of waste waters in order to reduce an estimated 8 million ktCO2eq in emissions annually in the period 2020-
2030.
ENVIRONMENTAL SOCIAL GOVERNANCE (ESG) STRATEGY
29
The current Directors’ details, all of whom are non-executive and are considered by the Board to be independent in
character, are set out below. 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: 13 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$48,156) per annum
All other public company directorships: None
Employment by the Investment Manager: None
Other connections with Investment Manager: 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 Investment Manager, 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: 4 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$48,156) per annum
All other public company directorships: Kennedy Wilson Inc.
Employment by the Investment Manager: None
Other connections with Investment Manager: None
Shared Directorships with any other Directors: None
THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS
30
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.
KEITH CORBIN
Status: Independent Non-Executive Director, Chairman of the Nomination Committee
Length of service: 4 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$42,137) per annum
All other public company directorships: None
Employment by the Investment Manager: None
Other connections with Investment Manager: 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: 4 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 US 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$42,137) per annum
All other public company directorships: None
Employment by the Investment Manager: None
Other connections with Investment Manager: 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.
Contribution: The Board has reviewed Peter’s contribution in light of his proposed re-election as a Director at the AGM.
The Board has concluded that Peter is an effective Senior Independent Director and his contribution to the Board, from
an industry, legal and corporate governance perspective, has been invaluable.
THE BOARD OF DIRECTORS
31
COLIN KINGSNORTH
Status: Non-Executive Director
Length of service: 21 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
Remuneration: £35,000 (US$42,137) per annum
All other public company directorships: None
Employment by the Investment Manager: None
Other connections with Investment Manager: None
Shared Directorships with any other Directors: None
Shareholding in Company: Colin is a director of Ursus Capital Limited which owns 12,253,680 Ordinary Shares
representing 8.9007 per cent of the issued share capital of the Company.
Contribution: The Board has reviewed Colin’s contribution in light of his proposed re-election as a Director at the AGM.
The Board has concluded that Colin continues to be an effective Director, providing support and challenge to the
Investment Manager on behalf of all shareholders.
JEMMA FREEMAN
Status: Independent Non-Executive Director
Length of service: 1 year 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$42,137) per annum
All other public company directorships: None
Employment by the Investment Manager: None
Other connections with Investment Manager: 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.
THE BOARD OF DIRECTORS
32
The Directors present their Report and the audited Consolidated Financial Statements for the year ended 31 December 2022.
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 Investment
Manager’s Review on pages 20 to 26.
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.
The Company invests either directly or through holdings in special purpose vehicles, joint venture vehicles, partnerships,
trusts or other structures. As at 31 December 2022, 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 56,000m2 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 Meliã Habana
Hotel and the Varadero Hotels;
• an indirect 32.5% interest in TosCuba S.A., which is the Cuban joint venture company that owns and is constructing
the Meliã Trinidad Península 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 2022 to 31 December 2022
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 Covid-19 and any possible
future impact on the Group’s investment portfolio and financing arrangements, and 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 50 to 53 of this Report.
CAPITAL STRUCTURE AND ISSUANCE
The Company’s capital structure is summarised in note 13 to the financial statements.
At 31 December 2022, there were 137,671,576 fully paid Ordinary Shares (2021: 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
33
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. AFML has delegated portfolio management to AAIL.
Both AFML and AAIL are wholly-owned subsidiaries of abrdn plc.
Pursuant to the terms of the Management Agreement, AFML is responsible for portfolio and risk management on behalf
of the Company and will carry out the on-going oversight functions and supervision and ensure compliance with the
applicable requirements of the AIFMD.
There are no performance, acquisition, exit or property management fees payable to the AIFM and / or the Investment
Manager.
MANAGEMENT FEE
Under the terms of the Management Agreement, AFML is entitled to receive an annual management fee at the rate of
1.5 per cent. of Total Assets. For this purpose, the term Total Assets means the aggregate of the assets of the Company
less liabilities on the last business day of the period to which the fee relates payable within 14 days (excluding from
liabilities any proportion of principal borrowed for investment and treated in the accounts of the Company as current
liabilities).
The annual management fee payable by the Company to the AIFM will be reduced by deduction of the running costs of
the Havana operations of CEIBA Property Corporation Limited, a subsidiary of the Company.
In addition, the AIFM is entitled to reimbursement for all costs and expenses properly incurred by the AIFM and / or the
Investment Manager in the performance of its duties under the Management Agreement.
In connection with execution of the Management Agreement, AFML paid the Company US$5,000,000 to compensate the
Company for the costs relating to its public offering and listing on the SFS as well as for releasing and making available
the Company’s internal management team to AFML. In the event that the Management Agreement is terminated prior
to the fifth anniversary of its coming into effect, the Company must pay AFML a pro-rated amount of the US$5,000,000
payment based on the amount of time remaining in the five-year period. As such, this payment has been recorded as a
deferred liability and is being amortised over the five-year period. At 31 December 2022 the liability was US$833,333
(2021: US$1,833,333).The amount amortised each period is accounted for as a reduction of the management fee.
The Management Engagement Committee is responsible for undertaking a review of the Management Agreement on a
regular basis and providing a recommendation on the continued appointment of the AIFM to the Board.
POLITICAL AND CHARITABLE DONATIONS
The Company does not make political donations and has not made any charitable donations during 2022 (2021: 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 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 29 to 31. 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. The Board considers that John Herring and Colin Kingsnorth continue to be independent in character and
judgement and bring a wealth of experience. However, due to John’s longstanding connection with Northview
Investments Ltd (the Company’s largest shareholder), and his length of service on the Board, John is not considered
independent for the purposes of the AIC Code of Corporate Governance (published in February 2019) (the “AIC Code”).
In addition, Colin, having served on the Board for an extended period of time and as a representative of Laxey Partners
Limited and Ursus Capital Limited, past and present major shareholders in the Company, is also not considered
independent for the purposes of the AIC Code.
DIRECTORS’ REPORT
34
The Board, which comprises six directors, regularly reviews the composition of the Board and succession planning
through the Nomination Committee. A key topic for the Nomination Committee during 2023 will be succession
planning and board evaluation. The Board will be looking to kick off a review of tenure, as in addition to the role that
John fulfils, it is recognised that three of CEIBA’s other directors all joined the Board in June 2018 and that all will reach
their 9 year limit at the same time. The Nomination Committee will advise the Board on how it might stagger the
changes of directors to ensure that any new Directors can be properly integrated. The role of the Chairman and plans
for his succession will also be discussed at that time.
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. All Directors will stand for re-election
at the forthcoming Annual General Meeting. The Board has reviewed the skills and experience of each Director and
believes that each contributes to the long-term sustainable success of the Company. The Board has no hesitation in
recommending their 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 2022.
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, as an externally managed
investment company. The Company does not have any employees, and the Board is comprised of non-executive
Directors. As set out on page 35, the Board has not established a separate Remuneration Committee given the size of
the Board. 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
35
Directors have attended the following scheduled meetings during the year ended 31 December 2022.
*Jemma Freeman was appointed as a member of the committees with effect from April 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. During the year, the evaluation was carried out by the
Nomination Committee, with support from the Company Secretary. The evaluation concluded that the Board and
committees were operating effectively, and no corporate governance concerns existed. On the basis of the results of
the evaluation process, the Board has no hesitation in recommending to shareholders the re-election of all Directors.
Board Committees
The Board has established an Audit Committee, a Management Engagement Committee and a Nomination Committee.
These committees undertake specific activities through delegated authority from the Board. Terms of reference for
each committee may be found on the Company’s website (www.ceibalimited.co.uk) and copies are available from the
Company 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
Nº of Management
Engagement
Committee Meetings
Attended
John Herring
4 of 4
n/a n/a
1 of 1
Keith Corbin
4 of 4 3 of 3 2 of 2 1 of 1
Trevor Bowen
4 of 4 3 of 3 2 of 2 1 of 1
Peter Cornell
2 of 4
n/a
1 of 2 1 of 1
Colin Kingsnorth
3 of 4
n/a n/a
1 of 1
Jemma Freeman
4 of 4 3 of 3
n/a* n/a*
36
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 42 to 44 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. When considering the composition of the Board, members will be mindful of
diversity, 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. 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 39 to 41.
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 twice, matters considered were the remuneration of the Directors,
board composition and succession planning for the role of the Chairman.
Management Engagement Committee
The Management Engagement Committee comprises the entire Board of Directors and is chaired by John Herring. The
principal duties of the Management Engagement Committee are to review the performance of the Investment Manager
and its compliance with the terms of the Management Agreement. The terms and conditions of the Investment
Manager’s appointment, including an evaluation of fees, are reviewed by the Management Engagement Committee on
an annual basis.
The Management Engagement Committee also reviews the terms of appointment of other key service providers to the
Company.
The Management Engagement Committee meets at least once per year and otherwise as required.
During the year, the Management Engagement Committee met once to consider the performance of, and the
contractual arrangements with, the key service providers of the Company, including the Investment Manager, the AIFM,
the Company Secretary and the Administrator. With effect from 1 December 2022, the Company’s Depositary,
Administrator, Company Secretary and Bond Registrar was changed to NSM Funds Limited from JTC Global AIFM
Solutions Limited, JTC Fund Solutions (Guernsey) Limited and JTC Registrars Limited who previously fulfilled these
functions.
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.
The Directors have delegated the investment management of the Company’s assets to AFML within overall guidelines,
and this embraces implementation of the system of internal control, including financial, operational and compliance
controls and risk management. Internal control systems are monitored and supported by the Investment Manager’s
internal audit function which undertakes periodic examination of business processes, including compliance with the
terms of the management agreement, and ensures that recommendations to improve controls are implemented.
DIRECTORS’ REPORT
37
Risks are identified and documented through a risk management framework by each function within the Investment
Manager’s group activities. Risk includes financial, regulatory, market, operational and reputational risk. This helps the
internal audit risk assessment model identify those functions for review. Any weaknesses identified are reported to the
Board, and timetables are agreed for implementing improvements to systems. The implementation of any remedial
action required is monitored and feedback provided to the Board.
The principal and emerging risks and uncertainties faced by the Company are detailed on pages 9 to 16.
The key components of the process designed by the Directors to provide effective internal control are outlined below:
• the Investment Manager prepares forecasts and management accounts which allow the Board to assess the
Company’s activities and review its performance;
• the Board and Investment Manager have agreed clearly defined investment criteria, specified levels of authority
and exposure limits. Reports on these issues, including performance statistics and investment valuations, are
regularly submitted to the Board and there are meetings with the Investment Manager as appropriate;
• as a matter of course the Investment Manager’s compliance department continually reviews the Investment
Manager’s operations and reports to the Audit Committee on a six-monthly basis;
• written agreements are in place which specifically define the roles and responsibilities of the Investment Manager
and other third-party service providers and, where relevant, ISAE3402 Reports, a global assurance standard for
reporting on internal controls for service organisations, or their equivalents are reviewed;
• the Board has considered the need for an internal audit function but, because of the compliance and internal
control systems in place within the Investment Manager, has decided to place reliance on the Investment
Manager’s systems and internal audit procedures; and
• the Audit Committee carried out an annual assessment of internal controls for the year ended 31 December 2022
by considering documentation from the Investment Manager, and the Depositary, including their internal audit and
compliance functions and taking account of events since 31 December 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 Investment Manager and the Administrator.
The Criminal Finances Act 2017 has introduced a new corporate criminal offence of “failing to take reasonable steps to
prevent the facilitation of tax evasion”. The Board has confirmed that it is the Company’s policy to conduct all of its
business in an honest and ethical manner. The Board takes a zero-tolerance approach to facilitation of tax evasion,
whether under Guernsey law or under the law of any foreign country.
DIRECTORS’ REPORT
38
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 2022:
On 6 February 2023 POP Investments Limited increased its interest in the Company to 13,881,374 Shares representing a
10.08% shareholding. There have been no other significant changes notified in respect of shareholdings between 31
December 2022 and 26 April 2023.
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 28 June 2023 at 2.00 p.m. An explanation of each resolution to be
proposed at the AGM is included in the Letter from the Chairman on page 100. All shareholders will have the
opportunity to put questions to the Board or the Investment Manager at the Company’s AGM. Shareholders are
encouraged to vote on the resolutions proposed in advance of the AGM and to submit questions to the Board and the
Investment Manager by emailing CEIBA.Investments@abrdn.com.
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 CEIBA.Investments@abrdn.com. The Annual Report
and Consolidated Financial Statements are widely distributed to other parties who have an interest in the Company’s
performance. Shareholders may obtain up to date information on the Company through the Company’s website
www.ceibalimited.co.uk.
The Board’s policy is to communicate directly with shareholders and their representative bodies without the
involvement of the Investment Manager in situations where direct communication is required and usually a
representative from the Board is available to meet with major shareholders on an annual basis in order to gauge their
views.
Approved by the Board of Directors on 26 April 2023 and signed on its behalf:
Keith Corbin Trevor Bowen
Director Director
Shareholder
Number of shares held
% held
Northview Investments Ltd
37,764,018
27.4
POP Investments Limited
12,253,681
8.9
Ursus Capital Limited
12,253,680
8.9
abrdn plc
9,838,532
7.1
Citco Global Custody NV
8,373,144
6.1
DIRECTORS’ REPORT
39
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 of Incorporation limit the annual aggregate fees payable to
the Board of Directors to no more than £500,000 (US$601,950) 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 £220,000 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 2022
(£)
31 Dec 2021
(£)
Chairman
40,000 40,000
Chairman of Audit Committee
40,000 40,000
Director
35,000 35,000
40
PERFORMANCE AND SERVICE CONTRACTS
• The Directors’ remuneration is not subject to any performance-related fee.
• No Director has a service contract.
• Although John Herring and Colin Kingsnorth 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 December 2022 the Nomination Committee reviewed the Directors’ fees and agreed that no changes were required
for the financial year ended 31 December 2022 but will keep this under review. There are no further fees to disclose as
the Company has no direct employees, chief executive or executive directors.
The total fees paid to, and received by, the Directors for the financial years to 31 December 2021 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’ 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 (including
connected persons) at 31 December 2022 are shown in the table below.
1 At 31 December 2022 Colin Kingsnorth is a director and shareholder of Ursus Capital Limited.Ursus holds 12,253,680 shares.
Director 2022
£
2022
US$
2021
£
2021
US$
John Herring
40,000 48,156
40,000
53,908
Keith Corbin
35,000 42,137
35,000 47,170
Peter Cornell
35,000
42,137
35,000 47,170
Trevor Bowen
40,000
48,156
40,000
53,908
Colin Kingsnorth
35,000
42,137
35,000 47,170
Jemma Freeman
35,000
42,137
8,750
11,792
Total
220,000
276,898
193,750
261,118
Director 31 December 2022
Ordinary Shares
31 December 2021
Ordinary Shares
John Herring
40,000 40,000
Keith Corbin - -
Peter Cornell
100,000 100,000
Trevor Bowen
43,600 43,600
Colin Kingsnorth
12,253,680 12,252,338
Jemma Freeman
- -
DIRECTORS’ REMUNERATION REPORT
41
The above interests are unchanged at 26 April 2023, 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 2022:
• 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,
John Herring
Chairman
26 April 2023
DIRECTORS’ REMUNERATION REPORT
42
COMMITTEE COMPOSITION
The Audit Committee (the “Committee”) presents its report for the year ended 31 December 2022.
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 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
43
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 13 April 2023, 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 2022, 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 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 underlying valuations of the investment properties
and investment properties under construction 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 Investment Manager and 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 Investment Manager and the Directors 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 Investment Manager and the Board 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 in place at the Investment Manager 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 16. The Committee will review the matrix of risks at each committee meeting.
REPORT OF THE AUDIT COMMITTEE
44
REVIEW OF 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 Administrator, the
Investment Manager, 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 externally audited internal control reports of the Investment Manager, Administrator and any other related
service providers.
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 45.
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 regards 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 Investment Manager; 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 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 16 June 2022. 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 is a suitable independent Auditor and therefore supports
the recommendation to the Board that the re-appointment of Grant Thornton 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
26 April 2023
REPORT OF THE AUDIT COMMITTEE
45
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 29 to 31, 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 Trevor Bowen
Director Director
26 April 2023
STATEMENT OF DIRECTORS' RESPONSIBILITIES
STATEMENT OF DIRECTORS' RESPONSIBILITIES
46
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, 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 a summary of significant accounting policies. The financial
reporting framework that has been applied in their preparation is applicable law and International Financial Reporting
Standards (IFRSs) as issued by the International Accounting Standards Board (IASB).
In our opinion, the consolidated financial statements:
• give a true and fair view of the state of the Group’s affairs as at 31 December 2022 and of the Group’s loss for the
year then ended;
• are in accordance with IFRSs as issued by the 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 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
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 (2022: $154,221,877,
2021: US$175,828,034)
As at 31 December 2022, the Group had equity
investments in joint venture companies comprising 68%
(2021: 71%) of the Group’s total assets. 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 fair value of equity investments as one of
the most significant assessed risks of material
misstatement due to fraud and error.
As explained in notes 2, 7 and 18, the investments are
carried at fair value, determined using a valuation
methodology which involves a high degree of
management judgments and estimates. The valuation of
the underlying real estate assets have been prepared
during ongoing market instability due to slower than
expected post Covid-19 recovery of Cuba’s tourism
sector, continuing US Cuba sanctions and the designation
of Cuba as a State Sponsor of Terrorism, the adoption of
unpredictable legislative efforts in Cuba aimed at
implementing new monetary reforms and Cuba’s ongoing
liquidity crises, which results in uncertainty in valuing the
underlying Cuban real estate assets.
Our audit work included, but was not restricted to the
following:
• We updated our understanding of the valuation
process and methodology used through detailed
discussions with management and their external
valuation expert and performed walkthroughs to
confirm our understanding of the systems and to
test the design and implementation of relevant key
controls over the valuation process.
• We assessed the independence, competence, and
objectivity of the Group’s external valuation expert;
• We obtained a copy of the valuation report prepared
by the valuation expert and confirmed this was
reviewed by management by inspecting board
minutes;
• We involved our valuation expert to perform the
below procedures:
– Read and assessed the valuation report, the
methodology and associated cash flow
statements, checked the reasonableness of key
assumptions such as the discount and
occupancy rates, checked the revenues including
but not limited to room and parking charges,
capex, contingency, checked any estimates and
judgements involved, and checked the
mathematical accuracy of the calculation;
47
Other information in the Annual Report
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.
The key audit matter (continued) How the matter was addressed in our audit (continued)
There is a risk that the fair value of these financial assets
may be materially misstated due to the use of incorrect
or inappropriate judgements, estimates and assumptions
in determining the fair value of the underlying 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 42-44);
Accounting policies in pages 57-63, and Note 2.3, Use of
estimates and judgements, to the Financial Statements.
– Held discussions with CEIBA management and
the group’s external valuation expert to obtain
an understanding of the discount rates applied
on the valuations considering the economic
climate when the valuation was prepared;
– assessed and corroborated management’s
valuation by deriving independent mark to
market valuation based on inputs for
comparable real estate assets; and
– Ascertained whether the fair value of the
underlying real estate assets is deemed
satisfactory in accordance with the Royal
Institution of Chartered Surveyors (RICS)
Valuation Global Standards 2019 based on our
knowledge and experience and the result of our
independent review of the valuation;
• We checked management’s valuation working
including the excess cash calculation by agreeing to
the supporting documents (i.e., audited financial
statements of the joint venture) obtained.
• We performed 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.
• We assessed the reasonableness of the relevant
valuation disclosures and notes to the consolidated
financial statements, including the adequacy of the
disclosures required in the financial statements (i.e.,
summarised financial information) for interests in
joint venture companies; and
• We reviewed management’s assessment for
measuring its equity investments (i.e., interest in joint
venture companies) 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.
Our results
Based on our work, we did not identify any material
misstatement of the valuation of the equity investments.
The assumptions and estimates used were reasonable in
the circumstance and the Group’s disclosures were
adequate.
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF CEIBA INVESTMENTS LIMITED
48
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 Company’s 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.
Responsibilities of the directors for the consolidated financial statements
As explained more fully in the Statement of Directors’ Responsibilities set out on page 45, the Directors are responsible
for the preparation of the consolidated financial statements which give a true and fair view in accordance with IFRSs 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.
• 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.
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF CEIBA INVESTMENTS LIMITED
49
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 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.
Cyril Swale
For and on behalf of Grant Thornton Limited
Chartered Accountants
St Peter Port
Guernsey
Date: 26 April 2023
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF CEIBA INVESTMENTS LIMITED
50
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December 2022
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
31 Dec 2022 31 Dec 2021
(restated)*
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
Deferred liabilities
17
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 note 23 for details regarding the restatement because of a reclassification of the loan interest receivable.
See accompanying notes 1 to 24, which are an integral part of these consolidated financial statements. These audited
Financial Statements on pages 50 to 53 were approved by the board of Directors and authorised for issue on 26 April
2023. They were signed on the Company’s behalf;
Keith Corbin, Director Trevor Bowen, Director
51
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2022
31 Dec 2022 31 Dec 2021
Note
US$ US$
Income
Dividend income
7
Interest income
Travel agency commissions
Foreign exchange gain
Expenses
Realised loss on equity investments
(49, 130 )
Foreign exchange loss
(130 ,198 )
Interest expense on bonds
(2,6 28,228 ) (2,176,9 31 )
Loss on change in fair value of equity investments
7
(16, 098,66 4 ) (1 3,843, 717 )
Share of loss of associate
8
(189 ,668 )
Expected credit losses
5
(6,7 63,633 ) (12 ,281,4 08 )
Management fees
17
(1,7 58,501 ) (2,276,5 74 )
Other staff costs
(97, 321 ) (7 2,958 )
Travel
(80, 163 ) (5 4,204 )
Operational costs
(286 ,797 ) (317 ,361 )
Legal and professional fees
(1,0 78,600 )
(1,4 87,338 )
Administration fees and expenses
(400 ,128 )
(344 ,620 )
Audit fees
22
(266 ,768 ) (321 ,625 )
Miscellaneous expenses
(337 ,572 ) (305 ,075 )
Directors’ fees and expenses
15
(320 ,603 ) (276 ,111 )
Depreciation
9
(24, 279 ) (2 9,792 )
(30,38 0,055 ) (33,91 7,912 )
Net loss before taxation
(11,28 4,821 ) (28,93 6,149 )
Income taxes
3.7
Net loss for the year
(11,28 4,821 ) (28,93 6,149 )
Other comprehensive income
to be reclassified to profit or loss in subsequent periods
Loss on exchange differences
of translation of foreign operations
(6,0 93,916 ) (8,140,1 91 )
Total comprehensive loss
(17,37 8,737 ) (37,07 6,340 )
Net loss for the year attributable to:
Shareholders of the parent
(14, 283,03 9 ) (2 8,811, 901 )
Non-controlling interest
(124 ,248 )
Total comprehensive gain/(loss) attributable to:
Shareholders of the parent
(18, 244,08 3 ) (3 4,103, 025 )
Non-controlling interest
(2,9 73,315 )
Basic and diluted loss per share
16
(0.10 0.21
See accompanying notes 1 to 24, which are an integral part of these consolidated financial statements.
52
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 December 2022
CONSOLIDATED STATEMENT OF CASH FLOWS
31 Dec 2022 31 Dec 2021
Note
US$ US$
Operating activities
Net loss for the year
(11, 284,82 1 ) (2 8,936, 149 )
Items not affecting cash:
Depreciation
9
Expected credit losses
5
Change in fair value of equity investments
7
Share of loss of associate
8
Dividend income
(15, 864,49 4 ) (3,050, 124 )
Interest income
(2,9 52,459 ) (1,924,1 10 )
Realised loss on equity investments
Interest expense
Foreign exchange (gain) / loss
(269 ,312 )
(4,617 ,484 )
(5,448 ,337 )
(Increase)/decrease accounts receivable and accrued income
(114 ,054 )
Increase in accounts payable and accrued expenses
Non-cash movement in amortisation of deferred liability
17
(1,0 00,000 ) (1,000,0 00 )
Dividend income received
Interest income received
Net cash flows from operating activities
(2,241 ,349 )
Investing activities
Purchase of property, plant & equipment
9
(5,7 33 ) (11 ,802 )
Loans and lending facilities disbursed
(25, 841,79 9 ) (3,168, 711 )
Loans and lending facilities recovered
Net cash flows from investing activities
(25,28 5,758 ) (2,346 ,777 )
Financing activities
Short term borrowings received
Issue of convertible bonds
Interest paid on convertible bonds
(2,6 28,228 ) (2,176,9 31 )
Cash distribution to non-controlling interest
13
(257 ,668 )
Net cash flows from financing activities
Change in cash and cash equivalents
(17,75 7,089 )
Cash and cash equivalents at beginning of the period
Foreign exchange on cash
(16, 736 ) (1,33 7,236 )
Cash and cash equivalents at end of the period
See accompanying notes 1 to 24, which are an integral part of these consolidated financial statements.
53
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2022
FOR THE YEAR ENDED
31 DECEMBER 2022 Notes
Stated Capital
US$
Revaluation
Surplus
US$
Retained
Earnings
US$
Other comprehensive
income
1
US$
Total Equity attributable
to the parent
US$
Non-controlling
interest
US$
Total Equity
US$
Opening Balance
Revaluation of assets / Net other
comprehensive income/(loss) to
be reclassified to profit or loss in
subsequent periods
7, 13
(3,96 1,045 ) (3, 961,04 5 ) (2, 132,87 1 ) (6,09 3,916 )
Net loss for the year
13
(14, 283,03 9 )
(14, 283,03 9 )
(11, 284,82 1 )
Capital increase/contributions
during the period
13
Balance at 31 December 2022
1
Relates to exchange differences on translation of foreign operations.
See accompanying notes 1 to 24, which are an integral part of these consolidated financial statements.
FOR THE YEAR ENDED
31 DECEMBER 2021 Notes
Stated Capital
US$
Revaluation
Surplus
US$
Retained
Earnings
US$
Other comprehensive
income
1
US$
Total Equity attributable
to the parent
US$
Non-controlling
interest
US$
Total Equity
US$
Opening Balance
Revaluation of assets / Net other
comprehensive income/(loss) to
be reclassified to profit or loss in
subsequent periods
7, 13
(5,29 1,124 ) (5, 291,12 4 ) (2, 849,06 7 ) (8,14 0,191 )
Net loss for the year
13
(28, 811,90 1 )
(28, 811,90 1 ) (124 ,248 ) (28, 936,14 9 )
Capital increase/contributions
during the period
13 - - - - - - -
Cash distribution to non-
controlling interest
13
(257 ,668 ) (257 ,668 )
Balance at 31 December 2021
54
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
55
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
56
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
57
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
58
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
59
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
60
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
61
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
62
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
63
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
64
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
65
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
66
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
67
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
68
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
69
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
70
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
71
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
72
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
73
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
74
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
75
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
76
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
77
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
78
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
79
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
80
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
81
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
82
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
83
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
84
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
85
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
86
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
87
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
88
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
89
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
90
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
91
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
92
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
93
COMPANY BACKGROUND / HISTORY
The Company was incorporated in 1995 in Guernsey as a closed-ended investment company for the purpose of
investing in Cuba. The Company made its first Cuban investment in 1996 and its portfolio subsequently included
interests in a variety of Cuban assets and businesses, including biotechnology ventures, mining, residential real estate,
consumer/industrial ventures and trade finance.
In 2002, a new external investment manager was appointed to manage the Company. The founders of this external
manager included Sebastiaan A.C. Berger and Cameron Young. Paul Austin subsequently joined the Company’s
management team in 2005.
Under this new external investment manager, the Company began to focus its investment activities on the Cuban real
estate and tourism sectors and disposed of its interests in non-complementary assets and businesses. In repositioning
the business of the Company during this period, the Company developed a new investment strategy with the following
main features:
• to acquire ownership interests in Cuban joint venture companies that own high-quality Cuban commercial real
estate and hotel assets;
• to pursue investments in development projects through the entering into of new joint ventures with the Cuban
government or other investments, or the acquisition of interests in existing joint ventures or other investments;
• to arrange secured financing for Cuban borrowers, primarily in the tourism sector;
• to establish a professional “on-the-ground” management team with experience in negotiating, managing and
exiting investments in Cuba; and
• to pay a regular annual dividend to Shareholders.
The Company was listed on the Irish Stock Exchange from 1996 to 2002 and subsequently on the Channel Islands Stock
Exchange from 2004 until the end of 2010. During the period from 2011 to 2018 the Company was unlisted and
internally-managed.
The Company is regulated by the Guernsey Financial Services Commission as a Registered Closed-Ended Collective
Investment Scheme with effect from 11 September 2018 under The Protection of Investors (Bailiwick of Guernsey) Law,
2020 as amended. The Ordinary Shares of the Company are listed on the Specialist Fund Segment of the London Stock
Exchange’s Main Market under the symbol CBA (ISIN: GG00BFMDJH11). The Company’s Bonds are listed on The
International Stock Exchange, Guernsey under the symbol CEIB1026 (ISIN: GG00BMV37C27). The Ordinary Shares and
Bonds of the Company should only be considered appropriate for professional investors.
WEBSITE
Further information on the Company can be found on its own dedicated website: www.ceibalimited.co.uk. This allows
web users to access information on the Company’s share price performance, capital structure, stock exchange
announcements and reports.
INVESTOR WARNING
The Board has been made aware by AFML that some investors have received telephone calls from people purporting to
work for AFML, or third parties, who have offered to buy their investment company shares. These may be scams which
attempt to gain personal information with which to commit identity fraud or could be ‘boiler room’ scams where a
payment from an investor is required to release the supposed payment for their shares.
These callers do not work for AFML and any third party making such offers has no link with AFML. AFML never makes
these types of offers and does not ‘cold-call’ investors in this way. If investors have any doubt over the veracity of a
caller, they should not offer any personal information, end the call and contact AFML’s investor services centre using the
details provided below.
DIRECT
Investors can buy and sell shares in the Company directly through a stockbroker or indirectly through a lawyer,
accountant or other professional adviser.
INVESTOR INFORMATION
INVESTOR INFORMATION
94
SHAREHOLDER ENQUIRIES
For internet users, detailed data on the Company, including price, performance information and regular Company
updates are available from the Company’s website (www.ceibalimited.co.uk).
In the event of queries regarding their holdings of shares, lost certificates, dividend payments, registered details, etc.,
Shareholders holding their shares in the Company directly should contact the registrars, Link Group, at 10th Floor,
Central Square, 29 Wellington Street, Leeds, LS1 4DL or Tel: 0371 664 0391. Lines are open 9.00 a.m. to 5.30 p.m.
(London Time) Monday to Friday. Calls may be recorded and monitored randomly for security and training purposes.
Changes of address must be notified to the registrars in writing.
Any general enquiries about the Company should be directed to the Company Secretary, NSM Funds Limited or by
email to operations@nsmfunds.com.
LITERATURE REQUEST SERVICE
For literature and application forms for the Company and the abrdn range of investment trust products, please contact:
Telephone: 0808 500 4000
Email: inv.trusts@abrdn.com
KEY INFORMATION DOCUMENT (“KID”)
The KID relating to the Company and published by AFML can be found on AFML’s website:
www.invtrusts.co.uk/en/investmenttrusts/literature-library.
DISCRETIONARY PRIVATE CLIENT STOCKBROKERS
If you have a large sum to invest, you may wish to contact a discretionary private client stockbroker. They can manage
your entire portfolio of shares and will advise you on your investments. To find a private client stockbroker visit the
Wealth Management Association at www.pimfa.co.uk.
INDEPENDENT FINANCIAL ADVISERS
To find an adviser who recommends on investment trusts, visit www.unbiased.co.uk.
REGULATION OF STOCKBROKERS
Before approaching a stockbroker, always check that they are regulated by the Financial Conduct Authority: Tel: 0800
111 6768 or at www.fca.org.uk/firms/systemsreporting/register/search or email: register@fca.org.uk
NOTE
Please remember that past performance is not a guide to the future. Stock market and currency movements may cause
the value of shares and the income from them to fall as well as rise and investors may not get back the amount they
originally invested.
As with all equity investments, the value of investment trusts purchased will immediately be reduced by the difference
between the buying and selling prices of the shares, the market maker’s spread.
Investors should further bear in mind that the value of any tax relief will depend on the individual circumstances of the
investor and that tax rates and reliefs, as well as the tax treatment of ISAs may be changed by future legislation.
INVESTOR INFORMATION
95
GLOSSARY OF TERMS AND DEFINITIONS AND ALTERNATIVE PERFORMANCE MEASURES
TERMS AND DEFINITIONS
Abacus
Arlington Consulting – Consultadoria Imobiliaria Limitada, trading under the name
Abacus.
abrdn
abrdn plc.
AGM
The Annual General Meeting of the Company to be held on 28 June 2023.
AIC
The Association of Investment Companies - the AIC is the trade body for closed-ended
investment companies (www.theaic.co.uk).
AIFMD
The Alternative Investment Fund Managers Directive - The AIFMD is European legislation
which created a European-wide framework for regulating managers of ‘alternative
investment funds’ (AIFs). It is designed to regulate any fund which is not a UCITS
(Undertakings for Collective Investments in Transferable Securities) fund and which is
managed/marketed in the EU. The Company has been designated as an AIF.
Alternative Performance Measure
or APM
An alternative performance measure is a financial measure of historical or future
financial performance, financial position, or cash flows, other than a financial measure
defined or specified in the applicable financial reporting framework.
abrdn Fund Managers Limited,
AFML or the AIFM
abrdn Fund Managers Limited is a wholly owned subsidiary of abrdn plc and acts as the
Alternative Investment Fund Manager for the Group. AFML is authorised and regulated
by the Financial Conduct Authority.
Bondholders
Registered holders of the Bonds.
Bonds
€25 million 10.00% senior unsecured convertible bonds due 2026.
CEIBA or the Company
CEIBA Investments Limited.
CEIBA MTC Properties
CEIBA MTC Properties Inc., a subsidiary of the Company.
CEIBA Tourism
CEIBA Tourism B.V., a subsidiary of the Company.
Construction Facility
The construction finance agreement entered into by the Group on 30 April 2018 and
amended on 19 August 2021 in connection with the construction of the Meliã Trinidad
Península Hotel.
Countervalue Fund
The countervalue fund created under the Debt Conversion Programme.
CPC
CEIBA Property Corporation Limited, a subsidiary of the Company.
Cubanacán
Cubanacán S.A., Corporación de Turismo y Comercio Internacional, a Cuban company.
CUP
Cuban Pesos, the lawful currency of Cuba.
Debt Conversion Programme
The Spanish Cuban Debt Conversion Programme created by agreements between Spain
and Cuba dated 2 November 2015 and 4 May 2016.
Depositary
NSM Funds Limited, an entity regulated by the Guernsey Financial Services Commission
to provide Independent Depositary services for the Company and AFML.
Discount
The amount by which the market price per share of an investment trust is lower than the
NAV per share. The discount is normally expressed as a percentage of the NAV per share.
Dividend
Income from an investment in shares.
Dividend yield
The annual dividends expressed as a percentage of the current share price.
EBITDA
Earnings Before Interest, Tax, Depreciation & Amortisation, a measure of the overall
financial performance.
ECL
Expected credit loss.
Excess Cash
Cash held by a joint venture company in excess of its working capital needs.
Financial Conduct Authority or
FCA
The FCA issues the Listing Rules and is responsible for the regulation of AFML.
GBM Mariel
Grupo B.M. Interinvest Technologies Mariel S.L., a Spanish company in which the Group
has a 50% interest.
Gearing
Investment Trusts can 'gear' or borrow money to invest but unit trusts are limited in this
respect. Gearing can magnify a fund’s return; however, a geared investment is riskier
because of the borrowed money.
GrandSlam
GrandSlam Limited, a subsidiary of the Company.
Gross Asset Value
The aggregate value of the total assets of the Company as determined in accordance
with the accounting principles adopted by the Company from time to time.
Group
CEIBA and its consolidated subsidiaries.
GLOSSARY OF TERMS AND DEFINITIONS AND ALTERNATIVE
PERFORMANCE MEASURES
96
GLOSSARY OF TERMS AND DEFINITIONS AND ALTERNATIVE PERFORMANCE MEASURES
HOMASI
HOMASI S.A., a subsidiary of the Company.
Hotels or Hotel Assets
The Meliã Habana Hotel and the Varadero Hotels.
IFRS
International Financial Reporting Standards as issued by the International Accounting
Standards Board.
Investment Manager
The Group’s Alternative Investment Fund Manager is abrdn Fund Managers Limited
which is authorised and regulated by the Financial Conduct Authority. Day to day
management of the portfolio has been delegated to abrdn Alternative Investments
Limited. abrdn Alternative Investments Limited and AFML are collectively referred to as
the Investment Manager.
IPO
The initial public offering of the Company carried out simultaneously with Listing on the
SFS on 22 October 2018.
Key Performance Indicators or
KPIs
Key Performance Indicators are factors by reference to which the development,
performance or position of the business of the Company can be measured effectively.
Listing
The Company’s shares were listed on the Specialist Fund Segment of the London Stock
Exchange on 22 October 2018.
Management Agreement
The management agreement executed between the Company and AFML on 31 May
2018.
Market Capitalisation
A measure of the size of an investment Group calculated by multiplying the number of
shares in issue by the price of the shares.
Meliã Habana Hotel
The Meliã Habana Hotel located in Havana, Cuba.
Meliã Hotels International
Meliã Hotels International S.A.
Meliã Las Américas Hotel
The Meliã Las Américas Hotel located in Varadero, Cuba.
Meliã Trinidad Península Hotel
The Meliã Trinidad Península Hotel development project located near Trinidad, Cuba.
Meliã Varadero Hotel
The Meliã Varadero Hotel located in Varadero, Cuba.
Miramar
Miramar S.A., a Cuban joint venture company in which the Group has an equity interest.
Monte Barreto
Inmobiliaria Monte Barreto S.A., a Cuban joint venture company in which the Group has
an equity interest.
Mosaico Hoteles
Mosaico Hoteles S.A., a subsidiary of the Company.
Net Asset Value or NAV
The value of total assets less liabilities attributable to the shareholders of the Company
(excluding non-controlling interests). Liabilities for this purpose includes current and
long-term liabilities. The NAV divided by the number of shares in issue produces the NAV
per share.
NAV Total Return
A measure showing how the NAV per share has performed over a period of time, taking
into account both capital returns and dividends paid to shareholders. The AIC shows
NAV total return as a percentage change from the start of the period. It assumes that
dividends paid to shareholders are reinvested at NAV at the time the shares are quoted
ex-dividend. NAV total return shows performance which is not affected by movements
in discounts and premiums. It also takes into account the fact that different investment
companies pay out different levels of dividends.
Ongoing Charges
Ratio of expenses as percentage of average daily shareholders’ funds calculated as per
the AIC’s industry standard method.
Ordinary Shares or Shares
Ordinary shares of the Company.
Other Cuban Assets
Other Cuba-related businesses in which the Company may invest in accordance with its
Investment Policy.
Premium
The amount by which the market price per share of an investment trust exceeds the NAV
per share. The premium is normally expressed as a percentage of the NAV per share.
Prior Charges
The name given to all borrowings including debentures, long term loans and short-term
loans and overdrafts used for investment purposes, reciprocal foreign currency loans,
currency facilities to the extent that they are drawn down, index-linked securities, and all
types of preference or preferred capital and the income shares of split capital trusts,
irrespective of the time until repayment.
Prospectus
A formal document that provides details about an investment offering for sale to the
public. A prospectus is used to help investors make a more informed investment
decision. The Company’s prospectus is available on the Company’s website at
www.ceibalimited.co.uk.
RevPAR
Revenue per available room.
SFS
The Specialist Fund Segment of the Main Market of the London Stock Exchange.
Sol Palmeras Hotel
The Sol Palmeras Hotel located in Varadero, Cuba.
97
GLOSSARY OF TERMS AND DEFINITIONS AND ALTERNATIVE PERFORMANCE MEASURES
ALTERNATIVE PERFORMANCE MEASURES
Alternative performance measures are numerical measures of the Company’s current, historical or future performance,
financial position or cash flows, other than financial measures defined or specified in the applicable financial
framework. The Directors assess the Company’s performance against a range of criteria which are viewed as
particularly relevant for closed-end investment companies.
Discount to NAV
The discount reflects the amount by which the share price of the Company is below the NAV per share expressed as a
percentage of the NAV per share. As at 31 December 2022, the share price was 40.5p / US$0.48 and the net asset value
per share was 85.7p / US$1.03, and the discount was therefore 52.7%.
NAV Return
The table below provides information relating to the NAV of the Company for the years ending 31 December 2021 and
2022.
Ongoing charges
The ongoing charges are based on actual costs incurred in the year excluding any non-recurring fees in accordance with
the AIC methodology. Expense items have been excluded in the calculation of the ongoing charges figure when they are
not deemed to meet the following AIC definition: “Ongoing charges are those expenses of a type which are likely to
recur in the foreseeable future, whether charged to capital or revenue, and which relate to the operation of the
investment company as a collective fund, excluding the costs of acquisition/disposal of investments, financing charges
and gains/losses arising on investments. Ongoing charges are based on costs incurred in the year as being the best
estimate of future costs.”
TosCuba
TosCuba S.A., a Cuban joint venture company in which the Group has an equity interest.
TosCuba Project
The Meliã Trinidad Peninsula Hotel development project located near Trinidad, Cuba,
presently under construction and being carried out by TosCuba.
Total assets
The total assets less current liabilities as shown on the Balance Sheet with the addition of
Prior Charges (as defined above).
Total Return
Total Return involves reinvesting the net dividend in the month that the share price goes
ex-dividend. The NAV Total Return involves investing the same net dividend in the NAV of
the Company on the date to which that dividend was earned, eg quarter end, half year or
year end date.
Varadero Hotels
The Meliã Las Américas Hotel, the Meliã Varadero Hotel and the Sol Palmeras Hotel.
2022
US$
2021
US$
Opening NAV per share
1.16 1.41
Closing NAV per share
1.03
1.16
Capital return
(11.4%) (17.5%)
98
The table below provides information relating to the ongoing charges of the Company for the years ending 31
December 2022 and 2021.
GLOSSARY OF TERMS AND DEFINITIONS AND ALTERNATIVE PERFORMANCE MEASURES
2022
US$
2021
US$
Total Expenses per statement of comprehensive income
30,380,055 33,917,912
Adjustments (items to exclude):
Realised loss on equity investments
(49,130)
-
Foreign exchange loss
-
(130,198)
Interest expense on bonds
(2,628,228) (2,176,931)
Loss on change in fair value of equity investments
(16,098.664) (13,843,717)
Share of loss of associate
(189,668)
-
Expected credit losses
(6,763,633) (12,281,408)
Non-recurring bond issuance costs
-
(395,228)
Total Annualised ongoing charges
4,650,732 5,090,430
Average undiluted net asset value in the period
152,887,789
181,554,628
Ongoing charges (%)
3.04% 2.80%
99
NOTICE OF ANNUAL GENERAL MEETING
NOTICE OF ANNUAL GENERAL MEETING
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt as to the
action you should take, you are recommended to seek immediately your own personal financial advice from
your stockbroker, bank manager, solicitor, accountant, or other independent professional adviser.
If you have sold or transferred all of your registered holding of Shares, please forward this document and the
documents accompanying it to the purchaser or transferee or to the stockbroker, bank or other agent through or by
whom the sale or transfer was effected for onward transmission to the purchaser or transferee. If you have sold or
transferred part only of your registered holding of Shares, please contact the stockbroker, bank or other agent through
whom the sale or transfer was effected.
Notice of the Annual General Meeting of Shareholders of the Company to be held at Les Echelons Court, Les Echelons,
St. Peter Port, Guernsey GY1 1AR, Channel Islands on 28 June 2023 at 2.00 p.m. is set out in Appendix 1 to this
document.
The Notice of Annual General Meeting contained in this document sets out the business to be carried out by way of
ordinary and extraordinary resolutions to be proposed at the Meeting. The Meeting will be chaired by the Chairman of
the Board or, in his absence, by a chairman to be elected at the meeting.
The quorum for the Meeting is at least two members present in person or by proxy. At the Meeting, the ordinary
resolutions will be decided on a show of hands (unless a poll is requested) and on a show of hands every shareholder
who is present in person or by proxy will have one vote. In order to be validly passed, the resolutions which are
proposed as ordinary resolutions will need to be approved by not less than 50% of shareholders, present in person or
by proxy and entitled to vote. For extraordinary resolutions these will be decided on a show of hands (unless a poll is
requested) and on a show of hands every shareholder who is present in person or by proxy will have one vote. In order
to be validly passed, the resolutions which are proposed as extraordinary resolutions will need to be approved by not
less than 75% of shareholders, present in person or by proxy and entitled to vote.
If, within half an hour from the appointed time for the Meeting, a quorum is not present, then the Meeting will stand
adjourned for 14 days at the same time and place. No notice of adjournment will be given.
CEIBA INVESTMENTS LIMITED
(Company Registration no. 30083)
(a non-cellular company limited by shares incorporated under the laws of the Island of Guernsey)
(the “Company”)
NOTICE OF ANNUAL GENERAL MEETING OF THE COMPANY
to be held on 28 June 2023
100
CEIBA INVESTMENTS LIMITED
(Company registration number 30083)
(a non-cellular company limited by shares incorporated under the laws of the Island of Guernsey)
(the “Company”)
Registered office:
Les Echelons Court, Les Echelons,
St. Peter Port, Guernsey
GY1 1AR, Channel Islands
26 April 2023
Dear Shareholders,
The purpose of this document is to give notice of the Annual General Meeting of the Company scheduled for 28 June 2023
at 2.00 p.m. (the “Meeting”). The formal Notice of the Meeting is set out in Appendix 1 of this document.
In addition to the ordinary business of the Meeting, there are also two extraordinary resolutions being proposed. Details
of the ordinary and extraordinary business to be proposed at the Meeting are set out below.
Matters to be dealt with at AGM:
The resolutions that will be put to Members at the Meeting are as follows:
(a) as to ordinary business (Resolutions 1-10):
i. to receive and adopt the Consolidated Financial Statements and Directors' Report for the year ended 31 December
2022;
ii. to ratify the appointment of Grant Thornton Limited as Auditors of the Company until the next Annual General
Meeting of the Company and authorise the Board to determine their remuneration; and approve the remuneration;
iii. to propose the re-election of Trevor Bowen, Keith Corbin, Peter Cornell, John Herring, Colin Kingsnorth and Jemma
Freeman as directors of the Company until the conclusion of the next Annual General Meeting of the Company; and
iv. to authorise the Company to buy back up to 10% of Ordinary Shares in issue as at the date of the resolution.
(b) as to extraordinary business (Resolution 11):
i. to authorise the Directors generally to issue securities of the Company representing up to 10% of the Ordinary Shares,
as if the pre-emption rights provided under Article 6.2 of the Articles of the Company did not apply.
The authority conferred by Resolutions 10-11, if passed, will lapse 15 months from the date of passing the Resolution, or
the conclusion of the Annual General Meeting of the Company held in 2024.
Resolutions 1-10 will be proposed as ordinary resolutions. Resolution 11 will be proposed as an extraordinary resolution.
An ordinary resolution requires a simple majority of the votes cast by Members entitled to vote and present in person or
by proxy to be cast in favour in order for it to be passed. An extraordinary resolution requires a majority of at least 75% of
the votes cast by Members entitled to vote and present in person or by proxy to be cast in favour in order for it to be
passed.
All Members are entitled to attend and vote at the Meeting. In accordance with the Articles, all Members entitled to vote
and present in person or by proxy at the Meeting shall upon a show of hands have one vote and upon a poll shall have
one vote in respect of each Ordinary Share held. In order to ensure that a quorum is present at the Meeting, it is necessary
for two or more Members present in person or by proxy.
The formal Notice convening the Annual General Meeting is set out in Appendix 1 of this document.
NOTICE OF ANNUAL GENERAL MEETING
101
Actions to be taken:
If you hold your ordinary shares in certificated form, your proxy vote must be submitted at www.signalshares.com so as to
have been received by the Company’s registrars, not less than 48 hours (excluding weekends and public holidays) before
the time appointed for the meeting or any adjournment of it. To register you will need your Investor Code which can be
found on your share certificate. By registering on the Signal shares portal at www.signalshares.com, you can manage your
shareholding, including:
• cast your vote
• change your dividend payment instruction
• update your address
• select your communication preference
If you need help with voting online please contact our Registrar, Link Group by email at
shareholderenquiries@linkgroup.co.uk , or you may call Link on 0371 664 0391 if calling from the UK, or +44 371 664 0391
if calling from outside of the UK. Calls are charged at the standard geographic rate and will vary by provider. Calls from
outside the United Kingdom will be charged at the applicable international rate. Lines are open 9.00 a.m. - 5.30 p.m.
(London time), Monday to Friday (excluding public holidays in England and Wales).
Alternatively, if you hold your ordinary shares in uncertificated form through CREST, appoint your proxy through the CREST
proxy appointment service as detailed in notes 9 - 11 of the Notes to the Notice of the Meeting.
A Form of Proxy is set out in the Notice attached as Appendix 1 to this document, which contains information regarding
the matters to be dealt with at the AGM. You are encouraged to complete and return the Form of Proxy in accordance
with the instructions printed thereon to the Company's Registrar, Link Group at PXS1, Central Square, 29 Wellington Street,
Leeds, LS1 4DL, or deliver it by hand during office hours only to the same address so as to be received as soon as possible
and in any event by no later than 2 p.m. on 26 June 2023. You will still be welcome to attend the Meeting in person and
vote if you wish.
To avoid the inconvenience of calling an adjourned meeting, we ask Members to submit their vote online at
www.signalshares.com or complete the enclosed proxy form and return it to Link Group at PXS1, Central Square,
29 Wellington Street, Leeds, LS1 4DL , or deliver it by hand during office hours only to the same address so as to be
received as soon as possible and in any event by no later than 2 p.m. on 26 June 2023. This will not preclude
Members from attending and voting in person at the Meeting.
In the event that any situation should affect the plans to hold the AGM on 28 June 2023 the Company will update
shareholders through an announcement to the London Stock Exchange and will provide further details on the
Company's website. The Board would encourage all shareholders to exercise their votes, and submit any
questions, in respect of the meeting in advance. This should ensure that your votes are registered in the event
that attendance at the AGM might not be possible.
Recommendation
The Board considers that the above proposals are in the best interests of the Members as a whole. Accordingly, the Board
unanimously recommends that Members vote in favour of the resolutions to be proposed at the Meeting.
Yours faithfully,
John Herring, Chairman
For and on behalf of the Board of Directors
CEIBA Investments Limited
Encl. Appendix 1: Notice of Annual General Meeting and Form of Proxy
NOTICE OF ANNUAL GENERAL MEETING
102
APPENDIX 1
CEIBA INVESTMENTS LIMITED
(THE “COMPANY”)
Registered No: 30083
NOTICE OF ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN that the Annual General Meeting of Shareholders of the Company will be held at Les Echelons
Court, Les Echelons, St. Peter Port, Guernsey, GY1 1AR Channel Islands on 28 June 2023 at 2.00 p.m. for the purpose of
considering and, if thought fit, passing the following resolutions as ordinary resolutions of the Company (in the case of
resolutions 1 to 10) and an extraordinary resolution of the Company (in the case of resolution 11):
ORDINARY RESOLUTIONS
ORDINARY BUSINESS:
1. To receive and adopt the Consolidated Financial Statements of the Company for the period ended 31 December 2022.
2. To ratify the appointment of Grant Thornton Limited, Guernsey as Auditors of the Company, to hold office until the
conclusion of the next Annual General Meeting of the Company.
3. To authorise the Directors to fix the remuneration of the Company's Auditors until the next Annual General Meeting
of the Company.
4. To re-appoint John Herring as a Director of the Company, to hold office until the conclusion of the next Annual
General Meeting of the Company.
5. To re-appoint Trevor Bowen as a Director of the Company, to hold office until the conclusion of the next Annual
General Meeting of the Company.
6. To re-appoint Keith Corbin as a Director of the Company, to hold office until the conclusion of the next Annual General
Meeting of the Company.
7. To re-appoint Peter Cornell as a Director of the Company, to hold office until the conclusion of the next Annual
General Meeting of the Company.
8. To re-appoint Colin Kingsnorth as a Director of the Company, to hold office until the conclusion of the next Annual
General Meeting of the Company.
9. To re-appoint Jemma Freeman as a Director of the Company, to hold office until the conclusion of the next Annual
General Meeting of the Company.
10. To authorise the Company in accordance with section 315 of The Companies (Guernsey) Law, 2008 (as amended) (the
"Law") to make one or more market acquisitions (as defined in the Law) of its own Ordinary Shares either for
cancellation or to hold as treasury shares for future resale or transfer provided that:
(i) the maximum number of Ordinary Shares authorised to be purchased is a number up to 10 per cent. of the
aggregate number of Ordinary Shares in issue as at the date of the Annual General Meeting;
(ii) the minimum price which may be paid for an Ordinary Share is £0.01;
(iii) the maximum price which may be paid for an Ordinary Share will be the higher of (i) an amount equal to 105 per
cent. of the average of the mid-market values of an Ordinary Share taken from the London Stock Exchange Daily
Official List for the five business days before the purchase is made; and (ii) the higher of the price of the last
independent trade or the highest current independent bid for Ordinary Shares on the London Stock Exchange at
the time the purchase is carried out; and
(iv) such authority shall expire on the earlier of the conclusion of the next annual general meeting of the Company
and the date 15 months after the date on which this resolution is passed.
NOTICE OF ANNUAL GENERAL MEETING
103
EXTRAORDINARY RESOLUTIONS
EXTRAORDINARY BUSINESS:
11. To authorise the Directors generally and unconditionally in accordance with Article 6.7 of the Articles of
Incorporation of the Company (the "Articles") to exercise all powers of the Company to issue equity securities (as defined
in Article 6.1(a) of the Articles) as if the members’ pre-emption rights contained in Article 6.2 of the Articles did not apply to
any such issue, provided that this power shall be limited to the allotment and issue of up to 13,767,158 new ordinary
shares of no par value in the Company (representing 10 per cent. of the issued share capital of the Company as at 26 April
2023). Such power hereby conferred shall expire on whichever is the earlier of: (i) the conclusion of the annual general
meeting of the Company to be held in 2024; or (ii) the date 15 months after the date on which this Extraordinary
Resolution is passed (unless renewed, varied or revoked by the Company prior to that date) save that the Company may,
before such expiry, make offers or agreements which would or might require equity securities to be issued after such
expiry and the Directors may issue equity securities in pursuance to such offers or agreements as if the authority
conferred hereby had not expired.
BY ORDER OF THE BOARD
NSM Funds Limited
Secretary
26 April 2023
NOTICE OF ANNUAL GENERAL MEETING
104
NOTICE OF ANNUAL GENERAL MEETING
Notes to the Notice of the Meeting:
1. A member is entitled to attend and vote at the meeting provided that all calls due from him/her in respect of his/her
shares have been paid. A Member is also entitled to appoint one or more proxies to attend, speak and vote on his/her
behalf at the meeting. The proxy need not be a Member of the Company. Your proxy vote may be submitted at
www.signalshares.com or by completing the form of proxy that is enclosed with this Notice of Meeting. To be
effective, the instrument appointing a proxy (together with any power of attorney or other authority under which it is
executed or a duly certified copy of such power) must be received by Link Group, PXS1, Central Square,Central
Square, 29 Wellington Street, Leeds, LS1 4DL, by no later than 2 p.m. on 26 June 2023, or not less than 48 hours before
(excluding weekends and bank holidays) the time for holding any adjourned meeting, as the case may be. A
corporation may execute a proxy under its common seal or by the hand of a duly authorised officer or other agent.
Completion and return of the form of proxy will not preclude Members from attending and voting in person at the
meeting. In the event that any situation should affect the plans to hold the AGM on 28 June 2023 the Company will
update shareholders through an announcement to the London Stock Exchange and will provide further details on the
Company's website. The Board would encourage all shareholders to exercise their votes, and submit any questions, in
respect of the meeting in advance. This should ensure that your votes are registered in the event that attendance at
the AGM might not be possible.
2. An ordinary resolution of the Members of the Company means a resolution passed by a simple majority.
3. An extraordinary resolution of the Members of the Company means a resolution passed by a majority of not less than 75%.
4. The quorum for the Meeting is at least two Members present in person or by proxy. To allow effective constitution of
the Meeting, if it is apparent to the Chairman that no Members will be present in person or by proxy, other than
by proxy in the Chairman’s favour, then the Chairman may appoint a substitute to act as proxy in his stead for any
Member, provided that such substitute proxy shall vote on the same basis as the Chairman.
5. Joint registered holders of Ordinary Shares shall not have the right of voting individually in respect of such Ordinary
Share but shall elect one of their number to represent them and to vote whether in person or by proxy in their name.
In default of such election the person whose name stands first on the register of Members of the Company shall
alone be entitled to vote.
6. In accordance with Regulation 41 of the Uncertificated Securities Regulations 2001, the Company specifies that only
those Members registered on the register of Members of the Company at close of business on 26 June 2023 (or in the
event that the Meeting is adjourned, only those Members registered on the register of Members of the Company as at
close of business on the day which is two days prior to the adjourned Meeting) shall be entitled to attend in person or
by proxy and vote at the Meeting in respect of the number of shares registered in their name at that time. Changes to
entries on the register of Members after that time shall be disregarded in determining the rights of any person to
attend or vote at the meeting.
7. A copy of this Notice of Meeting is available on the Company’s website: www.ceibalimited.co.uk.
8. The total issued share capital of the Company as at the date of this Notice of Meeting is 137,671,576 Ordinary Shares.
Pursuant to the Articles, on a show of hands every Member (being an individual) present in person or by proxy or
(being a corporation) present by a duly authorised representative shall have one vote on a show of hands, and one
vote per Ordinary Share on a poll (other than the Company itself where it holds its own shares as treasury shares).
9. CREST members who wish to appoint a proxy or proxies by utilising the CREST electronic proxy appointment service
may do so for the Meeting and any adjournment(s) thereof by utilising the procedures described in the CREST
manual. CREST personal members or other CREST sponsored members, and those CREST members who have
appointed a voting service provider(s), should refer to their CREST sponsor or voting service provider(s), who will be
able to take the appropriate action on their behalf.
10. In order for a proxy appointment made by means of CREST to be valid, the appropriate CREST message (a ‘‘CREST Proxy
Instruction’’) must be properly authenticated in accordance with Euroclear UK & Ireland Limited’s (EUI) specifications and
must contain the information required for such instructions, as described in the CREST Manual. The message must be
transmitted so as to be received by the Company’s agent Link Group, PXS1, Central Square, 29 Wellington Street, Leeds,
LS1 4DL (CREST ID RA:10) by 2 p.m. on 26 June 2023. For this purpose, the time of receipt will be taken to be the time (as
determined by the timestamp applied to the message by the CREST applications host) from which the Company’s agent
is able to receive the message by enquiry to CREST in the manner prescribed by CREST.
11. CREST members and, where applicable, their CREST sponsors or voting service providers should note that EUI does
not make available special procedures in CREST for any particular messages. Normal system timings and limitations
will therefore apply in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member
concerned to take (or, if the CREST member is a CREST personal member or sponsored member or has appointed a
voting service provider(s), to procure that his CREST sponsor or voting service provider(s) take(s)) such action as shall
be necessary to ensure that a message is transmitted by means of the CREST system by any particular time. In this
connection, CREST members and, where applicable, their CREST sponsors or voting service providers are referred, in
particular, to those sections of the CREST manual concerning practical limitations of the CREST system and timings.
The Company may treat as invalid a CREST Proxy.
105
NOTICE OF ANNUAL GENERAL MEETING
CEIBA INVESTMENTS LIMITED
(the “Company”)
Registered No: 30083
PROXY
Form of Proxy for use by Shareholders at the Annual General Meeting of the Company to be held at Les Echelons Court,
Les Echelons, St. Peter Port, Guernsey, GY1 1AR, Channel Islands on 28 June 2023 at 2.00 p.m.
I / We
(full name(s) in block capitals)
of
(address in block capitals)
hereby
1. appoint the Chairman or the Company Secretary of the meeting (See Note 1 below)
or
2.
(name and address of proxy in block capitals)
as my / our proxy to attend, and on a poll, vote for me / us and on my / our behalf at the Annual General Meeting of the
Company to be held on 28 June 2023 at 2.00 p.m. and at any adjournment thereof.
I / We wish my / our proxy to vote as indicated below in respect of the ordinary resolutions to be proposed at the
Meeting. Please indicate which way you wish your proxy to vote by ticking the appropriate box alongside each
resolution. (See Note 2 below).
ORDINARY RESOLUTIONS
Ordinary Business
FOR
AGAINST
VOTE WITHHELD
DISCRETIONARY
1. THAT the Consolidated Financial Statements of the Company for the period ended 31
December 2022 be received and adopted.
2. THAT the appointment of Grant Thornton Limited, Guernsey as Auditor of the Company
be ratified, to hold office until the conclusion of the next Annual General Meeting of the
Company.
3. THAT the Directors be authorised to fix the remuneration of the Company's Auditor until
the next Annual General Meeting of the Company.
4. THAT the re-appointment of John Herring as a Director of the Company, to hold office
until the conclusion of the next Annual General Meeting of the Company, be approved.
5. THAT the re-appointment of Trevor Bowen as a Director of the Company, to hold office
until the conclusion of the next Annual General Meeting of the Company, be approved.
6. THAT the re-appointment of Keith Corbin as a Director of the Company, to hold office
until the conclusion of the next Annual General Meeting of the Company, be approved.
7. THAT the re-appointment of Peter Cornell as a Director of the Company, to hold office
until the conclusion of the next Annual General Meeting of the Company, be approved.
8. THAT the re-appointment of Colin Kingsnorth as a Director of the Company, to hold
office until the conclusion of the next Annual General Meeting of tnhe Company, be
approved.
106
NOTICE OF ANNUAL GENERAL MEETING
Signature (See Note 3 below) Date
ORDINARY RESOLUTIONS (continued)
Ordinary Business (continued)
EXTRAORDINARY RESOLUTIONS
Extraordinary Business
9. THAT the re-appointment of Jemma Freeman as a Director of the Company, to hold
office until the conclusion of the next Annual General Meeting of the Company, be
approved.
10. THAT the Company be authorised in accordance with section 315 of The Companies
(Guernsey) Law, 2008 (as amended) (the "Law") to make one or more market
acquisitions (as defined in the Law) of its own Ordinary Shares either for cancellation or
to hold as treasury shares for future resale or transfer provided that:
(i) the maximum number of Ordinary Shares authorised to be purchased is a number
up to 10 per cent. of the aggregate number of Ordinary Shares in issue as at the
date of the Annual General Meeting;
(ii) the minimum price which may be paid for an Ordinary Share is £0.01;
(iii) the maximum price which may be paid for an Ordinary Share will be the higher of
(i) an amount equal to 105 per cent. of the average of the mid-market values of an
Ordinary Share taken from the London Stock Exchange Daily Official List for the five
business days before the purchase is made; and (ii) the higher of the price of the
last independent trade or the highest current independent bid for Ordinary Shares
on the London Stock Exchange at the time the purchase is carried out; and
(iv) such authority shall expire on the earlier of the conclusion of the next annual
general meeting of the Company and the date 15 months after the date on which
this resolution is passed.
FOR
AGAINST
VOTE WITHHELD
DISCRETIONARY
FOR
AGAINST
VOTE WITHHELD
DISCRETIONARY
11) That the Directors be and are authorised generally and unconditionally in accordance
with Article 6.7 of the Articles of Incorporation of the Company (the "Articles") to
exercise all powers of the Company to issue equity securities (as defined in Article 6.1(a)
of the Articles) as if the members’ pre-emption rights contained in Article 6.2 of the
Articles did not apply to any such issue provided that this power shall be limited to the
allotment and issue of up to 13,767,158 new ordinary shares of no par value in the
Company (representing 10 per cent. of the issued share capital of the Company as at 26
April 2023. Such power hereby conferred shall expire on whichever is the earlier of: (i)
the conclusion of the annual general meeting of the Company to be held in 2024; or (ii)
the date 15 months after the date on which this Extraordinary Resolution is passed
(unless renewed, varied or revoked by the Company prior to that date) save that the
Company may, before such expiry, make offers or agreements which would or might
require equity securities to be issued after such expiry and the Directors may issue
equity securities in pursuance to such offers or agreements as if the authority conferred
hereby had not expired.
107
NOTICE OF ANNUAL GENERAL MEETING
NOTES:
1. If you wish to appoint as your proxy someone other than the Chairman or the Company Secretary of the meeting,
cross out the words “the Chairman or the Company Secretary of the meeting” and write on the dotted line the full
name and address of your proxy. The change should be initialled.
2. In the absence of instructions, the person appointed proxy may vote or abstain from voting as he or she thinks fit
on the specified resolutions and, unless instructed otherwise, the person appointed proxy may also vote or abstain
from voting as he or she thinks fit on any other business (including amendments to resolutions) which may
properly come before the meeting.
3. This form must be signed and dated by the Shareholder or his / her attorney duly authorised in writing. If the
Member is a company, it may execute under its common seal, by the signature of a director and its secretary or
two directors or other authorised signatories in the name of the company or by the signature of a duly authorised
officer or attorney. In the case of joint holdings, any one holder may sign this form. The vote of the senior joint
holder who tenders a vote, whether in person or by proxy, will be accepted to the exclusion of the votes of the
other joint holders and for this purpose seniority will be determined by the order in which the names stand in the
register of members in respect of the joint holding.
4. To be effective, the instrument appointing a proxy (together with any power of attorney or other authority under
which it is executed or a duly certified copy of such power) must be sent to Link Group, PXS1, Central Square, 29
Wellington Street, Leeds, LS1 4DL, by no later than 2 p.m. on 26 June 2023, or not less than 48 hours before
(excluding weekends and bank holidays) the time for holding any adjourned meeting, as the case may be. A
corporation may execute a proxy under its common seal or by the hand of a duly authorised officer or other agent.
Completion and return of the form of proxy will not preclude Members from attending and voting in person at the
meeting.
5. The ‘vote withheld’ option is provided to enable you to abstain on any particular resolution however, it should be
noted that a ‘vote withheld’ is not a vote in law and will not be counted in the calculation of the proportion of the
votes ‘for’ and ‘against’ a resolution. The ‘discretionary’ option is provided to enable you to give discretion to your
proxy to vote or abstain from voting on a particular resolution as he or she thinks fit.
6. The quorum for the Meeting is at least two Members present in person or by proxy. To allow effective
constitution of the Meeting, if it is apparent to the Chairman that no Members will be present in person or
by proxy, other than by proxy in the Chairman’s favour, then the Chairman may appoint a substitute to act
as proxy in his stead for any Member, provided that such substitute proxy shall vote on the same basis as
the Chairman.
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Meliã Trinidad Península Hotel, Sancti Spíritus, Cuba