Blackrock Lat A Regulatory News (BRLA)

BlackRock Latin American Investment Trust Plc - Final Results

PR Newswire

London, March 18

BlackRock Latin American Investment Trust plc

(Legal Entity Identifier: UK9OG5Q0CYUDFGRX4151)

Information disclosed in accordance with Article 5 Transparency Directive, DTR 4.1

Annual Results Announcement for the year ended 31 December 2021

PERFORMANCE RECORD

Source: BlackRock.

1 The change in net assets reflects the market movements during the year and dividends paid.2 Based on an exchange rate of US$1.35445 to £1 at 31 December 2021 and US$1.3669 to £1 at 31 December 2020.3 Alternative Performance Measures, see the Glossary contained within the Annual Report and Financial Statements.4 The Company’s performance benchmark (the MSCI EM Latin America Index) may be calculated on either a gross or a net return basis. Net return (NR) indices calculate the reinvestment of dividends net of withholding taxes using the tax rates applicable to non-resident institutional investors, and hence give a lower total return than indices where calculations are on a gross basis (which assumes that no withholding tax is suffered). As the Company is subject to withholding tax rates for the majority of countries in which it invests, the NR basis is felt to be the most accurate, appropriate, consistent and fair comparison for the Company.

CHAIRMAN’S STATEMENT

Dear Shareholder

I am pleased to present the Annual Report to shareholders for the year ended 31 December 2021.

Review of 2021

The MSCI Developed Markets Index rose strongly over 2021 producing a net total return of 21.8% as extreme fiscal and monetary stimulus drove stock market prices upwards. However, this additional government stimulus has been far smaller outside the developed economies and the net total return on the MSCI Latin America Index was minus 8.1% and MSCI Emerging Markets Index minus 2.5%. Whilst 2021 was a challenging year for Latin American equity markets the poor overall return hides a story of a very diverse tale of the two countries that make up nearly 94% of the portfolio.

Mexico, the second largest constituent of the benchmark index (the MSCI EM Latin America Index), produced a net total return of 22.5%. The portfolio was overweight Mexico throughout 2021, focusing on companies like cement manufacturers that benefited from the pick-up in large scale US infrastructure projects and strong locally focused consumer names. As a major supplier to the US, the Mexican economy benefited from the rapid economic recovery in the US and by the increasing move to bring supply chains closer to their end markets in the US.

The big disappointment was Brazil, where the net total return (on a US Dollar basis) was minus 17.4%. The weakness of the Brazilian Real was a significant factor in this poor performance; in local currency terms the MSCI Brazil Index fell by just 11.2%, which was also the first annual drop since 2015 on a local currency basis.

The portfolio’s overweight positioning in Brazil (which is the largest constituent in the benchmark) was a significant contributor to the disappointing Net Asset Value (NAV) per share performance. The market was specifically hit in Brazil by the poorly handled COVID-19 pandemic, the rapid rise in interest rates (with locals abandoning the market for fixed income funds) and a volatile President who lost popularity as the year went on.

Additional information on the main contributors to and detractors from performance for the period under review is given in the Investment Manager’s Report below.

Throughout the COVID-19 outbreak, the Board has had to adjust its mode of operation to minimise the risk the virus has posed to the health and wellbeing of those working on the management and administration of the Company. The Board has continued to meet regularly (by video conference when required) and the Board has been pleased by the continuing high standard of support it is receiving from its Investment Manager and its other third-party suppliers as the pandemic evolves and working conditions remain difficult. The Board has worked closely with its Investment Manager to ensure that the Company’s operations have not been adversely impacted, that BlackRock and key service providers have established business continuity plans and a good level of service has continued to be maintained.

Performance

Over the year ended 31 December 2021, the Company’s NAV fell by 12.5% in US Dollar terms and on a net total return basis compared to a fall in the benchmark index of 8.1%. In British Pound Sterling (Sterling) terms, the NAV fell by 11.7% over the same period and the benchmark index in Sterling terms fell by 7.3% (all calculations on a net total return basis). The share price fell by 11.8% in US Dollar terms (11.0% in Sterling terms) (both on a total return basis). Details of the factors affecting performance are set out in the Investment Manager’s Report.

Gearing

The Board’s view is that 105% of NAV is the neutral level of gearing over the longer term and that gearing should be used actively in an approximate range of plus or minus 10% around this as measured at the time that gearing is instigated. These current parameters sit within the Company’s gearing policy, as set out in the investment policy in the Annual Report and Financial Statements, which states that net borrowings are not expected to exceed 25% of net assets under normal circumstances, and the Company’s Articles of Association which limit net borrowings to 100% of capital and reserves. The Board is pleased to note that, despite the high level of uncertainty over the year, the Portfolio Managers have been bold, ambitious and used gearing actively with a low of 105.7% in September 2021 and a high of 116.3% in July 2021. Average gearing for the year to 31 December 2021 was 110.5%.

Revenue return and dividends

Total revenue return for the year was 26.10 cents per share (2020: 14.86 cents per share). The increase of 75% was largely due to the exceptionally low level of dividends received in 2020 as the COVID-19 pandemic hit portfolio companies’ revenue streams. Notwithstanding this fact, current year revenues are still significantly higher than the more comparable earnings per share of 18.10 cents for the year to 31 December 2019.

Under the Company’s dividend policy, dividends are calculated and paid quarterly based on 1.25% of the US Dollar NAV at close of business on the last working day of March, June, September and December respectively; additional information in respect of the payment timetable is set out on page 106 of the Annual Report and Financial Statements. Dividends will be financed through a combination of available net income in each financial year and revenue and capital reserves. The Company has declared interim dividends totalling 27.56 cents per share in respect of the year ended 31 December 2021 (2020: 23.06 cents per share) as detailed in the table below; this represented a yield of 6.0% based on the Company’s share price at 31 December 2021.

Dividends declared in respect of the year ended 31 December 2021

The dividends paid and declared by the Company in 2021 have been funded from current year revenue, brought forward revenue and capital reserves. As at 31 December 2021, a balance of US$3,829,000 remained in revenue reserves, which is sufficient to cover approximately one and a half quarterly dividend payments at the most recently declared dividend rate of 6.21 cents per share.

Dividends will be funded out of capital reserves to the extent that current year revenue and revenue reserves are insufficient. The Board believes that this removes pressure from the Portfolio Managers to seek a higher income yield from the underlying portfolio itself which could detract from total returns. The Board also believes the Company’s dividend policy will enhance demand for the Company’s shares and help to narrow the Company’s discount, whilst maintaining the portfolio’s ability to generate attractive total returns. It is promising to note that since the dividend policy was introduced in 2018, the Company’s discount has narrowed from 14.9% as at 1 July 2018 to 7.1% as at 31 December 2021.

Performance triggered tender offer

As part of its discount control policy, in 2018 the Board undertook to make a tender offer to shareholders for 24.99% of the issued share capital (excluding treasury shares) of the Company at a tender price reflecting the latest cum-income NAV less 2% and related portfolio realisation costs if, over the four year period from 1 January 2018 to 31 December 2021 (the ‘Calculation Period’), either of the following conditions were met:

As at 31 December 2021, and over the Calculation Period, the Company had underperformed the Benchmark by 94 basis points on an annualised basis and the Company’s ordinary shares had traded at an average discount to NAV of 11.65%.

As a result, the Board announced on 4 January 2022 that it would make a tender offer to shareholders for 24.99% of the issued share capital of the Company (excluding treasury shares). A copy of the circular setting out the timetable and detailed structure of the tender offer will be posted out to eligible shareholders along with this report, and will also be made available on the Company’s website at www.blackrock.com/uk/brla. A resolution to implement the tender offer will be put to shareholders for approval at a General Meeting to be held immediately following the conclusion of the Company’s next Annual General Meeting (AGM) to be held on 19 May 2022. All Directors hold shares in the Company, and no Director will exercise his or her option to tender their shareholding.

The making and implementation of the tender offer will be conditional, amongst other things, upon the Company having the required shareholder authority or such shareholder authority being obtained, the Company having sufficient distributable reserves to effect the repurchase of any successfully tendered shares and, having regard to its continuing financial requirements, sufficient cash reserves to settle the relevant transactions with shareholders, the Company’s continuation vote being approved at the Annual General Meeting of shareholders in May 2022, and the Company’s continuing compliance with the Listing Rules and all other applicable laws and regulations.

Discount management and new discount control mechanism

The Directors recognise that it is in the long-term interests of shareholders that shares do not trade at a significant discount to their prevailing NAV and they continue to monitor the discount at which the ordinary shares trade to their prevailing NAV. In the year to 31 December 2021, the cum-income discount on the ordinary shares in Sterling terms has averaged 10.1% and ranged between 5.4% and 14.4%. Investor sentiment towards regional stock markets tends to be quite cyclical as a result of most Latin American economies being more cyclical than those of the broader global economy even though long-term economic growth expectations are strong. Therefore shares of Latin American investment trusts often experience quite volatile levels of discount. Previously, the Board has tried to reduce this volatility by the tender mechanism described above. The Board also offers shareholders the right to vote on whether the Company should continue in existence every two years.

The Board is proposing to adopt a new discount control policy for the four year period from 1 January 2022 to 31 December 2025 as set out in detail in the Strategic Report below. The new discount control mechanism will be a tender for 24.99 per cent of the shares in issue excluding treasury shares (at a tender price reflecting the latest cum-income NAV less 2 per cent and related portfolio realisation costs) subject to the Company not meeting either a performance target or an average discount target over the period. The tender will also be conditional on the passing of the biennial continuation votes at the AGMs in 2024 and 2026. The Board believes that a four year performance target will enable the Investment Manager to take a sufficiently long-term approach to investing in quality companies in the region, and it believes that it is in shareholders’ interests as a whole that this time period for assessing performance be adopted.

In addition, the Board will also seek to renew its existing authority to make market purchases of up to 14.99% of the Company’s ordinary shares to be held, sold, transferred or otherwise dealt with as treasury shares or cancelled upon completion of the purchase at the AGM in May 2022.

ESG and Socially Responsible Investment

As a Board we believe that good Environmental, Social and Governance (ESG) behaviour by the companies we invest in is important to the long-term financial success of our Company and are very encouraged that ESG issues are also increasingly at the forefront of investors’ minds. The Latin American economies are large producers to the world of vital food, timber, minerals and oil. These are all areas that are at the forefront of modern concerns about climate change, biodiversity and proportionate and sustainable use of land and ocean resources. The Board is aware that there is significant room for improvement in terms of disclosure and adherence to global best practices for many corporates throughout the Emerging Markets1 area and the Latin American region is no exception to this. The Board is also aware that as a whole the region lags global peers when it comes to ESG best practices.

The Board receives regular reporting from the Portfolio Managers on ESG matters and extensive analysis of our portfolio’s ESG footprint and actively engages with the Portfolio Managers to discuss when significant engagement is required with the management teams of our Company’s portfolio holdings. The Portfolio Managers are supported by the extensive ESG resources within BlackRock and devote a considerable amount of time to understanding the ESG risks and opportunities facing companies and industries in the portfolio. ESG analytics are integrated into the investment process when weighing up the risk and reward benefits of investment decisions.

The Board believes that communication and engagement with portfolio companies can lead to better outcomes for shareholders and the environment than merely excluding investment in certain areas. It is encouraged by the progress made through BlackRock’s company engagement to encourage sound corporate governance frameworks that promote strong leadership by boards of directors and good management practices contributing to a better outcome for all stakeholders. More information in respect of our approach to ESG can be found on pages 25 to 29 contained within the Annual Report and Financial Statements.

Annual General Meeting

The Company’s Annual General Meeting will be held at the offices of BlackRock at 12 Throgmorton Avenue, London EC2N 2DL on Thursday, 19 May 2022 at 12.00 noon.

Details of the business of the meeting are set out in the Notice of Annual General Meeting on pages 122 to 123 of the Annual Report and Financial Statements.

The Board is delighted to return to in person AGMs and as at present UK Government restrictions on public gatherings are no longer in force in connection with COVID-19, the AGM can be held in the normal way with physical attendance by shareholders. However, shareholders should be aware that it is possible that such restrictions could be reimposed prior to the date of the AGM.

Shareholders who intend to attend the AGM should ensure that they have read and understood the venue requirements for entry to the AGM. These requirements, along with further information on the arrangements for the AGM, can be found in the Directors’ Report on page 54 contained within the Annual Report and Financial Statements. Given the ongoing health issues posed by the COVID-19 virus, there will be no shareholder lunch provided at the AGM although light refreshments will be available. The Board hopes to reinstate the lunch arrangements in future years subject to health and safety considerations permitting.

In the absence of any reimposition of restrictions, the Board very much looks forward to meeting with shareholders at the AGM.

Outlook

After a challenging year in 2021 - particularly for Brazil - the region has had a very strong start to 2022. As global economies have reopened post the COVID-19 pandemic, the significant amounts of fiscal stimulus awash in the economy (particularly in the US) have driven commodity prices ever higher. This has subsequently been compounded by the recent devastating events in the Ukraine which have constricted the supply of key commodities dramatically and pushed prices up even further. Latin America has in abundance many key resources such as lithium, oil, iron ore, copper and important foodstuffs like wheat and soybeans. Some of the longest-life and low-cost reserves are in Brazil, Chile and Peru. Nearly 75% of exports in Latin America are linked to commodities (compared, for example, to 25% for Asia).

Aggressive interest rate hikes in several Latin American countries to bring inflation under control in 2021 have dramatically increased the interest rate differential with the US and this should benefit Latin American currencies (which are already amongst the best performing in the world in the first quarter of 2022). Currencies and equity markets should also benefit from the fact that the region is physically and politically removed from the epicentre of the conflict in Europe. The region has low exposure to Russia and overall positive correlations with higher commodity prices. The one caveat is Brazil imports 85% of its fertilizer needs and a fifth of that comes from Russia. The Brazilian government is already busy with a long-term plan to produce more local fertiliser.

All of these factors together mean that our Portfolio Managers are optimistic about the outlook for the region - especially Brazil which is the largest determinant of the Company’s overall performance. Food and energy prices are rising rapidly. Brazil will benefit from the overall increase in these prices because it has a much more diversified commodity export base compared to other countries in Latin America (although an important caveat here is that these higher prices could drive local food insecurity or food protectionism).

The other key area to watch in 2022 is politics. The presidential election in Brazil will be monitored carefully given the possible return of former left wing President Lula who is currently leading in the polls. He appears at the moment to be presenting himself as a ‘moderate’ alternative. The market could respond dramatically to all of this political volatility if Lula appears to move away from any pragmatic stances.

Higher commodity prices, solid earnings momentum, historically cheap currencies and equity markets especially in Brazil create the potential for attractive returns for the region as a whole.

Carolan DobsonChairman31 March 2022

1 Emerging Markets in this respect defined as the MSCI Emerging Markets Index.

INVESTMENT MANAGER’S REPORT

Market Overview

In contrast to a very strong start to 2022, with Brazil one of the top performing markets in the world, 2021 was a challenging year for Latin American markets. The region was down over the year by 8.1%1 underperforming Emerging Markets which fell by 2.5%1 and Developed Markets which rose by 21.8%1. Throughout the region rising inflation forced central banks to hike interest rates, creating headwinds for local equity markets and a heavy election calendar and polarised presidential elections created additional uncertainties for investors at a time when economies were still recovering from the COVID-19 pandemic.

Against this backdrop, the performance narrative was dominated by two countries: Brazil and Mexico. Brazil, the largest constituent in the Company’s benchmark, detracted the most from performance, falling by 17.4%1. The Brazilian market was weighed down by successive COVID-19 waves followed by higher inflation and the need for steep hikes in interest rates. Higher fiscal spending to offset economic disruption from COVID-19 put an additional burden on the already stretched debt dynamics in the country. Mexico in contrast was the standout star performer of the year, with markets rising by 22.5%1. Mexico’s ability to outshine in 2021 was a function of the reopening of the economy, which continued apace as the pandemic figures (cases and mortality rates) remained under relative control combined with the benefits from a strong US recovery partially helped by the continued trend of near-shoring supply chains.

Following a challenging 2021, Latin American equities have delivered a strong start to 2022, proving to be a bright star in turbulent times for global markets. We are confident that there are an abundance of reasons to be optimistic towards Latin American equities which we believe are underpinned by an attractive combination of higher commodity prices, geopolitical risk diversification, rapidly improving earnings momentum, and favourable valuations. As the world rebuilds after the pandemic, Latin America is a prime beneficiary of recovery in the global economy. Vast stimulus in the US and economic recovery across the world has pushed up demand for commodities at a time when supply shortages are being turbocharged by geopolitical conflict. Latin America is one of the most abundant regions in the world for key inputs such as lithium, iron ore, oil & gas and copper and features some of the longest-life reserves at a low cost in Brazil, Chile and Peru. There is no doubt that Latin America will be depended on heavily to fill a void being left by resource rich countries in conflict. Furthermore, aggressive rate hikes in several Latin American economies have sharply increased the interest rate differential with the US, supporting the case for local currencies to appreciate. In the short-term, the interest rate differential looks set to widen, further underpinning Latin American currencies which are among the best performing early on in 2022. Additionally, with the region’s relatively high commodity exposure, Latin American equities have seen a major improvement in earnings momentum, by far the largest gain among Emerging Market regions. As earnings momentum remains positive and accelerating, we view valuations as attractive, with the region trading on 8.6x 12-month forward Price to Earnings ratios, more than a 25% discount to its long-term history.

While we are optimistic about the outlook, we remain cognisant of the risks which could weigh on regional economic growth in the near term. Across Latin America, a growing middle class is seeing domestic consumption pressured from rising inflation and increasing domestic interest rates. Latin American economies were boosted throughout the pandemic, for the most part, by expansionary monetary and fiscal policies. Food and energy absorb a significant amount of disposable income and it is these areas where prices are rising fastest. This has led to a rapid near-term rebound in demand given the reopening of economies at a time where rising energy costs, low inventories and supply chain issues have led to inflation exceeding expectations across the region. Central banks have reacted aggressively by hiking domestic interest rates to tame intensifying inflation pressures. The impact of rising domestic rates will weigh on growth prospects, at the margin, but could be offset by continued loose fiscal policy.

Politics remains an area that presents several opportunities and challenges for Latin American markets. There have been key elections across the region, with some transformational candidates coming into power on the back of aggressive campaign promises. While history in past elections has shown that political fears based on radical reform initiatives tend to be overblown, it nonetheless creates volatility, which can result in attractive valuations for stocks within our opportunity set. We actively seek-out and look to take advantage of these short-term dislocations in valuations relative to underlying bottom-up fundamentals of the companies we invest in given our long-term perspective on markets. Over the course of 2022, we will see presidential elections in Colombia and Brazil and one of the biggest debates is the amount of government spending needed to continue to support development. The outcome of these debates will have profound impact on growth going forward.

In conclusion, rising commodity prices have underpinned a major improvement in earnings momentum for Latin American equities. As the region has experienced disappointing returns in recent years, the asset class enters the year as undervalued, under-owned and under-appreciated. The benefits of higher commodity prices, solid earnings momentum and cheap currencies have the potential to lead to attractive returns for the region going forward.

Portfolio positioning

Performance review

Our positioning in the portfolio in 2021 evolved throughout the year as we looked to take advantage of attractive valuations in the region. We started the year underweight Peru while maintaining an overweight to Mexico and Brazil. As the year went on, our country positioning favoured countries with superior fundamentals determined by a strong sovereign credit profile and those economies which benefit most from the rebound in trade with US and China markets. We identified Chile and Mexico as meeting these criteria and added accordingly, while more indebted and less open economies, such as Argentina, Brazil and Colombia struggled to sustain above-trend growth we saw from the post COVID-19 recovery.

We saw Mexico as a notable beneficiary of a growing emphasis on near-shoring and a strong economic recovery in the US. Given Mexico’s abundance of productive and relatively low-cost labour combined with a strong auto-manufacturing pedigree, we believe the country should be a beneficiary of additional investments from multinational companies who are looking to diversify their supply chains. Long overdue, large-scale infrastructure programmes in the US have increased the outlook for demand for cement production and we hold positions in one of the large Mexican cement companies which supply these needs. Over the year, we added to Mexican cement company, Cemex, and the company outperformed due to increased volumes and prices in Mexico and the United States. We also added to Mexican companies such as telecommunications company América Movil and convenience store retail company Fomento Economico, to gain exposure to Mexico’s reopening trade.

We have also been favourable toward Chile. It has had one of the highest vaccination rates in the world, with over 90% of the population receiving at least one jab by year end 2021*. This has allowed a strong economic recovery, that the Company accessed through exposure to banks and department stores in the region. As the December 2021 presidential election created some volatility in the short term, we took the opportunity to add to the Chilean department store chain, Falabella, given the company’s position to benefit from this gradual economic reopening and improving consumption trends.

Over the year we also added to Copa Holdings, a Panamanian airline, as we believe pricing power has increased. The company is navigating through the COVID-19 crisis well and we believe it will end up in a better competitive position given that multiple regional competitors are going through financial restructuring. The company is well positioned for return of demand to underserved markets with limited substitutions for air travel.

* Source: Our World in Data, 2 January 2022.

Current portfolio positioning

As in 2020, the portfolio ended 2021 with its largest country overweight in Mexico.

Looking forward after outperforming for much of the year, valuations are not as discounted in Mexico today as they are in other countries. While Argentina shows as a regional overweight, the Company holds a single holding in the country through IT consulting company, Globant. We like the company for its rapid revenue growth with expanding margins and a strong set of accelerators that leverage Artificial Intelligence and other technologies to reinvent key aspects of organisations.

The portfolio started off and also ended, the year with a slight overweight to Brazil. There is considerable uncertainty ahead of the November 2022 election and some strains are appearing in the public finances. That being said, we are finding plenty of opportunity at the individual stock level. We are looking at traditional banks and insurance companies that should be beneficiaries of rising interest rates. We also see opportunities in healthcare, as countries aim to rectify the weaknesses in their health infrastructure exposed by COVID-19. Over the year we added to Rede D’Or São Luiz, a Brazilian healthcare company. The company’s earnings momentum remains strong as it accelerates its leadership position through both organic expansion and acquisitions in a market with attractive long term growth opportunities. We also initiated a position in XP Inc, a Brazilian investment management company, as we continue to see the company taking share of wallet from incumbent banks. The company has an attractive mix of profitable growth and continues to display operational momentum from scale gains. Similarly, we added to B3, the Brazilian stock exchange, on the back of resilient growth in cash flows which will benefit from continued maturation of the domestic equity market as the country remains on the path of a broadening and deepening of financial markets.

Throughout 2021, and up to the date of this report, the Company did not have any exposure to Colombia. Colombia is highly dependent on oil (exports, fiscal revenues, index exposure) and has a fiscal deficit that is very likely to worsen from here if structural reforms are not enacted. As we get closer to the presidential election in the second quarter of 2022, we expect the equity markets and the currency to face volatility where we may see an opportunity to reexamine our exposure at more attractive valuations.

At the sector level, we are overweight financials and real estate, and underweight consumer staples and energy.

Environmental, Social and Governance (ESG) issues

It is 2022, and almost 40% of firms in Latin America still do not have any female representation in their senior management teams. It is equally disturbing that there are no female CEOs amongst the close to 200 firms in our investible universe. These figures are in noticeable contrast to global levels, where only 10% of firms are headed by all-male management teams and 5.5% have female CEOs. Female executives make up 13.4% of senior management teams in Latin America, compared to just under 20% globally. Whilst diversity in Latin America has long trailed global levels, the wide acceptance of the benefits of diversity, and the growth of ESG-focused investing, has resulted in a stark gap in representation between Latin American and global firms. With just 13.3% gender diversity at junior management level (where these figures are disclosed), the talent pipeline in the region also underlines that more concrete efforts need to be made by Latin American firms. While there are considerable differences between countries and sectors, the overriding conclusion is that gender diversity remains very low.

Furthermore, as society grows increasingly aware of climate risks, the need for biodiversity and the proportionate use of natural resources, the global emphasis on ESG continues to intensify and sustainability is increasingly at the forefront of decision making for governments and regulators. As Portfolio Managers, we devote a considerable amount of time to understanding the ESG risks and opportunities facing companies and industries in the portfolio. ESG analytics are integrated into the investment process and it should be noted that we believe there is a great deal of improvement that needs to be made in terms of disclosure and adherence to global best practices for corporates throughout the region. In our opinion, the Latin American region lags global peers when it comes to ESG best practices and we believe BlackRock’s communication and engagement with companies can lead to better outcomes for all stakeholders. As Portfolio Managers, we work very closely with, and are supported by, the extensive ESG resources at BlackRock which include BlackRock’s Investment Stewardship Team, Sustainable Investing Team and the Risk & Quantitative Analysis Team. We aim to engage with the directors and management of the companies that we invest in to advocate for sound corporate governance and sustainable business practices that result in long–term value creation for shareholders. More information in respect of BlackRock’s approach as a firm to ESG and shareholder engagement is given on pages 25 to 29 of the Annual Report and Financial Statements.

Outlook

A void in critical materials, both hard and soft commodities, has emerged in the wake of the Russia/Ukraine conflict, turbocharging an already supply-constrained global commodity backdrop. The quest for alternative suppliers and modified value chains has been kicked into high gear. Latin America is well situated to fill this gap given its abundance of natural resources. History has shown that strong raw material prices shine a favourable light on Latin American equity markets considering that in the last three commodity booms (since 1999), Latin American equities rose by an average of +203% (Brazil +287%). Additionally, when looking at 2002 (when China entered the World Trade Organisation) to the global financial crash in 2008, Brazilian stocks returned +672%. Despite the surge in commodity prices since March 2020, Latin American stocks have lagged due to subpar growth, political uncertainty, fiscal challenges and devastating COVID-19 waves. Conversely, the region trades at the widest discounts to historical multiples (Price to Earnings ratios, Price to Book Valuation, Enterprise Value to Sales ratios, EV/EBITDA (Earnings before interest, tax, depreciation and amortisation)) relative to Emerging Market peers (–1.4 standard deviations on average vs –0.1 for Asia-X, –0.6 for CEEMEA (Central and Eastern Europe, Middle East and Africa)). We would argue given current natural resource prices, commodity economies in the region are no longer ‘fragile’ given competitive currency exchange rates, current account surpluses, manageable deficits and large foreign currency reserves. We see scope for a growth and equity performance catch-up, especially if China reflates and/or signals for monetary ease.

Brazil is by far the largest, deepest and most liquid Emerging Market exposed to a new commodity supercycle. We acknowledge risks of soaring inflation in an election year, but we believe these concerns are largely offset by:

While there remain a number of economic and political challenges for Latin America in 2022, we believe many of its troubles should be behind it. The interest rate cycle may start to turn as inflationary pressures ease in the back half of 2022 following spikes early this year. The global economic recovery should create continued demand for natural resources, which Latin America has in abundance. Vaccination rates across the region are also high, and companies have grown more adept at dealing with mobility restrictions. We believe all these factors should allow for stronger economic growth in the years ahead. At the same time, we believe valuations are attractive. By global investment standards, Latin America is highly under-owned and rising interest rates have done little to improve its popularity. Higher rates have also taken some domestic equity investors out of the market as yields in fixed income have risen. However, we see the opportunity for this trend starting to reverse in 2022. Entering the year, expectations are low for Latin American equities, but there are many great companies benefiting from rapidly changing factors which can positively impact the region. We believe the future may be more positive than many expect.

Sam Vecht and Ed KuczmaBlackRock Investment Management (UK) Limited31 March 2022

1 All calculations in US Dollars on a net total return basis.

TEN LARGEST INVESTMENTSas at 31 December 2021

1+ Vale (2020: 3rd)MaterialsMarket value – American depositary share (ADS): US$16,147,000Share of investments: 7.6% (2020: 8.1%)is one of the world’s largest mining companies, with other business in logistics, energy and steelmaking. Vale is the world’s largest producer of iron ore and nickel but also operates in the coal, copper, and manganese and ferro-alloys sectors.

2- Petrobrás (2020: 1st)EnergyMarket value – American depositary receipt (ADR): US$9,804,000Market value – Preference shares ADR: US$6,180,000Share of investments: 7.5% (2020: 9.2%)is a Brazilian integrated oil and gas company, operating in the exploration and production, refining, marketing, transportation, petrochemicals, oil product distribution, natural gas, electricity, chemical-gas and biofuel segments of the industry. The company controls significant assets across Africa, North and South America, Europe and Asia, with a majority of production based in Brazil.

3+ América Movil (2020: 5th)Communication ServicesMarket value - ADR: US$15,125,000Share of investments: 7.1% (2020: 4.2%)is the leading provider of integrated telecommunications services in Latin America, with wireless and fixed-line presence in Latin America, the US, and Central and Eastern Europe. The company has the largest wireless subscriber base in the world outside of China and India.

4- Banco Bradesco (2020: 2nd)FinancialsMarket value - ADR: US$11,319,000Share of investments: 5.3% (2020: 8.5%)is one of Brazil’s largest private sector banks. The company divides its operations in two main areas – banking services and insurance services, management of complementary private pension plans and savings bonds.

5- B3 (2020: 4th)FinancialsMarket value – Ordinary shares: US$9,749,000Share of investments: 4.6% (2020: 4.9%)is a stock exchange located in Brazil, providing trading services in an exchange and OTC environment. B3’s scope of activities include the creation and management of trading systems, clearing, settlement, deposit and registration for the main classes of securities, from equities and corporate fixed income securities to currency derivatives, structured transactions and interest rates, and agricultural commodities. B3 also acts as a central counterparty for most of the trades carried out in its markets and offers central depository and registration services.

6+ Walmart de México y Centroamérica (2020: 7th)Consumer StaplesMarket value – Ordinary shares: US$9,637,000Share of investments: 4.5% (2020: 3.5%)is the Mexican and Central American division of Walmart Stores Inc, with operations in Mexico, Guatemala, El Salvador, Honduras, Nicaragua and Costa Rica. The company operates eight brands in the region, covering the discount, winery, supermarket and supercenter segments.

7+ Grupo Financiero Banorte (2020: 13th)FinancialsMarket value – Ordinary shares: US$9,451,000Share of investments: 4.5% (2020: 2.5%)is a Mexican banking and financial services holding company and is one of the largest financial groups in the country. It operates as a universal bank and provides a wide array of products and services through its broker dealer, annuities & insurance companies, retirements savings funds (Afore), mutual funds, leasing & factoring company and warehousing.

8+ Cemex (2020: 10th)MaterialsMarket value - ADR: US$7,674,000Share of investments: 3.6% (2020: 3.1%)is a Mexican multinational building materials company and is one of the world’s largest global building materials companies. It manufactures and distributes cement, ready-mix concrete and aggregates in more than 50 countries.

9+ Credicorp (2020: n/a)FinancialsMarket value – Ordinary shares: US$7,475,000Share of investments: 3.5% (2020: n/a)is a Peruvian financial company that was a top contributor as the stock continues to perform well following a period of volatility in the first half of 2021 surrounding the Peruvian presidential elections.

10+ Grupo Aeroportuario del Pacífico (2020: 16th)IndustrialsMarket value – ADS: US$4,565,000Market value – Ordinary shares – US$1,797,000Share of investments: 3.1% (2020: 2.3%)is a Mexican airport operator and it benefited the Company as the stock has outperformed following air traffic recovery.

All percentages reflect the value of the holding as a percentage of total investments. For this purpose, where more than one class of securities is held, these have been aggregated.

Together, the ten largest investments represent 51.3% of the total investments (ten largest investments as at 31 December 2020: 51.8%).

PORTFOLIO OF INVESTMENTSas at 31 December 2021

1 Composite units include 1 ordinary share and 4 preference shares.2 Unlisted securities.

All investments are in equity shares unless otherwise stated.

The total number of investments held at 31 December 2021 was 40 (31 December 2020: 43). At 31 December 2021, the Company did not hold any equity interests comprising more than 3% of any company’s share capital (31 December 2020: nil).

PORTFOLIO ANALYSISas at 31 December 2021

Geographical Weighting (gross market exposure) vs MSCI EM Latin America Index

Sources: BlackRock and MSCI.

Sector and geographical allocations

Source: BlackRock.

ENVIRONMENTAL, SOCIAL AND GOVERNANCE ISSUES AND APPROACH

The Board’s approach

Environmental, social and governance (ESG) issues can present both opportunities and threats to long-term investment performance. The securities within the Company’s investment remit are typically large producers of vital food, timber, minerals and oil supplies, and consequently face many ESG challenges and headwinds as they grapple with the impact of their operations on the environment and resources. The Board is also aware that there is significant room for improvement in terms of disclosure and adherence to global best practices for corporates throughout the Latin American region, which lags global peers when it comes to ESG best practice. These ESG issues faced by companies in the Latin American investment universe are a key focus of the Board, and it is committed to a diligent oversight of the activities of the Manager in these areas. Whilst the Company does not exclude investment in stocks on ESG criteria, ESG analytics are integrated into the investment process when weighing up the risk and reward benefits of investment decisions and the Board believes that communication and engagement with portfolio companies is important and can lead to better outcomes for shareholders and the environment than merely excluding investment in certain areas.

More information on BlackRock’s global approach to ESG integration, as well as activity specific to the BlackRock Latin American Investment Trust plc portfolio, is set out below. BlackRock has defined ESG integration as the practice of incorporating material ESG information and consideration of sustainability risks into investment decisions in order to enhance risk-adjusted returns. ESG integration does not change the Company’s investment objective. More information on sustainability risks may be found in the AIFMD Fund Disclosures document of the Company available on the Company’s website at https://www.blackrock.com/uk/individual/literature/policies/itc-disclosureblackrock-latin-america-trust-plc.pdf .

BlackRock Latin American Investment Trust plc - engagement with portfolio companies in 2021

Given the Board’s belief in the importance of engagement and communication with portfolio companies, it receives regular reports from the Manager in respect of activity undertaken for the year under review. The Board reviews these closely and asks for further updates and progress reports from the Portfolio Managers in respect of evolving ESG issues and the action being taken where appropriate. The Board notes that over the year to 31 December 2021, 61 total company engagements were held with the management teams of 23 portfolio companies representing 76% of the portfolio by value at 31 December 2021. Additional information is set out in the tables that follow.

1 Source: BlackRock and Institutional Shareholder Services as at 31 December 2021.

2 Source: BlackRock. Company valuation as included in the portfolio at 31 December 2021 as a percentage of the total portfolio value.

Engagement Themes *1

*Engagements include multiple company meetings during the year with the same company. Most engagement conversations cover multiple topics and are based on BlackRock vote guidelines and BlackRock’s engagement priorities can be found at: https://www.blackrock.com/corporate/aboutus/investment-stewardship#engagement-priorities. The numbers in the tables above reflect the number of meetings at which a particular topic is discussed.

1 Sources: ISS Proxy Exchange and BlackRock Investment Stewardship.

The importance and challenges of considering ESG when investing in the Latin American Sector and BlackRock’s approach to ESG Integration

1 Source: BlackRock’s 2021 voting spotlight report which can be found at https://www.blackrock.com/corporate/literature/publication/2021-voting-spotlight-full-report.pdf.2 The data in this table applies to the BlackRock’s Investment Stewardship Team’s engagements globally across all BlackRock-managed portfolios.

BlackRock’s approach to ESG integration

BlackRock believes that sustainability risk – and climate risk in particular - now equates to investment risk, and this will drive a profound reassessment of risk and asset values as investors seek to react to the impact of climate policy changes. This in turn, in BlackRock's view, is likely to drive a significant reallocation of capital away from traditional carbon intensive industries over the next decade. BlackRock believes that carbon-intensive companies will play an integral role in unlocking the full potential of the energy transition, and to do this, they must be prepared to adapt, innovate and pivot their strategies towards to a low carbon economy.

As part of BlackRock’s structured investment process, ESG risks and opportunities (including sustainability/climate risk) are considered within the portfolio management team’s fundamental analysis of companies and industries and the Company’s portfolio managers work closely with BlackRock's Investment Stewardship Team to assess the governance quality of companies and investigate any potential issues, risks or opportunities.

As part of their approach to ESG integration, the portfolio managers use ESG information when conducting research and due diligence on new investments and again when monitoring investments in the portfolio. In particular, portfolio managers at BlackRock now have access to 1,200 key ESG performance indicators in Aladdin (BlackRock's proprietary trading system) from third-party data providers. BlackRock’s internal sustainability research framework scoring is also available alongside third-party ESG scores in core portfolio management tools. BlackRock’s access to company management allows it to engage on issues that are identified through questioning management teams and conducting site visits. In conjunction with the portfolio management team, BlackRock Investment Stewardship Team meets with boards of companies frequently to evaluate how they are strategically managing their longer-term issues, including those surrounding ESG and the potential impact these may have on company financials. BlackRock's and the portfolio management team’s understanding of ESG issues is further supported by BlackRock’s Sustainable Investment Team (BSI). BSI look to advance ESG research and integration, active engagement and the development of sustainable investment solutions across the firm. ESG integration does not change the Company's investment objective, or constrain the Investment Manager’s investable universe, and does not mean that an ESG or impact focused investment strategy or any exclusionary screens have been or will be adopted by the Company. Similarly, ESG integration does not determine the extent to which the Company may be impacted by sustainability risks.

Investment Stewardship

As a fiduciary to its clients, BlackRock has built its business to protect and grow the value of clients’ assets. As part of this fiduciary duty to its clients, BlackRock is committed to promoting sound corporate governance through engagement with investee companies, development of proxy voting policies that support best governance practices and also through wider engagement on public policy issues.

Global Principles

BlackRock’s approach to corporate governance and stewardship is explained in its Global Principles. These high-level Principles are the framework for BlackRock’s more detailed, market-specific voting guidelines, all of which are published on the BlackRock website. The Principles describe BlackRock’s philosophy on stewardship (including how it monitors and engages with companies), its policy on voting, its integrated approach to stewardship matters and how it deals with conflicts of interest. These apply across relevant asset classes and products as permitted by investment strategies. BlackRock reviews its Global Principles annually and updates them as necessary to reflect in market standards, evolving governance practice and insights gained from engagement over the prior year. BlackRock’s Global Principles are available on its website at https://www.blackrock.com/corporate/literature/fact-sheet/blk-responsible-investment-engprinciples-global.pdf.

Market-specific proxy voting guidelines

BlackRock’s voting guidelines are intended to help clients and companies understand its thinking on key governance matters. They are the benchmark against which it assesses a company’s approach to corporate governance and the items on the agenda to be voted on at the shareholder meeting. BlackRock applies its guidelines pragmatically, taking into account a company’s unique circumstances where relevant. BlackRock informs voting decisions through research and engage as necessary. BlackRock reviews its voting guidelines annually and updates them as necessary to reflect changes in market standards, evolving governance practice and insights gained from engagement over the prior year.

BlackRock’s market-specific voting guidelines are available on its website at https://www.blackrock.com/corporate/about-us/investment-stewardship#principles-and-guidelines.

In 2021, BlackRock explicitly asked that all companies disclose a business plan aligned with the goal of limiting global warming to well below 2ºC, consistent with achieving net zero global greenhouse gas (GHG) emissions by 2050. BlackRock viewed these disclosures as essential to helping investors assess a company’s ability to transition its business to a low carbon world and to capture value-creation opportunities created by the climate transition. BlackRock also asked that companies align their disclosures to the Task Force on Climate-related Financial Disclosures (TCFD) framework and the SASB standards. For 2022, BlackRock is evolving its perspective on sustainability reporting to recognise that companies may use standards other than that of the SASB and reiterates its ask for metrics that are industry - or company - specific. BlackRock is also encouraging companies to demonstrate that their plans are resilient under likely decarbonisation pathways, and the global aspiration to limit warming to 1.5°C. BlackRock is also asking companies to disclose how considerations related to having a reliable energy supply and just transition affect their plans. More information in respect of BlackRock’s investment stewardship approach to sustainable investing can be found at https://www.blackrock.com/corporate/literature/publication/blk-commentary-climate-risk-and-energy-transition.pdf.

BlackRock has been a member of Climate Action 100+ since 2020 and has aligned its engagement and stewardship priorities to UN Sustainable Development Goals (including Gender Equality and Affordable and Clean Energy). A map of how BlackRock Investment Stewardship Team's engagement priorities align to the UN Sustainable Development Goals (SDGs) can be found at https://www.blackrock.com/corporate/literature/publication/blk-engagement-priorities-aligned-to-sdgs.pdf.

BlackRock is committed to transparency in terms of disclosure on its engagement with companies and voting rationales and is committed to voting against management to the extent that they have not demonstrated sufficient progress on ESG issues. This year, BlackRock voted against or withheld votes from 6,560 directors globally at 3,400 different companies driven by concerns regarding director independence, executive compensation, insufficient progress on board diversity, and overcommitted directors, reflecting our intensified focus on sustainability risks. In the 2020-21 proxy year, BlackRock voted against 255 directors and against 319 companies for climate-related concerns that could negatively affect long-term shareholder value. More detail in respect of BlackRock's engagement and voting history can be found at https://www.blackrock.com/corporate/literature/publication/2021-voting-spotlight-full-report.pdf.

BlackRock also publishes voting bulletins explaining its vote decision, and the engagement and analysis underpinning it, on certain high-profile proposals at company shareholder meetings. Vote bulletins for 2021 can be found at https://www.blackrock.com/corporate/about-us/investment-stewardship#vote-bulletins.

BlackRock's reporting and disclosures

In terms of its own reporting, BlackRock believes that the SASB provides a clear set of standards for reporting sustainability information across a wide range of issues, from labour practices to data privacy to business ethics. For evaluating and reporting climate-related risks, as well as the related governance issues that are essential to managing them, the TCFD provides a valuable framework. BlackRock recognises that reporting to these standards requires significant time, analysis, and effort. BlackRock's 2021 TCFD report can be found at https://www.blackrock.com/corporate/literature/continuous-disclosure-and-important-information/tcfd-report-2021-blkinc.pdf.

STRATEGIC REPORT

The Directors present the Strategic Report of the Company for the year ended 31 December 2021.

Objective

The Company’s objective is to secure long-term capital growth and an attractive total return primarily through investing in quoted securities in Latin America.

Strategy, business model and investment policy

The Company invests in accordance with the objective given above. The Board is collectively responsible to shareholders for the long-term success of the Company and is its governing body. There is a clear division of responsibility between the Board and the Manager. Matters for the Board include setting the Company’s strategy, including its investment objective and policy, setting limits on gearing (both bank borrowings and the effect of derivatives), capital structure, governance, and appointing and monitoring of performance of service providers, including the Manager.

The Company’s business model follows that of an externally managed investment trust; therefore the Company does not have any employees and outsources its activities to third party service providers including the Manager who is the principal service provider.

In accordance with the Alternative Investment Fund Managers’ Directive (AIFMD), as implemented, retained and onshored in the UK, the Company is an Alternative Investment Fund (AIF). BlackRock Fund Managers Limited (the Manager) is the Company’s Alternative Investment Fund Manager.

The management of the investment portfolio and the administration of the Company have been contractually delegated to the Manager who in turn (with the permission of the Company) has delegated certain investment management and other ancillary services to BlackRock Investment Management (UK) Limited (BIM (UK) or the Investment Manager). The Manager, operating under guidelines determined by the Board, has direct responsibility for the decisions relating to the day-to-day running of the Company and is accountable to the Board for the investment, financial and operating performance of the Company.

The Company delegates fund accounting services to the Manager, which in turn sub-delegates these services to The Bank of New York Mellon (International) Limited. Other service providers include the Depositary, The Bank of New York Mellon (International) Limited and the Registrar, Computershare Investor Services PLC.

Details of the contractual terms with these service providers are set out in the Directors’ Report contained within the Annual Report and Financial Statements.

Our strategy is that the portfolio will be chosen from a spread of companies which are listed in, or whose main activities are in, Latin America.

As an actively managed fund our primary aims over the medium term are significant outperformance of our benchmark index (the MSCI EM Latin America Index – net total return basis) and most of our competitors on a risk adjusted basis. Our portfolio and performance will diverge from the returns obtained simply by investing in the index.

Investment policy

As a closed end company we are able to adopt a longer-term investment horizon, and therefore may, when appropriate, have a higher proportion of less liquid mid and smaller capitalisation companies than comparable open ended funds.

The portfolio is subject to a number of geographical restrictions relative to the benchmark index but the Investment Manager is not constrained from investing outside the index. For Brazil, Mexico, Chile, Argentina, Peru, Colombia and Venezuela, the portfolio weighting is limited to plus or minus 20% of the index weighting for each of those countries. For all other Latin American countries the limit is plus or minus 10% of the index weighting. Additionally, the Company may invest in the securities of quoted companies whose main activities are in Latin America but which are not established or incorporated in the region or quoted on a local exchange.

The Company’s policy is that up to 10% of the gross assets of the portfolio may be invested in unquoted securities.

The Company will not hold more than 15% of the market capitalisation of any one company and no more than 15% of the Company’s investments will be held in any one company as at the date any such investment is made.

No more than 15% of the gross assets of the portfolio shall be invested in other UK listed investment companies (including other investment trusts).

The Company may deal in derivatives (including options, futures and forward currency transactions) for the purposes of efficient portfolio management (i.e. for the purpose of reducing, transferring or eliminating investment risk in the underlying investments of a collective investment undertaking, including any technique or instrument used to provide protection against exchange and credit risks). No more than 20% of the Company’s portfolio by value may be under option at any given time.

The Company may underwrite or sub-underwrite any issue or offer for the sale of investments. No such commitment will be entered into if, at that time, the aggregate of such investments would exceed 10% of the net asset value of the Company or any such individual investment would exceed 3% of the net asset value of the Company.

The Company may, from time to time, use borrowings to gear its investment portfolio or in order to fund the market purchase of its own ordinary shares. Under the Company’s Articles of Association, the net borrowings of the Company may not exceed 100% of the Company’s adjusted capital and reserves (as defined in the Glossary contained within the Annual Report and Financial Statements). However, net borrowings are not expected to exceed 25% of net assets under normal circumstances. The Investment Manager may also hold cash or cash-equivalent securities when it considers it to be advantageous to do so.

The Company’s financial statements are maintained in US Dollars. Although many investments are likely to be denominated and quoted in currencies other than in US Dollars, the Company does not currently employ a hedging policy against fluctuations in exchange rates.

No material change will be made to the Company’s investment policy without shareholder approval.

Investment process

An overview of the investment process is set out below.

The Investment Manager’s main focus is to invest in securities that provide opportunities for strong capital appreciation relative to our benchmark. We aim to maintain a concentrated portfolio of high conviction investment ideas that typically consists of companies with a combination of mispriced growth potential and/or display attributes of sustained value creation that are underappreciated by the financial markets.

The Manager’s experienced research analyst team conducts on the ground research, meeting with target companies, competitors, suppliers and others in the region in order to generate investment ideas for portfolio construction. In addition, the investment team meets regularly with government officials, central bankers, industry regulators and consultants.

Final investment decisions result from a combination of bottom-up, company specific research with top-down, macro analysis.

Discount management and implementation of tender

As part of its discount control policy, in 2018 the Board put in place a discount control mechanism whereby it undertook to make a tender offer to shareholders for 24.99 per cent of the issued share capital (excluding treasury shares) of the Company at a tender price reflecting the latest cum-income Net Asset Value (NAV) less 2 per cent and related portfolio realisation costs if, over the four year period from 1 January 2018 to 31 December 2021 (the ‘Calculation Period’), either of the following conditions were met:

As at 31 December 2021, and over the Calculation Period, the Company had underperformed the Benchmark by 94 basis points on an annualised basis and the Company’s ordinary shares had traded at an average discount to NAV of 11.65 per cent.

As a result, the Board announced on 4 January 2022 that it would make a tender offer to shareholders for 24.99 per cent of the issued share capital of the Company (excluding treasury shares). Full details of the tender process and the terms and conditions of the tender offer and the timetable for implementation can be found in the tender circular which will be posted to shareholders along with this annual report; a copy will also be made available on the Company's website at www.blackrock.com/uk/brla. A resolution to implement the tender offer will be put to shareholders for their approval at a General Meeting to be held immediately following the conclusion of the Company’s next Annual General Meeting in May 2022.

The making and implementation of the tender offer will be conditional, amongst other things, upon the Company having the required shareholder authority or such shareholder authority being obtained, the Company having sufficient distributable reserves to effect the repurchase of any successfully tendered shares and, having regard to its continuing financial requirements, sufficient cash reserves to settle the relevant transactions with shareholders, the Company’s continuation vote being approved at the Annual General Meeting of shareholders in May 2022, and the Company’s continuing compliance with the Listing Rules and all other applicable laws and regulations.

Share rating and discount control

The Directors recognise that it is in the long term interests of shareholders that shares do not trade at a significant discount to their prevailing NAV. The Board monitors the level of the Company’s discount to NAV on an ongoing basis.

Over the year under review, the Company's discount ranged from a high of 14.4% to a low of 5.4% and at the year end stood at 7.1%. Further details setting out how the discount or premium at which the Company’s shares trade is calculated are included in the Glossary contained within the Annual Report and Financial Statements.

A special resolution was passed at the AGM of the Company held on 19 May 2021, granting the Directors’ authority to make market purchases of the Company’s ordinary shares to be held, sold, transferred or otherwise dealt with as treasury shares or cancelled upon completion of the purchase. The Board intends to renew this authority at the AGM to be held in May 2022.

In addition, the Board is proposing to adopt a new discount control policy, for the four year period from 1 January 2022 to 31 December 2025. Under this new mechanism the Board undertakes to make a tender offer to shareholders for 24.99 per cent of the issued share capital (excluding treasury shares) of the Company at a tender price reflecting the latest cum-income Net Asset Value (NAV) less 2 per cent and related portfolio realisation costs if, over the four year period from 1 January 2022 to 31 December 2025 (the ‘Calculation Period’), either of the following conditions are met:

The making and implementation of this tender offer will be conditional, amongst other things, upon the Company having the required shareholder authority or such shareholder authority being obtained, the Company having sufficient distributable reserves to effect the repurchase of any successfully tendered shares and, having regard to its continuing financial requirements, sufficient cash reserves to settle the relevant transactions with shareholders, the Company’s biennial continuation votes being approved at the Annual General Meetings in 2024 and 2026. The Board believes that a four year performance target will enable the Manager to take a sufficiently long term approach to investing in quality companies in the region, and it believes that it is in shareholders’ interests as a whole that this time period for assessing performance be adopted.

Section 172 Statement: promoting the success of BlackRock Latin American Investment Trust plc

The Companies (Miscellaneous Reporting) Regulations 2018 require directors to explain more fully how they have discharged their duties under Section 172(1) of the Companies Act 2006 in promoting the success of their companies for the benefit of members as a whole. This enhanced disclosure covers how the Board has engaged with and understands the views of stakeholders and how stakeholders’ needs have been taken into account, the outcome of this engagement and the impact that it has had on the Board’s decisions.

As the Company is an externally managed investment company and does not have any employees or customers, the Board considers the main stakeholders in the Company to be the shareholders, key service providers (being the Manager and Investment Manager, the Custodian, Depositary, Registrar and Broker) and investee companies. The reasons for this determination, and the Board’s overarching approach to engagement, are set out in the table below.

A summary of the key areas of engagement undertaken by the Board with its key stakeholders in the year under review and how Directors have acted upon this to promote the long-term success of the Company are set out in the table below.

1 Alternative Performance Measure, see the Glossary contained within the Annual Report and Financial Statements.

Performance

Details of the Company’s performance are set out in the Chairman’s Statement above.

The Investment Manager’s Report above forms part of this Strategic Report and includes a review of the main developments during the year, together with information on investment activity within the Company’s portfolio.

Portfolio analysis

A detailed analysis of the investments and the sector and geographical allocations is provided above.

Results and dividends

The results for the Company are set out in the Income Statement below. The total loss for the year on ordinary activities, after taxation, was US$28,006,000 (2020: loss of US$43,572,000) of which the revenue profit amounted to US$10,247,000 (2020: US$5,834,000), and the capital loss amounted to US$38,253,000 (2020: capital loss of US$49,406,000).

Under the Company’s dividend policy, dividends are calculated based on 1.25% of the US Dollar NAV at close of business on the last working day of March, June, September and December and are paid in May, August, November and February respectively. Dividends will be financed through a combination of available net income in each financial year and revenue and capital reserves. The Company has declared interim dividends totaling 27.56 cents per share under this policy in respect of the year ended 31 December 2021 as detailed in the table below.

Details of this policy are also set out in the Chairman’s Statement above.

NAV, share price and index performance

At each meeting the Board reviews the detail of the performance of the portfolio as well as the net asset value and share price (total return) for the Company and compares this to the performance of other companies in the peer group of Latin American open and closed end funds and to our benchmark.

The Board also regularly reviews a number of indices and ratios to understand the impact on the Company’s relative performance of the various components such as asset allocation and stock selection.

Information on the Company’s performance is given in the performance record contained within the Annual Report and Financial Statements and in the Chairman’s Statement and Investment Manager’s Report above.

Tender Offer

As part of its discount control policy, the Board has stated previously that it would make a tender offer to shareholders for 24.99 per cent of the issued share capital (excluding treasury shares) of the Company at a tender price reflecting the latest cum-income Net Asset Value (NAV) less 2 per cent and related portfolio realisation costs if, over the four-year period from 1 January 2018 to 31 December 2021 (the ‘Calculation Period’), either of the following conditions have been met:

(i) the annualised total NAV return of the Company does not exceed the annualised benchmark index (being the MSCI EM Latin America Index) US Dollar total return by more than 100 basis points over the Calculation Period; or

(ii) the average daily discount to the cum-income NAV exceeds 12 per cent as calculated with reference to the trading of the ordinary shares over the Calculation Period.

As at 31 December 2021, and over the Calculation Period, the Company had underperformed the Benchmark by 94 basis points on an annualised basis and the Company’s ordinary shares had traded at an average discount to NAV of 11.65 per cent.

As a result, the Board intends to make a tender offer to shareholders for 24.99 per cent of the issued share capital of the Company (excluding treasury shares). The structure of the tender offer will be decided by the Board and a circular setting out further details of the exact timings and confirmation of the relevant dates, along with full details of the tender process and the terms and conditions of the tender offer, will be posted out to shareholders and will be made available on the Company’s website at www.blackrock.com/uk/brla. The requisite resolution to implement the tender offer will be put to shareholders for their approval at a General Meeting to be held immediately following the conclusion of the Company’s Annual General Meeting, scheduled to be held on 19 May 2022.

The making and implementation of the tender offer will be conditional, inter alia, upon the Company having the required shareholder authority or such shareholder authority being obtained, the Company having sufficient distributable reserves to effect the repurchase of any successfully tendered shares and, having regard to its continuing financial requirements, sufficient cash reserves to settle the relevant transactions with shareholders, the Company’s continuation vote being approved at the Annual General Meeting on 19 May 2022, and the Company’s continuing compliance with the Listing Rules and all other applicable laws and regulations.

Details of the Company’s discount control

The Board recognises that it is in the long-term interests of shareholders that shares do not trade at a significant discount to their prevailing NAV. The Board monitors the level of the Company’s discount to NAV on an ongoing basis and considers strategies for managing any discount. In the year to 31 December 2021, the Company’s share price to NAV traded in the range of a discount of 14.4% to 5.4% on a cum-income basis. The Board is also putting in place a new discount control mechanism whereby it will offer shareholders the ability to tender up to 24.99% of the Company’s issued share capital at the AGM in 2026 if certain performance and discount targets are not met. More details are given in the Strategic Report above.

Further details setting out how the discount or premium at which the Company’s shares trade is calculated are included in the Glossary contained within the Annual Report and Financial Statements.

Ongoing charges

The ongoing charges represent the Company’s management fee and all other operating expenses, excluding finance costs, direct transaction costs, custody transaction charges, VAT recovered, taxation and certain non-recurring items expressed as a percentage of average daily net assets.

The ongoing charges are based on actual costs incurred in the year as being the best estimate of future costs. The Board reviews the ongoing charges and monitors the expenses incurred by the Company on an ongoing basis against a peer group of Latin American open and closed end funds. A definition setting out in detail how the ongoing charges ratio is calculated is included in the Glossary contained within the Annual Report and Financial Statements.

Composition of shareholder register

The Board is mindful of the importance of a diversified shareholder register and the need to make the Company’s shares attractive to long-term investors; it is therefore the Board’s aim to increase the diversity of the shareholder register over time. The Board monitors the retail element of the register, which is defined for these purposes as wealth managers, Independent Financial Advisors (IFAs) and direct private investors. As at 31 December 2021, the Company’s share register comprised 38.6% retail investors; the Board will monitor this with the aim of growing the retail element of the register over time.

Key performance indicators

At each Board meeting, the Directors consider a number of performance measures to assess the Company’s success in achieving its objectives. The key performance indicators (KPIs) used to measure the progress and performance of the Company over time are comparable to those reported by other investment trusts and are set out in the Annual Report and Financial Statements.

The table below sets out the key KPIs for the Company. As indicated in footnote 2 to the table, some of these KPIs fall within the definition of ‘Alternative Performance Measures’ (APMs) under guidance issued by the European Securities and Markets Authority (ESMA) and additional information explaining how these are calculated is set out in the Glossary contained within the Annual Report and Financial Statements.

1 Calculated in US Dollar terms with dividends reinvested.2 Alternative Performance Measures, see Glossary contained within the Annual Report and Financial Statements.3 Ongoing charges represent the management fee and all other operating expenses excluding finance costs, direct transaction costs, custody transaction charges, VAT recovered and taxation as a % of average daily net assets.4 Source: Richard Davis Investor Relations

PRINCIPAL RISKSThe Company is exposed to a variety of risks and uncertainties and the key risks are set out below. The Board has put in place a robust process to identify, assess and monitor the principal and emerging risks. A core element of this process is the Company’s risk register. This identifies the risks facing the Company and assesses the likelihood and potential impact of each risk and the quality of controls operating to mitigate it. A residual risk rating is then calculated for each risk based on the outcome of the assessment. This approach allows the effect of any mitigating procedures to be reflected in the final assessment.

The risk register is regularly reviewed and the risks reassessed. The risk environment in which the Company operates is also monitored and regularly appraised. New risks are also added to the register as they are identified which ensures that the document continues to be an effective risk management tool. The COVID-19 pandemic has given rise to unprecedented challenges for businesses across the globe and the Board has taken into consideration the risks posed to the Company by the crisis and incorporated these into the Company’s risk register.

The risk register, its method of preparation and the operation of key controls in the Manager’s and third party service providers’ systems of internal control are reviewed on a regular basis by the Audit Committee in order to gain a more comprehensive understanding of the Manager’s and other third party service providers’ risk management processes and how these apply to the Company’s business. BlackRock’s internal audit department provides an annual presentation to the Audit Committee chairmen of the BlackRock investment trusts setting out the results of testing performed in relation to BlackRock’s internal control processes. Where produced, the Audit Committee also reviews Service Organisation Control (SOC 1) reports from the Company’s service providers.

As required by the UK Corporate Governance Code, the Board has undertaken a robust assessment of both the principal and emerging risks facing the Company, including those that would threaten its business model, future performance, solvency or liquidity. Those principal risks have been described in the table that follows, together with an explanation of how they are managed and mitigated. The Board will continue to assess these risks on an ongoing basis. Emerging risks are considered by the Board as they come into view and are incorporated into the existing review of the Company’s risk register. They were also considered as part of the annual evaluation process. Additionally, the Manager considers emerging risks in numerous forums and the Risk and Quantitative Analysis team produces an annual risk survey. Any material risks of relevance to the Company identified through the annual risk survey will be communicated to the Board.

The Board will continue to assess these risks on an ongoing basis. In relation to the 2018 UK Corporate Governance Code, the Board 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.

The current risk register includes a number of risks which have been categorised as follows:

The principal risks and uncertainties faced by the Company during the financial year, together with the potential effects, controls and mitigating factors, are set out in the following table.

Viability statement

In accordance with provision 31 of the 2018 UK Corporate Governance Code, the Directors have assessed the prospects of the Company over a longer period than the 12 months referred to by the ‘Going Concern’ guidelines. The Board recognises that it is obliged to propose a biennial continuation vote, with the next vote at the AGM to be held in May 2022. In addition, the Company will offer a tender (subject to shareholder approval at a general meeting to be held shortly after the AGM in May 2022) which, if fully subscribed, will see the Company reduce in size by 24.99%. The outcome of these events is unknown at the present time. In addition, the Board is cognisant of the uncertainty surrounding the potential duration of the COVID-19 pandemic and its impact on the global economy and the prospects for many of the Company’s portfolio holdings. Notwithstanding these uncertainties, given the factors stated below, the Board expects the Company to continue for the foreseeable future and has therefore conducted this review for the period up to the AGM in 2026, being a period of four years from the date of approval of this report. The Board considers four years to be an appropriate time horizon, being a reasonable time horizon to assess potential investments and the period being used to assess performance for the Company’s Discount Control mechanism (as set out in more detail in the Strategic Report above).

In choosing this period for its assessment of the viability of the Company the Directors have considered the following matters:

The Directors have also reviewed the assumptions and considerations underpinning the Company’s existing going concern assertion which are based on:

Based on the results of their analysis, the Directors have a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over the period of their assessment.

Future prospects

The Board’s main focus is the achievement of capital growth and an attractive total return. The future of the Company is dependent upon the success of the investment strategy. The outlook for the Company is discussed in both the Chairman’s Statement and the Investment Manager’s Report.

Social, community and human rights issues

As an investment trust with no employees, the Company has no direct social or community responsibilities or impact on the environment. However, the Company believes that it is in shareholders’ interests to consider human rights issues, environmental, social and governance factors when selecting and retaining investments. Details of the Company’s policy on socially responsible investment are set out within the Annual Report and Financial Statements.

Modern Slavery Act

As an investment vehicle the Company does not provide goods or services in the normal course of business, and does not have customers. Accordingly, the Directors consider that the Company is not required to make any slavery or human trafficking statement under the Modern Slavery Act 2015. In any event, the Board considers the Company’s supply chains, dealing predominantly with professional advisers and service providers in the financial services industry, to be low risk in relation to this matter.

Directors, gender representation and employees

The Directors of the Company on 31 December 2021, all of whom held office throughout the year, are set out in the governance structure and Directors’ biographies contained within the Annual Report and Financial Statements.

As at the date of this report, the Board consists of two men and three women, and also is inclusive of other protected characteristics covered in legislation. The Board recognises the importance of diverse backgrounds and skill sets, and in particular having a range of experienced Directors who, both individually and collectively, possess a suitable balance of skills, knowledge, and independence to enable it to fulfil its obligations. The Board believes that the current composition of the Board meets these objectives, and equality, diversity and inclusion are at the forefront of Directors’ minds when undertaking succession planning The Company does not have any employees, therefore there are no disclosures to be made in that respect.

The Chairman’s Statement, the Investment Manager’s Report and portfolio analysis above form part of the Strategic Report.

The Strategic Report was approved by the Board at its meeting on 31 March 2022.

By order of the BoardSARAH BEYNSBERGERFor and on behalf of BlackRock Investment Management (UK) LimitedCompany Secretary31 March 2022

Transactions with the AIFM and the Investment Manager

BlackRock Fund Managers Limited (BFM) provides management and administration services to the Company under a contract which is terminable on six months’ notice. BFM has (with the Company’s consent) delegated certain portfolio and risk management services, and other ancillary services, to BlackRock Investment Management (UK) Limited (BIM (UK)). Further details of the investment management contract are disclosed in the Directors’ Report contained within the Annual Report and Financial Statements.

The investment management fee is levied quarterly, based on 0.80% per annum of the Company's net asset value. The investment management fee due for the year ended 31 December 2021 amounted to US$1,726,000 (2020: US$1,452,000), as disclosed in note 4 below. At the year end, an amount of US$815,000 was outstanding in respect of these fees (2020: US$480,000).

In addition to the above services, BlackRock has provided the Company with marketing services. The total fees paid or payable for these services for the year ended 31 December 2021 amounted to US$101,000 excluding VAT (2020: US$122,000 excluding VAT). Marketing fees of US$108,000 (2020: US$127,000) were outstanding at 31 December 2021.

During the year the Manager pays the amounts due to the Directors. These fees are then reimbursed by the Company for the amounts paid on its behalf. As at 31 December 2021, an amount of US$124,000 (2020: US$124,000) was payable to the Manager in respect of Directors’ fees.

The ultimate holding company of the Manager and the Investment Manager is BlackRock, Inc., a company incorporated in Delaware, USA.

Related party transactions

Disclosures of the Directors’ interests in the ordinary shares of the Company and fees and expenses payable to the Directors are set out in the Directors’ Remuneration Report contained within the Annual Report and Financial Statements. At 31 December 2021, an amount of US$15,000 (2020: US$15,000) was outstanding in respect of Directors‘ fees.

The Board currently consists of five non-executive Directors, all of whom are considered to be independent by the Board. None of the Directors has a service contract with the Company. For the year ended 31 December 2021, the Chairman received an annual fee of £47,800, the Chairman of the Audit Committee received an annual fee of £36,700, the Chairman of the Remuneration Committee and Senior Independent Director received an annual fee of £34,600 and each other Director received an annual fee of £32,600. This excludes expenses paid to each of the Directors which are set out in the Directors' Remuneration Report contained within the Annual Report and Financial Statements. No change will be made to the level of Directors’ fees for the year ending 31 December 2022.

All current members of the Board hold ordinary shares in the Company. Carolan Dobson holds 4,792 ordinary shares, Mahrukh Doctor holds 686 ordinary shares, Nigel Webber holds 5,000 ordinary shares, Craig Cleland holds 10,000 ordinary shares and Laurie Meister holds 2,915 ordinary shares.

STATEMENT OF DIRECTORS’ RESPONSIBILITIES IN RESPECT OF THE ANNUAL REPORT AND FINANCIAL STATEMENTS

The Directors are responsible for preparing the Annual Report and Financial Statements in accordance with applicable United Kingdom law and regulations. Company law requires the Directors to prepare financial statements for each financial year. Under that law they have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company as at the end of each financial year and of the profit or loss of the Company for that year.

In preparing those financial statements, the Directors are required to:

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Directors are also responsible for preparing the Strategic Report, Directors’ Report, the Directors’ Remuneration Report, the Corporate Governance Statement and the Report of the Audit Committee in accordance with the Companies Act 2006 and applicable regulations, including the requirements of the Listing Rules and the Disclosure Guidance and Transparency Rules.

The Directors have delegated responsibility to the Manager for the maintenance and integrity of the Company’s corporate and financial information included on the Investment Manager’s website.

Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Each of the Directors, whose names are listed in the Annual Report and Financial Statements, confirm to the best of their knowledge that:

The 2018 UK Corporate Governance Code also requires Directors to ensure that the Annual Report and Financial Statements are fair, balanced and understandable. In order to reach a conclusion on this matter, the Board has requested that the Audit Committee advise on whether it considers that the Annual Report and Financial Statements fulfil these requirements. The process by which the Committee has reached these conclusions is set out in the Audit Committee’s report in the Annual Report and Financial Statements. As a result, the Board has concluded that the Annual Report and Financial Statements for the year ended 31 December 2021, taken as a whole, are fair, balanced and understandable and provide the information necessary for shareholders to assess the Company’s position, performance, business model and strategy.

For and on behalf of the BoardCAROLAN DOBSONChairman31 March 2022

INCOME STATEMENTfor the year ended 31 December 2021

The total column of this statement represents the Company’s profit and loss account. The supplementary revenue and capital accounts are both prepared under guidance published by the Association of Investment Companies (AIC). All items in the above statement derive from continuing operations. No operations were acquired or discontinued during the year. All income is attributable to the equity holders of the Company.

The net profit/(loss) for the year disclosed above represents the Company’s total comprehensive income/(loss).

STATEMENT OF CHANGES IN EQUITYfor the year ended 31 December 2021

1 Quarterly dividend of 7.45 cents per share for the year ended 31 December 2020, declared on 4 January 2021 and paid on 8 February 2021; quarterly dividend of 6.97 cents per share for the year ended 31 December 2021, declared on 1 April 2021 and paid on 10 May 2021; quarterly dividend of 7.82 cents per share for the year ended 31 December 2021, declared on 1 July 2021 and paid on 6 August 2021; quarterly dividend of 6.56 cents per share for the year ended 31 December 2021, declared on 1 October 2021 and paid on 8 November 2021.

2 Quarterly dividend of 9.15 cents per share for the year ended 31 December 2019, declared on 2 January 2020 and paid on 6 February 2020; quarterly dividend of 4.59 cents per share for the year ended 31 December 2020, declared on 1 April 2020 and paid on 20 May 2020; quarterly dividend of 5.57 cents per share for the year ended 31 December 2020, declared on 1 July 2020 and paid on 11 August 2020; quarterly dividend of 5.45 cents per share for the year ended 31 December 2020, declared on 1 October 2020 and paid on 9 November 2020.

For information on the Company’s distributable reserves, please refer to note 10 below and note 15 (contained within the Annual Report and Financial Statements).

BALANCE SHEETas at 31 December 2021

STATEMENT OF CASH FLOWSfor the year ended 31 December 2021

NOTES TO THE FINANCIAL STATEMENTSfor the year ended 31 December 2021

1. Principal activity

The Company was incorporated on 12 March 1990 and its principal activity is that of an investment trust company within the meaning of Section 1158 of the Corporation Tax Act 2010.

2. Accounting policies

The principal accounting policies adopted by the Company are set out below.

(a) Basis of preparation

The financial statements have been prepared on a going concern basis in accordance with ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland’ (FRS 102) and the revised Statement of Recommended Practice – ‘Financial Statements of Investment Trust Companies and Venture Capital Trusts’ (SORP), issued by the Association of Investment Companies (AIC) in October 2019 and updated in April 2021, and the provisions of the Companies Act 2006.

The Company’s Articles of Association require that an ordinary resolution be put to the Company’s shareholders to approve the continuation of the Company on a biennial basis. The last resolution was put to shareholders at the 2020 AGM and the next such resolution will be put to shareholders at the AGM in May 2022 (see the Annual Report and Financial Statements for further details). The Directors have no reason to believe that this resolution will not be passed.

Substantially, all of the assets of the Company consist of securities that are readily realisable and, accordingly, the Directors are satisfied that the Company has adequate resources to continue in operational existence for the period to 31 December 2023, being a period of at least 12 months from the date of approval of these financial statements, and therefore consider the going concern assumption to be appropriate. The Directors have considered any potential impact of the COVID-19 pandemic, its potential longer-term effects on the global economy and the mitigation measures which key service providers, including the Manager, have in place to maintain operational resilience on the going concern of the Company. The Directors have reviewed compliance with the covenants associated with the bank overdraft, income and expense projections and the liquidity of the investment portfolio in making their assessment.

The principal accounting policies adopted by the Company are set out below. Unless specified otherwise, the policies have been applied consistently throughout the year and are consistent with those applied in the preceding year. All of the Company’s operations are of a continuing nature.

The Company’s financial statements are presented in US Dollars, which is the functional and presentation currency of the Company. The US Dollar is the functional currency because it is the currency in which the bulk of the Company’s assets (notably portfolio investments, cash at bank, bank overdrafts and amounts due to and from brokers) are denominated. All values are rounded to the nearest thousand US Dollars (US$’000) except where otherwise indicated.

(b) Presentation of Income Statement

In order to reflect the activities of an investment trust company and in accordance with guidance issued by the AIC, supplementary information which analyses the Income Statement between items of a revenue and a capital nature has been presented alongside the Income Statement.

(c) Segmental reporting

The Directors are of the opinion that the Company is engaged in a single segment of business being investment business.

(d) Income

Dividends receivable on equity shares are treated as revenue for the year on an ex-dividend basis. Where no ex-dividend date is available, dividends receivable on or before the year end are treated as revenue for the year. Provisions are made for dividends not expected to be received.

Special dividends are recognised on an ex-dividend basis and treated as capital or revenue depending on the facts or circumstances of each particular dividend.

Dividends are accounted for in accordance with Section 29 of FRS 102 on the basis of income actually receivable, without adjustment for tax credits attaching to the dividend. Dividends from overseas companies continue to be shown gross of withholding tax.

Deposit interest receivable is accounted for on an accruals basis.

Where the Company has elected to receive its dividends in the form of additional shares rather than in cash, the cash equivalent of the dividend is recognised as revenue. Any excess in the value of the shares received over the amount of the cash dividend is recognised in capital.

Fixed returns on non-equity securities are recognised on a time apportionment basis. The return on a fixed interest security is recognised on a time apportionment basis so as to reflect the effective yield on the debt security. Amounts amortised during the year are recognised in the Income Statement. Interest income is accounted for on an accruals basis.

(e) Expenses

All expenses, including finance costs, are accounted for on an accruals basis. Expenses have been charged wholly to the revenue account of the Income Statement, except as follows:

(f) Taxation

The tax expense represents the sum of the tax currently payable and deferred tax. The tax currently payable is based on the taxable profit for the year. Taxable profit differs from net profit as reported in the Income Statement because it excludes items of income or expenses that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Company’s liability for current tax is calculated using tax rates that were applicable at the balance sheet date.

The current tax effect of different items of expenditure is allocated between capital and revenue on the marginal basis using the Company’s effective rate of corporation tax for the accounting period.

Deferred taxation is recognised in respect of all timing differences at the financial reporting date, where transactions or events that result in an obligation to pay more taxation in the future or right to less taxation in the future have occurred at the balance sheet date. Deferred tax is measured on a non-discounted basis, at the average tax rates that are expected to apply in the periods in which the timing differences are expected to reverse based on tax rates and laws that have been enacted or substantively enacted by the balance sheet date. This is subject to deferred taxation assets only being recognised if it is considered more likely than not that there will be suitable profits from which the future reversal of the timing differences can be deducted.

(g) Investments held at fair value through profit or loss

The Company’s investments are classified as held at fair value through profit or loss in accordance with Sections 11 and 12 of FRS 102 and are managed and evaluated on a fair value basis in accordance with its investment strategy.

All investments are classified upon initial recognition as held at fair value through profit or loss. Purchases of investments are recognised on a trade date basis. Sales are recognised at the trade date of the disposal and the proceeds are measured at fair value, which is regarded as the proceeds of the sale less any transaction costs.

The fair value of the financial investments is based on their quoted bid price at the balance sheet date on the exchange on which the investment is quoted, without deduction for the estimated future selling costs.

Changes in the value of investments held at fair value through profit or loss and gains and losses on disposal are recognised in the Income Statement as ‘Gains or losses on investments held at fair value through profit or loss’. Also included within this heading are transaction costs in relation to the purchase or sale of investments.

The fair value hierarchy consists of the following three levels:

Level 1 – Quoted market prices for identical instruments in active markets.Level 2 – Valuation techniques using observable inputs.Level 3 – Valuation techniques using significant unobservable inputs.

Unquoted investments are valued by the Directors at fair value using International Private Equity and Venture Capital Valuation Guidelines, endorsed by the British Private Equity & Venture Capital Association. This policy applies to unquoted fixed asset investments held by the Company.

(h) Debtors

Debtors include sales for future settlement, other debtors and prepayments and accrued income in the ordinary course of business. If collection is expected in one year or less, they are classified as current assets. If not, they are presented as non-current assets.

(i) Creditors

Creditors include purchases for future settlement, interest payable, share buy back costs and accruals in the ordinary course of business. Creditors are classified as creditors – amounts falling due within one year if payment is due within one year or less. If not, they are presented as creditors – amounts falling due after more than one year.

(j) Dividends payable

Under Section 32 of FRS 102, final dividends should not be accrued in the financial statements unless they have been approved by shareholders before the balance sheet date. Dividends payable to equity shareholders are recognised in the Statement of Changes in Equity when they have been approved by shareholders and have become a liability of the Company. Interim dividends are only recognised in the financial statements in the period in which they are paid. Dividends are financed through a combination of available net income in each financial year and revenue and capital reserves.

(k) Cash and cash equivalents

Cash comprises cash in hand and demand deposits. Cash equivalents include bank overdrafts repayable on demand and short-term, highly liquid investments, that are readily convertible to known amounts of cash and that are subject to an insignificant risk of changes in value.

(l) Foreign currency translation

In accordance with Section 30 of FRS 102, the Company is required to nominate a functional currency being the currency in which the Company predominately operates. The functional and reporting currency is US Dollars, reflecting the primary economic environment in which the Company operates. Transactions in foreign currencies are translated into US Dollars at the rates of exchange ruling on the date of the transaction. Foreign currency monetary assets and liabilities, and non-monetary assets held at fair value are translated into US Dollars at the rates of exchange ruling at the balance sheet date. Profits and losses thereon are recognised in the capital account of the Income Statement and taken to the capital reserve.

(m) Share repurchases

Shares repurchased and subsequently cancelled – share capital is reduced by the nominal value of the shares repurchased and capital redemption reserve is correspondingly increased in accordance with Section 733 of the Companies Act 2006. The full cost of the repurchase is charged to the capital reserve.

Shares repurchased and held in treasury – the full cost of the repurchase is charged to the capital reserve.

(n) Bank borrowings

Bank overdrafts are recorded as the proceeds received. Finance charges are accounted for on an accruals basis in the Income Statement using the effective interest rate method and are added to the carrying amount of the instruments to the extent that they are not settled in the period in which they arise.

(o) Critical accounting estimates and judgements

The Company makes estimates and assumptions concerning the future. The resulting accounting estimates and assumptions will, by definition, seldom equal the related actual results. Estimates and judgements are regularly evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The Directors do not believe that any accounting judgements or estimates have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities within the next financial year.

3. Income

Dividends and interest received in cash during the year amounted to US$12,285,000 and US$12,000 (2020: US$6,688,000 and US$206,000).

Special dividends of US$nil have been recognised in capital in 2021 (2020: US$nil).

4. Investment management fee

Under the terms of the investment management agreement, BFM is entitled to a fee of 0.80% per annum based on the Company’s daily Net Asset Value (NAV). The fee is levied quarterly.

The investment management fee is allocated 25% to the revenue account and 75% to the capital account of the Income Statement. There is no additional fee for company secretarial and administration services.

5. Other operating expenses

1 All expenses other than depositary fees are paid in Sterling and are therefore subject to exchange rate fluctuations.2 No non-audit services were provided by the Company’s Auditor.3 Further information on Directors’ emoluments can be found in the Directors’ Remuneration Report contained within the Annual Report and Financial Statements. The Company has no employees.4 Relates to prior year accrual for AIC fees and Director search fees written back during the year.5 For the year ended 31 December 2021, expenses of US$10,000 (2020: US$58,000) were charged to the capital account of the Income Statement. These relate to transaction costs charged by the Custodian on sale and purchase trades.6 Alternative Performance Measures, see the Glossary contained within the Annual Report and Financial Statements.

6. Dividends

On 30 May 2018, shareholders approved a resolution to amend the Company’s dividend policy to pay regular quarterly dividends equivalent to 1.25% of the Company’s US Dollar NAV on the last working day of March, June, September and December each year, with the dividends being paid in May, August, November and February each year, respectively. Therefore for the year ended 31 December 2021, the quarterly dividends were calculated based on the Company’s cum-income US Dollar NAV at the last working day of the quarter.

The Company’s cum-income US Dollar NAV at 31 December 2021 as issued to the market was 496.39 cents per share, and the Directors have declared a fourth quarterly interim dividend of 6.21 cents per share. The dividend was paid on 8 February 2022 to holders of ordinary shares on the register at the close of business on 14 January 2022.

The total dividends payable in respect of the year which form the basis of determining retained income for the purpose of Section 1158 of the Corporation Tax Act 2010 and Section 833 of the Companies Act 2006, and the amount proposed for the year ended 31 December 2021, meet the relevant requirements as set out in this legislation.

1 Based on 39,259,620 ordinary shares in issue at 13 January 2022.

All dividends paid or payable are distributed from the Company’s distributable reserves.

7. Earnings and net asset value per ordinary share

Revenue, capital loss and net asset value per ordinary share are shown below and have been calculated using the following:

1 Based on an exchange rate of US$1.35445 to £1 at 31 December 2021 and US$1.3699 to £1 at 31 December 2020.

There are no dilutive securities at the year end.

8. Investments held at fair value through profit or loss

The Company received US$144,427,000 (2020: US$239,128,000) from investments sold in the year. The book cost of these investments when they were purchased was US$146,803,000 (2020: US$282,375,000). These investments have been revalued over time and until they were sold any unrealised gains/losses were included in the fair value of investments.

Transaction costs of US$136,000 were incurred on the acquisition of investments (2020: US$366,000). Costs relating to the disposal of investments during the year amounted to US$178,000 (2020: US$375,000). All transaction costs have been included within capital reserves.

9. Share capital

During the period to 31 December 2021, no ordinary shares were purchased and transferred to treasury (2020: nil).

The ordinary shares give shareholders voting rights, the entitlement to all of the capital growth in the Company’s assets, and to all income from the Company that is resolved to be distributed.

10. Reserves

The share premium account and capital redemption reserve are not distributable reserves under the Companies Act 2006. In accordance with ICAEW Technical Release 02/17BL on Guidance on Realised and Distributable Profits under the Companies Act 2006, the capital reserve may be used as distributable reserves for all purposes and, in particular, the repurchase by the Company of its ordinary shares and for payments as dividends. In accordance with the Company’s Articles of Association, capital reserves and the revenue reserve may be distributed by way of dividend. The capital reserve arising on the revaluation of investments of US$7,247,000 (2020: gain of US$41,604,000) is subject to fair value movements and may not be readily realisable at short notice, as such it may not be entirely distributable. The investments are subject to financial risks; as such capital reserves (arising on investments sold) and the revenue reserve may not be entirely distributable if a loss occurred during the realisation of these investments.

11. Valuation of financial instruments

Financial assets and financial liabilities are either carried in the Balance Sheet at their fair value (investments) or at an amount which is a reasonable approximation of fair value (due from brokers, dividends and interest receivable, due to brokers, accruals, cash at bank and bank overdrafts). Section 34 of FRS 102 requires the Company to classify fair value measurements using a fair value hierarchy that reflects the significance of inputs used in making the measurements. The valuation techniques used by the Company are explained in the accounting policies note to the Financial Statements above.

Categorisation within the hierarchy has been determined on the basis of the lowest level input that is significant to the fair value measurement of the relevant asset.

The fair value hierarchy has the following levels:

Level 1 – Quoted market price for identical instruments in active markets

A financial instrument is regarded as quoted in an active market if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service or regulatory agency and those prices represent actual and regularly occurring market transactions on an arm’s length basis. These include exchange traded derivatives. The Company does not adjust the quoted price for these instruments.

Level 2 – Valuation techniques using observable inputs

This category includes instruments valued using quoted prices for similar instruments in markets that are considered less active, or other valuation techniques where significant inputs are directly or indirectly observable from market data.

Valuation techniques used for non-standardised financial instruments such as over-the-counter derivatives, include the use of comparable recent arm’s length transactions, reference to other instruments that are substantially the same, discounted cash flow analysis, option pricing models and other valuation techniques commonly used by market participants making the maximum use of market inputs and relying as little as possible on entity specific inputs.

Level 3 – Valuation techniques using significant unobservable inputs

This category includes all instruments where the valuation technique includes inputs not based on market data and these inputs could have a significant impact on the instrument’s valuation.

This category also includes instruments that are valued based on quoted prices for similar instruments where significant entity determined adjustments or assumptions are required to reflect differences between the instruments and instruments for which there is no active market. The Investment Manager considers observable data to be that market data that is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided by independent sources that are actively involved in the relevant market.

The level in the fair value hierarchy within which the fair value measurement is categorised in its entirety is determined on the basis of the lowest level input that is significant to the fair value measurement. If a fair value measurement uses observable inputs that require significant adjustment based on unobservable inputs, that measurement is a Level 3 measurement.

Assessing the significance of a particular input to the fair value measurement in its entirety requires judgement, considering factors specific to the asset or liability. The determination of what constitutes ‘observable’ inputs requires significant judgement by the Investment Manager.

Fair values of financial assets and financial liabilities

The table below is an analysis of the Company’s financial instruments measured at fair value at the balance sheet date.

For exchange listed equity investments the quoted price is the bid price. Substantially all investments are valued based on unadjusted quoted market prices. Where such quoted prices are readily available in an active market, such prices are not required to be assessed or adjusted for any price related risks, including climate risk, in accordance with the fair value related requirements of the Company’s Financial Reporting Framework.

12. Capital management policies and procedures

The Company’s capital management objectives are:

Gearing will be selectively employed with the aim of enhancing returns. The Board’s view is that 105% of the net asset value is the neutral level of gearing over the longer term and that gearing should be used actively in an approximate range of plus or minus 10% around this as measured at the time that gearing is instigated. These current parameters sit within the Company’s gearing policy as set out in the investment policy contained within the Annual Report and Financial Statements which states that net borrowings are not expected to exceed 25% of net assets under normal circumstances, and the Company’s Articles of Association which limit net borrowings to 100% of capital and reserves.

The Company’s total capital as at 31 December 2021 was US$194,838,000 (2020: US$234,151,000) comprised of equity, capital and reserves.

Under the terms of the overdraft facility agreement, the Company's total indebtedness shall at no time exceed US$40 million or 30% of the Company's net asset value (whichever is the lowest) (2020: US$40 million or 30% of the Company's net asset value (whichever is the lowest)).

The Board with the assistance of the Investment Manager monitors and reviews the broad structure of the Company’s capital on an ongoing basis. This review includes:

The Company is subject to externally imposed capital requirements:

During the year, the Company complied with the externally imposed capital requirements to which it was subject.

13. Transactions with the Investment Manager and AIFM

BlackRock Fund Managers Limited (BFM) provides management and administration services to the Company under a contract which is terminable on six months’ notice. BFM has (with the Company’s consent) delegated certain portfolio and risk management services, and other ancillary services, to BlackRock Investment Management (UK) Limited (BIM (UK)). Further details of the investment management contract are disclosed in the Directors’ Report contained within the Annual Report and Financial Statements.

The investment management fee is levied quarterly, based on 0.80% per annum of the Company's net asset value. The investment management fee due for the year ended 31 December 2021 amounted to US$1,726,000 (2020: US$1,452,000), as disclosed in note 4 above. At the year end, an amount of US$815,000 was outstanding in respect of these fees (2020: US$480,000).

In addition to the above services, BlackRock has provided the Company with marketing services. The total fees paid or payable for these services for the year ended 31 December 2021 amounted to US$101,000 excluding VAT (2020: US$122,000). Marketing fees of US$108,000 (2020: US$127,000) were outstanding at 31 December 2021.

During the year the Manager pays the amounts due to the Directors. These fees are then reimbursed by the Company for the amounts paid on its behalf. As at 31 December 2021, an amount of US$124,000 (2020: US$124,000) was payable to the Manager in respect of Directors’ fees.

The ultimate holding company of the Manager and the Investment Manager is BlackRock, Inc., a company incorporated in Delaware, USA.

14. Related party disclosure

Disclosures of the Directors’ interests in the ordinary shares of the Company and fees and expenses payable to the Directors are set out in the Directors’ Remuneration Report contained within the Annual Report and Financial Statements. At 31 December 2021, an amount of US$15,000 (2020: US$15,000) was outstanding in respect of Directors‘ fees.

Significant holdings

The following investors are:

As at 31 December 2021

As at 31 December 2020

15. Contingent liabilities

There were no contingent liabilities at 31 December 2021 (2020: none).

16. Publication of Non-Statutory Accounts

The financial information contained in this announcement does not constitute statutory accounts as defined in the Companies Act 2006. The 2021 Annual Report and Financial Statements will be filed with the Registrar of Companies shortly.

The Report of the Auditors for the year ended 31 December 2021 contains no qualification or statement under Section 498(2) or (3) of the Companies Act 2006.

The comparative figures are extracts from the audited financial statements of BlackRock Latin American Investment Trust plc for the year ended 31 December 2020, which have been filed with the Registrar of Companies, unless otherwise stated. The Report of the Auditor on those financial statements contained no qualification or statement under Section 498 of the Companies Act.

This announcement was approved by the Board of Directors on 31 March 2022. 

17. Annual Report

Copies of the Annual Report will be sent to members shortly and will also be available from the registered office, c/o The Company Secretary, BlackRock Latin American Investment Trust plc, 12 Throgmorton Avenue, London EC2N 2DL. 

18. Annual General Meeting

The Annual General Meeting of the Company will be held at 12 Throgmorton Avenue, London EC2N 2DL on Thursday, 19 May 2022 at 12:00 noon.

ENDS

The Annual Report will also be available on the BlackRock Investment Management website at http://www.blackrock.com/uk/brla. Neither the contents of the Investment Manager’s website nor the contents of any website accessible from hyperlinks on the Investment Manager’s website (or any other website) is incorporated into, or forms part of, this announcement.

For further information, please contact:

Melissa Gallagher, Managing Director, Investment Trusts, BlackRock Investment Management (UK) LimitedTel: 020 7743 3893

Press Enquiries:

Ed Hooper, Lansons Communications – Tel: 020 7294 3620E-mail: BlackRockInvestmentTrusts@lansons.com or EdH@lansons.com

31 March 2022

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