Blackrock Lat A Regulatory News (BRLA)

BlackRock Latin American Investment Trust Plc - Final Results

PR Newswire

London, March 22

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 2018

FINANCIAL HIGHLIGHTS AS AT 31 DECEMBER 2018

Percentage comparisons are year on year against 31 December 2017.

1 Outperformance based on cum-income NAV per share calculated relative to the MSCI EM Latin America Index (Net Return) with dividends reinvested for the year ended 31 December 2018 (all in US Dollars).2 Yield calculated based on dividends announced in the last 12 months prior to the date of publication of this report and the share price as at 31 December 2018 of 557.20 cents. 2017 dividend yield based on total dividends of 13.00 cents and a share price at 31 December 2017 of 622.29 cents.3 All calculations on a total return basis with dividends reinvested.4 Comprises dividends declared in respect of the financial year to 31 December 2018 of 23.55 cents per share, compared to dividends declared in respect of the financial year to 31 December 2017 of 13.00 cents per share.

PERFORMANCE RECORD

Source: BlackRock.

* Based on an exchange rate of $1.2736 to £1 at 31 December 2018 and $1.3528 to £1 at 31 December 2017.** 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. Historically the benchmark data for the Company has always been stated on a Gross basis. However going forward it is the Board’s intention to monitor the Company’s performance with reference to the NR version of the benchmark. For transparency both sets of benchmark data have been provided in the performance data contained in this year end financial report.

The table showing the NAV and share price return for the five year period to 31 December 2018 along with the benchmark return for the same period on both a gross and net basis can be found on page 3 of the Annual Report.

CHAIRMAN’S STATEMENT

Dear Shareholder

I am pleased to present the Annual Report to shareholders for the year ended 31 December 2018.

MARKET OVERVIEWLatin American markets were characterised by volatility in 2018, with the MSCI EM Latin America Index (net return with dividends reinvested) falling by 6.6%. Stock markets in the region’s largest economy, Brazil, were marginally down over the year (-0.5%) but this masked a rollercoaster ride as markets fell by 18.6% in the first half of the year impacted by concerns over the presidential elections and the truck drivers’ strike in May. The market bounced back in the second half of 2018, mainly due to the election of Jair Bolsonaro as president in October, which investors viewed in a positive light.

In Mexico, markets fell by 15.5% over the year under review due to concerns about the election of a more populist president, Andres Manuel López Obrador, and the re-negotiation of the North American Free Trade Agreement (NAFTA). These developments, combined with interest rate increases to combat persistent inflation, created a challenging climate for the domestic equity market.

Markets in the Andean region performed poorly over the year. In Colombia and Chile markets fell by 11.5% and 19.7% respectively, mainly due to commodity prices which fell on the back of concerns over Chinese growth. In Argentina the stock market also fell by over 50% in the year, with high inflation and currency weakness driving the collapse. (All percentages are total return in US Dollar terms).

On 25 January 2019, the tailings dam at Vale’s Córrego do Feijão Mine dam in Brumadinho collapsed, tragically causing significant loss of life and substantial environmental damage. At the time of writing the underlying cause of the disaster is still under investigation and our managers are closely monitoring the situation. As at 28 February 2019 Vale represented 5.78% of the Company’s assets.

CONTRIBUTION TO TOTAL RETURNFOR THE YEAR ENDED 31 DECEMBER 2018

BNY Mellon provide performance attribution based on a Brinson Fachler daily transactions-based methodology. This service is in line with GIPS recommendations but may not be considered to be of audit quality, however the analysis is considered to be useful management information.

Source: BNY Mellon.

1 All calculations on a total return basis with dividends reinvested.2 Benchmark returns based on net return indices with dividends reinvested.

PERFORMANCEOver the year ended 31 December 2018 the Company’s net asset value per share (NAV) fell by 5.4%1 in US Dollar terms compared to benchmark return of -6.6%. In sterling terms the NAV rose marginally by 0.6%1 over the same period and the benchmark in sterling terms fell by 0.8%2. The share price fell by 6.9%1 in US Dollar terms (1.0%1 in Sterling terms).

Details of the factors affecting performance are set out in the Investment Manager’s Report.GEARINGThe Board’s view is that 105% of 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 in the Annual Report 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. Average gearing for the year to 31 December 2018 was 108.7% and as at the year end the Company was geared by 108.9%.

REVENUE RETURN AND DIVIDENDSTotal revenue return for the year was 15.13 cents per share (2017: 13.03 cents per share). The increase was largely due to a higher level of special dividends received in the year which accounted for 2 cents per share of total revenue return (2017: 0.4 cents per share).

With effect from July 2018, and as part of the Board’s overall strategy to reduce the discount at which the Company’s shares trade, a new dividend policy was implemented whereby the Company would pay a regular quarterly dividend equivalent to 1.25% of the Company’s US Dollar NAV at the end of each calendar quarter. The Company has paid interim dividends totalling 23.55 cents per share under this policy in respect of the year ended 31 December 2018 as detailed in the table below; this represented a yield of 4.2% based on the Company’s share price at 31 December 2018. Had the policy been in place for the full 12 month period, and assuming a dividend had been paid based on 1.25% of the NAV at 31 March 2018, the yield would have been 6.0%.

Under the Company’s new 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.

DISCOUNT MANAGEMENTThe Directors continue to monitor the discount at which the ordinary shares trade to their prevailing NAV and in the year to 31 December 2018 the cum-income discount on the ordinary shares in sterling terms has averaged 14.5% and ranged between 10.8% and 20.6%.

The Board has tried to reduce this volatility by offering shareholders a discount control mechanism covering the four years to 31 December 2021 whereby shareholders are offered 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) in the event that the continuation vote for each relevant biennial period is approved (being the continuation votes at the AGMs in 2020 and 2022), where 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 (net basis) by more than 100 basis points over the four year period from 1 January 2018 to 31 December 2021 (the Calculation Period).

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

The making of any tender offer pursuant to the above will be conditional upon the Company having the required shareholder authority or such shareholder authority being obtained, the Company having sufficient distributable reserves to effect the repurchase and, having regard to its continuing financial requirements, sufficient cash reserves to settle the relevant transactions with shareholders, and the Company’s continuing compliance with the Listing Rules and all other applicable laws and regulations. The Company may require a minimum level of participation in any such tender offer to be met, failing which the tender offer may be declared void.

Further details of the tender mechanism and shareholder continuation vote are set out in the Strategic Report.

SHARE CAPITALAs noted above, the Directors are mindful of the Company’s discount to NAV. The Board monitors the Company’s share rating closely, and is committed to making share purchases where appropriate to manage the discount. During the financial year ended 31 December 2018, the Company bought back 110,000 ordinary shares at an average price of 443.31 pence per share and at an average discount of 12.5% representing total consideration of £487,687. The Company has not bought back any shares since 31 December 2018 up to the close of business on 27 March 2019.

The Company did not issue any shares during the year or since the year end.

PORTFOLIO MANAGERThe Board announced on 24 December 2018 that Will Landers, the Company’s portfolio manager, was leaving BlackRock as were two analysts based in São Paulo and that Sam Vecht and Ed Kuczma would take over responsibility for managing the portfolio with immediate effect subject to a formal Board review at a later date. The Board subsequently held several meetings with Sam and Ed and also Belinda Boa, Head of Emerging Markets at BlackRock, to discuss how the portfolio will be managed and its future risk and reward characteristics. The Board was encouraged by these discussions and the feedback they received from shareholders and confirmed Sam and Ed’s appointment as the Company’s co-managers. Sam is a Managing Director in BlackRock’s Global Emerging Markets Equities team. He joined Merrill Lynch Investment Managers (MLIM) (which merged with BlackRock in 2006) in 2000 and has managed a number of UK investment trusts since 2004. He has been portfolio manager for BlackRock Emerging Markets Equity Strategies Fund since September 2015, and BlackRock Frontiers Investment Trust plc since 2010, both of which have invested in the Latin American region since launch. Ed joined BlackRock in 2015 as a senior research analyst on the Latin American equity team from Morgan Stanley Investment Management where he covered emerging market equities, with a primary focus on Latin America and has 15 years of investment experience across all sectors and countries in Latin America.

BOARD COMPOSITIONMr Monteiro de Castro informed the Board last year that it was his intention to step down as a Director of the Company on 31 March 2019 after 11 years of service. I would like to take this opportunity to express the Board’s gratitude to Mr Monteiro de Castro for his invaluable contribution to the success of the Company during his tenure and to wish him well for the future.

The Board having carefully considered the composition of the Board and the need to ensure that a suitable balance of skills, knowledge, experience, independence and diversity was maintained, undertook a search and selection process to identify a new Director. Following a thorough and detailed search, I am delighted to welcome Mr Craig Cleland to the Board and who will take over as Chair of the Audit Committee following the retirement of Mr Monteiro de Castro on 31 March 2019. Mr Cleland is Head of Corporate Development/Investment Trusts at CQS (UK) LLP, a multi-asset management firm in London with a focus on credit markets, where his responsibilities include advising and developing the closed-end fund business. He was previously at JPMorgan Asset Management (UK) Limited, latterly as Managing Director, and led their technical groups in the investment trust business and has a wealth of experience in the investment trust sector. Mr Cleland will stand for election at the forthcoming Annual General Meeting. Further details of Mr Cleland’s background and the biographies of all the Directors can be found in the Annual Report. Information on the recruitment and selection process undertaken and details of the Board’s policy on director tenure and succession planning can be found in the Directors’ Report within the Annual Report.

Mr Whitehead had also notified the Board of his intention to step down at the AGM in 2019 after 15 years of service, but at the beginning of this year the Board asked him to delay his retirement to the end of 2019 to allow more continuity on the Board as the new portfolio managers settle in. In the autumn the Board will conduct a search and selection process to recruit a replacement director.

In accordance with best practice and developing corporate governance, the Directors have agreed to submit themselves to annual re-election. Therefore all Directors (with the exception of Mr Monteiro de Castro) will retire and stand for re-election (or, in the case of Mr Cleland, for election) at the forthcoming AGM.

CORPORATE GOVERNANCE AND SOCIALLY RESPONSIBLE INVESTINGAlthough investment trusts do not employ staff and accordingly have no direct impact on social matters, they can be significant investors in the economies of the regions in which they invest. The Board believes that it is important to invest in companies whose boards act responsibly in respect of environmental, ethical and social issues, and has engaged a Manager with a disciplined approach to corporate governance and the resources to implement this on a global basis. BlackRock is one of the world’s leading asset management firms and has a rigorous approach to corporate governance with the BlackRock Investment Stewardship team responsible for protecting and enhancing the value of clients’ assets through engagement with companies to encourage business and management practices that support sustainable financial performance over the long-term. This specialist team is a centralised resource for portfolio managers and provides insight on environmental, social and governance (ESG) considerations. This overlay approach ensures that BlackRock can most effectively use its voice as a long-term, actively engaged shareholder to protect the economic interests of its clients. The BlackRock Investment Stewardship team takes a regional approach to engagement in the context of globally consistent principles and is based in the US, UK, Japan, Hong Kong and Singapore. Regional advisory committees of investment colleagues help inform the team’s work and establish a shareholder value framework for the team’s engagements and policy development. Additional information on the Manager’s approach to socially responsible investing can be found at https://www.blackrock.com/corporate/about-us/ investment-stewardship and is also given in the Corporate Governance Statement in the Annual Report and the Manager’s policy on the exercise of voting rights attached to the Company’s portfolios disclosed in the Directors’ Report within the Annual Report.

ANNUAL GENERAL MEETINGThe AGM will be held at 12.00 noon on 15 May 2019 at the offices of BlackRock at 12 Throgmorton Avenue, London EC2N 2DL. We hope that as many shareholders as possible will attend. Following the AGM there will be a presentation by Sam Vecht and Ed Kuczma, the co-portfolio managers, on the outlook for the year ahead and an opportunity to meet Sam, Ed and the Directors.

OUTLOOKOur portfolio managers are positive about the prospects for Brazil, which remains the portfolio’s largest overweight country position. This is based on expectations for the incoming administration under newly elected President Jair Bolsonaro, and in particular the continuation of the reform programme initiated in 2017. The portfolio managers have also recently added to Mexico on a selective basis. The portfolio has a lower than benchmark exposure to the Andean region where economic growth has been disappointing. The portfolio managers have a positive view on (and an overweight position in) Argentina, where the sell-off in 2018 has left stocks trading at attractive valuations with some interesting investment opportunities.

Carolan DobsonChairman28 March 2019

STRATEGIC REPORT

The Directors present the Strategic Report of the Company for the year ended 31 December 2018.

OBJECTIVEThe 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 POLICYThe 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) 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 Investment 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 Registrars, Computershare Investor Services PLC.

Prior to 1 November 2017, the entity appointed as the Company’s Depositary was BNY Mellon Trust & Depositary (UK) Limited. Details of the contractual terms with these service providers are set out in the Directors’ Report within the Annual Report.

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 return with dividends reinvested) 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 POLICYAs 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 percent of the index weighting for each of those countries. For all other Latin American countries the limit is plus or minus 10 percent 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. 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 PROCESSAn 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 MANAGEMENTThe 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 Company has in place a discount control policy for the four year period from 1 January 2018 to 31 December 2021 as set out in detail in the Chairman’s Statement. The new discount control mechanism will be a tender for 24.99% of the shares in issue excluding treasury shares (at a tender price reflecting the latest cum-income NAV less 2% and related portfolio realisation costs) subject to the Company not meeting either a performance target or an average discount target over the period. Full details of these targets are set out within the Chairman’s Statement. The tender will also be conditional on the passing of the biennial continuation votes at the AGMs in 2020 and 2022.

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

The Investment Manager’s Report 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 ANALYSISA detailed analysis of the investments and the sector and geographical allocations are set out following the 10 largest investments.

RESULTS AND DIVIDENDSThe results for the Company are set out in the Income Statement. The total loss for the year on ordinary activities, after taxation, was US$14,877,000 (2017: profit of US$63,765,000) of which the revenue profit amounted to US$5,947,000 (2017: US$5,129,000), and the capital loss amounted to US$20,824,000 (2017: profit of US$58,636,000).

With effect from July 2018, a new dividend policy was implemented whereby the Company pays a regular quarterly dividend equivalent to 1.25% of the Company’s US Dollar NAV at the end of each calendar quarter. The Company has declared interim dividends totalling 23.55 cents per share under this policy in respect of the year ended 31 December 2018 as detailed in the table below.

Under the Company’s new 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.

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

KEY PERFORMANCE INDICATORSAt 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 below.

PerformanceAt 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 and the Chairman’s Statement and Investment Manager’s Report.

Premium/discount to NAVThe 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 2018, the Company’s share price to NAV traded in the range of a discount of 10.8% to 20.6% on a cum-income basis.

110,000 shares were repurchased and held in treasury during the year.

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

Ongoing chargesThe ongoing charges represent the Company’s management fee and all other recurring operating and investment management expenses, excluding finance costs, transaction costs and taxation expressed as a percentage of average 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 in the Annual Report.

Composition of shareholder registerThe 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, IFAs and direct private investors. On this basis the Company’s share register currently comprises 32.8% retail investors; the Board will monitor this with the aim of growing the retail element of the register over time.

1 Calculated in US Dollar terms with dividends reinvested. 2 Further details of the calculation methodology are given in the Glossary in the Annual Report.3 Ongoing charges, calculated as a percentage of average shareholders’ funds and using expenses, excluding finance costs, transaction costs and taxation expressed as a percentage of average net assets.

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 assess and monitor these risks. A core element of this 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, 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, the Audit Committee periodically receives presentations from BlackRock’s Internal Audit and Risk & Quantitative Analysis teams. Where produced, the Audit Committee also reviews Service Organisation Control (SOC 1) reports from the Company’s service providers.

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

· Counterparty;

· Investment performance;

· Income/dividend;

· Legal and regulatory compliance;

· Operational;

· Market;

· Financial; and

· Marketing

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.

As required by the UK Corporate Governance Code, the Board has undertaken a robust assessment of the principal 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 above table together with an explanation of how they are managed and mitigated. The Board will continue to assess these risks on an ongoing basis.

VIABILITY STATEMENTIn accordance with provision C.2.2 of the 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 in 2020, and the Board proposes to offer a tender for 24.99% of the Company’s ordinary shares in issue (excluding treasury shares) at the AGM in 2022 if certain conditions are met. The outcome of these events are unknown at the present time, however, 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 2023.

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

· the Company has a relatively liquid portfolio (as at 31 December 2018, 100% of the portfolio was estimated as being capable of being liquidated within 20 days);

· the Company’s expenses and liabilities are relatively stable;

· the Company’s business model should remain attractive for much longer than the period up to the AGM in 2023, unless there is a significant economic or regulatory change;

· the Company’s principal risks and uncertainties as set out above are unlikely to change materially;

· the impact of a significant fall in Latin American markets on the value of the Company’s investment portfolio;

· the ongoing relevance of the Company’s investment objective, business model and investment policy in the current environment; and

· the level of demand for the Company’s shares.

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

· processes for monitoring costs;

· key financial ratios;

· evaluation of risk management and controls;

· portfolio risk profile;

· share price discount to NAV;

· gearing; and

· counterparty exposure and liquidity risk.

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 PROSPECTSThe 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 ISSUESAs 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 in the Annual Report.

MODERN SLAVERY ACTAs 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 EMPLOYEESThe Directors of the Company on 31 December 2018, all of whom held office throughout the year, are set out in the governance structure and Directors’ biographies in the Annual Report.

With effect from 1 January 2019 the Board will consist of 4 men and 2 women, moving to 3 men and 2 women from March 2019.

The Company does not have any employees, therefore there are no disclosures to be made in that respect.

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

The Strategic Report was approved by the Board at its meeting on 28 March 2019.

By order of the BoardSarah BeynsbergerFor and on behalf of BlackRock Investment Management (UK) LimitedCompany Secretary28 March 2019

TRANSACTIONS WITH THE AIFM AND THE INVESTMENT MANAGERBlackRock 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 within the Annual Report.

The investment management fee is levied quarterly, based on 0.80% per annum of the net asset value on the last day of each month.

The investment management fee due for the year ended 31 December 2018 amounted to US$2,091,000 (2017: US$2,119,000), as disclosed in note 4. At the year end, an amount of US$520,000 was outstanding in respect of these fees (2017: US$1,150,000).

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 2018 amounted to US$112,000 excluding VAT (2017: US$120,000). Marketing fees of US$114,000 (2017: US$112,000) were outstanding at 31 December 2018.

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 in the Annual Report. At 31 December 2018, an amount of US$nil (2017: US$nil) was outstanding in respect of Directors’ fees.The Board currently consists of six 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 2018, the Chairman received an annual fee of £46,000, the Chairman of the Audit Committee received an annual fee of £35,000 and each other Director received an annual fee of £31,000. This excludes expenses paid to each of the Directors which are set out in the Directors' Remuneration Report in the Annual Report and Financial Statements. With effect from 1 January 2019, the Chairman will receive an annual fee of £47,000, the Chairman of the Audit Committee will receive an annual fee of £36,000, the Senior Independent Director will receive an annual fee of £34,000 and each other Director will receive an annual fee of £32,000.

All current members of the Board hold ordinary shares in the Company. Carolan Dobson holds 4,792 ordinary shares, Antonio Monteiro de Castro holds 47,000 ordinary shares, Laurence Whitehead holds 15,203 ordinary shares, Mahrukh Doctor holds 686 ordinary shares, Nigel Webber holds 5,000 ordinary shares and Craig Cleland holds 5,000 ordinary shares.

INVESTMENT MANAGER’S REPORT

MARKET OVERVIEWLatin American performance was volatile throughout 2018, ending the year down 6.6% (net return with dividends reinvested) in USD terms, making it the top performing region within the broader emerging markets complex, which was down 14.6% over the same period. Intraregional performance was quite diverse, driven by a mixture of domestic politics and negative sentiment felt across all emerging market regions. Brazil (-0.5%), the region’s largest economy, was subject to shifts in market sentiment for the entirety of the period. Whilst January was very strong with indices and flows hitting recent highs, sentiment quickly tailed off, following a sharp correction in the US. Despite improved confidence, falling inflation and further central bank rate cuts in the beginning of the year, Brazil declined 18.6% by the end of the first-half of 2018, as volatility spiked following the May truckers’ strike and uncertainty surrounding presidential elections grew. Brazil recovered sharply in the second half of the year primarily due to the election of Jair Bolsonaro on 28 October. On this note, Brazil’s performance resisted the sharp deterioration in global equities through the fourth quarter of 2018, with Brazilian currency movements responsible for about 50% of equity gains in USD. While data for the year was mixed, signs of an economic rebound persist.

Mexico (-15.5%) was plagued by stubborn inflation, leading to a hawkish Central Bank earlier in the period, while complexity surrounding NAFTA negotiations continued to put pressure on the currency. Although the market showed resiliency in the second quarter with uncertainty surrounding the presidential race declining, volatility picked up following the cancellation of the partially built new airport in Mexico City (the NAIM project) and increased concerns over how President López Obrador’s administration will try to pass policy following the transition period into 2019. Performance in Colombia (-11.5%) and Chile (-19.7%), was primarily dictated by commodity prices, which continued a downward trend into year-end, fuelled by concerns over Chinese growth.

Peru (+1.6%) was the top performer in 2018, and was the only country in the region to end in positive territory.

Argentina was at the opposite end of the spectrum, with markets declining 50.8% in 2018. A persistently strong US Dollar and elevated inflation led to a collapse of both the equity and FX markets in June. Central Bank missteps to combat rising inflation, led to an initial $50bn Stand-By Arrangement with the IMF to help support the currency. Investors remained unconvinced of the government’s economic plan leading to persistent outflows through the second half of 2018, with the exception of a short lived relief rally in the third quarter following August lows.

PORTFOLIO REVIEWDuring the year, the Company posted a 5.4%1 decline in its NAV, while its share price decreased by 6.9%1. This resulted in the NAV outperformance of its benchmark, the MSCI EM Latin America Index, which returned -6.2%1 on a gross return basis and -6.6%1 on a net return basis over the same time period. 1(All calculations in US Dollar terms with dividends reinvested.)

The Company’s strong overweight to and selection within Brazil was the primary contributor to returns as the market there rallied strongly following a positive election outcome in October and attention focused on the formation of the new government. Large-cap macro proxies such as lender, Banco Bradesco, were among the top contributors amid continued optimism surrounding an economic recovery. Consumption oriented names also performed well. Digital retailer, B2W CIA Digital, has been able to maintain progression and positive cash flow generation on its third party marketplace, while Linx has benefitted from an increased demand for payment software solutions. Budget airline operator, Azul, also posted stronger performance, benefitting from stronger than expected traffic volumes and oil price weakness later in the period. The Company’s underweight to Chile was also additive to relative performance amid commodity price declines in the second half of 2018. On the other hand, the Company’s off-benchmark exposure to Argentina was the largest detractor to performance. Lenders, Supervielle and Galicia, were among the most affected names as the equity and FX markets were unable to find a floor, despite appropriate measures taken by the government to suppress investor concerns over runaway inflation. Cement producer, Loma Negra, also posted heavy declines as domestic growth slowed. An underweight to Colombia weighed on returns as the oil dependent market surged early in the period, moving alongside oil price strength. The Company’s leverage facility and implied 105% gross notional, neutral level amplified underperformance to the benchmark.

PORTFOLIO POSITIONINGWe notably shifted risk into Mexico, bringing our exposure to a more neutral position. We increased some exposure to Chile, predominantly through mining names, while exiting our Peruvian exposure as we found better prospects elsewhere. Following a severe correction in the Brazilian market over the summer, due to a combination of inflation concerns stemming from the May truckers’ strike and spill over effects of Argentina’s peso crisis, we added to underperforming State Owned Enterprises (SOEs) in Brazil given significant underperformance, attractive valuation, and our continued belief that the October election would elect a government committed to the current economic reform process. At that time we trimmed exposure to off-benchmark Argentina as tough fiscal and CPI (Consumer Price Index) targets associated with the International Monetary Fund (IMF) Stand-By Agreement are likely to result in lower growth. We continue to maintain an off-benchmark allocation to Argentina through software exporter, Globant, which benefitted from persistent pressure on the currency. We continued to add to our Brazil overweight following a positive election result, primarily topping up on existing positions in macro sensitive financials. On the other hand we have remained cautious on Mexico amid increased political uncertainty, maintaining a neutral position. We have been active in taking profits across our positions and redeploying capital on market dips. Most recently we have also trimmed exposure across the resource sectors. The Company ended the period being overweight Brazil, while being underweight Chile, Peru, Colombia, and neutral Mexico. At the sector level, we remain overweight the domestic consumer, while being underweight consumer staples and utilities.

In determining portfolio construction, focus is given to the four ‘C’s, namely; Commodities, Currency, Consumption and Credit. More detail is given below:

Commodities:

Moderation in global growth outlook, led by China.

Improving supply discipline favours energy sector.

Improving economic cycle in Brazil allows for exposure to Brazilian steel stocks.

Currencies:

Outlook for appreciation in the Brazilian real and stabilization in the Argentinian peso leads to above benchmark exposure to Brazil and Argentina.

Uncertainty on the Mexican peso leads to neutral Mexico positioning.

Consumption:

Historically low interest rates, moderate inflation and improving unemployment make Brazilian consumer stocks attractive.

The new Mexican administration’s social programmes should support positions in Mexican beverage companies, convenience stores and hypermarkets.

Credit:

The low level of household and corporate indebtedness allows for supportive loan growth and low level of delinquency for the Brazilian bank sector.

Lower economic activity and expensive valuations have precluded exposure to Chilean banks.

OUTLOOKBrazil remains our largest overweight, given our positive expectations for the incoming administration. So far newly elected President Jair Bolsonaro has delivered on his campaign promises, looking to reduce the size of government by initially reducing the number of ministries, naming sector/subject experts to lead cabinets, and pointing to a continuation of the reform process initiated two years ago. Meanwhile, the outlook for upcoming corporate results points to a continuation in the economic recovery, providing strong momentum for growth into 2019. Elsewhere, the cancellation of the NAIM airport project reminded markets of the concerns regarding increasing populism for the incoming administration in Mexico, reiterating our cautiousness with Mexican equities. We remain underweight in the Andean region due to a combination of unattractive valuation and disappointing growth. Finally, the dramatic sell off in Argentina in 2018 leaves the stocks trading at attractive valuations while interest rates and FX have mostly stabilised providing a foundation for the economy to rebound from recent downturn.

Sam Vecht & Ed KuczmaBlackRock Investment Management Limited28 March 2019

TEN LARGEST INVESTMENTS

All percentages reflect the value of the holding as a percentage of total investments. Together, the ten largest investments represent 56.2% of the total investments (ten largest investments as at 31 December 2017: 50.8%).

PORTFOLIO AS AT 31 DECEMBER 2018

All investments are in equity shares unless otherwise stated.

† Unlisted securities

The total number of investments held at 31 December 2018 was 56 (31 December 2017: 65). At 31 December 2018 the Company did not hold any equity interests comprising more than 3% of any company’s share capital.

GEOGRAPHICAL WEIGHTING VS MSCI EM LATIN AMERICA INDEX

Source: BlackRock and MSCI

SECTOR AND GEOGRAPHICAL ALLOCATIONS

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:

· present fairly the financial position, financial performance and cash flows of the Company;

· select suitable accounting policies and then apply them consistently;

· present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;

· make judgements and estimates that are reasonable and prudent;

· state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

· prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

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 Investment 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, confirm to the best of their knowledge that:

· the Financial Statements, prepared in accordance with applicable accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company; and

· the Annual Report and Financial Statements include a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that it faces.

The 2016 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. As a result, the Board has concluded that the Annual Report and Financial Statements for the year ended 31 December 2018, 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 DOBSONChairman28 March 2019

INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2018

The total column of this statement represents the Company’s profit and loss account. The supplementary revenue and capital columns 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 EQUITY FOR THE YEAR ENDED 31 DECEMBER 2018

* Final dividend of 7.00 cents per share for the year ended 31 December 2017, declared on 13 March 2018 and paid on 6 June 2018; first interim dividend of 7.57 cents per share for the year ended 31 December 2018, declared on 3 July 2018 and paid on 23 August 2018; second interim dividend of 7.85 cents per share for the year ended 31 December 2018, declared on 2 October 2018 and paid on 9 November 2018.** Final dividend of 9.00 cents per share for the year ended 31 December 2016, declared on 9 March 2017 and paid on 12 May 2017. Interim dividend of 6.00 cents for the year ended 31 December 2017, declared on 27 September 2017 and paid on 30 October 2017.

BALANCE SHEET AS AT 31 DECEMBER 2018

The financial statements were approved and authorised for issue by the Board of Directors on 28 March 2019 and signed on its behalf by Carolan Dobson, Chairman.BlackRock Latin American Investment Trust plcRegistered in England, No. 2479975

STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2018

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2018

1. PRINCIPAL ACTIVITYThe 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 POLICIESThe principal accounting policies adopted by the Company are set out below.

(a) Basis of preparationThe 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 November 2014 and updated in January 2017, 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 Directors are satisfied that the Company has adequate resources to continue in operational existence for the foreseeable future and therefore consider the going concern assumption to be appropriate. The last resolution was put to shareholders at the 2018 AGM and the next such resolution will be put to shareholders at the AGM in 2020. (See in the Annual Report for further details.) The Directors have no reason to believe that this resolution will not be passed.

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 most related to the primary economic environment in which the Company operates. All values are rounded to the nearest thousand dollars (US$’000) except where otherwise indicated.

(b) Presentation of income statementIn 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 reportingThe Directors are of the opinion that the Company is engaged in a single segment of business being investment business.

(d) IncomeDividends 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 and circumstances of each 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. Underwriting commission is recognised when the issue underwritten closes.

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 unless the availability of accurate accrual information is limited in which case a cash receipts basis is used.

Options may be purchased or written over securities held in the portfolio for generating or protecting capital returns, or for generating or maintaining revenue returns. Where the purpose of the option is the generation of income, the premium is treated as a revenue item. Where the purpose of the option is the maintenance of capital, the premium is treated as a capital item. Options are held at fair value based on the bid/offer prices of the options written to which the Company is exposed. The value of the option is subsequently marked to market to reflect the fair value of the option based on traded prices.

Option premium income is recognised as revenue evenly over the life of the option contract and included in the revenue column of the Income Statement unless the option has been written for the maintenance and enhancement of the Company’s investment portfolio and represents an incidental part of a larger capital transaction, in which case any premia arising are allocated to the capital column of the Income Statement. Where the premium is taken to revenue, an appropriate amount is shown as capital return such that the total return reflects the overall change in the fair value of the option. When an option is exercised the gain or loss is accounted for as a capital gain or loss. Any cost on closing out an option is transferred to revenue along with any remaining unamortised premium.

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

· expenses which are incidental to the acquisition or disposal of an investment are treated as capital. Details of transaction costs on the purchases and sales of investments are disclosed in note 10 in the Annual Report;

· expenses are treated as capital where a connection with the maintenance or enhancement of the value of the investments can be demonstrated;

· the investment management fee and finance costs have been allocated 75% to the capital column and 25% to the revenue column of the Income Statement in line with the Board’s expected long term split of returns, in the form of capital gains and income respectively, from the investment portfolio.

(f) TaxationThe 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 lossThe 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 designated 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. This policy applies to unquoted fixed asset investments held by the Company.

(h) DebtorsDebtors include sales for future settlement, other debtors and pre-payments 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) CreditorsCreditors include purchases for future settlements, interest payable, share buy back costs and accruals in the ordinary course of business. Creditors are classified as creditors – amounts due within one year if payment is due within one year or less. If not, they are presented as creditors – amounts due after more than one year.

(j) Dividends payableUnder 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.

(k) Cash and cash equivalentsCash 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 translationIn 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 column of the Income Statement and taken to the capital reserve.

(m) Share repurchasesShares repurchased and held in treasury – the full cost of the repurchase is charged to the capital reserve. Where treasury shares are subsequently reissued, any surplus is taken to the share premium account.

(n) Bank borrowingsBank 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 judgementsThe 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 period amounted to US$7,827,000 and US$209,000 (2017: US$6,748,000 and US$283,000).

Special dividends of US$234,000 have been recognised in capital in 2018 (2017: US$554,000).

4. INVESTMENT MANAGEMENT FEES

Under the terms of the investment management agreement with BFM, BFM is entitled to a fee of 0.80% per annum on the Net Asset Value (NAV).

The investment management fee is allocated 75% to the capital column and 25% to the revenue column of the Income Statement.

5. OTHER OPERATING EXPENSES

* All expenses other than depositary fees are paid in sterling and are therefore subject to exchange rate fluctuations.** Non-audit fees relate to services provided by the auditors to review performance calculations for the two years ended 31 December 2017 used to determine if the tender mechanism would be triggered.*** Further information on Directors’ emoluments can be found in the Directors’ Remuneration Report within the Annual Report.

Expenses of US$56,000 (2017: US$86,000) charged to the capital column of the Income Statement relate to transaction costs charged by the custodian on the purchase and sale of investments and charges on Brazilian foreign exchange transactions.

The Company has no employees.

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 2018, the third quarterly dividend under this new policy was calculated based on the Company’s cum-income US Dollar NAV at 31 December 2018 (being the last working day of the quarter).

The Company’s cum-income US Dollar NAV at 31 December 2018 was 650.15 US cents per share, and the Directors have declared a third quarterly interim dividend of 8.13 cents per share. The dividend was paid on 8 February 2019 to holders of ordinary shares on the register at the close of business on 11 January 2019.

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 2018, meet the relevant requirements as set out in this legislation.

* Based upon 39,259,620 ordinary shares in issue at 11 January 2019.

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

7. EARNINGS AND NET ASSET VALUE PER ORDINARY SHARERevenue, capital earnings and net asset value per ordinary share are shown below and have been calculated using the following:

There were no dilutive securities at the year end.

1 Based on an exchange rate of $1.2736 to £1 at 31 December 2018 and $1.3528 to £1 at 31 December 2017.

8. INVESTMENTS HELD AT FAIR VALUE THROUGH PROFIT OR LOSS

Transaction costs of US$161,000 (2017: US$145,000) were incurred on the acquisition of investments. Costs relating to the disposal of investments during the year amounted to US$141,000 (2017: US$169,000). All transaction costs have been included within capital reserves.

Gains/(losses) on investments held at fair value through profit or loss

9. SHARE CAPITAL

During the period to 31 December 2018, 110,000 ordinary shares were purchased and transferred to treasury at a total cost of US$659,000 (2017: no ordinary shares were repurchased or cancelled during the year).

10. RESERVES

* Represents the Company’s distributable reserves.

11. VALUATION OF FINANCIAL INSTRUMENTSFinancial 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 in the Annual Report.

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

A reconciliation of fair value measurement in Level 3 is set out below.

The Level 3 investments in the table above for 2017 relate to the Hypera Pharma 11.3% 15/10/18 convertible bond and Klabin 8% 08/01/19 convertible bond. During the period, the Klabin 8% 08/01/19 convertible bond was converted to equity and consequentially transferred to Level 1 and the Hypera Pharma bond matured. The Company held no Level 3 securities as at 31 December 2018 (2017: 2).

For exchange listed equity investments the quoted price is the bid price.

The unquoted fixed asset investments, as shown in Level 3 for the year ended 31 December 2017 were valued based on the Directors’ best estimate based on latest information in line with the principles of the International Private and Venture Capital Valuation Guidelines.

12. CAPITAL MANAGEMENT POLICIES AND PROCEDURESThe Company’s capital management objectives are:

· to ensure it will be able to continue as a going concern; and

· to secure long term capital growth and an attractive total return primarily through investing in quoted securities in Latin America.

Gearing will be selectively employed with the aim of enhancing returns. The Board view that 105% of 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 Strategic Report 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 2018 was US$255,245,000 (2017: US$279,590,000) comprised of equity, capital and reserves.

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 planned level of gearing, which takes into account the Investment Manager’s view on the market; and

· the need to buy back equity shares, either for cancellation or to be held in treasury, which takes account of the difference between the NAV per share and the share price (i.e. the level of share price discount or premium).

The Company is subject to externally imposed capital requirements:

· as a public company, the Company has a minimum share capital of £50,000; and

· in order to be able to pay dividends out of profits available for distribution, the Company has to be able to meet one of the two capital restrictions tests imposed on investment companies by law.

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

13. TRANSACTIONS WITH MANAGER AND INVESTMENT MANAGERBlackRock 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 within the Annual Report.

The investment management fee is levied quarterly, based on 0.80% per annum of the net asset value on the last day of each month.

The investment management fee due for the year ended 31 December 2018 amounted to US$2,091,000 (2017: US$2,119,000), as disclosed in note 4. At the year end, an amount of US$520,000 was outstanding in respect of these fees (2017: US$1,150,000).

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 2018 amounted to US$112,000 excluding VAT (2017: US$120,000). Marketing fees of US$114,000 (2017: US$112,000) were outstanding at 31 December 2018.

14. RELATED PARTY DISCLOSUREDisclosures 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 within the Annual Report. At 31 December 2018, an amount of US$nil (2017: US$nil) was outstanding in respect of Directors’ fees.

15. CONTINGENT LIABILITIESThere were no contingent liabilities at 31 December 2018 (2017: US$nil).

16. PUBLICATION OF NON-STATUTORY ACCOUNTSThe financial information contained in this announcement does not constitute statutory accounts as defined in the Companies Act 2006. The 2018 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 2018 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 2017, 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 28 March 2019.

17. ANNUAL REPORTCopies 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 Wednesday, 15 May 2019 at 12:00 noon.

This announcement contains inside information as defined in EU Regulation No. 596/2014 and is in accordance with the Company's obligations under Article 17 of that Regulation. Upon the publication of this announcement the inside information within is now considered to be in the public domain.

ENDS

The Annual Report will also be available on the BlackRock Investment Management website at http://www.blackrock.co.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:Simon White, Managing Director, Investment Trusts, BlackRock Investment Management (UK) LimitedTel: 020 7743 5284

Press Enquiries:Lucy Horne, Lansons Communications – Tel: 020 7294 3689E-mail: lucyh@lansons.com

28 March 2019

12 Throgmorton AvenueLondon EC2N 2DL