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 2019

FINANCIAL HIGHLIGHTS AS AT 31 DECEMBER 2019

Outperformance of index benchmark                  0.7%^1,6

Revenue profit per ordinary share (+19.6%)        18.10 cents

Ordinary share price (+22.0%^3,6)                      643.17 cents⁴

NAV per ordinary share (+18.2%^3,6)                 732.15 cents

Net assets (+12.6%)                                      US$287.4 million

Total dividends (+48.2%⁵)                          34.89 cents

Dividend yield                                                    5.4%^2,6                             

Percentage comparisons are year on year against 31 December 2018.

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 2019 (all in US Dollars).
2     Yield calculated based on 4 quarterly dividends for the year ended 31 December 2019 of 34.89 cents per share and the share price as at 31 December 2019 of 643.17 cents. 2018 dividend yield based on total dividends of 23.55 cents and a share price at 31 December 2018 of 557.20 cents.
3     All calculations in US Dollars with dividends reinvested.
4     Mid-market price.
5     Dividends declared in respect of the financial year to 31 December 2019 of 34.89 cents per share compared to dividends declared in respect of the financial year to 31 December 2018 of 23.55 cents per share.
6     Alternative Performance Measure. See Glossary in the Annual Report and Financial Statements.

PERFORMANCE RECORD

	31 December 2019	31 December 2018	Change %
Net assets (US$’000)	287,444	255,245	+12.6
Net asset value per ordinary share (US$ cents)	732.15c	650.15c	+12.6
– with dividends reinvested1			+18.2
Ordinary share price (mid-market) (US$ cents)2	643.17c	557.20c	+15.4
– with dividends reinvested1			+22.0
Ordinary share price (mid-market) (pence)	485.50p	437.50p	+11.0
– with dividends reinvested1			+17.2
Discount1	12.2%	14.3%	n/a
MSCI EM Latin America Index (Net return)3	558.16	475.18	+17.5

   

	Year ended  31 December 2019	Year ended  31 December 2018	Change %
Revenue
Net profit after taxation (US$’000)	7,106	5,947	+19.5
Revenue profit per ordinary share (US$ cents)	18.10	15.13	+19.6
Dividends per ordinary share (US$ cents)
Quarter to 31 March	8.56	n/a	n/a
Quarter to 30 June	9.15	7.57	+20.9
Quarter to 30 September	8.03	7.85	+2.3
Quarter to 31 December	9.15	8.13	+12.5
	-----------------	-----------------	-----------------
Total dividends paid and payable (US$ cents)	34.89	23.55	+48.2
	==========	==========	==========

Source: BlackRock.

1     Alternative Performance Measures, see Glossary in the Annual Report and Financial Statements.
2     Based on an exchange rate of $1.3248 to £1 at 31 December 2019 and $1.2736 to £1 at 31 December 2018.
3     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 2019.

Since our year end we have moved into an unprecedented global economic and social situation with the COVID-19 pandemic so I thought it helpful to update shareholders on what the Board’s key focus has been through this period to protect shareholder interests.

OPERATIONAL SECURITY AND WELL BEING
We have been working with BlackRock and the Company’s key suppliers to minimise the risk the virus poses to the health and wellbeing of all those working on the management and administration of the Company. We have received regular updates and have been ensuring that the Company’s operations are not affected and that established business continuity plans are effective.

GEARING
We have reviewed our current loan facilities which comprise a $40,000,000 overdraft with BNYM (subject to a covenant restriction that limits total borrowings to 30% of net asset value) and are comfortable that this provides suitable liquidity.

INVESTMENT PORTFOLIO CONSTRUCTION
We have been regularly discussing with the portfolio managers the resilience of the portfolio in these extraordinary times and what actions have been taken this year. There is a detailed update by the portfolio managers on this below.

FOCUS ON WELL GOVERNED COMPANIES
Our portfolio managers are supported by a very experienced team of investors with a considerable amount of resources dedicated to Latin America. Their experience of investing in Latin America has proven to them and to us that one of the best strategies to deal with adverse economic and market conditions is to populate the portfolio with companies with experienced management teams that have lived, operated and survived through crisis periods in the past. Whether it is hyperinflation, currency devaluations, periods of political turmoil or social and environmental calamities, Latin America has a long history of dealing with crisis. In addition, as our portfolio managers conduct stress tests on our investment universe, they find that companies that survive and thrive through periods of economic and market volatility are ones that have a high, relative degree of profitability through the cycle and sound balance sheets.

OUTLOOK
Whilst it is impossible at this stage to estimate the scale and duration of the global and regional economic downturn caused by the COVID-19 pandemic, it is also important to reflect on the scale and speed of the current market downturn relative to prior market falls. The amount of indiscriminate selling of securities at any price is the sign of a true market panic. The volatility seen in markets as a result of current biosecurity fears will have inevitably created dislocations in market valuations that are not consistent with long term fundamentals of the stocks we invest in. For example, the current value of Brazilian equites in US Dollar terms, as measured by the local stock index, is of a similar value today as it was in 2005, despite the considerable economic advances that the country has gone through in the last fifteen years.

As the market environment evolves and we face bouts of panic in equity markets our portfolio managers remain attuned to dislocations in pricing in the market which may provide significant opportunities for companies with their preferred attributes.

REVIEW OF 2019
Latin American stock markets were very strong in 2019 with the MSCI EM Latin America Index (US Dollar and total return (net) basis with dividends reinvested) rising by 17.5%. However it was also a year of considerable volatility between countries as political reform, electoral concerns and social unrest dominated the agenda. In Brazil, the region’s largest economy, the long awaited pension and fiscal reforms began to be implemented, which drove the stock market up by 26.3%. In Mexico, markets also rose and gained 11.4% driven by a supportive fiscal policy, but kept to a more moderate gain by concerns over the government’s ability to maintain fiscal discipline and keep spending under control. Colombia (up by 30.8%) was the region’s top performing market in 2019, buoyed by healthy domestic demand, higher oil prices and stable inflation.

CONTRIBUTION TO TOTAL RETURN FOR THE YEAR ENDED 31 DECEMBER 2019

Benchmark Return2 (Net Return)	17.5%
Asset Allocation	2.7%
Stock Selection	-2.5%
Gearing1	1.4%
Management Fees and Operating Costs	-0.9%
NAV Total Return1	18.2%

The performance attribution is based on a Brinson Fachler daily transactions-based methodology and is in line with Global Investment Performance Standards (GIPS) recommendations

Source: BNY Mellon.

¹     Alternative Performance Measures. Further details of the calculation of performance with dividends reinvested are given in the Glossary in the Annual Report and Financial Statements.
²     Benchmark returns based on net return indices with dividends reinvested.

Other countries in the region did not fare so well, with stock markets in Argentina falling dramatically in excess of 50% in August on news of the defeat of the incumbent president Mauricio Macri. The MSCI’s decision to retain the country’s ‘Emerging Market’ classification helped boost market performance in the fourth quarter of 2019, but the market still ended the year down by 20.8% and was the region’s worst performer. Markets in Chile also lost ground, falling by 16.9% over the year on the back of currency weakness and persistent social unrest.

PERFORMANCE
Over the year ended 31 December 2019 the Company’s Net Asset Value (NAV) rose by 18.2%¹ in US Dollar terms compared to benchmark return of 17.5%. In Sterling terms the NAV rose by 13.6%¹ over the same period and the benchmark in sterling terms rose by 12.9%². The share price increased by 22.0%¹ in US Dollar terms (17.2%¹ in Sterling terms).

Details of the factors affecting performance are set out in the Investment Manager’s Report. Key aspects of performance attribution for the year are set out in the chart above.

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. Gearing is used actively with a low of 104.5% as at 31 December 2019 and the high at 111.3% in October 2019. Average gearing for the year to 31 December 2019 was 109.2%.

REVENUE RETURN AND DIVIDENDS
Total revenue return for the year was 18.10 cents per share (2018: 15.13 cents per share). The increase of 19.6% was largely due to a higher level of dividends received in the year from portfolio companies.

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 in 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 34.89 cents per share in respect of the year ended 31 December 2019 as detailed in the table below; this represented a yield of 5.4% based on the Company’s share price at 31 December 2019. An interim dividend of 4.59 cents per share in respect of the first quarter of 2020 was declared on 1 April 2020 and will be paid on 20 May 2020 to shareholders on the register on 14 April 2020.

The dividends paid and declared by the Company in 2019 have been funded from current year revenue and brought forward revenue reserves. As at 31 December 2019, a balance of US$6.9 million remained in revenue reserves, which is sufficient to cover approximately two quarterly dividend payments at the most recently declared dividend rate of 9.15 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 investment 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 July 2018, the Company’s discount has narrowed from 14.9% as at 1 July 2018 to 6.2% as at 2 April 2020.

	Dividend	Pay date
Quarter to 31 March 2019	8.56 cents	17 May 2019
Quarter to 30 June 2019	9.15 cents	16 August 2019
Quarter to 30 September 2019	8.03 cents	8 November 2019
Quarter to 31 December 2019	9.15 cents	6 February 2020
	----------------------
Total	34.89 cents
	============

DISCOUNT MANAGEMENT
The Directors continue to monitor the discount at which the ordinary shares trade to their prevailing NAV and in the year to 31 December 2019 the cum-income discount on the ordinary shares in Sterling terms has averaged 12.1% and ranged between 7.4% and 17.1%.

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 forthcoming AGM in 2020 and in 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 (net return) 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.

In respect of the above conditions, the Company’s annualised total NAV return on a US Dollar basis for the 24 months to 31 December 2019 was 5.75%¹, outperforming the annualised benchmark return for the same period of 4.76% by 0.99%¹. The cum-income discount of the Company’s ordinary shares has averaged 13.3%¹ for this period and ranged from a discount of 7.4%¹ to 20.6%¹, ending on a discount of 12.2%¹ at 31 December 2019.

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 below.

SHARE CAPITAL
As 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. The Company has not bought back any shares during the financial year ended 31 December 2019 and up to the date of publication of this report (2018: 110,000 ordinary shares).

BOARD COMPOSITION
The Board is mindful of the increasing focus on independence, tenure and succession planning set out in the updated Financial Reporting Council’s review of the UK Corporate Governance Code, which applies for periods commencing on or after 1 January 2019. With this in mind, the Board commenced a search in 2018 to identify a new Director to join the Board, assisted by a third-party recruitment firm; as a result of this and as previously disclosed in the 2018 annual report, Mr Craig Cleland joined the Board as a Director with effect from 1 January 2019, and subsequently took over the role of Audit Committee Chairman on 31 March 2019.

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 further search and selection process in 2019 to identify an additional new Director. Following a thorough and detailed search, I am delighted to welcome Ms Laurie Meister to the Board. Ms Meister joined as a Director with effect from 1 February 2020. Ms Meister has 32 years of financial markets experience, both in New York and in London, with 28 years dedicated to having led and developed Latin American equity and capital markets, businesses and other emerging markets. Ms Meister will also serve as a member of the Company’s Audit Committee, Nomination Committee, Management Engagement Committee and Remuneration Committee, and she will stand for election at the forthcoming Annual General Meeting. Further details of Ms Meister’s background and the biographies of all the Directors are set out in the Annual Report and Financial Statements. 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 in the Annual Report and Financial Statements.

After 11 years of dedicated service to the Company, Mr Monteiro de Castro retired as Director of the Company on 31 March 2019. Mr Whitehead also retired as a Director on 31 December 2019 after more than 15 years of excellent service. On behalf of all shareholders, and my fellow Directors, I would like to thank Laurence and Antonio for their hard work and wise counsel over the past decade.

In accordance with the UK Code of Corporate Governance, the Directors have agreed to submit themselves to annual re-election. Therefore all Directors will retire and stand for re-election (or, in the case of Ms Meister, for election) at the forthcoming AGM.

FINANCIAL AND CORPORATE REPORTING
The Board takes its governance responsibilities very seriously and follows best practice requirements as closely as possible. The revised UK Code of Corporate Governance (the UK Code) published in 2018 requires enhanced disclosure setting out how we, as Directors, have fulfilled our duties in taking into account the wider interests of stakeholders in promoting the success of the Company. As part of this reporting, and given the environmental, social and governance (ESG) issues that are faced by many companies within the Company’s benchmark index, we have provided a detailed report on these matters as part of the Strategic Report. We have also provided more information on our Manager’s approach to shareholder engagement and voting activities.

Earlier this year, the Association of Investment Companies (AIC) also published updates to its Code of Corporate Governance (the AIC Code) which were endorsed by the Financial Reporting Council (FRC) as being appropriate for investment companies. The 2019 AIC Code applies to accounting periods beginning on or after 1 January 2019 and the Board has fully adopted the recommendations of the 2019 AIC Code.

ANNUAL GENERAL MEETING
The AGM will be held at 12.00 noon on 29 June 2020 at the offices of BlackRock at 12 Throgmorton Avenue, London EC2N 2DL. The Board is mindful that on 26 March 2020, as a response to the COVID-19 pandemic, the Stay at Home Measures were passed into law in England and Wales, with immediate effect, in statutory instruments (2020/350 in England and 2020/353 in Wales) made pursuant to the Public Health (Control of Disease) Act 1984. Under these restrictions, public gatherings of more than two people are not permitted. Accordingly, it will not be possible for shareholders to attend general meetings in person until these restrictions are lifted, and they are therefore encouraged to submit their votes by proxy. The only attendees who will be permitted entry to AGMs under the current legislation will be those who will need to be present to form the quorum to allow the business to be conducted. In the hope that these restrictions will be lifted in the next few months, the Board has scheduled the Company’s AGM for the furthest date in the future permitted by law and regulation, being 29 June 2020.   Further information will be made available in due course through the Company’s website at www.blackrock.co.uk/brla and regulatory new service announcements to the London Stock Exchange.  Notwithstanding these difficult circumstances, the Board look forward to offering opportunities for shareholders to meet the portfolio managers and the Board at some safer stage in the future.

CHANGES TO ARTICLES OF ASSOCIATION

The Board is proposing to make amendments to the Articles to enable the Company to hold general meetings (wholly or partially) by electronic means and to give additional powers in respect of postponing or adjourning meetings in appropriate circumstances.  The amendments are being sought in response to challenges posed by government restrictions on social interactions as a result of the COVID-19 pandemic, which have made it impossible for shareholders to attend physical general meetings.  The Board also notes that the business secretary, Alok Sharma, noted in his speech on 28 March, that the Government is seeking to implement changes to the AGM rules to allow virtual meetings, and these changes are to ensure that the Company is prepared for these changes, once implemented.   The Board’s aim in introducing these changes is to make it easier for shareholders to participate in general meetings through introducing electronic access for those not able to travel, and also to ensure appropriate security measures are in place for the protection and wellbeing of shareholders.

The principal changes proposed to be introduced in the Articles, and their effect, are set out more detail in the Directors’ report on pages 51 and 52 in the Annual Report and Financial Statements.

OUTLOOK
Before the outbreak of COVID-19, our portfolio managers were positive about the prospects for Latin America; the largest economy Brazil was making progress in fiscal and administrative reform, in Mexico the eventual approval of the USMCA (United States, Mexico and Canada) trade agreement in North America should improve business sentiment, in Colombia economic stability was increasing and in Argentina, despite the significant negative market sentiment, the Manager believes that there are interesting investment opportunities.

However, it is too early to really understand the economic implications of the COVID-19 pandemic on the Global or Latin American economy. We do know that there is currently a sharp slowdown in economic activity in the countries that were first affected by the virus and already there has been a considerable amount of disruption to global supply chains. In these circumstances, Latin America benefits from not being highly dependent on exports for economic growth, but it does remain heavily exposed to commodities in terms of oil and minerals where lowering global economic activity sharply affects prices.

CAROLAN DOBSON
Chairman
7 April 2020

¹  Alternative Performance Measures. Further details of the calculation of performance with dividends reinvested are given in the Glossary in the Annual Report and Financial Statements.

STRATEGIC REPORT

The Directors present the Strategic Report of the Company for the year ended 31 December 2019.

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) 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 Registrar, 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 in 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 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 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. No options contracts were entered into by the Company in the year under review.

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 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.

PROMOTING THE SUCCESS OF THE BLACKROCK LATIN AMERICAN INVESTMENT TRUST PLC

New regulations (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 consider 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.

Stakeholders
Shareholders	Manager and Investment Manager	Other key service providers	Investee companies
Continued shareholder support and engagement are critical to the continued existence of the Company and the successful delivery of its long-term strategy. The Board is focused on fostering good working relationships with shareholders and on understanding the views of shareholders in order to incorporate them into the Board’s strategy and objectives in delivering long-term growth and income.	The Board’s main working relationship is with the Manager, who is responsible for the Company’s portfolio management (including asset allocation, stock and sector selection) and risk management, as well as ancillary functions such as administration, secretarial, accounting and marketing services. The Manager has sub-delegated portfolio management to the Investment Manager. Successful management of shareholders’ assets by the Investment Manager is critical for the Company to successfully deliver its investment strategy and meet its objective. The Company is also reliant on the Manager as AIFM to provide support in meeting relevant regulatory obligations under the AIFMD other relevant legislation.	In order for the Company to function as an investment trust with a listing on the premium segment of the official list of the FCA and trade on the London Stock Exchange’s (LSE) main market for listed securities, the Board relies on a diverse range of advisors for support in meeting relevant obligations and safeguarding the Company’s assets. For this reason the Board considers the Company’s Custodian, Depositary, Registrar and Broker to be stakeholders. The Board maintains regular contact with its key external providers and receives regular reporting from them through the Board and committee meetings, as well as outside of the regular meeting cycle.	Portfolio holdings are ultimately shareholders’ assets, and the Board recognises the importance of good stewardship and communication with investee companies in meeting the Company’s investment objective and strategy. The Board monitors the Manager’s stewardship arrangements and receives regular feedback from the Manager in respect of meetings with the management of portfolio companies.

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.

Area of Engagement	Issue	Engagement	Impact
Investment mandate and objective	The Board is committed to promoting the role and success of the Company in delivering on its investment mandate to shareholders over the long term. However, the Board recognises that securities within the Company’s investment remit may involve significant additional risk due to the political volatility and environmental, social and governance concerns facing many of the countries in the Company’s investment universe. These ethical and sustainability issues should be a key focus of our Manager’s research. More than ever consideration of sustainable investment is a key part of the investment process and must be factored in when making investment decisions. The Board also have responsibility to shareholders to ensure that the Company’s portfolio of assets are invested in line with the stated investment objective and in a way that ensures an appropriate balance between spread of risk and portfolio returns.	The Board believes that responsible investment and sustainability are important to the longer term delivery of growth in capital and income and has worked very closely with the Manager throughout the year to regularly review the Company’s performance, investment strategy and underlying policies and to understand how ESG considerations are integrated into the investment process. The Manager’s approach to the consideration of ESG factors in respect of the Company’s portfolio, as well as its engagement with investee companies to encourage the adoption of sustainable business practices which support long-term value creation, are kept under review by the Board. The Manager reports to the Board in respect of its consideration of ESG factors and how these are integrated into the investment process; a summary of BlackRock’s approach to ESG and sustainability is set out in the Annual Report and Financial Statements. The Board discussed ESG concerns in respect of specific portfolio companies with the Manager, including action being taken in respect of the tragic dam collapse last year in Brumadinho, operated by Vale.	The portfolio activities undertaken by the Manager, can be found in the Investment Manager’s Report below. The Manager has engaged with management at Vale in respect of the results of the internal and external investigations into the causes of the Brumadinho tragedy and the company has taken steps to implement repairs and to ensure safety measures are enhanced, and has made pledges towards responding to the social and environmental costs of the accident. The Manager continues to monitor progress and will vote against management being reappointed at the next AGM to the extent that it considers sufficient progress has not been made. During the year under review, the Manager increased its underweight positioning in Vale, and at 31 December 2019 the stock represented 4.7% of the portfolio compared to a benchmark weighting of 5.9%.
Dividend target	A key element of the Board’s overall strategy to reduce the discount at which the Company’s shares trade is the Company’s dividend policy 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 Board believes this policy which produced a dividend yield of 5.4% (based on the share price of 643.17c at 31 December 2019), enhances demand for the Company’s shares, which will help to narrow the Company’s discount over time. These dividends are 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 investment managers to seek a higher income yield from the underlying portfolio itself which could detract from total returns but keep the dividend policy and its impact on total return under review.	The Manager reports total return performance statistics to the Board on a regular basis, along with the portfolio yield and the impact of the dividend policy on brought forward distributable reserves. The Board reviews the Company’s discount on a regular basis and holds regular discussions with the Manager and the Company’s broker regarding the discount level. The Manager provides the Board with feedback and key performance statistics regarding the success of the Company’s marketing initiatives which include messaging to highlight the quarterly dividends. The Board also reviews feedback from shareholders in respect of the level of dividend. Notwithstanding the issues posed by the COVID-19 pandemic, in normal operating conditions shareholders may attend the Company’s annual general meeting where formal questions may be put to the Board.	Since the dividend policy was introduced in July 2018, the Company’s discount has narrowed from 14.3% as at 31 December 2018 to 12.2% as at 31 December 2019. At the date of this report the discount stood at 6.2%. Of total dividends of US$13,697,000 paid out in the year, US$6,591,000 has been paid out of reserves. The Company’s portfolio managers (Sam Vecht and Ed Kuczma) attended 35 professional investor meetings, and held discussions with over 75 different wealth management desks and offices over the year to promote the Company and raise the profile in terms of the investment strategy, including the dividend policy.
Discount management	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. To this end, the Board has put in place 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 where either a performance target or an average discount target is not met (see the Chairman’s Statement above for more details).	The Board monitors the tender trigger targets described in the Chairman’s Statement on a regular basis in conjunction with the Manager. The Manager provides regular performance updates and detailed performance attribution.	The Company’s average discount for the current tender trigger period to date (from 1 January 2018 to 31 December 2019) was 13.3%1 compared to the tender discount target of 12%.1 The Company’s annualised outperformance of the benchmark for the same tender trigger period was 0.99%1 compared to a threshold of 1.00%.1 On this basis the tender would be implemented if the tender trigger date had fallen on 31 December 2019. The Company’s discount has narrowed significantly over the year under review, from 14.3% at 31 December 2018 to 12.2% at 31 December 2019. As at 2 April 2020 the discount was 6.2%.
Service levels of third party providers	The Board acknowledges the importance of ensuring that the Company’s principal suppliers are providing a suitable level of service: including the Manager in respect of investment performance and delivering on the Company’s investment mandate; the Custodian and Depositary in respect of in their duties towards safeguarding the Company’s assets; the Registrar in its maintenance of the Company’s share register and dealing with investor queries and the Company’s Brokers in respect of the provision of advice and acting as a market maker for the Company’s shares.	The Manager reports to the Board on the Company’s performance on a regular basis. The Board carries out a robust annual evaluation of the Manager’s performance, their commitment and available resources. The Board performs an annual review of the service levels of all third party service providers and concludes on their suitability to continue in their role. The Board receives regular updates from the AIFM, Depositary, Registrar and Brokers on an ongoing basis. Since the year end, in light of the challenges presented by the COVID-19 pandemic to the operation of business across the globe, the Board has worked closely with the Manager to gain comfort that relevant business continuity plans are operating effectively for all of the Company’s service providers.	All performance evaluations were performed on a timely basis and the Board concluded that all third party service providers, including the Manager, Custodian, Depositary and Fund administrator were operating effectively and providing a good level of service. The level of fee paid to the Depositary was reviewed and was reduced from 1.15 basis points per annum of net assets to rate of 0.95 basis points per annum with effect from 1 January 2019. The Board has received updates in respect of business continuity planning from the Company’s Manager, Custodian, Depositary, Fund administrator, Brokers, Registrar and printers, and is confident that arrangements are in place to ensure that a good level of service will continue to be provided despite the impact of the COVID-19 pandemic.
Board composition	The Board is committed to ensuring that its own composition brings an appropriate balance of knowledge, experience and skills, and that it is compliant with best corporate governance practice under the new UK Code, including guidance on tenure and the composition of the Board’s committees.	Over recent years the Board undertook a review of succession planning arrangements and identified the need for action given that from July 2019, if no action were taken, a majority of Board Directors would have had tenure in excess of nine years. The Nomination Committee agreed the selection criteria and the method of selection, recruitment and appointment. Board diversity, including gender, was taken into account when establishing the criteria. The services of an external search consultant, Cornforth Consulting Limited, was used to identify potential candidates. All Directors are subject to a formal evaluation process on an annual basis (more details and the conclusions in respect of the 2019 evaluation process are given in the Corporate Governance Statement in the Annual Report and Financial Statements). All Directors stand for re-election by shareholders annually. Shareholders may attend the AGM and raise any queries in respect of Board composition or individual Directors in person, or may contact the Company Secretary or the Chairman using the details provided on page 109 of the Annual Report and Financial Statements if they wish to raise any issues.	Mr Antonio Monteiro de Castro, whose tenure exceeded the nine year limit recommended by the UK Code, retired as a Director and as Chairman of the Audit Committee on 31 March 2019. The Board appointed Mr Craig Cleland as a Director of the Company with effect from 1 January 2019, and he took over the position of Chairman of the Audit Committee with effect from 31 March 2019. Mr Laurence Whitehead, whose tenure also exceeded nine years, retired from the Board on 31 December 2019. Subsequently the Board announced in January 2020 that Ms Laurie Meister would join the Board with effect from 1 February 2020. From this date the Board was comprised of three women and two men. Mr Cleland and Ms Meister’s biographies are set out in the Annual Report and Financial Statements. Details of each Directors’ contribution to the success and promotion of the Company are set out in the Directors’ report in the Annual Report and Financial Statements. The Directors are not aware of any issues that have been raised directly by shareholders in respect of Board composition in 2019. Details for the proxy voting results in favour and against individual Directors’ re-election at the 2019 AGM are given on the Company’s website at www.blackrock.co.uk/brla.
Shareholders	Continued shareholder support and engagement are critical to the continued existence of the Company and the successful delivery of its long-term strategy.	The Board is committed to maintaining open channels of communication and to engage with shareholders. Notwithstanding the challenges posed by the COVID-19 pandemic, in normal operating circumstances the Company welcomes and encourages attendance and participation from shareholders at its Annual General Meetings. Shareholders therefore have the opportunity to meet the Directors and Investment Manager and to address questions to them directly. The Annual Report and Half-Yearly Financial Report are available on the BlackRock website and are also circulated to shareholders either in printed copy or via electronic communications. In addition, regular updates on performance, monthly factsheets, the daily NAV and other information are also published on the website at blackrock.co.uk/brla. The Board also works closely with the Manager to develop the Company’s marketing strategy, with the aim of ensuring effective communication with shareholders in respect of the investment mandate and objective. Unlike trading companies, one-to-one shareholder meetings usually take the form of a meeting with the portfolio manager as opposed to members of the Board. As well as attending regular investor meetings the portfolio managers hold regular discussions with wealth management desks and offices to build on the case for, and understanding of, long-term investment opportunities in Latin America. The Manager also coordinates public relations activity, including meetings between the portfolio managers and relevant industry publications to set out their vision for the portfolio strategy and outlook for the region. The Manager releases monthly portfolio updates to the market to ensure that investors are kept up to date in respect of performance and other portfolio developments, and maintains a website on behalf of the Company that contains relevant information in respect of the Company’s investment mandate and objective. If shareholders wish to raise issues or concerns with the Board, they are welcome to do so at any time. The Chairman is available to meet directly with shareholders periodically to understand their views on governance and the Company’s performance where they wish to do so. She may be contacted via the Company Secretary whose details are given on page 109 of the Annual Report and Financial Statements.	The Board values any feedback and questions from shareholders ahead of and during Annual General Meetings in order to gain an understanding of their views and will take action when and as appropriate. Feedback and questions will also help the Company evolve its reporting, aiming to make reports more transparent and understandable. Feedback from all substantive meetings between the Investment Manager and shareholders will be shared with the Board. The Directors will also receive updates from the Company’s broker on any feedback from shareholders, as well as share trading activity, share price performance and an update from the Investment Manager. The portfolio managers attended 35 professional investor meetings, and held discussions with over 75 different wealth management desks and offices in respect of the Company during the year under review. Investors gave positive feedback in respect of the change of portfolio management team in December 2018 and the move to a higher conviction portfolio. Investors were also impressed with the wide pool of resource available through BlackRock’s Global Emerging Markets team, and the rigorous ‘bottom-up/top-down’ investment approach (set out in more detail above). Investors were concerned over the volatility of the Latin American region and market liquidity.

SUSTAINABILITY AND OUR ESG POLICIES

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 may involve significant additional risk due to the political volatility and ESG concerns facing many of the countries in the Company’s investment universe. These ethical and sustainability issues are a key focus of the Board, and your Board is committed to a diligent oversight of the activities of the Manager in these areas. The Board believes effective engagement with management is, in most cases, the most effective way of driving meaningful change in the behaviour of investee company management. This is particularly true for the Company’s Manager given the extent of BlackRock’s shareholder engagement (BlackRock held 2,050 engagements with 1,458 companies based in 42 markets for the year to 30 June 2019). As well as the influence afforded by its sheer scale, the Board believes that BlackRock is well placed as Manager to fulfil these requirements due to the integration of ESG into its investment processes, the emphasis it places on sustainability, its collaborative approach in its investment stewardship activities and its position in the industry as one of the largest suppliers of sustainable investment products in the global market. More information on BlackRock’s approach to sustainability is set out on pages 38 and 39 of the Annual Report and Financial Statements.

The importance of considering ESG when investing in the Latin American Sector
Environmental		Social		Corporate Governance
Some of the companies forming the largest components of the Company’s benchmark index are oil and mining companies. The oil and gas exploration company Petrobras represents 8% of the benchmark at 31 December 2019, and the Brazilian mining company Vale represents nearly 6%. Digging mines and drilling for oil will inevitably have an impact on the local environment. Key is how companies manage this process ensuring the benefits are appropriately shared amongst all stakeholders. The value wiped off the market capitalisation of companies, such as Vale, after the Brumadinho dam collapse, highlights the key role that ESG has on share price performance. As set out in more detail in the Annual Report and Financial Statements BlackRock will be aligning its engagement and stewardship priorities to UN Sustainable Development Goals and is committed to voting against management to the extent that they have not demonstrated sufficient progress in how they manage these environmental impacts and operating events.		BlackRock believes it is vital that companies maintain their social licence to operate. By this, BlackRock means that companies maintain broad acceptance from their employees, stakeholders, local communities and the national government. The portfolio management team’s site visits to companies’ assets provide them with valuable insight into these issues which often cannot be properly understood from company reports.		As with all companies, good corporate governance is critical for natural resources companies. In conjunction with the BlackRock Investment Stewardship team, the portfolio management team actively engage with companies on a wide range of governance issues including board independence, executive compensation, shareholder protection and timely disclosure.

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

The Investment Manager’s Report below 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 below.

RESULTS AND DIVIDENDS
The results for the Company are set out in the Income Statement below. The total profit for the year on ordinary activities, after taxation, was US$45,496,000 (2018: loss of US$14,877,000) of which the revenue profit amounted to US$7,106,000 (2018: US$5,947,000), and the capital profit amounted to US$38,390,000 (2018: loss of US$20,824,000).

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 34.89 cents per share under this policy in respect of the year ended 31 December 2019 as detailed in the table below.

	Dividend	Pay date
Quarter to 31 March 2019	8.56 cents	17 May 2019
Quarter to 30 June 2019	9.15 cents	16 August 2019
Quarter to 30 September 2019	8.03 cents	8 November 2019
Quarter to 31 December 2019	9.15 cents	6 February 2020
	----------------------
Total	34.89 cents
	============

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 above.

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 below.

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 above and the Chairman’s Statement above and Investment Manager’s Report below.

PREMIUM/DISCOUNT TO NAV
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 2019, the Company’s share price to NAV traded in the range of a discount of 7.4% to 17.1% on a cum-income basis.

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 and Financial Statements.

ONGOING CHARGES
The 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 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. On this basis the Company’s share register currently comprises 32.2% retail investors; the Board will monitor this with the aim of growing the retail element of the register over time.

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 in the Annual Report and Financial Statements.

Key Performance Indicators	Year ended  31 December 2019	Year ended  31 December 2018
Net asset value total return1,2	18.2%	-5.4%
Share price total return1,2	22.0%	-6.9%
Benchmark total return (net)1	17.5%	-6.6%
Discount to net asset value2	12.2%	14.3%
Revenue return per share – basic (cents)	18.10	15.13
Ongoing charges2,3	1.13%	1.03%
Retail element of share register	32.2%	32.8%

1     Calculated in US Dollar terms with dividends reinvested.
2     Alternative Performance Measures, see Glossary in the Annual Report and Financial Statements.
3     Ongoing charges represent the management fee and all other recurring operating expenses excluding finance costs, direct transaction costs, custody transaction charges and taxation as a % of average shareholders’ funds.

PRINCIPAL RISKS
The Company is exposed to a variety of risks and uncertainties and the key risks are set out on the following pages. 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. Since the year end, 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.

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. 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:

• 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.

Principal Risk	Mitigation/Control
Counterparty Potential loss that the Company could incur if a counterparty is unable (or unwilling) to perform on its commitments.	Due diligence is undertaken before contracts are entered into and exposures are diversified across a number of counterparties. The Depositary is liable for restitution for the loss of financial instruments held in custody unless able to demonstrate the loss was a result of an event beyond its reasonable control.
Investment performance Returns achieved are reliant primarily upon the performance of the portfolio. The Board is responsible for: deciding the investment strategy to fulfil the Company’s objective; and for monitoring the performance of the Investment Manager and the implementation of the investment strategy. An inappropriate investment strategy may lead to: poor performance compared to the benchmark index and the Company’s peer group; a loss of capital; and dissatisfied shareholders.	To manage this risk the Board: regularly reviews the Company’s investment mandate and long term strategy; has set investment restrictions and guidelines which the Investment Manager monitors and regularly reports on; receives from the Investment Manager a regular explanation of stock selection decisions, portfolio exposure, gearing and any changes in gearing and the rationale for the composition of the investment portfolio; and monitors the maintenance of an adequate spread of investments in order to minimise the risks associated with factors specific to particular sectors, based on the diversification requirements inherent in the investment policy.
Income/dividend The Company’s dividend policy is to pay dividends based on 1.25% of the US Dollar net asset value at each quarter end. Under this policy, a portion of the dividend is likely to be paid out of capital reserves, and over time this might erode the capital base of the Company, with a consequential impact on longer term total returns. The rate at which this may occur and the degree to which dividends are funded from capital are also dependent upon the level of dividends and other income earned from the portfolio. Income returns from the portfolio are dependent, among other things, upon the Company successfully pursuing its investment policy. Any change in the tax treatment of dividends or interest received by the Company, including as a result of withholding taxes or exchange controls imposed by jurisdictions in which the Company invests, may reduce the level of dividends received by shareholders.	The Board monitors this risk through the receipt of detailed income forecasts and considers the level of income at each meeting. The Company has the ability to make dividend distributions out of capital reserves as well as revenue reserves to support any dividend target. These reserves totalled $262,382,000 at 31 December 2019. The Board is mindful of the balance of shareholder returns between income and capital and monitors the impact of the Company’s dividend on the Company’s capital base and the impact over time on total return. Any changes to the Company’s dividend policy are communicated to the market on a timely basis and shareholder approval will be sought for significant changes.
Legal and regulatory compliance The Company has been approved by HM Revenue & Customs as an investment trust, subject to continuing to meet the relevant eligibility conditions and operates as an investment trust in accordance with Chapter 4 of Part 24 of the Corporation Tax Act 2010. As such, the Company is exempt from capital gains tax on the profits realised from the sale of its investments. Any breach of the relevant eligibility conditions could lead to the Company losing investment trust status and being subject to corporation tax on capital gains realised within the Company’s portfolio. In such event the investment returns of the Company may be adversely affected. Any serious breach could result in the Company and/or the Directors being fined or the subject of criminal proceedings or the suspension of the Company’s shares which would in turn lead to a breach of the Corporation Tax Act 2010. Amongst other relevant laws and regulations, the Company is required to comply with the provisions of the Companies Act 2006, the Alternative Investment Fund Managers’ Directive, the UK Listing Rules and Disclosure Guidance and Transparency Rules and the Market Abuse Regulation.	The Investment Manager monitors investment movements and the amount of proposed dividends, if any, to ensure that the provisions of Chapter 4 of Part 24 of the Corporation Tax Act 2010 are not breached. The results are reported to the Board at each meeting. Compliance with the accounting rules affecting investment trusts is carefully and regularly monitored. The Company Secretary and the Company’s professional advisers provide regular reports to the Board in respect of compliance with all applicable rules and regulations. Following authorisation under the Alternative Investment Fund Managers’ Directive (AIFMD), the Company and its appointed Alternative Investment Fund Manager (AIFM) are subject to the risks that the requirements of this Directive are not correctly complied with. The Board and the AIFM also monitor changes in government policy and legislation which may have an impact on the Company. The Market Abuse Regulation came into force across the EU on 3 July 2016. The Board has taken steps to ensure that individual Directors (and their Persons Closely Associated) are aware of their obligations under the regulation and has updated internal processes, where necessary, to ensure the risk of non-compliance is effectively mitigated.
Operational In common with most other investment trust companies, the Company has no employees. The Company therefore relies on the services provided by third parties. Accordingly, it is dependent on the control systems of the Manager and The Bank of New York Mellon (International) Limited (the Depositary and Fund Accountant) who maintain the Company’s assets, dealing procedures and accounting records. The security of the Company’s assets, dealing procedures, accounting records and adherence to regulatory and legal requirements depend on the effective operation of the systems of these other third party service providers. There is a  risk that a major disaster, such as floods, fire, a global pandemic or terrorist activity, renders the Company’s service providers unable to conduct business at normal operating capacity and effectiveness Failure by any service provider to carry out its obligations to the Company could have a material adverse effect on the Company’s performance. Disruption to the accounting, payment systems or custody records could prevent the accurate reporting and monitoring of the Company’s financial position.	Due diligence is undertaken before contracts are entered into with third party service providers. Thereafter, the performance of the provider is subject to regular review and reported to the Board. Most third party service providers produce Service Organisation Control (SOC 1) reports to provide assurance regarding the effective operation of internal controls as reported on by their reporting accountants. These reports are provided to the Audit Committee for their review. The Company’s assets are subject to a strict liability regime and in the event of a loss of financial assets held in custody, the Depositary must return assets of an identical type or the corresponding amount, unless able to demonstrate the loss was a result of an event beyond its reasonable control. The Board reviews the overall performance of the Manager, Investment Manager and all other third party service providers and compliance with the Investment Management Agreement on a regular basis. The Board also considers the business continuity arrangements of the Company’s key service providers on an ongoing basis and reviews these as part of their review of the Company’s risk register.  In respect of the unprecedented and emerging risks posed by the COVID-19 pandemic in terms of the ability of service providers to function effectively, the Board have received reports from key service providers (the Manager, the Depositary, the Custodian, the Fund administrator, the Broker, the Registrar and the printers) setting out the measures that they have put in place to address the crisis in addition to their existing business continuity framework.  Having considered these arrangements and reviewed the level of service in recent weeks as the crisis has evolved, the Board are confident that a good level of service will be maintained.
Market Market risk arises from volatility in the prices of the Company’s investments. It represents the potential loss the Company might suffer through holding investments in the face of negative market movements. There may be exposure to significant economic, political and currency risks due to the location of the operation of the businesses in which the Company may invest, or as a result of a global economic crisis such as the COVID-19 pandemic. Shares in businesses in which the Company invests can prove volatile and this may be reflected in the Company’s share price. The Company may also invest in smaller capitalisation companies or in the securities markets of developing countries which are not as large as the more established securities markets and have substantially less trading volume, which may result in a lack of liquidity and higher price volatility. Market risk includes the potential impact of events which are outside the scope of the Company’s control, such as the UK’s decision to leave the European Union.	The Board considers asset allocation, stock selection, unquoted investments, if any, and levels of gearing on a regular basis and has set investment restrictions and guidelines which are monitored and reported on by the Investment Manager. The Board monitors the implementation and results of the investment process with the Investment Manager. The Board also recognises the benefits of a closed end fund structure in extremely volatile markets such as those experienced in recent weeks as the COVID-19 pandemic escalates.  Unlike open ended counterparts, closed end funds are not obliged to sell down portfolio holdings at low valuations to meet liquidity requirements for redemptions.  During times of elevated volatility and market stress, the ability of a closed end fund structure to remain invested for  the long term enables the portfolio managers to adhere to disciplined fundamental analysis from a bottom-up perspective and be ready to respond to dislocations in the market as opportunities present themselves.
Financial The Company’s investment activities expose it to a variety of financial risks that include interest rate, currency and liquidity risk.	Details of these risks are disclosed in note 16 to the financial statements in the Annual Report and Financial Statements, together with a summary of the policies for managing these risks.
Marketing Marketing efforts are inadequate or do not comply with relevant regulatory requirements, and fail to communicate adequately with shareholders or reach out to potential new shareholders, resulting in reduced demand for the Company’s shares and a widening discount.	The Board focuses significant time on communicating directly with the major shareholders and reviewing marketing strategy and initiatives. All investment trust marketing documents are subject to appropriate review and authorisation.

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 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 on 29 June 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. 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 2023, being a period of three years from the date of approval of this report. The Board considers three years to be an appropriate time horizon, being the period generally used to assess potential investments.

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

• The tender mechanism put in place by the Board in 2018 provides investors with liquidity through the ability to tender up to 24.99% of the issued share capital of the Company in 2022 if certain discount and performance targets are not met. Shareholders voted in favour of continuation at the May 2018 AGM shortly after this mechanism was put in place (March 2018), which the Board believes was a clear indication that shareholders were supportive of the continuation of the Company in return for the liquidity provided by the tender mechanism. The Board has had no indication that shareholder views have changed in this regard;
• the Board and the Company’s broker are confident, based on their knowledge of the shareholders of the Company and their long term relationships with all of the core shareholders of the Company and discussions them, that the continuation vote at the AGM in June 2020 will be passed by a significant majority of shareholders;
• the Company has a relatively liquid portfolio (as at 31 December 2019, 100% of the portfolio was estimated as being capable of being liquidated within 14 days, with 95% capable of being liquidated within 3 days);
• the Board has reviewed portfolio liquidity as at 2 April 2020 in light of the impact of the COVID-19 pandemic on global market liquidity.  As at 2 April 2020, 100% of the portfolio was estimated as being capable of being liquidated within 14 days, with 95% capable of being liquidated within 3 days;
• the Company’s expenses and liabilities are relatively stable and represent a very small percentage of net assets (1.13% for the year ended 31 December 2019, and estimated at 1.24% on an ongoing basis based on recent market falls as at 2 April 2020 as set out in note 16 below);
• the Board have reviewed the Company’s revenue and expense forecasts in light of the COVID-19 pandemic and its anticipated impact on dividend income and market valuations.  In particular, these forecasts have been modelled taking into account the market falls in the Company’s portfolio between the year end and 2 April 2020 in excess of 51% as disclosed in note 16 below. The Board are comfortable that the Company’s business model remains viable and that the Company has sufficient resources to meet all liabilities as they fall due for the period under review;
• 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;
• to the extent that the tender offer proceeds in 2022 and is fully subscribed, the Company would remain a viable size and would retain a liquid portfolio with ongoing expenses and liabilities still representing a very small percentage of net assets;
• the Company has a $40 million bank overdraft facility in place to meet liquidity requirements, subject to a maximum restriction of 30% of net asset value.  As at 2 April, this facility had an unutilised margin of US$30 million for the Company to draw on for liquidity purposes;
• the Board keep the Company’s principal risks and uncertainties as set out above under review, and are confident that the Company has appropriate controls and processes in place to manage these and to maintain its operating model, even given the global economic challenges posed by COVID-19;
• 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 (in particular the Company’s closed end structure which provides intraday liquidity to investors and the ability for the portfolio managers to invest over a longer term time horizon than many open-ended peers);
• the operational resilience of the Company and its key service providers (the Manager, Depositary, Custodian, Fund administrator, Registrar and Broker); and
• the level of demand for the Company’s shares.

The Company will undertake its biennial continuation vote at the forthcoming Annual General Meeting and the Board has reviewed the potential impact that this may have on the Company’s viability. The Board is confident that the continuation vote will be passed and have prepared the viability statement under this assumption.

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

• the operational robustness of key service providers and their ability to continue to provide a good level of service for the foreseeable future;
• the effectiveness of business continuity plans in place for the Company and key service providers in particular in respect of COVID-19;
• 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 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 in 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 2019, all of whom held office throughout the year, are set out in the governance structure and Directors’ biographies in the Annual Report and Financial Statements.

As at the date of this report, the Board consists of two men and three women.

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

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

The Strategic Report was approved by the Board at its meeting on 7 April 2020.

BY ORDER OF THE BOARD
SARAH BEYNSBERGER
For and on behalf of
BlackRock Investment Management (UK) Limited
Company Secretary
7 April 2020

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 within the Annual Report and Financial Statements.

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 2019 amounted to US$2,194,000 (2018: US$2,091,000), as disclosed in note 4 to the Financial Statements below. At the year end, an amount of US$1,161,000 was outstanding in respect of these fees (2018: US$520,000).

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 2019 amounted to US$117,000 excluding VAT (2018: US$112,000). Marketing fees of US$117,000 (2018: US$114,000) were outstanding at 31 December 2019.

As at 31 December 2019, an amount of US$250,000 (2018: US$56,000) was payable to the Manager in respect of directors' fees.

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 and Financial Statements. At 31 December 2019, an amount of US$nil (2018: US$nil) 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 2019, the Chairman received an annual fee of £47,000, the

Chairman of the Audit Committee received an annual fee of £36,000, the Chairman of the Remuneration Committee and Senior Independent Director received an annual fee of £34,000 and each other Director received an annual fee of £32,000. 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 2020, the Chairman will receive an annual fee of £47,800, the Chairman of the Audit Committee will receive an annual fee of £36,700, the Senior Independent Director will receive an annual fee of £34,600 and each other Director will receive an annual fee of £32,600.

All current members of the Board, with the exception of Laurie Meister, 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 and Craig Cleland holds 5,000 ordinary shares.

INVESTMENT MANAGER’S REPORT

MARKET OVERVIEW
Latin American performance was relatively volatile throughout 2019 as sentiment shifted across the region, swayed by reform news in Brazil, inflation and election concerns in Argentina, changing policy expectations in Mexico and social unrest in Chile. The region (as represented by the MSCI EM Latin America Index (Net Return)) ended the year up 17.5%¹, slightly underperforming the broader MSCI Emerging Market Index, which was up 18.4%¹. Over the year ended 31 December 2019 the Company’s net asset value per share (NAV) rose by 18.2%^{1, 2} and the share price rose by 22.0%^{1, 2}.

Coming into the year, Brazilian momentum remained positive, as signs of an economic rebound persisted, and the market priced in a quick resolution to social security reform. However, lacklustre economic activity and delays on the reform front resulted in a sharp correction early in the year. The market rebounded in the second quarter as reforms got back on track and a dovish central bank indicated the potential for further easing. The market performed well in the fourth quarter of 2019 following better than expected GDP growth, congressional approval of the much-awaited pension bill, and the central bank undertaking a project of foreign currency reform. Brazil ended the year up +26.3%¹. Mexico ended the year +11.4%¹ as the market was impacted by foreign currency depreciation early in the year and remained tempered amid concerns over Andres Manuel López Obrador’s administration’s policy focuses, particularly over the government’s ability to balance expected infrastructure spending with surplus targets. Central bank rate cuts have been supportive, but declining GDP, and the lowest PMI (Purchasing Managers’ Index) since the 2016 U.S. elections have largely offset any impact. Colombia (+30.8%¹) was the region’s top performing country in 2019 due in part to healthy domestic demand, anchored inflation and oil price strength into the year-end.

On the other hand, despite a strong first half of 2019, supported by the country’s reclassification to ‘Emerging Market’ and subsequent inclusion in the MSCI Emerging Market Index, Argentina sold off dramatically in August after incumbent president Mauricio Macri lost the primary elections by a surprisingly large margin, concerns over a potential sovereign default down the line and increased capital controls. The market lost roughly half its market capitalisation (-50.4%¹) over the month, while the Argentine Peso corrected -26.3%. MSCI’s decision to keep the country’s ‘Emerging Market’ classification helped boost market performance in the fourth quarter of 2019, but the market still ended the year down -20.8%¹ and was the region’s biggest loser. Chile (-16.9%¹) also ended 2019 in negative territory, plagued by weak sentiment surrounding tax reform earlier in the year. Persistent social unrest and increasingly violent demonstrations was the primary source for further declines and has put pressure on the government to release a social package and reshuffle its cabinet, while the Banco Central de Chile announced a foreign exchange intervention program to support the currency.

PORTFOLIO REVIEW
The Company posted a 18.2%^1,2 gain in its US Dollar NAV for the year ended 31 December 2019 which outperformed the 17.5%¹ return on the MSCI EM Latin America Index on a net return basis over the year.

At the individual country level, our underweight positioning to Chile was the dominant driver to relative returns over the year. Despite a positive start to the year supported by commodity prices, demonstrations and social unrest escalated through year-end putting pressure on both the currency and domestic equity markets. A position in miner, Antofagasta, was within our broader allocation decision, as the pure copper play benefitted from strong production, low global inventory levels and recovering consumption. The Company’s levered position (average 109.2% gearing) contributed positively as we were able to express conviction across Brazil. Home builder, Cyrela Brazil Realty, was the year’s best performer on the back of operational momentum and increased lending support for home buyers. Rail operator, Rumo Logística Operadora Multimodal, was another top contributor benefiting from concession renewals and shifting expectations on grain exports, following heightened U.S.-China trade tensions and the impact of African Swine Flu on global supply chains. Healthcare names such as Qualicorp and Notre Dame Intermedica Participações, have also performed well. The latter, which has delivered better than expected growth via M&A activity and maintains an edge over competition, has seen strong price momentum following a successful rights offering in December. Outside of Brazil, Mexican airport operator, Grupo Aeroportuario del Pacifico, was another strong performer following a larger than expected tariff increase in the fourth quarter, and a more pragmatic and business friendly stance from regulators.

On the other hand, our Argentine overweight exposure into the summer was the primary detractor to relative performance. The portfolio management team’s view that President Macri’s conservative government would see a second term was not realised, as populist candidate Alberto Fernandez took a commanding lead in the August elections, shaking market confidence, prompting a sell-off of almost 50%. Overweights to Banco Macro, utility company Pampa Energía, and energy firm YPF were among the largest detractors alongside a collapse in the equity and foreign currency markets. Detractors in Brazil, were primarily driven by stock specific selections. An off-benchmark position in telecom, Oi SA, weighed on performance as industry reforms stalled. Further a lack of positioning in retailer, Magazine Luiza, detracted as the company maintained strong top-line growth and sequential acceleration. Similarly, a lack of positioning in food producer, JBS, hurt relative returns as the company benefitted from the severity in African Swine Fever which impacted hog supply globally. Better than expected earnings results and continued deleveraging were both supportive of positive price momentum over the year.

PORTFOLIO POSITIONING
The Company continues to evolve the portfolio with enhancements in strategy made at the beginning of the year as our primary guideposts. Such enhancements include a reduction in the number of positions in the portfolio, which allows the portfolio to concentrate positions in high conviction ideas, as well as taking a more tactical approach to the use of gearing. The combination of these enhancements is designed to make individual stock selection a prominent determinant of portfolio performance.

During the year ended 31 December 2019, we reduced leverage in the portfolio, notably reducing exposure to Brazil, though it remains the Company’s largest overweight exposure. During the year, we trimmed our position in Vale following the collapse of a tailings dam at one of their mines in Brumadinho, and further reduced the position in the second half of the year as strong iron ore prices attracted additional supply midway through the year. Similarly, we exited a position in long steel producer Gerdau, amid increased pricing pressure from domestic competitors.

Elsewhere, we rotated exposure from financials into more defensive staples and healthcare names. We specifically initiated a position in AmBev following a strong second quarter of 2019, citing the company’s ability to benefit from the diversification and innovation of its portfolio, despite a tough macro environment. In the healthcare sector, we initiated positions in service-oriented names, Notre Dame Intermedica Participações and Qualicorp. Although our overweight market exposure to Mexico persisted, we rotated exposure within the country over the year, notably reducing market exposure to financials, while adding to real estate and industrial names. Within the smaller markets, we started a position in Southern Copper. The stock is expected to benefit from supply disruptions, due to labour unrest in Chile. We also increased exposure to Colombia, through a purchase of Ecopetrol following the mid-year sell-off in oil.

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

The four “C”s of Latin America portfolio construction

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.
• No exposure to Mexican mining companies due to regulatory concerns.

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.
• Pressure expected on currencies in Chile and Peru.

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.
• The portfolio reflects a structural shift to e-commerce at the expense of department stores and shopping malls.

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.
• Emphasis on financial inclusion and improving credit penetration offset policy fears in Mexico.

OUTLOOK
While the political landscape in the Latin American region continues to present both opportunities and challenges in equity markets, at the start of 2020 we were encouraged as the external environment appeared to support asset prices due to reduction in trade tensions between the U.S. and China and global coordination to maintain low interest rates, supporting economic expansion.

However as we move through the first quarter of 2020, the COVID-19 pandemic has created unprecedented market uncertainty and it is inevitable that the crisis will significantly impact the global economy. At the time of writing (6 April 2020), the MSCI Latin America index is down -45.6% year to date. Global equity markets sold-off aggressively on the back of increasing concerns over the impact of COVID-19 and a significant drop in oil prices. Metals commodities have been hit hard, which we think means that the market is already pricing significantly lower global growth over the next quarters. Our base case is that COVID-19 will be less of a driver of volatility in the markets within the next six months and that China and large western economies will launch significant stimulus to reverse the negative economic impact of the crisis. During times of elevated volatility and market stress, we find it important to focus on the long term investment horizon, adhere to disciplined fundamental analysis from a bottom-up perspective and be ready to respond to dislocations in the market as opportunities present themselves.

It is also important to reflect on the scale and speed of the current market downturn relative to prior market falls. The amount of indiscriminate selling of securities at any price is the sign of a true market panic. In our opinion, the volatility seen in markets as a result of current biosecurity fears have inevitably created dislocations in market valuations that are not consistent with long term fundamentals of the stocks we invest in. For example, the current value of Brazilian equites in US Dollar terms, as measured by the local stock index, is of a similar value today as it was in 2005, which in our opinion represents a tremendous opportunity given the economic advances that the country has gone through in the last fifteen years. In our view, when other market participants are fearful, is precisely the time when long term investors will benefit from being brave.

Our constructive long term thesis for Brazilian equities remains and is based on three pillars:

i)    a gradual local economic recovery;
ii)   low interest rates; and
iii)  structural reforms.

On the economic recovery, our expectations have been readjusted downwards amid signs of cooling economic activity in the first quarter of 2020 and the global economic slowdown. Low interest rates could be a silver lining, as the Brazilian Central Bank has signalled that it may take steps to mitigate the effects of the COVID-19 pandemic on the domestic economy. On the structural reforms, we look for progress in administrative and tax reforms, yet growing tensions between the executive and legislative branches have raised concerns about the likelihood of a positive short-term outcome. However, if the reform agenda gets back onto centre stage, Brazil could outperform its emerging market peers.

We expect the Colombian index performance to continue fluctuating in tandem with oil prices over the medium term. However, compared with the oil shock in the second half of 2014, Colombian stocks have been trading at lower valuations before the correction started (14x trailing P/E vs. 17x by mid-2014) which, in our view, may mitigate the extent of the downside from current levels. At the same time, Colombian companies are entering this period with increased debt levels (2.5x net debt / trailing EBITDA vs. 2.0x by mid-2014) which may prove problematic if a downturn scenario persists for extended period. From a top-down standpoint, the Colombian government is less dependent on oil, but has limited room to manoeuvre. Oil represents ~8.5% of Colombian government revenue (1.4% of GDP in 2019), down from almost 20% in 2013. This transition has come at the cost of increased debt levels (51.6% debt/GDP in 2019 vs. 37.1% in 2013), which in our view limits the government’s ability to implement countercyclical policies if the oil shock persists.

In Mexico, falling oil prices have tightened the government’s fiscal rope even further, making it hard for it not to contemplate a higher deficit in 2020. Pemex (the Mexican state-owned petroleum company) losses could be offset with government savings, but given the expected weakness in the economy, it’s increasingly likely the government will have to increase the deficit through spending. The government has said it will revisit fiscal policy in April, to decide whether or not to cut fiscal spending. Despite the impact from lower oil prices on the economy, we believe Mexico could be viewed as a defensive market in the current environment given that the companies listed in Mexico have low level of financial leverage and the market was already trading at relatively inexpensive valuations heading into the current volatility which can limit the downside as external conditions remain challenging.

The volatility in equity markets is creating real opportunities for investors with a long term investment horizon. At the time of this writing, we are not ready to buy widely yet, but we note that the current volatility is offering opportunities in places where business models are perceived to be ultra-resilient in the current environment in Latin America such as e-commerce, real estate, healthcare and education names, which we believe are well suited to withstand current bouts of market turbulence given robust and dynamic business models, balance sheets and management teams. We have taken an active approach to managing the portfolio by proactively positioning the Company to reduce exposure to companies with high financial leverage, while at the same time, promoting stocks which we perceive to have a high degree of visibility in respect of earnings and free cash flow generation. In addition we have reduced portfolio beta and portfolio gearing to have dry powder to redeploy funds as opportunities present themselves. We still believe that markets have not yet fully grasped the full extent of the economic impact of the demand shock. We expect volatility to remain elevated and look forward to taking advantage of dislocations in valuations relative to underlying fundamentals.

SAM VECHT & ED KUCZMA
BLACKROCK INVESTMENT MANAGEMENT LIMITED
7 April 2020

¹     All calculations in US Dollars with dividends reinvested.
²     Alternative Performance Measures, see Glossary in the Annual Report and Financial Statements.

TEN LARGEST INVESTMENTS

1  2018 3rd
Petrobrás
Integrated oil company
Market Value – ADR                           $15,624,000
Market Value – Preference shares   $11,621,000
Share of portfolio                                 9.1%

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.

2 2018 2nd
Itaú Unibanco
Bank
Market Value – ADR                            $22,381,000
Share of portfolio                                 7.5%

Brazil’s largest private sector bank and the largest Latin American bank by assets and market capitalization, born through the merger of Banco Itau and Unibanco in 2009. The company’s presence spans across the Americas, Europe and Asia, offering a blend of retail, private banking, and investment and corporate banking services.

3 2018 1st
Banco Bradesco
Bank
Market Value – ADR                           $17,258,000
Share of portfolio                                 5.7%

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.

4 2018 4th
Vale
Diversified mining company
Market Value – ADS                            $14,105,000
Share of portfolio                                 4.7%

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.

5 2018 5th
América Movil
Telecommunications company
Market Value – ADR                           $13,432,000
Share of portfolio                                 4.5%

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 touts the largest wireless subscriber base in the world outside of China and India.

6  2018 12th
Banco do Brasil
Bank
Market Value – Ordinary Shares       $13,104,000
Share of portfolio                                 4.4%

State-owned lender that is the country’s oldest financial institution and largest bank by assets.

7 2018 6th
FEMSA
Retail group
Market Value – ADR                           $9,996,000
Share of portfolio                                 3.3%

The Mexican holding company that provides an investment vehicle to Mexico’s domestic retail market via its controlling interest in Coca-Cola’s largest independent bottler, Coca-Cola Femsa and Mexico’s fastest growing retailing chain, Oxxo, which has over 16,500 convenience stores throughout Mexico and Colombia. The company also has a 15% stake in global brewer Heineken.

8  2018 10th
Walmart de Mexico y Centroamerica
Retailer
Market Value – Ordinary Shares       $9,672,000
Share of portfolio                                 3.2%

The Mexican and Central American division of Wal-Mart Stores Inc, with operations in Mexico, Guatemala, El Salvador, Honduras, Nicaragua, and Costa Rica. The company operates 8 brands in the region, covering the discount, winery, supermarket, and supercenter segments.

9 2018 8th
Grupo Financiero Banorte
Bank
Market Value – Ordinary Shares       $8,420,000
Share of portfolio                                 2.8%

Mexico’s second largest financial group, with the business diversification in the market. It operates as a universal bank, providing in addition, a wide array of products and services through its broker dealer, annuities & insurance companies, mutual funds, leasing & factoring company and warehousing. The financial group’s retirement savings fund company Afore XXI Banorte, is the largest in the country in AUM.

10 2018 n/a
Ternium
Steel manufacturer
Market Value – ADR                           $7,724,000
Share of portfolio                                 2.6%

A leading steel company in Latin America, with a high integrated process to manufacture flat and long steel products. The company maintains production centres in Argentina, Brazil, Mexico, Colombia, the southern United States, and Central America.

All percentages reflect the value of the holding as a percentage of total investments. Together, the ten largest investments represent 47.8% of the total investments (ten largest investments as at 31 December 2018: 56.2%).

PORTFOLIO AS AT 31 DECEMBER 2019

	Market  value  US$’000		% of  investments
Brazil
Petrobrás – ADR	15,624	} }	9.1
Petrobrás – preference shares – ADR	11,621
Itaú Unibanco – ADR	22,381		7.5
Banco Bradesco – ADR	17,258		5.7
Vale – ADS	14,105		4.7
Banco do Brasil	13,104		4.4
B2W CIA Digital	7,643		2.5
AmBev – ADR	7,576		2.5
Cia Brasileira De Distribuição	7,469		2.5
Energisa – units	6,652		2.2
Cyrela Brazil Realty	6,013		2.0
Gol Linhas Aéreas	6,000		2.0
B3	5,965		2.0
Rumo Logística Operadora Multimodal	5,736		1.9
Suzano Papel e Celulose	5,465		1.8
Companhia de Locacao	5,197		1.7
Lojas Americanas – preference shares	5,054	}	1.7
Lojas Americanas – rights	4
Light	4,920		1.6
Fleury	4,840		1.6
SulAmérica – units	4,702		1.6
Notre Dame Intermedica Participações	4,272		1.4
Arco Platform	3,742		1.3
Via Varejo	3,673		1.2
Linx	3,655		1.2
Petrobas Distribuidora	3,584		1.2
Azul – ADR	3,528		1.2
Iochpe–Maxion	2,597		0.9
Klabin 7.25% 15/06/20 convertible bond	236	}	0.1
Klabin 2.5% 15/06/22 bond	109
Klabin warrants 15/06/20	–
Neoenergia	30		–
	----------------		----------------
	202,755		67.5
	----------------		----------------
Mexico
América Movil – ADR	13,432		4.5
FEMSA – ADR	9,996		3.3
Walmart de México y Centroamérica	9,672		3.2
Grupo Financiero Banorte	8,420		2.8
Cemex SAB – ADR	7,230		2.4
Grupo Aeroportuario del Pacifico – ADS	5,092	} }	2.2
Grupo Aeroportuario del Pacifico	1,449
Fibra Uno Administracion – REIT	6,255		2.1
Arca Continental	3,408		1.1
Corporación Inmobiliaria Vesta	3,088		1.0
Grupo Cementos de Chihuahua	928		0.3
	----------------		----------------
	68,970		22.9
	----------------		----------------
Argentina
Ternium – ADR	7,724		2.6
YPF – ADR	4,672		1.6
Banco Macro – ADR	1		–
	----------------		----------------
	12,397		4.2
	----------------		----------------
Colombia
Ecopetrol – ADR	5,359		1.8
Bancolombia – ADR	4,550		1.5
	----------------		----------------
	9,909		3.3
	----------------		----------------
Peru
Southern Copper	4,051		1.3
	----------------		----------------
	4,051		1.3
	----------------		----------------
Chile
Empresas CMPC	2,489		0.8
	----------------		----------------
	2,489		0.8
	----------------		----------------
Total Investments	300,571		100.0
	==========		==========

All investments are in equity shares unless otherwise stated.

The total number of investments held at 31 December 2019 was 49 (31 December 2018: 56). At 31 December 2019, the Company did not hold any equity interests comprising more than 3% of any company’s share capital (31 December 2018: nil).

GEOGRAPHICAL WEIGHTING (GROSS MARKET EXPOSURE) VS MSCI EM LATIN AMERICA INDEX

	% of net assets	MSCI EM Latin America Index
Brazil	70.5	65.7
Mexico	24.0	20.1
Argentina	4.3	1.4
Colombia	3.5	3.2
Peru	1.4	3.0
Chile	0.9	6.5

Sources: BlackRock and MSCI.

SECTOR AND GEOGRAPHICAL ALLOCATIONS

	Brazil  %	Mexico  %	Argentina  %	Colombia  %	Peru  %	Chile  %	Net other  liabilities  %	2019  Total  %	2018  Total  %
Communication Services	–	4.7	–	–	–	–	–	4.7	6.6
Consumer Discretionary	10.3	–	–	–	–	–	–	10.3	12.1
Consumer Staples	5.2	8.0	–	–	–	–	–	13.2	10.0
Energy	9.5	–	1.6	1.9	–	–	–	13.0	9.7
Financials	22.1	2.9	–	1.6	–	–	–	26.6	35.9
Health Care	3.2	–	–	–	–	–	–	3.2	0.8
Industrials	8.0	2.3	–	–	–	–	–	10.3	9.4
Information Technology	1.3	–	–	–	–	–	–	1.3	2.4
Materials	6.8	2.8	2.7	–	1.4	0.9	–	14.6	18.7
Real Estate	–	3.3	–	–	–	–	–	3.3	0.1
Utilities	4.0	–	–	–	–	–	–	4.0	3.2
Fixed Income	0.1	–	–	–	–	–	–	0.1	0.1
Net other liabilities	–	–	–	–	–	–	(4.6)	(4.6)	(9.0)
	----------------	----------------	----------------	----------------	----------------	----------------	----------------	----------------	----------------
2019 total	70.5	24.0	4.3	3.5	1.4	0.9	(4.6)	100.0	–
	==========	==========	==========	==========	==========	==========	==========	==========	==========
2018 total	79.7	23.4	0.9	1.5	–	3.5	(9.0)	–	100.0
	==========	==========	==========	==========	==========	==========	==========	==========	==========

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 and Financial Statements, 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 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 2019, 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 BOARD
CAROLAN DOBSON
Chairman
7 April 2020

INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2019

	Notes	Revenue  2019  US$’000	Revenue  2018  US$’000	Capital  2019  US$’000	Capital  2018  US$’000	Total  2019  US$’000	Total  2018  US$’000
Gains/(losses) on investments held at fair value through profit or loss	8	–	–	40,807	(18,800)	40,807	(18,800)
(Losses)/gains on foreign exchange		–	–	(128)	103	(128)	103
Income from investments held at fair value through profit or loss	3	9,231	8,017	–	–	9,231	8,017
Other income	3	2	1	–	–	2	1
		----------------	----------------	----------------	----------------	----------------	----------------
Total income/(losses)		9,233	8,018	40,679	(18,697)	49,912	(10,679)
		----------------	----------------	----------------	----------------	----------------	----------------
Expenses
Investment management fees	4	(548)	(523)	(1,646)	(1,568)	(2,194)	(2,091)
Other operating expenses	5	(839)	(688)	(48)	(56)	(887)	(744)
		----------------	----------------	----------------	----------------	----------------	----------------
Total operating expenses		(1,387)	(1,211)	(1,694)	(1,624)	(3,081)	(2,835)
		----------------	----------------	----------------	----------------	----------------	----------------
Net profit/(loss) on ordinary activities before finance costs and taxation		7,846	6,807	38,985	(20,321)	46,831	(13,514)
Finance costs		(198)	(167)	(595)	(503)	(793)	(670)
		----------------	----------------	----------------	----------------	----------------	----------------
Net profit/(loss) on ordinary activities before taxation		7,648	6,640	38,390	(20,824)	46,038	(14,184)
Taxation		(542)	(693)	–	–	(542)	(693)
		----------------	----------------	----------------	----------------	----------------	----------------
Net profit/(loss) on ordinary activities after taxation		7,106	5,947	38,390	(20,824)	45,496	(14,877)
		----------------	----------------	----------------	----------------	----------------	----------------
Earnings/(loss) per ordinary share (US$ cents)	7	18.10	15.13	97.78	(52.98)	115.88	(37.85)
		==========	==========	==========	==========	==========	==========

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 2019

	Notes	Called  up share  capital  US$’000	Share  premium  account  US$’000	Capital  redemption  reserve  US$’000	Non-  distributable  reserve  US$’000	Capital  reserves  US$’000	Revenue  reserve  US$’000	Total  US$’000
For the year ended 31 December 2019
At 31 December 2018		4,144	11,719	4,843	4,356	217,063	13,120	255,245
Total comprehensive income:
Net profit for the year		–	–	–	–	38,390	7,106	45,496
Transactions with owners, recorded directly to equity:
Dividends paid1	6	–	–	–	–	–	(13,297)	(13,297)
		----------------	----------------	----------------	----------------	----------------	----------------	----------------
At 31 December 2019		4,144	11,719	4,843	4,356	255,453	6,929	287,444
		==========	==========	==========	==========	==========	==========	==========
For the year ended 31 December 2018
At 31 December 2017		4,144	11,719	4,843	4,356	240,131	14,397	279,590
Total comprehensive (loss)/income:
Net (loss)/profit for the year		–	–	–	–	(20,824)	5,947	(14,877)
Transactions with owners, recorded directly to equity:
Ordinary shares purchased into treasury		–	–	–	–	(654)	–	(654)
Share purchase costs		–	–	–	–	(5)	–	(5)
Dividends paid2	6	–	–	–	–	(1,585)	(7,224)	(8,809)
		----------------	----------------	----------------	----------------	----------------	----------------	----------------
At 31 December 2018		4,144	11,719	4,843	4,356	217,063	13,120	255,245
		==========	==========	==========	==========	==========	==========	==========

¹     Quarterly dividend of 8.13 cents per share for the year ended 31 December 2018, declared on 2 January 2019 and paid on 8 February 2019; quarterly dividend of 8.56 cents per share for the year ended 31 December 2019, declared on 1 April 2019 and paid on 17 May 2019; quarterly dividend of 9.15 cents per share for the year ended 31 December 2019, declared on 1 July 2019 and paid on 16 August 2019; quarterly dividend of 8.03 cents, declared on 1 October 2019 and paid on 8 November 2019.

²      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.

BALANCE SHEET AS AT 31 DECEMBER 2019

	Notes	2019  US$’000	2018  US$’000
Fixed assets
Investments held at fair value through profit or loss	8	300,571	278,124
		----------------	----------------
Current assets
Debtors		7,175	3,680
Cash and cash equivalents		305	137
		----------------	----------------
		7,480	3,817
		----------------	----------------
Creditors – amounts falling due within one year
Bank overdraft		(18,610)	(25,593)
Other creditors		(1,735)	(841)
		----------------	----------------
		(20,345)	(26,434)
		----------------	----------------
Net current liabilities		(12,865)	(22,617)
		----------------	----------------
Total assets less current liabilities		287,706	255,507
		----------------	----------------
Creditors – amounts falling due after more than one year
Non current tax liability		(238)	(238)
Non-equity redeemable shares		(24)	(24)
		----------------	----------------
		(262)	(262)
		----------------	----------------
Net assets		287,444	255,245
		==========	==========
Capital and reserves
Called up share capital	9	4,144	4,144
Share premium account	10	11,719	11,719
Capital redemption reserve	10	4,843	4,843
Non-distributable reserve	10	4,356	4,356
Capital reserves	10	255,453	217,063
Revenue reserve	10	6,929	13,120
		----------------	----------------
Total shareholders’ funds		287,444	255,245
		==========	==========
Net asset value per ordinary share (US$ cents)	7	732.15	650.15
		==========	==========

STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2019

	2019  US$’000	2018  US$’000
Operating activities
Net profit/(loss) before taxation	46,038	(14,184)
Add back finance costs	793	670
(Gains)/losses on investments held at fair value through profit or loss	(40,807)	18,800
Losses/(gains) on foreign exchange	128	(103)
Sales of investments held at fair value through profit or loss	256,355	129,248
Purchases of investments held at fair value through profit or loss	(241,533)	(124,526)
Decrease/(increase) in other debtors	43	(151)
Increase/(decrease) in other creditors	894	(800)
Taxation on investment income	(542)	(693)
	----------------	----------------
Net cash generated from operating activities	21,369	8,261
	----------------	----------------
Financing activities
Interest paid	(793)	(670)
Share purchase costs paid	–	(5)
Ordinary shares purchased into treasury	–	(654)
Dividends paid	(13,297)	(8,809)
	----------------	----------------
Net cash used in financing activities	(14,090)	(10,138)
	----------------	----------------
Increase/(decrease) in cash and cash equivalents	7,279	(1,877)
Cash and cash equivalents at the start of the year	(25,456)	(23,682)
Effect of foreign exchange rate changes	(128)	103
	----------------	----------------
Cash and cash equivalents at end of the year	(18,305)	(25,456)
	----------------	----------------
Comprised of:
Cash at bank	305	137
Bank overdraft	(18,610)	(25,593)
	----------------	----------------
	(18,305)	(25,456)
	==========	==========

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019

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 November 2014 and updated in October 2019, and the provisions of the Companies Act 2006.

The revised SORP issued in October 2019 is applicable for accounting periods beginning on or after 1 January 2019. As a result, the gain arising from disposals of investments of US$27,781,000 (gain in 2018 of US$3,404,000) and gain on revaluation of investments of US$13,026,000 (loss in 2018 of US$22,204,000) have now been combined, as shown in note 8 to the financial statements. The result of this change has no impact on the net asset value or total return for both the current year and prior year. No other accounting policies or disclosures have changed as a result of the revised SORP.

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 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 preparation of the Company’s financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts in the financial statements. These assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in the current and future periods, depending on circumstance. 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.

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 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 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.

(e) Expenses
All 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 8 on below;
• 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) 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 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) Debtors
Debtors 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) Creditors
Creditors 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 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 column 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.

3. INCOME

	2019  US$’000	2018  US$’000
Investment income:
Overseas dividends	7,446	6,640
Overseas REIT distributions	278	154
Overseas special dividends	1,270	787
UK dividends	197	220
Fixed interest income	40	216
	----------------	----------------
	9,231	8,017
	----------------	----------------
Other income:
Deposit interest	2	1
	----------------	----------------
Total	9,233	8,018
	==========	==========

Dividends and interest received in cash during the period amounted to US$9,442,000 and US$49,000 (2018: US$7,827,000 and US$209,000).

Special dividends of US$nil have been recognised in capital in 2019 (2018: US$234,000).

4. INVESTMENT MANAGEMENT FEES

	2019			2018
	Revenue  US$’000	Capital  US$’000	Total  US$’000	Revenue  US$’000	Capital  US$’000	Total  US$’000
Investment management fees	548	1,646	2,194	523	1,568	2,091

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

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

5. OTHER OPERATING EXPENSES

	2019  US$’000	2018  US$’000
Allocated to revenue:
Custody fee	61	59
Depositary fees1	26	31
Auditors’ remuneration	40	40
Registrar’s fees	36	34
Directors’ emoluments2	271	254
Marketing fees	117	112
Postage and printing fees	47	34
AIC fees	22	20
Broker fees	59	65
Employer NI contributions	32	21
FCA fee	11	11
Director search fees	29	–
Other administration costs	88	7
	----------------	----------------
	839	688
	----------------	----------------
Allocated to capital:
Custody transaction charges	48	56
	----------------	----------------
	887	744
	----------------	----------------
The Company’s ongoing charges3, calculated as a percentage of average net assets and using recurring expenses, excluding finance costs, direct transaction costs, custody transaction charges and taxation were:	1.13%	1.03%
	==========	==========

¹      All expenses other than depositary fees are paid in sterling and are therefore subject to exchange rate fluctuations.
²      Further information on Directors’ emoluments can be found in the Directors’ Remuneration Report in the Annual Report and Financial Statements.
³     Alternative Performance Measure, see Glossary in the Annual Report and Financial Statements.

Expenses of US$48,000 (2018: US$56,000) charged to the capital column of the Income Statement relate to transaction costs charged by the custodian on the purchase and sale of investments.

6. DIVIDENDS

Dividends paid on equity shares	Record date	Payment date	2019  US$’000	2018  US$’000
2017 Final dividend of 7.00 cents	27 April 2018	06 June 2018	–	2,756
Quarter to 31 December 2018 – dividend of 8.13 cents	11 January 2019	08 February 2019	3,192	–
Quarter to 31 March 2019 – dividend of 8.56 cents	12 April 2019	17 May 2019	3,361	–
Quarter to 30 June 2019 – dividend of 9.15 cents	12 July 2019	16 August 2019	3,592	2,972
Quarter to 30 September 2019 – dividend of 8.03 cents	11 October 2019	08 November 2019	3,152	3,081
			----------------	----------------
			13,297	8,809
			==========	==========

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 ending 31 December 2019, 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 2019 as issued to the market was 732.30 US cents per share, and the Directors have declared a fourth quarterly interim dividend of 9.15 cents per share. The dividend was paid on 6 February 2020 to holders of ordinary shares on the register at the close of business on 10 January 2020.

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 2019, meet the relevant requirements as set out in this legislation.

Dividends paid or proposed on equity shares:	2019  US$’000	2018  US$’000
Quarter to 31 March 2019 – 8.56 cents (2018: n/a)	3,361	–
Quarter to 30 June 2019 – 9.15 cents (2018: 7.57)	3,592	2,972
Quarter to 30 September 2019 – 8.03 cents (2018: 7.85)	3,152	3,081
Quarter to 31 December 2019 – 9.15 cents* (2018: 8.13)	3,592	3,192
	----------------	----------------
	13,697	9,245
	==========	==========

*Based upon 39,259,620 ordinary shares in issue at 10 January 2020.

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

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

	2019	2018
Net revenue profit attributable to ordinary shareholders (US$’000)	7,106	5,947
Net capital profit/(loss) attributable to ordinary shareholders (US$’000)	38,390	(20,824)
	----------------	----------------
Total profit/(loss) attributable to ordinary shareholders (US$’000)	45,496	(14,877)
	----------------	----------------
Total shareholders’ funds (US$’000)	287,444	255,245
	----------------	----------------
Earnings per share
The weighted average number of ordinary shares in issue during the year on which the earnings per ordinary share was calculated was:	39,259,620	39,302,016
	----------------	----------------
The actual number of ordinary shares in issue at the year end on which the net asset value was calculated was:	39,259,620	39,259,620
	----------------	----------------
The number of ordinary shares in issue, including treasury shares at the year end was:	41,441,282	41,441,282
	----------------	----------------
Calculated on weighted average number of ordinary shares:
Revenue profit (US$ cents)	18.10	15.13
Capital profit/(loss) (US$ cents)	97.78	(52.98)
	----------------	----------------
Total profit/(loss) (US$ cents)	115.88	(37.85)
	==========	==========

   

	As at  31 December	As at  31 December
	2019	2018
Net asset value per ordinary share (US$ cents)	732.15	650.15
	----------------	----------------
Ordinary share price (US$ cents)1	643.17	557.20
	==========	==========

There are no dilutive securities at the year end.

¹ Based on an exchange rate of $1.3248 to £1 at 31 December 2019 and $1.2736 to £1 at 31 December 2018.

8. INVESTMENTS HELD AT FAIR VALUE THROUGH PROFIT OR LOSS

	2019  US$’000	2018  US$’000
Overseas listed equity investments	300,226	277,783
Overseas unlisted fixed income investments	345	341
	----------------	----------------
Valuation of investments at 31 December	300,571	278,124
	----------------	----------------
Opening book cost of equity and fixed income investments	243,947	247,247
Investment holding gains	34,177	56,381
	----------------	----------------
Opening fair value	278,124	303,628
Analysis of transactions made during the year:
Purchases at cost	241,533	124,415
Sales proceeds received	(259,893)	(131,119)
Gains/(losses) on investments	40,807	(18,800)
	----------------	----------------
Closing fair value	300,571	278,124
Closing book cost of equity and fixed income investments	253,368	243,947
Closing investment holding gains	47,203	34,177
	----------------	----------------
Closing fair value	300,571	278,124
	==========	==========

The Company received US$259,893,000 (2018: US$131,119,000) from investments sold in the year. The book cost of these investments when they were purchased was US$232,112,000 (2018: US$127,715,000). These investments have been revalued over time and until they were sold any unrealised gains/losses were included in the fair value of investments.

The revised SORP issued in October 2019 is applicable for accounting periods beginning on or after 1 January 2019. As a result, the gain on disposals of investments of US$27,781,000 (2018: gain of US$3,404,000) and gain on revaluation of investments of US$13,026,000 (2018: loss of US$22,204,000) have now been combined in the note above. The result of this change has no impact on the net asset value or total return for both the current year and prior year. No other accounting policies or disclosures have changed as a result of the revised SORP.

Transaction costs of US$313,000 were incurred on the acquisition of investments (2018: US$161,000). Costs relating to the disposal of investments during the year amounted to US$346,000 (2018: US$141,000). All transaction costs have been included within capital reserves.

9. CALLED UP SHARE CAPITAL

	Ordinary  shares  number	Treasury  shares  number	Total shares	Nominal  value  US$’000
Allotted, called up and fully paid share capital comprised:
Ordinary shares of 10 cents each
At 31 December 2018	39,259,620	2,181,662	41,441,282	4,144
Shares purchased into treasury	–	–	–	–
	----------------	----------------	----------------	----------------
At 31 December 2019	39,259,620	2,181,662	41,441,282	4,144
	==========	==========	==========	==========

During the period to 31 December 2019, no ordinary shares were purchased and transferred to treasury (2018: 110,000 ordinary shares were repurchased during the year at a total cost of US$659,000).

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

	Share  premium  account  US$’000	Capital  redemption  reserve  US$’000	Non-  distributable  reserve  US$’000	Distributable Reserves
				Capital  reserves  arising on  investments  sold  US$’000	Capital  reserves  arising on  revaluation  of  investments  held  US$’000	Revenue  reserve  US$’000
At 31 December 2018	11,719	4,843	4,356	182,859	34,204	13,120
Movement during the year:
Total Comprehensive Income:
Net profit for the year	–	–	–	25,675	12,715	7,106
Dividends paid during the year from revenue	–	–	–	–	–	(13,297)
	----------------	----------------	----------------	----------------	----------------	----------------
At 31 December 2019	11,719	4,843	4,356	208,534	46,919	6,929
	==========	==========	==========	==========	==========	==========

The share premium account and capital redemption reserve are not distributable profits under the Companies Act 2006. In accordance with the Company’s articles, net capital reserves may be distributed by way of the repurchase by the Company of its ordinary shares and for payment as dividends. In accordance with the Company’s status as an investment company under the provisions of section 1158 of the Corporation Tax Act 2010, net capital returns may be distributed by way of dividend.

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.

Financial assets at fair value through profit or loss as at 31 December 2019	Level 1  US$’000	Level 2  US$’000	Level 3  US$’000	Total  US$’000
Equity investments	300,226	–	–	300,226
Fixed interest investments	–	345	–	345
	----------------	----------------	----------------	----------------
Total	300,226	345	–	300,571
	==========	==========	==========	==========

   

	Level 1	Level 2	Level 3	Total
Financial assets at fair value through profit or loss as at 31 December 2018	US$’000	US$’000	US$’000	US$’000
Equity investments	277,783	–	–	277,783
Fixed interest investments	–	341	–	341
	----------------	----------------	----------------	----------------
Total	277,783	341	–	278,124
	==========	==========	==========	==========

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

Level 3 Financial assets at fair value through profit or loss at 31 December 2019	2019  US$’000	2018  US$’000
Opening fair value	–	1,339
Fixed interest converted to equity and transferred to Level 1	–	(1,471)
Total gains included in gains/(losses) on investments in the Income Statement:
– assets disposed during the year	–	132
	----------------	----------------
Closing balance	–	–
	==========	==========

The Level 3 investments in the table above for 2018 relate to the Hypera Pharma 11.3% 15/10/18 convertible bond and Klabin 8% 08/01/19 convertible bond. During the year to 31 December 2018, 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 2019 (2018: nil).

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

12. CAPITAL MANAGEMENT POLICIES AND PROCEDURES
The 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 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 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 2019 was US$287,444,000 (2018: US$255,245,000) 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 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 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 2019 amounted to US$2,194,000 (2018: US$2,091,000), as disclosed in note 4 to the Financial Statements above. At the year end, an amount of US$1,161,000 was outstanding in respect of these fees (2018: US$520,000).

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 2019 amounted to US$117,000 excluding VAT (2018: US$112,000). Marketing fees of US$117,000 (2018: US$114,000) were outstanding at 31 December 2019.

As at 31 December 2019, an amount of US$250,000 (2018: US$56,000) was payable to the Manager in respect of directors' fees.

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 within the Annual Report and Financial Statements. At 31 December 2019, an amount of US$nil (2018: US$nil) was outstanding in respect of Directors’ fees.

Significant holdings
The following investors are:

a.     funds managed by the BlackRock Group or are affiliates of BlackRock Inc. (“Related BlackRock Funds”) or

b.     investors (other than those listed in (a) above) who held more than 20% of the voting shares in issue in the Company and are as a result, considered to be related parties to the Company (“Significant Investors”).

As at 31 December 2019

	Total % of shares held by Significant	Number of Significant Investors who
Total % of shares held by Related	Investors who are not affiliates of	are not affiliates of BlackRock Group or
BlackRock Funds	BlackRock Group or BlackRock, Inc.	BlackRock, Inc.
1.5	29.4	1

As at 31 December 2018

	Total % of shares held by Significant	Number of Significant Investors who
Total % of shares held by Related	Investors who are not affiliates of	are not affiliates of BlackRock Group or
BlackRock Funds	BlackRock Group or BlackRock, Inc.	BlackRock, Inc.
1.5	29.9	1

15. CONTINGENT LIABILITIES
There were no contingent liabilities at 31 December 2019 (2018: US$nil).

16. POST BALANCE SHEET EVENTS

As noted in the Chairman’s Statement and Investment Manager’s Report, since 31 December 2019, equity markets have fallen significantly due primarily to concerns around the scale of the impact of COVID-19 on the global economy.

Subsequent to the year end, the net asset value per share of the Company has decreased by 51.4% (50.7% with dividends reinvested) from 732.15 cents per share to 356.13 cents per share and the Company’s share price has decreased by 48.0% (47.3% with dividends reinvested) from 643.17 cents per share to 334.23 cents per share as at 2 April 2020. The Company’s benchmark has decreased by 47.0% from 558.16 to 295.62 on a net return basis and has decreased by 47.4% from 2,917.73 to 1,535.18 on a price only basis (all calculated on a US Dollar basis).

This is primarily attributed to market movements and currency movements including the impact on the financial markets of the increasing fears over the spread of COVID-19. The Board and the Manager continue to monitor investment performance in line with the investment objectives. The Company has determined that these events are non-adjusting subsequent events.

On 1 April 2020, the Company declared an interim dividend of 4.59 cents per share in respect of the first quarter of the financial year ended 31 December 2020.

17. 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 2019 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 2019 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 2018, 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 7 April 2020.

18. 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.

19. ANNUAL GENERAL MEETING

The Annual General Meeting of the Company will be held at 12 Throgmorton Avenue, London EC2N 2DL on Monday, 29 June 2020 at 12:00 noon.

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

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

7 April 2020

12 Throgmorton Avenue
London EC2N 2DL