Final Results

17 February 2010 BLACKROCK LATIN AMERICAN INVESTMENT TRUST PLC Annual results announcement for the year ended 31 December 2009 Chairman's Statement In the year ended 31 December 2009, Latin American markets, and Brazil in particular, performed well and were amongst the first markets to emerge from the severe deterioration in the wider global equity markets. I am pleased to report that both the Company's net asset value ("NAV") and share price have recovered well during the financial year. Latin American companies which had experienced a severe decline in valuations in late 2008 and early 2009 have rallied since last March and are currently trading at significantly higher market valuations than they were a year ago. Against this encouraging background the Company's NAV (debt at fair value) grew by 123.4% in US Dollar terms (98.9% in Sterling terms) compared to an increase in the benchmark of 104.2% (81.8% in Sterling terms). The share price increased by 151.1% in US Dollar terms (123.6% in Sterling terms). All percentages have been calculated with income reinvested. The Portfolio Manager, Will Landers and his team deserve particular recognition for their outstanding performance. This was largely due to country allocation and stock selection, particularly in Brazil, coupled with being geared in the final quarter of the year following the issue of the convertible bonds. Further details are given in the Investment Manager's Report. Since the year end, the Company's NAV has decreased by 4.0% in Sterling terms and by 6.8% in US Dollar terms. The share price has decreased by 9.7% in Sterling terms and by 12.4% in US Dollar terms. Revenue return and dividends The Company generated a total return per share for the year of 549.49 cents per share (2008: loss of 639.68 cents per share) of which 18.57 cents per share is the revenue return (2008: 15.31 cents per share). The Board declared a first interim dividend of 2.50 cents per share which was paid on 25 September 2009 (2008: 2.50 cents per share). The Board is pleased to declare a second interim dividend of 12.50 cents per share (2008: 9.50 cents per share) which will be payable on 14 April 2010 to shareholders on the register as at 5 March 2010. This is the minimum dividend required to satisfy the requirements of section 842 ICTA 1988. This makes a total dividend of 15.00 cents per share (2008: 12.00 cents per share) for the year, representing an increase of 25.0% over the previous year. Convertible bonds At a General Meeting held on 11 September 2009, shareholders approved the proposal to issue up to US$80 million in nominal amount of 3.5% unsecured convertible bonds 2015 ("the bonds"). Following the general meeting, a total of 800 bonds of US$100,000 each were allotted to participating investors. The bonds may be converted into ordinary shares at any time from 22 September 2009 to 1 September 2015. The detailed terms and conditions of the bonds are set out in the prospectus dated 18 August 2009. The first interest payment is due to be made on 15 March 2010 to bondholders on the Company's register on 26 February 2010. Redenomination of bonds It is proposed that in order to facilitate their liquidity, the bonds should be redenominated into amounts of US$1,000 each, thereby resulting in 80,000 bonds being in issue. A meeting of bondholders will be convened for 11.45 am on 11 May 2010 at which an extraordinary resolution to redenominate the bonds will be proposed. The necessary quorum is one or more bondholders present in person or by proxy, holding or representing a clear majority in nominal amount of the bonds outstanding. A circular containing the notice of meeting will be sent to bondholders shortly. Discount control As part of their discount control policy, the Directors of the Company have the discretion to make semi-annual tender offers. The Directors exercised their discretion to operate the half yearly tender offer on 31 March 2009 which was oversubscribed with 17,703,293 (37.4% of the shares in issue excluding treasury shares) being tendered. Shareholders who tendered had their basic entitlement (7.5% of their shares) satisfied in full and their election for further shares was scaled back pro rata with each shareholder receiving 10.67257% of their election for further shares. All 3,554,231 shares tendered were transferred into treasury and will be cancelled after a period of 12 months if they have not been reissued. The tender price calculated as at close of business on 31 March 2009 was 465.18 cents per share which represented a discount of 2.0% to the cum income NAV at that date. The Directors announced on 7 July 2009 that the Company's ordinary shares had traded at relatively tight discounts since late January. Given this favourable background, together with the improving liquidity and rating of the ordinary shares and the issue of the convertible bonds, the Board had decided not to implement the September 2009 tender offer. It was announced on 14 January 2010 that the Board had decided not to proceed with a semi-annual tender offer in March 2010. Over the 6 month period to 31 December 2009, the average discount to NAV was only 1.3% and the Company's NAV performance had been strong with the undiluted NAV returning 52.6% in US Dollar terms against a benchmark return of 40.4%. The Board therefore concluded that it was not in the interests of shareholders as a whole to implement a semi-annual tender offer in March 2010 at a discount to NAV. The Board will continue to pay close attention to the rating of the shares in the market and trading activity, and where necessary will take appropriate action to address any supply/demand imbalance. Gearing The Company is now geared via the convertible bonds having previously been geared via a loan and overdraft facility. The Company also has an overdraft facility which may be used for investment purposes and to cover short term timing differences. The maximum net gearing utilised during the year was 8.9% (net gearing is redeemable shares, loans, overdrafts and bonds at par value less cash and fixed interest stocks as a percentage of net assets). Directorate We were very pleased to welcome Dr Mahrukh Doctor to the Board in November 2009. Mahrukh is a lecturer in political economy at the University of Hull, specialising in Latin America. She is also the Brazil expert on the Oxford Analytica International Conference Latin America panel. It is with much regret that I report that Mailson Ferreira da Nobrega has decided to retire as a Director of the Company at the forthcoming Annual General Meeting ("AGM"). Mailson has served as a Director since the launch of the Company in 1990. I would like to thank Mailson on behalf of the Board for his outstanding contribution and wise counsel during his long service to the Company. Annual General Meeting The AGM will be held at 12 noon on Tuesday, 11 May 2010 at the offices of BlackRock at 33 King William Street, London EC4R 9AS. We hope that as many shareholders as possible will attend. Following the AGM there will be a presentation by Will Landers, the Portfolio Manager, on the outlook for the year ahead and an opportunity to meet the Portfolio Manager and Directors. New Articles of Association At the forthcoming AGM, the Directors will be proposing that the Company should adopt New Articles of Association in substitution for the existing Articles of Association in order to reflect the changes in UK company law which have been brought into force by the Companies Act 2006 and the Regulations implementing the EU Shareholder Rights Directive in the UK which came into force on 3 August 2009. Outlook The year ahead is likely to remain challenging for businesses and global investors as a whole. Brazil's attractive valuation provides excellent investment opportunities for investors seeking exposure to the Latin American region. Although global equity markets generally remain uncertain, our positive outlook for the Latin American region continues unchanged. Peter Burnell Chairman 17 February 2010 Statement of Directors' responsibilities The Directors are responsible for preparing the Annual Report, the Directors' Remuneration Report and the financial statements in accordance with applicable law and regulations. Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). 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 and of the profit or loss of the Company for that period. In preparing these financial statements, the Directors are required to: - select suitable accounting policies and then apply them consistently; - 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 and the Directors' Remuneration Report 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. Each of the Directors confirm to the best of their knowledge that: - the financial statements, prepared in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), give a true and fair view of the assets, liabilities, financial position and net return of the Company; and - the annual report includes a fair view 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 the Company faces. By order of the Board Peter Burnell 17 February 2010 Related party transactions The Investment Manager is regarded as a related party and details of the investment management fees payable are set out in note 4. Principal risks The key risks faced by the Company are set out below. The Board regularly reviews and agrees policies for managing each risk, as summarised below. - Performance risk - The Board is responsible for deciding the investment strategy to fulfil the Company's objectives and monitoring the performance of the Investment Manager. An inappropriate strategy may lead to poor performance. To manage this risk the Investment Manager provides an explanation of significant stock selection decisions and the rationale for the composition of the investment portfolio. The Board monitors and maintains an adequate spread of investments in order to minimise the risks associated with particular countries or factors specific to particular sectors, based on the diversification requirements inherent in the Company's investment policy. - Income/dividend risk - The amount of dividends and future dividend growth will depend on the Company's underlying portfolio. Any change in the tax treatment of the 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. - Regulatory risk - The Company operates as an investment trust in accordance with section 842 of ICTA. As such, the Company is exempt from capital gains tax on the profits realised from the sale of its investments. The Investment Manager monitors investment movements, the level and type of forecast income and expenditure and the amount of proposed dividends to ensure that the provisions of section 842 of ICTA are not breached and the results are reported to the Board at each meeting. - Operational risk - In common with most other investment trust companies, the Company has no employees. The Company therefore relies upon the services provided by third parties and is dependent on the control systems of the Investment Manager and the Company's other service providers. The security, for example, of the Company's assets, dealing procedures, accounting records and maintenance of regulatory and legal requirements, depend on the effective operation of these systems. These have been regularly tested and monitored and an internal control report, which includes an assessment of risks together with procedures to mitigate such risks, is prepared by the Investment Manager and reviewed by the Audit Committee twice a year. The Custodian and the Investment Manager also produce annual SAS 70 reports which are reported on by their respective reporting accountants and give assurance regarding the effective operation of controls. - Market risk - 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. The Board considers asset allocation, stock selection 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. - Financial risks - The Company's investment activities expose it to a variety of financial risks that include foreign currency risk, sovereign risk and interest rate risk. Investment Manager's Report Overview While 2008 went down in history as one of the worst years for equity markets around the world, the rebound in markets during 2009 was also historic. Latin American markets were among the hardest hit during 2008, but were the best performing region during the recovery experienced in 2009. We entered the year with fears of a deep global recession potentially turning into a 1929-style depression, and saw equity markets for the most part sell down to the year's lows through the early part of March. Since then, as market participants became more willing to take on risk as the fear of a major depression receded, and in some parts of the world growth was beginning to re-emerge, emerging markets were strong outperformers. It is noteworthy that since the MSCI began to track emerging markets in the late 1980s, 2009 has gone down in history as the best year ever (following the worst year ever in 2008). Within this scenario of improving markets, Latin America was the best performing region in the world, led by Brazil (the best performer among the BRIC nations and the second best country return overall after Indonesia). As we discussed in the last annual report, the whole decoupling theory was put to the test given the weak performance of markets during 2008. What has become more apparent is that markets can recouple quite quickly in periods of extreme downward pressure as we saw through the early part of 2009, even if economic activity remains somewhat decoupled. This last part was important, as many countries in Latin America, especially those in South America whose economies are not very reliant on the US economy for growth, were among the last economies to be affected negatively by the global recession, and among the first to show signs of recovery. As risk appetite increased, global investors began to look for opportunities to invest cash that had been earning close to zero return in cash accounts - Latin America became one of the markets of choice, therefore posting the strong recovery seen in the last nine months of the year. MSCI Foreign Country risk Index exchange (EMBI) % % change FX/ % YTD Region/indices US$ US$ change BPS change Argentina 61.1 3.80 -9.1 660 -1,044 Brazil 121.3 1.74 +32.9 189 -241 Chile 81.4 507.45 +25.8 95 -248 Colombia 76.5 2,043.00 +10.1 198 -299 Mexico 53.1 13.08 +6.3 192 -242 Peru 69.3 2.89 +8.6 165 -344 World 27.0 GEMs 74.5 274 -416 Latin America 98.1 328 -393 Emerging Asia 70.3 206 -390 EMEA 63.5 226 -514 Sources: Santander Investments, Bloomberg and BlackRock. During 2009, Argentina was moved to MSCI's Frontier Markets Index given the country's capital controls making local investments costly. We have stayed away from investing in the country for many years, limiting our exposure to Buenos Aires based Tenaris and Ternium - the first a global player in the oil services sector and the latter a pan-regional steel producer. We do not foresee investing locally in Argentina as long as current market conditions prevail. In contrast, Brazil became a role model for managing an economy in crisis in many people's eyes, attracting a lot of attention from the media and investors alike. The country did not start to feel the impact from the global crisis until late in 2008, and this impact was limited in scope and duration, with some economic indicators already turning positive as early as late first quarter 2009. The Central Bank reduced the Selic rate five times to 8.75%, the first time in Brazil's recent history that its nominal interest rate was in single digits. In addition, IPI taxes (similar to VAT) were reduced for several sectors, including automobiles, white goods and construction materials, providing a boost to these sectors which are more dependant on credit. While credit growth slowed during the year, it remained positive on a year-on-year basis. Finally, despite the aggressive reduction in interest rates, Brazil's real rate remained among the highest in the world as inflation for the year was below the 4.5% target - as a result, the Brazilian Real was among the strongest currencies in the world, gaining almost 33% against the US Dollar. The final icing on the cake came late in the year when the city of Rio de Janeiro was chosen as the host city for the 2016 Olympic Games. Taking into consideration that Brazil will also be hosting the 2014 FIFA World Cup, infrastructure investments will be abundant, adding to the already strong 4-5% growth forecast for the nation in coming years. While GDP growth was close to zero in 2009 it is expected to rebound strongly into the 5-6% range. Chile has generally been perceived as Latin America's most stable economy, with growth of around 6% and inflation under control. During 2009, the country was among the hardest hit in the region given its higher participation of exports in GDP. As a result, despite a stimulus plan that was among the highest in the world at close to 3% of GDP, GDP declined by approximately 1.5% in the year (and is expected to rebound at least to 4% in 2010). The Central Bank was aggressive in cutting rates, bringing the official rate to 0.49%, in line with rates in the developed world. Domestic growth is very important to the Chilean equity market, and as sentiment improved, so did the Chilean market. Pension funds continued to be active market participants, contributing to the market's strong performance. Mexico had the weakest performance among major markets in the region, but still outperformed the performance of the MSCI World. Mexico's economy is among the most correlated with the US given the importance of NAFTA and the resulting impact that close to 80% of Mexico's exports are destined for the US market. That, along with the approximate 16% decline in remittances from Mexican-Americans living in the US and sending funds to family members in Mexico caused Mexico's economy to contract by close to 7% during 2009. Mid-term elections were held in July, resulting in President Calderon's party, the PAN, losing seats in Congress and creating a much more combative legislature - this resulted in tough negotiations around the 2010 budget, with many taxes being increased. Mexico's sovereign rating was reduced by all three major rating houses, but still remained in the investment grade range. After such a sharp decline in GDP in 2009, a rebound is likely for 2010 - the magnitude of any rebound is highly dependent on the recovery in US economic activity. The Andean region, led by Peru and Colombia, posted strong results, although such results were behind Brazil and Chile. The Peruvian economy suffered a significant contraction as exports, especially copper and gold, declined significantly. Still, the country's strong fiscal and liquidity position provided a healthy buffer for the domestic economy, which is poised to recover in 2010. Colombia's economy suffered more given its strong economic ties with neighbouring Venezuela, at times very contentious. In addition, the lack of definition at the time of writing regarding President Uribe's status for the 2010 presidential election continues to create some uncertainty. Venezuela remains an unfriendly market for investors. 2009 Portfolio Review The Company posted a 123.4% appreciation in its NAV during 2009, outperforming by 19.2% its benchmark, the MSCI Latin America EM Free Index, which saw its value increase by 104.2% during the year. The outperformance was equally attributable to country allocation as it was to stock selection, with the deployment of gearing in September following the issue of the convertible bonds adding further to the strong performance during the fourth quarter of 2009. At the country level, the overweight position in Brazil along with the underweight in virtually every other country in the region, provided positive country allocation versus the benchmark for the year. As mentioned previously, Brazil was the only country that outperformed Latin America as a region - thus having an average 7.5% overweight position in the country during the year proved to be beneficial to the Company's performance. The approximate 2% average underweight in Mexico proved to be just as beneficial given that market's large underperformance. Underweights in Chile, Colombia and Argentina, along with off benchmark positions in Argentine based companies and Central America also had a positive effect on the year's performance. Interestingly, stock selection was even more important to the year's outperformance, accounting for more than half of the overall outperformance versus the benchmark. Brazil was once again the most outstanding region, with the overweight position in financials highlighted by Banco Itaú, steel companies including Usiminas, and Brazilian small capitalisation stocks highlighted by consumer goods producer Hypermarcas (given strong domestic consumption patterns despite the lacklustre GDP performance overall), real estate developers PDG Realty and MRV (sector was one of the first to show signs of recovery), wood board manufacturer Duratex (a play on housing as well) and software developer Totvs (largest IT provider to SMEs) having the largest positive impact on returns. The mandated underweight position in Petrobrás, which averaged a 17.8% weight in the benchmark during the year, was the largest detractor from performance in Brazil. In Mexico, the positive stock selection attribution came from the decision not to hold fixed telephony giant TelMex and timely trading around cement giant Cemex (added to the portfolio during the year after the end of its debt negotiations). Overweight positions in homebuilder Homex and broadcaster Televisa, both stocks that underperformed the Mexican benchmark offset some of the positive performance in the region. No other country provided significant attribution at the stock level. Finally, the introduction of gearing in September following the issue of the bonds contributed to the year's positive performance. We estimate that gearing accounted for nearly half of the 4.5% of outperformance during the last quarter of the year. Approximately half of the funds were invested in equities as soon as the transaction was completed with the remaining proceeds invested in short term Real denominated Brazilian government bonds that earned over 8% in annual interest income. At the end of 2009, net gearing represented approximately 8.9% of net assets, with investments in Brazil's government bonds representing 7.9% of net assets. 2010 Outlook and Positioning After leading the world in 2009, the question for 2010 is what can Latin America do for an encore? We remain confident that many of the reasons why the market performed so strongly in 2009 are intact for 2010. The resilience shown during the height of the crisis was based on a strong fiscal position, disciplined monetary policy, high levels of liquidity and a strong corporate sector. While stimulus plans and low growth during 2009 have resulted in deteriorating fiscal accounts, fiscal numbers continue to look healthy and should be aided by faster growth in 2010. Other than in the frontier markets of Argentina and Venezuela, Central Banks around the region showed their discipline and resolve during the crisis, and will be ready to raise rates as needed to keep inflation under control. Liquidity levels remain strong, with the region finishing the year with almost US$500 billion in aggregate reserves, an increase of almost 10%. Last, but certainly not least, the corporate sector is as strong as ever, with clean balance sheets, renewed focus on growth, and equity valuation levels which we continue to find compelling. The Company's portfolio is positioned with a large overweight in Brazil, funded by underweight positions in Mexico, Chile and Colombia. Despite strong outperformance during 2009, we are not ready to reduce our overweight in Brazil's equity market - we expect Brazil to be one of the fastest growing economies in Latin America during 2010, with credit expansion continuing and therefore domestic consumption being a major driver for growth. We therefore continue to have strong overweight positions in domestic sectors, such as financials, housing, retailers and beverages. In addition, cyclical stories such as Petrobras and Vale look attractive to us (the first due to increasing oil prices and the discoveries in the pre-salt area and the latter due to a tight iron market), and such positions are funded with underweight positions in steels (domestic premium pricing seems unsustainable and we took profits in the sector later in 2009) and petrochemicals (global supply growth in a sector that Brazil has few competitive advantages). Finally, we do not expect the October elections to result in significant changes to Brazil's economic policies, thus leading to a continuation of the Real plan started in 1994. Mexico remains an underweight market for us. The country's growth rate is likely to be significantly lower than Brazil's, with the defining factor being the strength of the US economic recovery. President Calderon looks unlikely to be able to pass significant reforms in the second half of his tenure, as opposition party PRI took control of the lower house and now seems intent on positioning itself to take over the presidency in 2012. Finally, we do not find valuations to be compelling enough to make us increase our Mexican weighting. Looking at the smaller markets in the region, Chile remains the perennially expensive market relative to other Latin American markets. The election of right of center presidential candidate Sebastian Piniera in the second round vote in January 2010 seems to be priced in already given Chile's high valuations relative to other emerging markets. However, should he move forward with certain economic reforms and listing of government owned companies, the market's liquidity and overall attractiveness may improve. Peru today represents a similar proportion of the Company's assets as Chile, we expect the Peruvian economy to rebound strongly in 2010 - liquidity is the biggest issue preventing us from having even more of the Company's assets invested in the country. A significant question mark for Colombia in 2010 will be whether President Uribe is allowed to run for a third term via a constitutional amendment - whatever the outcome we do not expect significant changes to Colombia's economic policy - liquidity and market depth continue to be the major issues for investing in the country. Overall, we expect Latin American equity markets to continue to perform strongly in 2010. As the wider global economy continues to stabilise and some of the world's developed nations show signs of positive economic recovery, emerging markets overall (and Latin America specifically) should benefit as investors risk appetite grows. The region should post strong economic growth in 2010, which coupled with what we believe are attractive valuation levels, should translate into positive equity market returns. Will Landers BlackRock Investment Management (UK) Limited 17 February 2010 Ten Largest Equity Investments Set out below is a brief description by the Investment Manager of the Company's largest equity investments. Petrobrás - 11.9% (2008: 13.0%) is Brazil's vertically integrated oil company. The company continues to invest heavily on increasing its production, utilising free cash flow to guarantee future production growth. Recent new oil findings in the pre-salt region could transform the company (and Brazil) into one of the world's major oil producers. Vale (formerly known as CVRD) - 10.5% (2008: 11.6%) is the world's largest producer of iron ore, with operations in several other commodities, including nickel, copper and alumina, among others. The company is the lowest cash cost producer of iron ore and is positioned to benefit from a tight iron ore market. Banco Itaú - 7.3% (2008: 3.0%) became Brazil's largest private sector bank after the merger with Unibanco in 2009. Itaú has maintained superior profitability levels while participating in the overall growth in the Brazilian financial system. The combined entity should be able to generate significant gains from synergies. América Móvil - 5.2% (2008: 9.1%) is Latin America's leading provider of wireless communications. The company recently announced its intention to acquire Carso Global Telecom (giving it a 60% stake in Telmex) and Telmex International - these acquisitions will allow the company to offer better bundled products as well as better manage its backbone. AmBev - 4.0% (2008: 3.8%) is Brazil's leading beverages company with operations throughout the Americas. The company is well positioned to continue to benefit from its defensive position as the region's largest staples producer, while maintaining a strong focus on cost containment, a perennial AmBev management strength. The Company is showing good growth in Brazil and good cost discipline outside of Brazil. Banco Bradesco - 3.4% (2008: 6.9%) is Brazil's second largest private sector bank and is in an advantageous position to benefit from the strong demand for credit in Brazil. The country's growing middle class continues to demand more financial products, and Bradesco's leading branch network positions the bank to offer such services. Grupo Televisa - 2.4% (2008: 1.4%) is Mexico's leading Television broadcasting operator and leading provider of satellite and cable television. The latter has allowed the company to become a leading provider of broadband internet access and Internet Protocol telephony. Cyrela Brazil Realty - 2.3% (2008: 1.3%) is Brazil's largest homebuilder. Traditionally the leader in the upper-end of Brazil's market, the company has quickly become a leading operator for the low income segment through its wholly owned subsidiary Living. Redecard - 1.9% (2008: 1.4%) is a multi-brand merchant acquirer for credit, debit and benefit cards as well as a leader in Brazil's payment card market. The company acquires merchants for its credit and debit cards, captures, transmits, processes and settles credit and debit card transactions, and offers other value added services to merchants across Brazil. Ogx Petroleoegas Participacões - 1.8% (2008: 1.3%) is Brazil's largest private sector oil and gas company in terms of offshore exploratory acreage, the company is moving ahead with its exploratory campaign with 27 oil wells forecasted to be drilled in 2010. All percentages reflect the value of the holding as a percentage of total investments. Percentages in brackets represent the value of the holding at 31 December 2008. Sector and geographical weightings Total Total Brazil Chile Argentina Mexico Colombia Panama Peru 2009* 2008* % % % % % % % % % Energy 14.1 - 1.3 - - - - 15.4 14.6 Consumer discretionary 7.2 0.5 - 2.4 - - - 10.1 8.4 Consumer staples 7.1 - - 3.2 - - - 10.3 10.9 Financials 15.5 1.2 - 0.4 - - 1.6 18.7 23.9 Health 1.8 - - 0.6 - - - 2.4 1.8 Industrials 3.2 - - 1.8 - 1.1 - 6.1 4.0 Information technology 2.4 - - - - - - 2.4 2.0 Materials 13.3 - 0.5 0.8 - - 0.5 15.1 18.7 Telecommunications 0.6 - - 5.2 - - - 5.8 10.9 Utilities 6.5 0.6 - - - - - 7.1 4.8 Fixed Income 6.6 - - - - - - 6.6 - ----- ----- ----- ----- ----- ----- ----- ------ Total investments 78.3 2.3 1.8 14.4 - 1.1 2.1 100.0 ----- ----- ----- ----- ----- ----- ----- ------ ------ 2008 Totals 71.7 4.0 1.4 19.3 - 0.7 2.9 100.0 ----- ----- ----- ----- ----- ----- ----- ------ *Expressed as a percentage of net assets Source: BlackRock Geographical Weighting vs MSCI EM Latin America Index MSCI EM Latin America Country BRLAIT Index Argentina 1.8 - Brazil 78.3 70.9 Chile 2.3 5.9 Colombia - 2.7 Mexico 14.4 18.1 Peru 2.1 2.4 Panama 1.1 - Source: BlackRock Investments 31 December 2009 Market value % of Country of operation US$'000 investments Brazil Petrobrás 64,527 11.9 Vale 56,845 10.5 Banco Itaú 39,347 7.3 Republic of Brazil 0% 01/01/10 35,060 6.5 Ambev 21,734 4.0 Banco Bradesco 18,556 3.4 Cyrela Brazil Realty } Cyrela Brazil warrants 12,520 } 2.3 Redecard } Redecard warrants 10,101 } 1.9 Ogx Petróleoegás Participações 9,752 1.8 BM&F Bovespa 9,460 1.7 Cia Brasiliera de Distribucáo 7,956 1.5 Lojas Renner } Lojas Renner warrants 7,059 } 1.3 TAM 6,222 1.1 Usiminas 5,621 1.0 Banco Santander 5,556 1.0 CPFL Energia 5,469 1.0 Hypermarcas 5,404 1.0 Duratex 5,111 0.9 Copel 5,036 0.9 Anhanguera Educacional 4,541 0.8 Eletropaulo Metropolitana 4,414 0.8 Odontoprev 3,557 0.7 PDG Realty 3,543 0.7 CCR 3,425 0.6 Telenorte Leste 3,418 0.6 Eletrobrás 3,334 0.6 DASA 3,269 0.6 Saraiva Livreiros 3,199 0.6 Porto Seguro 3,192 0.6 Bunge 3,192 0.6 CESP 3,042 0.6 Tractebel Energia 2,985 0.6 Fibria Celulose 2,737 0.5 Profarma Distibuidora 2,720 0.5 CTEEP 2,652 0.5 Rossi Residencial 2,607 0.5 Totvs 2,460 0.5 Even 2,375 0.4 EDP - Energias do Brasil 2,339 0.4 BR Malls } BR Malls warrants 2,339 } 0.4 ALL – América Latina Logistíca 2,323 0.4 Ultrapar 2,298 0.4 CSN 2,235 0.4 Lupatech 2,136 0.4 Banco BIC 2,058 0.4 WEG 1,963 0.4 MRV } MRV warrants 1,936 } 0.3 Cemig 1,803 0.3 Terna 1,715 0.3 Equatorial Energia 1,509 0.3 Iguatemi Empressa de Shopping Centers 1,433 0.3 Banco ABC Brasil 1,422 0.3 Copasa 1,420 0.3 Metalfrio Solutions 1,371 0.3 Rodobens 1,245 0.2 Amil 1,170 0.2 ------- ----- 424,713 78.3 ------- ----- Mexico América Móvil 28,146 5.2 Grupo Televisa 12,963 2.4 Formento Economico Mexicano 8,609 1.6 Walmart de México 8,916 1.6 Cemex 4,728 0.9 Grupo México 4,506 0.8 Desarrolladora Homex 3,356 0.6 Genomma Lab Internacional 3,087 0.6 Grupo Financiero Banorte 2,259 0.4 Empresas ICA 1,397 0.3 ------- ----- 77,967 14.4 ------- ----- Chile Banco Santander-Chile 6,457 1.2 Endesa 3,154 0.6 Falabella 2,617 0.5 ------- ----- 12,228 2.3 ------- ----- Peru Credicorp 8,702 1.6 Minas Buenaventura 2,836 0.5 ------- ----- 11,538 2.1 ------- ----- Argentina Tenaris 7,251 1.3 Ternium 2,834 0.5 ------- ----- 10,085 1.8 ------- ----- Panama Copa 5,992 1.1 ------- ----- 5,992 1.1 ------- ----- Total investments 542,523 100.0 ------- ----- The total number of investments held at 31 December 2009 was 74 (31 December 2008: 66). All investments are in equity shares unless otherwise stated. INCOME STATEMENT for the year ended 31 December 2009 Revenue Revenue Capital Capital Total Total 2009 2008 2009 2008 2009 2008 Notes US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 Gains/(losses) on investments held at fair value through profit or loss - - 262,094 (309,886) 262,094 (309,886) Convertible bonds held at fair value through profit or loss - - (22,400) - (22,400) - Exchange gains - - 567 72 567 72 Income from investments held at fair value through profit or loss 3 11,986 12,006 - - 11,986 12,006 Other income 3 1 151 - - 1 151 Investment management fees 4 (761) (882) (2,283) (2,647) (3,044) (3,529) Write back of prior years' VAT 4 & 5 - 174 - - - 174 Other operating expenses 5 (1,103) (1,052) (187) (45) (1,290) (1,097) ------ ------ ------- ------- ------- ------- Net return before finance costs and taxation 10,123 10,397 237,791 (312,506) 247,914 (302,109) Finance costs 6 (520) (149) (1,560) (448) (2,080) (597) ------ ------ ------- ------- ------- ------- Net return on ordinary activities before taxation 9,603 10,248 236,231 (312,954) 245,834 (302,706) Taxation on ordinary activities (1,302) (2,956) 1,154 882 (148) (2,074) ------ ------ ------- ------- ------- ------- Return on ordinary activities after taxation 8,301 7,292 237,385 (312,072) 245,686 (304,780) ------ ------ ------- ------- ------- ------- Undiluted return per ordinary share (US$ cents) 8 18.57 15.31 530.92 (654.99) 549.49 (639.68) ------ ------ ------- ------- ------- ------- Diluted return per ordinary share (US$ cents) 8 17.98 15.31 502.69 (654.99) 520.67 (639.68) ------ ------ ------- ------- ------- ------- The total column of this statement represents the Income Statement of the Company. The supplementary revenue and capital columns are both prepared under guidance published by the Association of Investment Companies ("AIC"). The Company had no recognised gains or losses other than those disclosed in the Income Statement and the Reconciliation of Movements in Shareholders' Funds. All items in the above statement derive from continuing operations and no operations were acquired or discontinued during the year. All income is attributable to the equity holders of BlackRock Latin American Investment Trust plc. RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS for the year ended 31 December 2009 Share Capital Non Share premium redemption distributable Capital Revenue capital account reserve reserve reserves reserve Total Note US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 For the year ended 31 December 2009 At 31 December 2008 4,779 11,655 4,207 4,356 184,808 10,259 220,064 Return for the year - - - - 237,385 8,301 245,686 Shares repurchased and held in treasury - - - - (16,534) - (16,534) Share purchase costs - - - - (208) - (208) Shares cancelled (40) - 40 - - - - Dividends paid (a) 7 - - - - - (5,598) (5,598) ----- ------ ----- ----- ------- ------ ------- At 31 December 2009 4,739 11,655 4,247 4,356 405,451 12,962 443,410 ----- ------ ----- ----- ------- ------ ------- For the year ended 31 December 2008 At 31 December 2007 4,779 11,655 4,207 4,356 500,777 7,507 533,281 Return for the year - - - - (312,072) 7,292 (304,780) Shares purchased and held in treasury - - - - (3,799) - (3,799) Share purchase costs - - - - (98) - (98) Dividends paid (b) 7 - - - - - (4,540) (4,540) ----- ------ ----- ----- ------- ------ ------- At 31 December 2008 4,779 11,655 4,207 4,356 184,808 10,259 220,064 ----- ------ ----- ----- ------- ------ ------- (a) Second interim dividend paid in respect of the year ended 31 December 2008 of 9.50 cents per share declared on 18 February 2009 and paid on 15 April 2009 and the first interim dividend for the year ended 31 December 2009 of 2.50 cents per share declared on 14 August 2009 and paid on 25 September 2009. (b) Second interim dividend paid in respect of the year ended 31 December 2007 of 7.00 cents per share declared on 19 February 2008 and paid on 16 April 2008 and the first interim dividend for the year ended 31 December 2008 of 2.50 cents per share declared on 5 August 2008 and paid on 26 September 2008. BALANCE SHEET as at 31 December 2009 2009 2008 Notes US$'000 US$'000 Fixed assets Investments held at fair value through profit or loss 542,523 231,189 ------- ------- Current assets Debtors 2,691 2,363 Cash 5,413 2,636 ------- ------- 8,104 4,999 Creditors - amounts falling due within one year Bank loan - (12,500) Other creditors (4,793) (3,600) ------- ------- (4,793) (16,100) ------- ------- Net current assets/ (liabilities) 3,311 (11,101) ------- ------- Total assets less current liabilities 545,834 220,088 Creditors - amounts falling due after one year Non-equity redeemable shares (24) (24) Convertible bonds held at fair value through profit or loss (102,400) - ------- ------- (102,424) (24) ------- ------- Net assets 443,410 220,064 ------- ------- Capital and reserves Share capital 9 4,739 4,779 Share premium account 11,655 11,655 Capital redemption reserve 4,247 4,207 Non distributable reserve 4,356 4,356 Capital reserves 405,451 184,808 Revenue reserve 12,962 10,259 ------- ------- Total equity shareholders' funds 443,410 220,064 ------- ------- Net asset value per ordinary share (US$ cents) - basic 8 1,011.53 464.37 -------- ------- Net asset value per ordinary share (US$ cents) - diluted 8 1,036.42 464.37 -------- ------- CASH FLOW STATEMENT for the year ended 31 December 2009 2009 2008 Note US$'000 US$'000 Net cash inflow from operating activities 9,199 7,178 Servicing of finance Finance costs (1,330) (284) Taxation paid (1,426) (1,773) Capital expenditure and financial investment Purchase of investments (248,684) (267,423) Proceeds from sale of investments 199,422 262,736 Capital expenses (185) (42) ------- ----- Net cash outflow from capital expenditure and financial investment (49,447) (4,729) ------- ----- Equity dividends paid 7 (5,598) (4,540) ------- ----- Net cash outflow before financing (48,602) (4,148) ------- ----- Financing (Repayment)/drawdown of US Dollar loan (12,500) 12,500 Repurchase of ordinary shares (16,688) (3,799) Share repurchase expenses paid - (98) Convertible bonds issue proceeds 80,000 - ------- ----- Net cash inflow from financing 50,812 8,603 ------- ----- Increase in cash in the year 2,210 4,455 ------- ----- NOTES TO THE FINAL STATEMENTS 1. Principal activity The principal activity of the Company is that of an investment trust company within the meaning of section 842 of the Income and Corporation Taxes Act 1988. 2. Accounting policies (a) Basis of preparation The Company's financial statements have been prepared on a going concern basis and on the historical cost basis of accounting, modified to include the revaluation of fixed assets investments and convertible bonds in accordance with the Companies Act 2006, UK Generally Accepted Accounting Practice ("UK GAAP") and with the Statement of Recommended Practice `Financial Statements of Investment Trust Companies' ("SORP") revised in January 2009. The principal accounting policies adopted by the Company are set out below. All of the Company's operations are of a continuing nature. The Company's financial statements are presented in US Dollars, which is the functional and presentational currency of the Company. The US Dollar is the functional currency because it is the currency mostly 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 the Income Statement In order to better reflect the activities of an investment trust company and in accordance with guidance issued by the Association of Investment Companies, supplementary information which analyses the Income Statement between items of a revenue and capital nature has been presented alongside the Income Statement. In accordance with the Company's status as a UK investment company under section 833 of the Companies Act 2006, net capital returns may not be distributed by way of dividend. (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. Fixed returns on non equity securities are recognised on a time apportionment basis. Interest income and expenses are accounted for on an accruals basis. Dividends are accounted for in accordance with Financial Reporting Standard 16 `Current Taxation' (FRS16) on the basis of income actually receivable, without adjustment for the tax credit attaching to the dividends. Dividends from overseas companies continue to be shown gross of withholding tax. Where the Company has elected to receive its dividends in the form of additional shares rather than in cash, the amount of the cash dividend foregone is recognised as income. Any excess in the value of the shares received over the amount of the cash dividend foregone is recognised in capital reserves. Special dividends are recognised on an ex-dividend basis and treated as a capital or revenue item depending on the facts or circumstances of each dividend. (e) Expenses All expenses are accounted for on an accruals basis. Expenses have been treated as revenue except as follows: - expenses which are directly attributable to the acquisition or disposal of investments are included within the cost of the investments or deducted from the disposal proceeds of investments and are thus charged to the capital reserves; - the investment management fee has been allocated 75% to capital reserves and 25% to the revenue account 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; - performance fees if applicable, are allocated wholly to capital reserves, to the extent that performance is predominantly generated through capital returns of the investment portfolio. (f) Finance costs Interest bearing bank loans and overdrafts are recorded as the proceeds received, net of direct issue costs. Finance charges, including interest payable and direct issue costs, are accounted for on an accrual basis in the Income Statement using the effective interest rate method and are added to the carrying amount of the instrument to the extent that they are not settled in the period in which they arise. Finance costs are allocated, insofar as they relate to the financing of the Company's investments, 75% to capital reserves and 25% to the revenue account, 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. (g) Taxation The 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 taxation for the accounting period. Deferred tax is recognised in respect of all temporary differences at the balance sheet date, where transactions or events that result in an obligation to pay more tax in the future or right to pay less tax in the future have occurred at 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 temporary differences can be deducted. (h) 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 FRS 26 - Financial Instruments: Recognition and Measurement 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. The sale of assets are recognised at the trade date of the disposal. Proceeds will be measured at fair value which will be regarded as the proceeds of sale less any transaction costs. The fair value of the financial instruments 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. Unquoted investments are valued by the Directors at fair value using International Private Equity and Venture Capital Association Guidelines. This policy applies to all current and non current asset investments of the Company. 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. In order to improve the disclosure of how companies measure the fair value of their financial investments, the disclosure requirements in FRS 29 have been extended to include a fair value hierarchy. The fair value hierarchy consists of the following three levels: Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities Level 2 - inputs other than quoted prices included within level 1 that are observable for the asset or liability Level 3 - inputs for the asset or liability that are not based on observable market data This policy applies to non current asset investments held by the Company. (i) Dividends payable Under FRS 21, 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 Reconciliation of Movements in Shareholders' Funds when they have been approved by shareholders and become a liability of the Company. (j) Foreign currency translation All transactions in foreign currencies are translated into US Dollars at the rates of exchange ruling on the dates of such transactions. Monetary assets and liabilities and equity investments held at fair value through profit or loss denominated in foreign currency are translated into US Dollars at the exchange rates ruling at that date. Exchange differences arising on the revaluation of investments held as fixed assets are included in gains or losses on investments held at fair value through profit or loss. Exchange differences arising on the translation of foreign currency assets and liabilities are taken to capital reserves. (k) Convertible bonds On 15 September 2009, the Company issued US$80 million worth of 3.5% unsecured convertible bonds ("the bonds") redeemable at par on 15 September 2015. This instrument has been accounted for in accordance with FRS 26 - "Financial Instruments: Recognition and Measurement", and held at fair value on the Company's balance sheet. On initial recognition, fair value was deemed to be the issue proceeds received of US$80 million, and issue costs of US$1.1 million were debited to the Income Statement and allocated 25% to revenue and 75% to capital in line with the Board's policy on allocation of finance costs as set out in note 2(f). Subsequent to initial recognition, the bonds have been fair valued by reference to their traded market price valuation movements arising from increases or decreases in this price are credited or debited through the capital column of the Income Statement. Interest costs arising on the bonds are debited through the Income Statement and allocated 25% to revenue and 75% to capital in line with the Board's policy on allocation of finance costs. The bonds may be converted at any time before 15 September 2012 into ordinary shares at a price of US$8.98, and thereafter at a price of US$9.83 from 15 September 2012 but on or before the tenth business day (inclusive) prior to 15 September 2015. On conversion, the value of bonds converted will be credited to long term liabilities. The nominal value of the ordinary shares issued on conversion will be debited to share capital and the balance representing the excess of conversion proceeds over the nominal value of the shares will be credited to the share premium account. If the bonds have not been converted into ordinary shares before the tenth business day (inclusive) prior to 15 September 2015, they will be redeemed at their nominal value. Any valuation differences between the carrying value of the debt and the nominal redemption value at this time will be debited or credited to the capital column of the Income Statement. (l) Capital redemption reserve The nominal value of ordinary share capital repurchased for cancellation is transferred out of share capital and into the capital redemption reserve. Shares repurchased and held in treasury - the full cost of the repurchase is charged to the capital reserves. Where treasury shares are subsequently reissued, any surplus is taken to the share premium account. (m) Capital reserves The following transactions are accounted for in the capital reserve arising on investments sold: - gains and losses on the disposal of investments; - realised exchange differences of a capital nature; - cost of professional advice, including irrecoverable VAT, relating to the capital structure of the Company; - other capital charges and credits charged or credited to capital reserves in accordance with the above policies; and - cost of purchasing ordinary shares and warrants. The following transactions are accounted for in the capital reserves arising on investments held: - increases and decreases in the valuation of investments held at the year end and the change in fair value of the convertible bonds; and - unrealised exchange differences of a capital nature. (n) Going concern The Company's Articles of Association require that an ordinary resolution be put to the Company's shareholders bi-annually at the AGM to approve the continuation of the Company. The last resolution was put to shareholders at the 2008 AGM and the next such resolution will be put to shareholders at the forthcoming AGM in 2010. The Directors have recommended that shareholders vote in favour of the resolution. 3. Income 2009 2008 US$'000 US$'000 Investment income: Overseas dividends 11,130 11,943 Interest income 856 - Scrip dividends - 63 ------ ------ 11,986 12,006 ------ ------ Other income: Deposit interest 1 41 Interest relating to prior years' VAT - 110 ------ ------ 11,987 12,157 ------ ------ 4. Investment Management fees 2009 2008 Revenue Capital Total Revenue Capital Total US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 Investment management fees 761 2,283 3,044 882 2,647 3,529 Write back of prior years' VAT relating to management fees - - - (160) - (160) --- ----- ----- --- ----- ----- Total 761 2,283 3,044 722 2,647 3,369 --- ----- ----- --- ----- ----- The Investment Manager is also entitled to a performance fee equal to 10% of any outperformance of the NAV per share against the benchmark (in US Dollar terms on a total return basis, excluding any adjustments to reflect the fair value of the bonds) plus a hurdle of 1%. The performance fee is capped at 1% of NAV. No performance fee has been accrued as at 31 December 2009 (2008: nil). 5. Other expenses 2009 2008 US$'000 US$'000 (a) Other expenses AIC subscriptions 37 32 Auditors' remuneration: - audit services 54 31 - other audit services 7 2 Custody fee 385 426 Directors' and Officers' liability insurance 16 28 Directors' emoluments: - fees for services to the Company 280 239 Printing and postage 69 95 Professional fees 61 54 Registrar's fees 24 27 Other administrative costs 170 118 ----- ----- 1,103 1,052 ----- ----- Write back of prior years' VAT relating to other operating expenses - (14) ----- ----- 1,103 1,038 ----- ----- The Company's total expense ratio, calculated as a percentage of average net assets and using expenses, excluding finance costs and VAT written back, after relief for taxation was: 0.9% 1.0% ----- ----- Total auditors' remuneration, exclusive of VAT, for other services, relating to advice in respect of the convertible bonds issue amounted to US$7,000 (2008: US$2,000). The underlying audit fee is invoiced in Sterling and is therefore susceptible to exchange rate fluctuations. The fee has not increased materially from year-to-year. Expenses of US$187,000 charged to the capital column of the Income Statement relate to transaction costs charged by the custodian on the purchases and sales of investments and charges on Brazilian foreign exchange transactions (2008: US$45,000). 2009 2008 US$'000 US$'000 (b) Reconciliation of net return before finance costs and taxation to net cash flow from operating activities Net return before finance costs and taxation 247,914 (302,109) (Gains)/losses on investments held at fair value through profit or loss (262,094) 309,886 Fair value adjustment for the convertible bonds 22,400 - Exchange gains of a capital nature (567) (72) Non-operating expenses of a capital nature 187 45 Increase in accrued income (214) (482) Decrease in other debtors 20 189 Increase/(decrease) in creditors 1,553 (216) Scrip dividends - (63) ----- ----- Net cash inflow from operating activities 9,199 7,178 ----- ----- 6. Finance costs 2009 2008 Revenue Capital Total Revenue Capital Total US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 Bank loan 31 92 123 86 261 347 Interest on convertible bonds 210 630 840 - - - Convertible bonds issue costs 268 806 1,074 - - - Bank overdraft 11 32 43 63 187 250 --- ----- ----- --- --- --- 520 1,560 2,080 149 448 597 --- ----- ----- --- --- --- 7. Dividends Dividends on 2009 2008 ordinary shares Register date Payment date US$'000 US$'000 2007 Second interim of 7.00 cents 29 February 2008 16 April 2008 - 3,345 2008 Interim of 2.50 cents 15 August 2008 26 September 2008 - 1,195 2008 Second interim of 9.50 cents 27 February 2009 15 April 2009 4,502 - 2009 Interim of 2.50 cents 14 August 2009 25 September 2009 1,096 - ----- ----- 5,598 4,540 ----- ----- The Directors propose to pay a second interim dividend in respect of the year ended 31 December 2009 of 12.50 cents per share on 14 April 2010, to all shareholders on the register as at 5 March 2010. The proposed second interim dividend has not been included as a liability in these financial statements as interim dividends are only recognised in the financial statements in the period in which they are paid or approved by shareholders. The dividends disclosed in the note below have been considered in view of the requirements of section 842 of the Income and Corporation Taxes Act 1988 and section 833 of the Companies Act 2006, and the amounts proposed meet the relevant requirements as set out in this legislation. 2009 2008 US$'000 US$'000 Dividend payable on equity shares: First interim paid 2.50 cents (2008: 2.50 cents) 1,096 1,195 Second interim payable 12.50 cents (2008: 9.50 cents) 5,479 4,502 ----- ----- 6,575 5,697 ----- ----- 8. Return and net asset value per ordinary share Revenue and capital returns per share are shown below and have been calculated using the following: 2009 2008 Net revenue return attributable to ordinary shareholders (US$'000) 8,301 7,292 Net capital return attributable to ordinary shareholders (US$'000) 237,385 (312,072) ------- ------- Total return (US$'000) 245,686 (304,780) ------- ------- Equity shareholders' funds (US$'000) 443,410 220,064 ------- ------- Net revenue return on which the diluted return per share has been calculated (with interest costs of US$210,000 on convertible bonds added back): 8,511 - Net capital return on which the diluted return per share has been calculated (with interest costs of US$630,000 added back): 238,015 - The weighted average number of ordinary shares in issue during the year, on which the undiluted return per ordinary share was calculated, was: 44,711,908 47,645,490 ---------- ---------- The weighted average number of ordinary shares in issue during the year, on which the diluted return per ordinary share was calculated, was: 47,347,903 - ---------- ---------- The actual number of ordinary shares in issue at the end of each year, on which the undiluted net asset value was calculated, was 43,835,522 47,389,753 ---------- ---------- The actual number of ordinary shares in issue at the end of each year, on which the diluted net asset value was calculated, was 52,744,207 47,389,753 ---------- ---------- 2009 2008 Revenue Capital Total Revenue Capital Total cents cents cents cents cents cents Undiluted return per share Calculated on weighted average number of shares 18.57 530.92 549.49 15.31 (654.99) (639.68) Calculated on actual number of shares 18.94 541.53 560.47 15.39 (658.52) (643.13) Diluted return per share Calculated on the weighted average number of shares 17.98 502.69 520.67 15.31 (654.99) (639.68) ----- ------ -------- ----- ------ ------ Net asset value per share - undiluted 1,011.53 464.37 ----- ------ -------- ----- ------ ------ Diluted net asset value per share US$'000 Net assets with convertible bonds at fair value per balanced share 443,410 Add back convertible bonds at fair value 102,400 Interest on convertible bonds at 31 December 2009 840 ------- Adjusted net assets following conversion of the convertible bonds 546,650 (a) ------- Number of ordinary shares for NAV at 31 December 2009 43,835,522 Number of shares arising on conversion of the convertible bonds (US$80,000,000 @ US$8.98) 8,908,685 ---------- Total 52,744,207 (b) ---------- Diluted NAV per share (US$ cents (a/b)) 1,036.42 ---------- 9. Share capital Ordinary Treasury shares shares number number Total (nominal) (nominal) shares US$'000 Authorised share capital comprised: Ordinary shares of 10 cents each 110,000,000 - 110,000,000 11,000 Allotted, issued and fully paid: Shares in issue at 31 December 2008 47,389,753 400,000 47,789,753 4,779 Shares cancelled from treasury on 22 August 2009 - (400,000) (400,000) (40) Shares purchased and held in treasury (3,554,231) 3,554,231 - - ---------- --------- ---------- ----- At 31 December 2009 43,835,522 3,554,231 47,389,753 4,739 ---------- --------- ---------- ----- During the year 3,554,231 ordinary shares were repurchased and held in treasury at a total cost of US$16,742,000 (2008: 400,000 ordinary shares repurchased at a cost of US$3,799,000). The number of ordinary shares in issue at the year end was 47,389,753, of which 3,554,231 were held in treasury (2008: 47,789,753 and 400,000 held in treasury). The ordinary shares (excluding any shares held in treasury) carry the right to receive any dividends and have one voting right per ordinary share. There are no restrictions on the voting rights of the shares or on transfer of the shares. 10. 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 2009 annual report and financial statements will be filed with the Registrar of Companies after the Annual General Meeting. The report of the Auditor for the year ended 31 December 2009 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 2008, which have been filed with the Registrar of Companies. The report of the Auditor on those accounts contained no qualification or statement under section 498 of the Companies Act. This announcement was approved by the Board of Directors on 17 February 2010. 11. Annual Report Copies of the annual report will be sent to members shortly and will be available from the registered office, c/o The Company Secretary, BlackRock Latin American Investment Trust plc, 33 King William Street, London EC4R 9AS. This report will also be available on the BlackRock Investment Management website at www.blackrock.co.uk/its. 12. Annual General Meeting The Annual General Meeting of the Company will be held at 33 King William Street, London EC4R 9AS on Tuesday, 11 May 2010 at 12 noon. For further information, please contact: Peter Burnell - Chairman Tel: 01434 632292 Jonathan Ruck Keene, Managing Director, Investment Companies, BlackRock Investment Management (UK) Limited Tel: 020 7743 2178 Emma Phillips, Media & Communication, BlackRock Investment Management (UK) Limited Tel: 020 7743 2922 William Clutterbuck, The Maitland Consultancy Tel: 020 7379 5151 17 February 2010 33 King William Street London EC4R 9AS

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