UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-06349
Name of Fund: BlackRock Latin America Fund, Inc.
Fund Address: P.O. Box 9011
Princeton, NJ 08543-9011
Name and address of agent for service: Robert C. Doll, Jr., Chief Executive
Officer, BlackRock Latin America Fund, Inc., 800 Scudders Mill Road,
Plainsboro, NJ 08536. Mailing address: P.O. Box 9011, Princeton, NJ
08543-9011
Registrant's telephone number, including area code: (609) 282-2800
Date of fiscal year end: 11/30/06
Date of reporting period: 12/01/05 - 11/30/06
Item 1 - Report to Stockholders
ALTERNATIVES BLACKROCK SOLUTIONS EQUITIES
FIXED INCOME LIQUIDITY REAL ESTATE
BlackRock Latin America BLACKROCK
Fund, Inc.
ANNUAL REPORT | NOVEMBER 30, 2006
NOT FDIC INSURED
MAY LOSE VALUE
NO BANK GUARANTEE
BlackRock Latin America Fund, Inc.
Portfolio Information as of November 30, 2006
- --------------------------------------------------------------------------------
Ten Largest Holdings Percent of
(Equity Investments) Net Assets
- --------------------------------------------------------------------------------
Petroleo Brasileiro SA ............................................. 12.7%
America Movil, SA de CV ............................................ 9.9
Companhia Vale do Rio Doce (Preference 'A' Shares) ................. 9.8
Banco Bradesco SA .................................................. 6.3
Tenaris SA ......................................................... 3.7
Grupo Televisa, SA ................................................. 3.6
Cemex, SA de CV .................................................... 3.3
Wal-Mart de Mexico, SA de CV ....................................... 3.2
Cia de Bebidas das Americas (Preference Shares) .................... 3.0
Fomento Economico Mexicano, SA de CV ............................... 2.8
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Five Largest Industries Percent of
(Equity Investments) Net Assets
- --------------------------------------------------------------------------------
Metals & Mining .................................................... 16.5%
Oil & Gas .......................................................... 12.7
Banks .............................................................. 11.3
Wireless Telecommunication Services ................................ 9.9
Beverages .......................................................... 6.1
- --------------------------------------------------------------------------------
For Fund compliance purposes, the Fund's industry classifications refer to
any one or more of the industry sub-classifications used by one or more
widely recognized market indexes or ratings group indexes, and/or as
defined by Fund management. This definition may not apply for purposes of
this report, which may combine industry sub-classifications for reporting
ease.
- --------------------------------------------------------------------------------
Percent of
Total
Geographic Allocation Investments
- --------------------------------------------------------------------------------
Brazil ............................................................. 51.6%
Mexico ............................................................. 24.7
Chile .............................................................. 4.6
Argentina .......................................................... 3.8
Panama ............................................................. 0.5
Colombia ........................................................... 0.4
Other* ............................................................. 14.4
- --------------------------------------------------------------------------------
* Includes portfolio holdings in mutual funds and short-term investments.
2 BLACKROCK LATIN AMERICA FUND, INC. NOVEMBER 30, 2006
A Letter to Shareholders
Dear Shareholder
As 2006 nears a conclusion, we are able to say it has been an interesting year
for investors. After a volatile start and far-reaching mid-year correction, the
financial markets regained some positive momentum through late summer and into
fall. For the six-month and 12-month periods ended November 30, 2006, the major
market indexes posted positive returns:
Total Returns as of November 30, 2006 6-month 12-month
========================================================================================================
U.S. equities (Standard & Poor's 500 Index) +11.33% +14.23%
- --------------------------------------------------------------------------------------------------------
Small cap U.S. equities (Russell 2000 Index) + 9.72 +17.43
- --------------------------------------------------------------------------------------------------------
International equities (MSCI Europe, Australasia, Far East Index) +11.19 +28.20
- --------------------------------------------------------------------------------------------------------
Fixed income (Lehman Brothers Aggregate Bond Index) + 5.93 + 5.94
- --------------------------------------------------------------------------------------------------------
Tax-exempt fixed income (Lehman Brothers Municipal Bond Index) + 4.53 + 6.12
- --------------------------------------------------------------------------------------------------------
High yield bonds (Credit Suisse High Yield Index) + 6.28 +11.53
- --------------------------------------------------------------------------------------------------------
After raising the target short-term interest rate 17 times between June 2004 and
June 2006, the Federal Reserve Board (the Fed) finally opted to pause on August
8. This left the federal funds rate at 5.25%, where it remained through the
September, October and December Federal Open Market Committee meetings. In
interrupting its two-year interest rate-hiking campaign, the Fed acknowledged
that economic growth is slowing, led by softness in the housing market. However,
the central bankers continue to take a cautionary position on inflation, despite
a decline in energy prices in the fall. At the time of this writing, the price
of crude oil was roughly $62 per barrel after reaching nearly $78 per barrel in
the summer.
Notwithstanding the mid-year correction, equity markets generally found support
in solid corporate earnings reports in the first three quarters of the year.
Overall corporate health, including strong company balance sheets, helped to
sustain robust dividend-distribution, share-buyback and merger-and-acquisition
activity. Many international equity markets fared equally well or better, thanks
in part to higher economic growth rates and low inflation.
In the U.S. bond market, prices declined (and yields correspondingly rose) for
much of the year as investors focused on decent economic activity and inflation
concerns. Bond prices began to improve (yields fell) in the summer as the
economy showed signs of weakening and the Fed paused. Notably, the Treasury
curve inverted periodically, a phenomenon typically associated with periods of
economic weakness. At the end of November, the one-month Treasury bill offered
the highest yield on the curve at 5.22%, while the 30-year Treasury bond had a
yield of 4.56%.
Amid the uncertainty inherent in the financial markets, we encourage you to
review your goals periodically with your financial professional and to make
portfolio changes, as needed. For additional insight and timely "food for
thought" for investors, we also invite you to visit Shareholder magazine at
www.blackrock.com/shareholdermagazine. We are pleased to make our
investor-friendly magazine available to you online. We thank you for trusting
BlackRock with your investment assets, and we look forward to continuing to
serve your investment needs.
Sincerely,
/s/ Robert C. Doll, Jr.
Robert C. Doll, Jr.
President and Director
BLACKROCK LATIN AMERICA FUND, INC. NOVEMBER 30, 2006 3
A Discussion With Your Fund's Portfolio Manager
The Fund outperformed its benchmark for the fiscal year and continued to
benefit from successful stock selection in its key markets -- Brazil, Mexico and
Chile -- and favorable country biases.
How did the Fund perform during the fiscal year in light of the existing market
conditions?
For the 12-month period ended November 30, 2006, BlackRock Latin America Fund,
Inc.'s (formerly Merrill Lynch Latin America Fund, Inc.) Institutional, Investor
A, Investor B and Investor C Shares had total returns of +38.12%, +37.77%,
+36.72% and +36.75%, respectively. (Fund results shown do not reflect sales
charges and would be lower if sales charges were included. Complete performance
information can be found on pages 6 and 7 of this report to shareholders.) The
Fund's returns compared favorably with the +35.49% return of its benchmark, the
Morgan Stanley Capital International Emerging Markets (MSCI EM) Latin America
Index, and the +37.14% average return of the Lipper Latin American Funds
category for the 12-month period. (Funds in this Lipper category concentrate
their investments in equity securities with primary trading markets or
operations in the Latin America region or in a single country within this
region.) The Fund's outperformance of the benchmark is attributed primarily to
strong stock selection across our three major markets -- Brazil, Mexico and
Chile -- as well as maintaining an overweight position in Brazil and an
underweight position in Chile.
In a scenario similar to prior years, Latin America ranked among the
best-performing markets in the world for the fourth consecutive year. Despite a
very heavy election calendar and concerns regarding a potential move to the
political left, the region continued to benefit from improved fiscal discipline,
an aggregate current account surplus, reduced public sector debt and falling
inflation. At the company level, the combination of attractive valuations,
healthy balance sheets, increased focus on corporate governance and strong
earnings growth made Latin America a target for dedicated as well as global
investors. Overall, the market enjoyed strong liquidity, was able to withstand
the global market sell-off that took place in the May-June period, and finished
the year close to its all-time high.
What changes were made to the portfolio during the period?
During the past year, the Fund's country exposures were relatively unchanged.
Brazil remained the portfolio's largest overweight throughout the 12 months,
closing the year at nearly 60% of net assets. The Fund's allocation to Mexico
oscillated around the benchmark weighting throughout the year, and finished as
an underweight. This reflected some profit-taking following the market rally
that ensued after Felipe Calderon's presidential election victory. Chile
remained an underweight for the entire year given its high valuations.
In our Brazilian portfolio, we gradually increased exposure to the consumer
throughout the year, adding to our weightings in retailers, homebuilders,
airlines and food & beverages. Meanwhile, we reduced exposure to cyclical names
in oil, iron ore and steel. We participated in several initial public offerings
(IPOs) during the year, most of which were listed in the Novo Mercado, a segment
of Sao Paulo's Bovespa Index with the most rigorous corporate governance
standards, providing the highest level of minority shareholder protection.
In Mexico, we systematically reduced exposure to some of the country's
larger-capitalization names, particularly Telmex and Cemex, SA de CV. We were
concerned about a lack of growth at telecommunications company Telmex and high
cash balances not being fully paid to shareholders. Cement company Cemex,
already vulnerable to a slowdown in the U.S. homebuilding sector, made a bid for
Australian cement producer Rinker that would further increase the company's
exposure to the U.S. market. While trimming these positions, we continued to add
to the Mexican homebuilding sector, and maintained America Movil, SA de CV as
one of the Fund's largest positions.
4 BLACKROCK LATIN AMERICA FUND, INC. NOVEMBER 30, 2006
Compared to the benchmark, the Fund's Chilean weighting finished the year at its
highest level in some time, but still at an underweighting of close to 200 basis
points (2%). We added to our consumer exposure in Chile by purchasing shares of
airlines, retailers and banks, sectors where we found interesting valuation
levels relative to both the broader Chilean market and other Latin American
counterparts.
In other portfolio activity, we exited the Peruvian and Venezuelan markets ahead
of those countries' elections. Venezuela is not on our target list currently
given President Chavez's unorthodox policies. In Peru, we are concerned about
valuation levels. The Fund's exposure to Argentina increased to an overweighting
during the year given our favorable outlook for Tenaris SA, a global oil
services company that is headquartered in Buenos Aires.
How would you characterize the Fund's position at the close of the period?
We believe the Fund is positioned to continue to benefit from macroeconomic
stability regionwide. That stability should allow Latin American companies to
post another year of strong earnings growth in 2007, while beginning the year
with relatively low valuations. We expect that domestic economies in the region
will drive growth in 2007, and have positioned the Fund to benefit from this
growth in consumer demand and credit.
In Brazil, we expect the central bank to continue the interest rate easing cycle
started in 2005, which saw the Selic rate fall 400 basis point in 2006. We are
just beginning to see the benefits of these rate cuts in economic activity.
Furthermore, with real interest rates now in the single digits, we expect that
institutional investors in Brazil will be forced to return to the equity market
in 2007, bringing back a large group of buyers that have been mostly absent from
the market over the past several years.
Mexico is the Latin American economy most closely tied to the performance of the
U.S. economy. Given an expected slowdown in the United States in 2007, along
with above-average valuation parameters, we maintain an underweight position in
the Mexican market. Still, Mexico represents more than 25% of the portfolio,
with a couple of themes represented in the Fund. First, we expect growth in home
ownership to remain strong throughout President Calderon's term. As such,
Mexican homebuilders remain a core position in the Fund. Second, America Movil
is considered part of our Mexican portfolio, but represents a pan-regional
exposure to wireless growth. Third, consumer credit continues to grow, and we
gain exposure to this sector via our investments in the retail sector.
Chile should once again post gross domestic product growth in the 5% - 6% range
during 2007, leading the major economies of Latin America. Our Chilean portfolio
continues to be exposed to growth in the Chilean consumer sector via retailers,
banks and the country's main airline. Other investments represent stock-specific
ideas rather than country themes, including Tenaris in Argentina, as discussed
above.
As always, we thank you for your interest in BlackRock Latin America Fund, Inc.
William M. Landers, CFA
Vice President and Portfolio Manager
December 18, 2006
- --------------------------------------------------------------------------------
Effective October 2, 2006, the Fund's Class A, Class B, Class C and Class I
Shares were redesignated Investor A, Investor B, Investor C and Institutional
Shares, respectively.
- --------------------------------------------------------------------------------
BLACKROCK LATIN AMERICA FUND, INC. NOVEMBER 30, 2006 5
Performance Data
About Fund Performance
Effective October 2, 2006, the Fund's Class A, Class B, Class C and Class I
Shares were redesignated Investor A, Investor B, Investor C and Institutional
Shares, respectively. As previously communicated to shareholders, new sales
charge schedules came into effect at the same time for certain of these classes.
The Fund has multiple classes of shares:
o Institutional Shares are not subject to any front-end sales charge.
Institutional Shares bear no ongoing distribution or service fees and are
available only to eligible investors.
o Investor A Shares incur a maximum initial sales charge (front-end load) of
5.25% and a service fee of 0.25% per year (but no distribution fee).
o Investor B Shares are subject to a maximum contingent deferred sales
charge of 4.50% declining to 0% after six years. In addition, Investor B
Shares are subject to a distribution fee of 0.75% per year and a service
fee of 0.25% per year. These shares automatically convert to Investor A
Shares after approximately eight years. (There is no initial sales charge
for automatic share conversions.) All returns for periods greater than
eight years reflect this conversion.
o Investor C Shares are subject to a distribution fee of 0.75% per year and
a service fee of 0.25% per year. In addition, Investor C Shares are
subject to a 1% contingent deferred sales charge if redeemed within one
year of purchase.
Performance information reflects past performance and does not guarantee future
results. Current performance may be lower or higher than the performance data
quoted. Refer to www.blackrock.com to obtain performance data current to the
most recent month-end. Performance results do not reflect the deduction of taxes
that a shareholder would pay on fund distributions or the redemption of fund
shares. The Fund may charge a 2% redemption fee for sales or exchanges of shares
within 30 days of purchase or exchange. Performance data does not reflect this
potential fee. Figures shown in each of the following tables assume reinvestment
of all dividends and capital gain distributions, if any, at net asset value on
the ex-dividend date. Investment return and principal value of shares will
fluctuate so that shares, when redeemed, may be worth more or less than their
original cost. Dividends paid to each class of shares will vary because of the
different levels of service, distribution and transfer agency fees applicable to
each class, which are deducted from the income available to be paid to
shareholders.
Recent Performance Results
6-Month 12-Month 10-Year
As of November 30, 2006 Total Return Total Return Total Return
================================================================================
Institutional Shares* +24.31% +38.12% +367.13%
- --------------------------------------------------------------------------------
Investor A Shares* +24.15 +37.77 +355.44
- --------------------------------------------------------------------------------
Investor B Shares* +23.68 +36.72 +327.19
- --------------------------------------------------------------------------------
Investor C Shares* +23.70 +36.75 +320.99
- --------------------------------------------------------------------------------
MSCI EM Latin America Index** +24.66 +35.49 +340.38
- --------------------------------------------------------------------------------
* Investment results shown do not reflect sales charges; results shown would
be lower if a sales charge was included. Cumulative total investment
returns are based on changes in net asset values for the periods shown,
and assume reinvestment of all dividends and capital gains distributions
at net asset value on the ex-dividend date.
** This unmanaged market capitalization-weighted Index by Morgan Stanley
Capital International is comprised of a representative sampling of stocks
of large-, medium- and small-capitalization companies in Argentina,
Brazil, Chile and Mexico, which are freely purchasable by foreign
investors.
6 BLACKROCK LATIN AMERICA FUND, INC. NOVEMBER 30, 2006
Performance Data (concluded)
Total Return Based on a $10,000 Investment
A line graph depicting the growth of an investment in the Fund's Institutional,
Investor A, Investor B and Investor C Shares compared to growth of an investment
in the MSCI EM Latin America Index. Values are from November 1996 to November
2006.
MSCI EM
Institutional Investor A Investor B Investor C Latin America
Shares*+ Shares*+ Shares*+ Shares*+ Index++
11/96 $10,000 $ 9,475 $10,000 $10,000 $10,000
11/97 $12,179 $11,503 $12,051 $12,052 $12,708
11/98 $ 8,558 $ 8,064 $ 8,385 $ 8,381 $ 9,531
11/99 $11,017 $10,360 $10,675 $10,679 $12,073
11/00 $11,352 $10,641 $10,882 $10,882 $11,125
11/01 $10,120 $ 9,462 $ 9,604 $ 9,603 $10,446
11/02 $ 8,901 $ 8,308 $ 8,361 $ 8,359 $ 8,814
11/03 $13,852 $12,896 $12,871 $12,873 $14,092
11/04 $20,186 $18,744 $18,556 $18,556 $20,196
11/05 $33,821 $31,323 $31,008 $30,785 $32,502
11/06 $46,713 $43,153 $42,719 $42,099 $44,038
* Assuming maximum sales charge, if any, transaction costs and other
operating expenses, including advisory fees.
+ The Fund invests primarily in Latin American equity and debt securities.
++ This unmanaged market capitalization-weighted Index by Morgan Stanley
Capital International is comprised of a representative sampling of stocks
of large-, medium- and small-capitalization companies in Argentina,
Brazil, Chile and Mexico, which are freely purchasable by foreign
investors.
Past performance is not indicative of future results.
Average Annual Total Return
Return
================================================================================
Institutional Shares
================================================================================
One Year Ended 11/30/06 +38.12%
- --------------------------------------------------------------------------------
Five Years Ended 11/30/06 +35.79
- --------------------------------------------------------------------------------
Ten Years Ended 11/30/06 +16.67
- --------------------------------------------------------------------------------
Return Without Return With
Sales Charge Sales Charge*
================================================================================
Investor A Shares
================================================================================
One Year Ended 11/30/06 +37.77% +30.53%
- --------------------------------------------------------------------------------
Five Years Ended 11/30/06 +35.46 +34.00
- --------------------------------------------------------------------------------
Ten Years Ended 11/30/06 +16.37 +15.74
- --------------------------------------------------------------------------------
Return Return
Without CDSC With CDSC++
================================================================================
Investor B Shares+
================================================================================
One Year Ended 11/30/06 +36.72% +32.22%
- --------------------------------------------------------------------------------
Five Years Ended 11/30/06 +34.38 +34.26
- --------------------------------------------------------------------------------
Ten Years Ended 11/30/06 +15.63 +15.63
- --------------------------------------------------------------------------------
Return Return
Without CDSC With CDSC++
================================================================================
Investor C Shares+++
================================================================================
One Year Ended 11/30/06 +36.75% +35.75%
- --------------------------------------------------------------------------------
Five Years Ended 11/30/06 +34.39 +34.39
- --------------------------------------------------------------------------------
Ten Years Ended 11/30/06 +15.46 +15.46
- --------------------------------------------------------------------------------
* Assuming maximum sales charge of 5.25%.
+ Maximum contingent deferred sales charge is 4.50% and is reduced to 0%
after six years.
++ Assuming payment of applicable contingent deferred sales charge.
+++ Maximum contingent deferred sales charge is 1% and is reduced to 0% after
one year.
BLACKROCK LATIN AMERICA FUND, INC. NOVEMBER 30, 2006 7
Disclosure of Expenses
Shareholders of this Fund may incur the following charges: (a) expenses related
to transactions, including sales charges, redemption fees and exchange fees; and
(b) operating expenses including advisory fees, distribution fees including
12b-1 fees, and other Fund expenses. The following example (which is based on a
hypothetical investment of $1,000 invested on June 1, 2006 and held through
November 30, 2006) is intended to assist shareholders both in calculating
expenses based on an investment in the Fund and in comparing these expenses with
similar costs of investing in other mutual funds.
The first table below provides information about actual account values and
actual expenses. In order to estimate the expenses a shareholder paid during the
period covered by this report, shareholders can divide their account value by
$1,000 and then multiply the result by the number in the first line under the
heading entitled "Expenses Paid During the Period."
The second table below provides information about hypothetical account values
and hypothetical expenses based on the Fund's actual expense ratio and an
assumed rate of return of 5% per year before expenses. In order to assist
shareholders in comparing the ongoing expenses of investing in this Fund and
other funds, compare the 5% hypothetical example with the 5% hypothetical
examples that appear in other funds' shareholder reports.
The expenses shown in the table are intended to highlight shareholders' ongoing
costs only and do not reflect any transactional expenses, such as sales charges,
redemption fees or exchange fees. Therefore, the second table is useful in
comparing ongoing expenses only, and will not help shareholders determine the
relative total expenses of owning different funds. If these transactional
expenses were included, shareholder expenses would have been higher.
Expenses Paid
Beginning Ending During the Period*
Account Value Account Value June 1, 2006 to
June 1, 2006 November 30, 2006 November 30, 2006
===============================================================================================================
Actual
===============================================================================================================
Institutional $ 1,000 $1,243.10 $ 7.65
- ---------------------------------------------------------------------------------------------------------------
Investor A $ 1,000 $1,241.50 $ 9.05
- ---------------------------------------------------------------------------------------------------------------
Investor B $ 1,000 $1,236.80 $ 13.35
- ---------------------------------------------------------------------------------------------------------------
Investor C $ 1,000 $1,237.00 $ 13.35
===============================================================================================================
Hypothetical (5% annual return before expenses)**
===============================================================================================================
Institutional $ 1,000 $1,018.28 $ 6.88
- ---------------------------------------------------------------------------------------------------------------
Investor A $ 1,000 $1,017.03 $ 8.14
- ---------------------------------------------------------------------------------------------------------------
Investor B $ 1,000 $1,013.17 $ 12.01
- ---------------------------------------------------------------------------------------------------------------
Investor C $ 1,000 $1,013.17 $ 12.01
- ---------------------------------------------------------------------------------------------------------------
* For each class of the Fund, expenses are equal to the annualized expense
ratio for the class (1.36% for Institutional, 1.61% for Investor A, 2.38%
for Investor B and 2.38% for Investor C), multiplied by the average
account value over the period, multiplied by 183/365 (to reflect the
one-half year period shown).
** Hypothetical 5% annual return before expenses is calculated by pro-rating
the number of days in the most recent fiscal half year divided by 365.
8 BLACKROCK LATIN AMERICA FUND, INC. NOVEMBER 30, 2006
Consolidated Schedule of Investments (in U.S. dollars)
Shares
Industry Common Stocks Held Value
====================================================================================================
Argentina--4.5%
Commercial Banks--0.2%
Banco Macro Bansud SA (a) 34,500 $ 967,035
-------------------------------------------------------------------------------------
Electric Utilities--0.1%
Endesa Costanera SA (b) 300,498 279,806
-------------------------------------------------------------------------------------
Metals & Mining--4.2%
Tenaris SA (a) 355,000 16,688,550
Ternium SA (a)(b) 81,500 1,940,515
------------
18,629,065
-------------------------------------------------------------------------------------
Total Common Stocks in Argentina 19,875,906
====================================================================================================
Brazil--59.5%
Airlines--0.7%
Tam SA (Preference Shares) (a)(b) 110,000 3,066,800
-------------------------------------------------------------------------------------
Apparel, Accessories & Luxury
Goods--0.0%
Empresa Nacional de Comercio Redito e
Participacoes SA (Preference Shares) 12,284,085 79,435
-------------------------------------------------------------------------------------
Automobiles--0.2%
Localiza Rent A Car SA 26,000 666,393
-------------------------------------------------------------------------------------
Banks--10.9%
Banco Bradesco SA (a)(f) 742,000 27,980,820
Banco Itau Holding Financeira SA (a)(f) 298,000 9,977,040
Uniao de Bancos Brasileiros SA (a) 124,000 10,499,080
------------
48,456,940
-------------------------------------------------------------------------------------
Beverages--3.3%
Cia de Bebidas das Americas (a) 30,000 1,245,000
Cia de Bebidas das Americas
(Preference Shares) (a)(f) 295,000 13,602,450
------------
14,847,450
-------------------------------------------------------------------------------------
Building Products--0.3%
Duratex SA (Preference Shares) 113,000 1,521,455
-------------------------------------------------------------------------------------
Cosmetics & Toiletries--1.1%
Natura Cosmeticos SA 378,000 5,115,658
-------------------------------------------------------------------------------------
Diversified Consumer Services--0.4%
Guararapes Confeccoes SA 39,000 1,772,564
-------------------------------------------------------------------------------------
Diversified Telecommunication
Services--1.3%
Tele Norte Leste Participacoes SA 180,000 5,753,349
-------------------------------------------------------------------------------------
Electric Utilities--2.5%
CPFL Energia SA (a) 54,500 2,152,750
Cia Energetica de Sao Paulo (b) 283,300,000 2,876,182
EDP--Energias do Brasil SA 99,000 1,335,243
Equatorial Energia SA (b) 170,000 1,370,208
Terna Participacoes SA (b) 180,000 2,003,695
Tractebel Energia SA 245,400 1,850,985
------------
11,589,063
-------------------------------------------------------------------------------------
Food Products--0.7%
Cosan SA Industria e Comercio (b) 58,000 1,009,441
M Dias Branco SA (b) 195,000 2,152,656
Perdigao SA 11 132
------------
3,162,229
-------------------------------------------------------------------------------------
Health Care Providers &
Services--0.1%
Odontoprev SA (b) 46,300 598,799
-------------------------------------------------------------------------------------
Industrial Materials--0.4%
Marcopolo SA 716,000 1,729,644
-------------------------------------------------------------------------------------
Insurance--1.0%
Porto Seguro SA 175,000 4,461,894
-------------------------------------------------------------------------------------
Machinery--0.5%
Weg SA (Preference Shares) 393,000 2,359,815
-------------------------------------------------------------------------------------
Media--0.4%
Vivax SA (b) 104,500 1,684,550
-------------------------------------------------------------------------------------
Medical Services--0.4%
Diagnosticos da America SA (b) 86,500 1,837,875
-------------------------------------------------------------------------------------
Metals & Mining--12.3%
Companhia Vale do Rio Doce
(Preference 'A' Shares) (a)(f) 1,860,000 43,803,000
Lupatech SA (b) 114,000 1,423,815
Usinas Siderurgicas de Minas Gerais SA
(Preference 'A' Shares) 283,000 9,561,871
------------
54,788,686
-------------------------------------------------------------------------------------
Multiline Retail--1.8%
Lojas Americanas SA
(Preference Shares) 62,155,000 3,002,962
Lojas Renner SA 367,500 4,808,903
------------
7,811,865
-------------------------------------------------------------------------------------
Oil & Gas--12.7%
Petroleo Brasileiro SA (a)(f) 670,000 56,883,000
-------------------------------------------------------------------------------------
Paper--1.4%
Suzano Bahia Sul Papel e Celulose SA 235,600 2,249,354
Votorantim Celulose e Papel SA (a) 194,000 3,860,600
------------
6,109,954
-------------------------------------------------------------------------------------
Pharmaceuticals--0.4%
Profarma Distribuidora de Produtos
Farmaceuticos SA (b) 146,600 1,869,573
-------------------------------------------------------------------------------------
Public Thoroughfares--1.3%
Cia de Concessoes Rodoviarias 325,000 4,135,681
Obrascon Huarte Lain Brasil SA (b) 123,000 1,786,199
------------
5,921,880
-------------------------------------------------------------------------------------
Pulp--0.6%
Aracruz Celulose SA (a) 40,500 2,464,830
-------------------------------------------------------------------------------------
Real Estate--2.4%
Cyrela Brazil Realty SA 316,000 6,086,467
Gafisa SA (b) 135,000 1,964,203
Klabin Segall SA (b) 310,000 2,570,208
------------
10,620,878
-------------------------------------------------------------------------------------
Software--0.5%
Datasul (b) 243,120 2,139,231
-------------------------------------------------------------------------------------
Transportation--1.5%
All America Latina Logistica SA 775,000 6,855,081
-------------------------------------------------------------------------------------
Water--0.4%
Companhia de Saneamento de
Minas Gerais 172,000 1,735,889
-------------------------------------------------------------------------------------
Total Common Stocks in Brazil 265,904,780
====================================================================================================
BLACKROCK LATIN AMERICA FUND, INC. NOVEMBER 30, 2006 9
Consolidated Schedule of Investments (continued) (in U.S. dollars)
Shares
Industry Common Stocks Held Value
====================================================================================================
Chile--5.3%
Airlines--0.5%
Lan Airlines SA (a) 43,000 $ 2,109,150
-------------------------------------------------------------------------------------
Commercial Banks--0.5%
Banco Santander Chile SA (a) 42,500 2,063,375
-------------------------------------------------------------------------------------
Electric Utilities--1.4%
Empresa Nacional de Electricidad SA (a) 109,000 3,780,120
Enersis SA (a) 173,000 2,631,330
------------
6,411,450
-------------------------------------------------------------------------------------
Food & Staples Retailing--1.3%
Centros Comerciales
Sudamericanos SA 1,452,000 4,387,874
Ripley Corp. SA 1,228,000 1,397,794
------------
5,785,668
-------------------------------------------------------------------------------------
Paper--0.4%
Masisa SA (Preference Shares) (a) 175,000 1,715,000
-------------------------------------------------------------------------------------
Specialty Retail--0.3%
La Polar SA 320,000 1,511,903
-------------------------------------------------------------------------------------
Water--0.9%
Inversiones Aguas
Metropolitanas SA (a) 152,000 3,909,926
Inversiones Aguas Metropolitanas SA 41,000 52,833
------------
3,962,759
-------------------------------------------------------------------------------------
Total Common Stocks in Chile 23,559,305
====================================================================================================
Colombia--0.4%
Banks--0.4%
BanColombia SA (a) 63,500 1,909,445
-------------------------------------------------------------------------------------
Total Common Stocks
in Colombia 1,909,445
====================================================================================================
Mexico--28.5%
Airports--0.6%
Grupo Aeroportuario del Centro Norte
Sab de CV (a)(b) 14,200 306,010
Grupo Aeroportuario del Pacifico,
SA de CV (a)(f) 59,000 2,329,910
------------
2,635,920
-------------------------------------------------------------------------------------
Beverages--2.8%
Fomento Economico Mexicano,
SA de CV (a) 120,000 12,630,000
-------------------------------------------------------------------------------------
Broadcasting & Cable TV--3.6%
Grupo Televisa, SA (a) 614,000 16,135,920
-------------------------------------------------------------------------------------
Building--Home Builders--3.0%
Corporacion GEO, SA de CV
Series B (b) 2,250,000 9,740,659
Desarrolladora Homex, SA de CV (a)(b) 78,000 3,851,640
------------
13,592,299
-------------------------------------------------------------------------------------
Construction & Engineering--0.6%
Empresas ICA Sociedad Controladora,
SA de CV (b) 756,000 2,735,988
-------------------------------------------------------------------------------------
Construction Materials--3.3%
Cemex, SA de CV (a)(b)(f) 450,000 14,643,000
-------------------------------------------------------------------------------------
Food & Staples Retailing--0.5%
Alsea SA 413,000 2,222,250
-------------------------------------------------------------------------------------
Household Products--0.4%
Kimberly-Clark de Mexico, SA de CV 400,000 1,673,040
-------------------------------------------------------------------------------------
Multiline Retail--3.5%
Controladora Comercial Mexicana,
SA de CV 673,000 1,340,044
Wal-Mart de Mexico, SA de CV 3,800,000 14,219,382
------------
15,559,426
-------------------------------------------------------------------------------------
Specialty Retail--0.3%
Grupo Famsa SA (b) 316,900 1,159,566
-------------------------------------------------------------------------------------
Wireless Telecommunication
Services--9.9%
America Movil, SA de CV (a) 1,000,000 44,470,000
-------------------------------------------------------------------------------------
Total Common Stocks in Mexico 127,457,409
====================================================================================================
Panama--0.5%
Airlines--0.5%
Copa Holdings SA Class A 55,500 2,361,525
-------------------------------------------------------------------------------------
Total Common Stocks in Panama 2,361,525
====================================================================================================
Total Common Stocks
(Cost--$293,027,204)--98.7% 441,068,370
====================================================================================================
Mutual Funds
====================================================================================================
United Kingdom--1.0%
Merrill Lynch Latin American Investment
Trust Plc (c) 603,800 4,261,056
-------------------------------------------------------------------------------------
Total Mutual Funds
(Cost--$3,960,371)--1.0% 4,261,056
====================================================================================================
Short-Term Beneficial
Securities Interest
====================================================================================================
BlackRock Liquidity Series, LLC Cash
Sweep Series I, 5.26% (c)(d) $ 2,644,237 2,644,237
BlackRock Liquidity Series, LLC Money
Market Series, 5.29% (c)(d)(e) 67,538,150 67,538,150
-------------------------------------------------------------------------------------
Total Short-Term Securities
(Cost--$70,182,387)--15.7% 70,182,387
====================================================================================================
Total Investments
(Cost--$367,169,962*)--115.4% 515,511,813
Liabilities in Excess of Other Assets--(15.4%) (68,719,621)
------------
Net Assets--100.0% $446,792,192
============
10 BLACKROCK LATIN AMERICA FUND, INC. NOVEMBER 30, 2006
Consolidated Schedule of Investments (concluded) (in U.S. dollars)
* The cost and unrealized appreciation (depreciation) of investments as of
November 30, 2006, as computed for federal income tax purposes, were as
follows:
Aggregate cost .............................. $ 367,504,191
=============
Gross unrealized appreciation ............... $ 149,129,138
Gross unrealized depreciation ............... (1,121,516)
-------------
Net unrealized appreciation ................. $ 148,007,622
=============
(a) Depositary receipts.
(b) Non-income producing security.
(c) Investments in companies considered to be an affiliate of the Fund, for
purposes of Section 2(a)(3) of the Investment Company Act of 1940, were as
follows:
----------------------------------------------------------------------------------
Dividend/
Net Interest
Affiliate Activity Income
----------------------------------------------------------------------------------
BlackRock Liquidity Series, LLC Cash
Sweep Series I $ (2,316,905) $ 160,720
BlackRock Liquidity Series, LLC Money
Market Series $ 67,538,150 $ 40,926
Merrill Lynch Latin American Investment Trust Plc 603,800 $ 15,510
----------------------------------------------------------------------------------
(d) Represents the current yield as of November 30, 2006.
(e) Security was purchased with the cash proceeds from securities loans.
(f) Security, or a portion of security, is on loan.
o For Fund compliance purposes, the Fund's industry classifications refer to
any one or more of the industry sub-classifications used by one or more
widely recognized market indexes or ratings group indexes, and/or as
defined by Fund management. This definition may not apply for purposes of
this report, which may combine industry sub-classifications for reporting
ease. Industries are shown as a percent of net assets. These industry
classifications are unaudited.
See Notes to Consolidated Financial Statements.
BLACKROCK LATIN AMERICA FUND, INC. NOVEMBER 30, 2006 11
Consolidated Statement of Assets and Liabilities
As of November 30, 2006
===================================================================================================================================
Assets
- -----------------------------------------------------------------------------------------------------------------------------------
Investments in unaffiliated securities, at value (including securities
loaned of $65,949,227) (identified cost--$293,027,204) ............................. $ 441,068,370
Investments in affiliated securities, at value (identified cost--$74,142,758) ....... 74,443,443
Foreign cash (cost--$182,870) ....................................................... 183,905
Receivables:
Dividends ........................................................................ $ 1,933,650
Capital shares sold .............................................................. 1,725,473
Securities sold .................................................................. 409,332
Securities lending ............................................................... 4,852 4,073,307
-------------
Prepaid expenses and other assets ................................................... 39,308
-------------
Total assets ........................................................................ 519,808,333
-------------
===================================================================================================================================
Liabilities
- -----------------------------------------------------------------------------------------------------------------------------------
Collateral on securities loaned, at value ........................................... 67,538,150
Bank overdraft ...................................................................... 90,589
Payables:
Securities purchased ............................................................. 4,067,048
Capital shares redeemed .......................................................... 570,176
Investment adviser ............................................................... 355,717
Distributor ...................................................................... 93,224
Other affiliates ................................................................. 73,406 5,159,571
-------------
Accrued expenses and other liabilities .............................................. 227,831
-------------
Total liabilities ................................................................... 73,016,141
-------------
===================================================================================================================================
Net Assets
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets .......................................................................... $ 446,792,192
=============
===================================================================================================================================
Net Assets Consist of
- -----------------------------------------------------------------------------------------------------------------------------------
Institutional Shares of Common Stock, $.10 par value, 100,000,000 shares
authorized ......................................................................... $ 377,123
Investor A Shares of Common Stock, $.10 par value, 100,000,000 shares authorized .... 381,070
Investor B Shares of Common Stock, $.10 par value, 100,000,000 shares authorized .... 28,983
Investor C Shares of Common Stock, $.10 par value, 100,000,000 shares authorized .... 106,778
Paid-in capital in excess of par .................................................... 317,401,759
Undistributed investment income--net ................................................ $ 4,190,460
Accumulated realized capital losses--net ............................................ (24,035,388)
Unrealized appreciation--net ........................................................ 148,341,407
-------------
Total accumulated earnings--net ..................................................... 128,496,479
-------------
Net Assets .......................................................................... $ 446,792,192
=============
===================================================================================================================================
Net Asset Value
- -----------------------------------------------------------------------------------------------------------------------------------
Institutional--Based on net assets of $191,085,371 and 3,771,225 shares
outstanding ........................................................................ $ 50.67
=============
Investor A--Based on net assets of $191,186,837 and 3,810,701 shares outstanding .... $ 50.17
=============
Investor B--Based on net assets of $13,911,119 and 289,827 shares outstanding ....... $ 48.00
=============
Investor C--Based on net assets of $50,608,865 and 1,067,784 shares outstanding ..... $ 47.40
=============
See Notes to Consolidated Financial Statements.
12 BLACKROCK LATIN AMERICA FUND, INC. NOVEMBER 30, 2006
Consolidated Statement of Operations
For the Year Ended November 30, 2006
===================================================================================================================================
Investment Income
- -----------------------------------------------------------------------------------------------------------------------------------
Dividends (net of $923,016 foreign withholding tax and including $15,510 from
affiliates) ........................................................................ $ 10,940,042
Interest from affiliates ............................................................ 160,720
Securities lending--net ............................................................. 40,926
-------------
Total income ........................................................................ 11,141,688
-------------
===================================================================================================================================
Expenses
- -----------------------------------------------------------------------------------------------------------------------------------
Investment advisory fees ............................................................ $ 3,984,015
Service fees--Investor A ............................................................ 425,762
Service and distribution fees--Investor C ........................................... 416,654
Custodian fees ...................................................................... 365,566
Accounting services ................................................................. 183,641
Transfer agent fees--Institutional .................................................. 180,843
Transfer agent fees--Investor A ..................................................... 179,592
Service and distribution fees--Investor B ........................................... 141,648
Professional fees ................................................................... 81,632
Printing and shareholder reports .................................................... 69,867
Registration fees ................................................................... 55,645
Transfer agent fees--Investor C ..................................................... 52,605
Directors' fees and expenses ........................................................ 45,113
Transfer agent fees--Investor B ..................................................... 17,975
Pricing fees ........................................................................ 4,270
Other ............................................................................... 30,184
-------------
Total expenses ...................................................................... 6,235,012
-------------
Investment income--net .............................................................. 4,906,676
-------------
===================================================================================================================================
Realized & Unrealized Gain (Loss)--Net
- -----------------------------------------------------------------------------------------------------------------------------------
Realized gain (loss) on:
Investments--net ................................................................. 79,718,712
Foreign currency transactions--net ............................................... (116,614) 79,602,098
-------------
Change in unrealized appreciation/depreciation on:
Investments--net ................................................................. 31,488,734
Foreign currency transactions--net ............................................... (20,901) 31,467,833
------------------------------
Total realized and unrealized gain--net ............................................. 111,069,931
-------------
Net Increase in Net Assets Resulting from Operations ................................ $ 115,976,607
=============
See Notes to Consolidated Financial Statements.
BLACKROCK LATIN AMERICA FUND, INC. NOVEMBER 30, 2006 13
Consolidated Statements of Changes in Net Assets
For the Year Ended
November 30,
------------------------------
Increase (Decrease) in Net Assets: 2006 2005
===================================================================================================================================
Operations
- -----------------------------------------------------------------------------------------------------------------------------------
Investment income--net .............................................................. $ 4,906,676 $ 3,719,693
Realized gain--net .................................................................. 79,602,098 23,803,220
Change in unrealized appreciation/depreciation--net ................................. 31,467,833 83,085,019
------------------------------
Net increase in net assets resulting from operations ................................ 115,976,607 110,607,932
------------------------------
===================================================================================================================================
Dividends to Shareholders
- -----------------------------------------------------------------------------------------------------------------------------------
Investment income--net:
Institutional .................................................................... (2,173,490) (926,811)
Investor A ....................................................................... (1,938,797) (1,333,099)
Investor B ....................................................................... (76,298) (85,843)
Investor C ....................................................................... (315,049) (80,874)
------------------------------
Net decrease in net assets resulting from dividends to shareholders ................. (4,503,634) (2,426,627)
------------------------------
===================================================================================================================================
Capital Share Transactions
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets derived from capital share transactions .................. 23,702,211 54,977,709
------------------------------
===================================================================================================================================
Redemption Fee
- -----------------------------------------------------------------------------------------------------------------------------------
Redemption fee ...................................................................... 61,123 355,418
------------------------------
===================================================================================================================================
Net Assets
- -----------------------------------------------------------------------------------------------------------------------------------
Total increase in net assets ........................................................ 135,236,307 163,514,432
Beginning of year ................................................................... 311,555,885 148,041,453
------------------------------
End of year* ........................................................................ $ 446,792,192 $ 311,555,885
==============================
* Undistributed investment income--net ........................................... $ 4,190,460 $ 3,345,041
==============================
See Notes to Consolidated Financial Statements.
14 BLACKROCK LATIN AMERICA FUND, INC. NOVEMBER 30, 2006
Consolidated Financial Highlights
Institutional
----------------------------------------------------------------
The following per share data For the Year Ended
and ratios have been derived November 30,
from information provided in ----------------------------------------------------------------
the financial statements. 2006 2005 2004 2003 2002
==================================================================================================================================
Per Share Operating Performance
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year ........................... $ 37.27 $ 22.64 $ 15.83 $ 10.23 $ 11.66
----------------------------------------------------------------
Investment income--net* ...................................... .65 .57 .33 .22 .19
Realized and unrealized gain (loss)--net ..................... 13.32 14.42 6.79 5.44 (1.59)
----------------------------------------------------------------
Total from investment operations ............................. 13.97 14.99 7.12 5.66 (1.40)
----------------------------------------------------------------
Less dividends from investment
income--net ................................................ (.58) (.41) (.31) (.06) (.03)
----------------------------------------------------------------
Redemption fee ............................................... .01 .05 --+ -- --
----------------------------------------------------------------
Net asset value, end of year ................................. $ 50.67 $ 37.27 $ 22.64 $ 15.83 $ 10.23
================================================================
==================================================================================================================================
Total Investment Return**
- ----------------------------------------------------------------------------------------------------------------------------------
Based on net asset value per share ........................... 38.12% 67.55% 45.73% 55.61% (12.04%)
================================================================
==================================================================================================================================
Ratios to Average Net Assets
- ----------------------------------------------------------------------------------------------------------------------------------
Expenses ..................................................... 1.31% 1.43% 1.60% 1.81% 1.85%
================================================================
Investment income--net ....................................... 1.49% 1.98% 1.81% 1.78% 1.63%
================================================================
==================================================================================================================================
Supplemental Data
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (in thousands) ....................... $191,085 $135,279 $ 47,921 $ 27,811 $ 17,018
================================================================
Portfolio turnover ........................................... 48.33% 47.35% 56.80% 57.86% 45.85%
================================================================
Investor A
----------------------------------------------------------------
The following per share data For the Year Ended
and ratios have been derived November 30,
from information provided in ----------------------------------------------------------------
the financial statements. 2006 2005 2004 2003 2002
==================================================================================================================================
Per Share Operating Performance
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year ........................... $ 36.93 $ 22.45 $ 15.71 $ 10.15 $ 11.56
----------------------------------------------------------------
Investment income--net* ...................................... .53 .51 .29 .19 .16
Realized and unrealized gain (loss)--net ..................... 13.21 14.29 6.72 5.40 (1.57)
----------------------------------------------------------------
Total from investment operations ............................. 13.74 14.80 7.01 5.59 (1.41)
----------------------------------------------------------------
Less dividends from investment
income--net ................................................ (.51) (.37) (.27) (.03) --
----------------------------------------------------------------
Redemption fee ............................................... .01 .05 --+ -- --
----------------------------------------------------------------
Net asset value, end of year ................................. $ 50.17 $ 36.93 $ 22.45 $ 15.71 $ 10.15
================================================================
==================================================================================================================================
Total Investment Return**
- ----------------------------------------------------------------------------------------------------------------------------------
Based on net asset value per share ........................... 37.77% 67.10% 45.35% 55.23% (12.20%)
================================================================
==================================================================================================================================
Ratios to Average Net Assets
- ----------------------------------------------------------------------------------------------------------------------------------
Expenses ..................................................... 1.57% 1.68% 1.85% 2.07% 2.10%
================================================================
Investment income--net ....................................... 1.23% 1.81% 1.60% 1.52% 1.37%
================================================================
==================================================================================================================================
Supplemental Data
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (in thousands) ....................... $191,187 $139,062 $ 81,969 $ 62,145 $ 42,062
================================================================
Portfolio turnover ........................................... 48.33% 47.35% 56.80% 57.86% 45.85%
================================================================
* Based on average shares outstanding.
** Total investment returns exclude the effects of sales charges. Effective
December 28, 2005, Institutional Shares are no longer subject to any
front-end sales charge.
+ Amount is less than $.01 per share.
See Notes to Consolidated Financial Statements.
BLACKROCK LATIN AMERICA FUND, INC. NOVEMBER 30, 2006 15
Consolidated Financial Highlights (concluded)
Investor B
----------------------------------------------------------------
The following per share data For the Year Ended
and ratios have been derived November 30,
from information provided in ----------------------------------------------------------------
the financial statements. 2006 2005 2004 2003 2002
==================================================================================================================================
Per Share Operating Performance
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year ........................... $ 35.33 $ 21.45 $ 15.01 $ 9.75 $ 11.20
----------------------------------------------------------------
Investment income--net* ...................................... .20 .29 .15 .08 .07
Realized and unrealized gain (loss)--net ..................... 12.68 13.70 6.43 5.18 (1.52)
----------------------------------------------------------------
Total from investment operations ............................. 12.88 13.99 6.58 5.26 (1.45)
----------------------------------------------------------------
Less dividends from investment
income--net ................................................ (.22) (.16) (.14) -- --
----------------------------------------------------------------
Redemption fee ............................................... .01 .05 --+ -- --
----------------------------------------------------------------
Net asset value, end of year ................................. $ 48.00 $ 35.33 $ 21.45 $ 15.01 $ 9.75
================================================================
==================================================================================================================================
Total Investment Return**
- ----------------------------------------------------------------------------------------------------------------------------------
Based on net asset value per share ........................... 36.72% 65.91% 44.16% 53.95% (12.95%)
================================================================
==================================================================================================================================
Ratios to Average Net Assets
- ----------------------------------------------------------------------------------------------------------------------------------
Expenses ..................................................... 2.34% 2.46% 2.64% 2.89% 2.91%
================================================================
Investment income--net ....................................... .48% 1.10% .86% .75% .62%
================================================================
==================================================================================================================================
Supplemental Data
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (in thousands) ....................... $ 13,911 $ 12,144 $ 11,497 $ 15,129 $ 18,259
================================================================
Portfolio turnover ........................................... 48.33% 47.35% 56.80% 57.86% 45.85%
================================================================
Investor C
----------------------------------------------------------------
The following per share data For the Year Ended
and ratios have been derived November 30,
from information provided in ----------------------------------------------------------------
the financial statements. 2006 2005 2004 2003 2002
==================================================================================================================================
Per Share Operating Performance
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year ........................... $ 35.07 $ 21.38 $ 15.00 $ 9.74 $ 11.19
----------------------------------------------------------------
Investment income--net* ...................................... .17 .25 .14 .08 .07
Realized and unrealized gain (loss)--net ..................... 12.56 13.64 6.41 5.18 (1.52)
----------------------------------------------------------------
Total from investment operations ............................. 12.73 13.89 6.55 5.26 (1.45)
----------------------------------------------------------------
Less dividends from investment
income--net ................................................ (.41) (.25) (.17) -- --
----------------------------------------------------------------
Redemption fee ............................................... .01 .05 --+ -- --
----------------------------------------------------------------
Net asset value, end of year ................................. $ 47.40 $ 35.07 $ 21.38 $ 15.00 $ 9.74
================================================================
==================================================================================================================================
Total Investment Return**
- ----------------------------------------------------------------------------------------------------------------------------------
Based on net asset value per share ........................... 36.75% 65.90% 44.15% 54.00% (12.96%)
================================================================
==================================================================================================================================
Ratios to Average Net Assets
- ----------------------------------------------------------------------------------------------------------------------------------
Expenses ..................................................... 2.34% 2.45% 2.63% 2.88% 2.91%
================================================================
Investment income--net ....................................... .42% .94% .80% .71% .59%
================================================================
==================================================================================================================================
Supplemental Data
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (in thousands) ....................... $ 50,609 $ 25,071 $ 6,655 $ 4,074 $ 3,084
================================================================
Portfolio turnover ........................................... 48.33% 47.35% 56.80% 57.86% 45.85%
================================================================
* Based on average shares outstanding.
** Total investment returns exclude the effects of sales charges.
+ Amount is less than $.01 per share.
See Notes to Consolidated Financial Statements.
16 BLACKROCK LATIN AMERICA FUND, INC. NOVEMBER 30, 2006
Notes to Consolidated Financial Statements
1. Significant Accounting Policies:
On September 29, 2006, Merrill Lynch Latin America Fund, Inc. was renamed
BlackRock Latin America Fund, Inc. (the "Fund"). The Fund is registered under
the Investment Company Act of 1940, as amended, as a non-diversified, open-end
management investment company. The Fund's financial statements are prepared in
conformity with U.S. generally accepted accounting principles, which may require
the use of management accruals and estimates. Actual results may differ from
these estimates. The Fund offers multiple classes of shares. Effective October
2, 2006, Class I, Class A, Class B and Class C Shares were redesignated
Institutional, Investor A, Investor B and Investor C Shares, respectively.
Institutional Shares are sold without a sales charge and only to certain
eligible investors. Investor A Shares are sold with a front-end sales charge.
Shares of Investor B and Investor C may be subject to a contingent deferred
sales charge. All classes of shares have identical voting, dividend, liquidation
and other rights and the same terms and conditions, except that Investor A,
Investor B and Investor C Shares bear certain expenses related to the account
maintenance of such shares and Investor B and Investor C Shares also bear
certain expenses related to the distribution of such shares. Each class has
exclusive voting rights with respect to matters relating to its account
maintenance and distribution expenditures (except that Investor B shareholders
may vote on certain changes to the Investor A distribution plan). Income,
expenses (other than expenses attributable to a specific class) and realized and
unrealized gains and losses are allocated daily to each class based on its
relative net assets. The following is a summary of significant accounting
policies followed by the Fund.
(a) Valuation of investments -- Equity securities held by the Fund that are
traded on stock exchanges or the NASDAQ Global Market are valued at the last
sale price or official close price on the exchange, as of the close of business
on the day the securities are being valued or, lacking any sales, at the last
available bid price for long positions, and at the last available asked price
for short positions. In cases where equity securities are traded on more than
one exchange, the securities are valued on the exchange designated as the
primary market by or under the authority of the Board of Directors of the Fund.
Long positions traded in the over-the-counter ("OTC") markets, NASDAQ Capital
Market or Bulletin Board are valued at the last available bid price or yield
equivalent obtained from one or more dealers or pricing services approved by the
Board of Directors of the Fund. Short positions traded in the OTC markets are
valued at the last available asked price. Portfolio securities that are traded
both in the OTC market and on a stock exchange are valued according to the
broadest and most representative market.
Options written are valued at the last sale price in the case of exchange-traded
options or, in the case of options traded in the OTC market, the last asked
price. Options purchased are valued at their last sale price in the case of
exchange-traded options or, in the case of options traded in the OTC market, the
last bid price. Swap agreements are valued based upon quoted fair valuations
received daily by the Fund from a pricing service or counterparty. Financial
futures contracts and options thereon, which are traded on exchanges, are valued
at their last sale price as of the close of such exchanges. Obligations with
remaining maturities of 60 days or less are valued at amortized cost unless the
Investment Adviser believes that this method no longer produces fair valuations.
Valuation of other short-term investment vehicles is generally based on the net
asset value of the underlying investment vehicle or amortized cost. Investments
in open-end investment companies are valued at their net asset value each
business day.
Repurchase agreements are valued at cost plus accrued interest. The Fund employs
pricing services to provide certain securities prices for the Fund. Securities
and assets for which market quotations are not readily available are valued at
fair value as determined in good faith by or under the direction of the Board of
Directors of the Fund, including valuations furnished by the pricing services
retained by the Fund, which may use a matrix system for valuations. The
procedures of a pricing service and its valuations are reviewed by the officers
of the Fund under the general supervision of the Fund's Board of Directors. Such
valuations and procedures will be reviewed periodically by the Board of
Directors of the Fund.
Generally, trading in foreign securities, as well as U.S. government securities,
money market instruments and certain fixed income securities, is substantially
completed each day at various times prior to the close of business on the New
York Stock Exchange ("NYSE"). The values of such securities used in computing
the net asset value of the Fund's shares are determined as of such times.
Foreign currency exchange rates will generally be determined as of the close of
business on the NYSE. Occasionally, events affecting the values of such
securities and such exchange rates may occur between the times at which they are
determined and the close of business on the NYSE that may not be reflected in
the computation of the Fund's net asset value. If events (for example, a company
announcement, market volatility or a natural disaster) occur during such periods
that are expected to materially affect the
BLACKROCK LATIN AMERICA FUND, INC. NOVEMBER 30, 2006 17
Notes to Consolidated Financial Statements (continued)
value of such securities, those securities may be valued at their fair value as
determined in good faith by the Fund's Board of Directors or by the Manager
using a pricing service and/or procedures approved by the Fund's Board of
Directors.
(b) Foreign currency transactions -- Transactions denominated in foreign
currencies are recorded at the exchange rate prevailing when recognized. Assets
and liabilities denominated in foreign currencies are valued at the exchange
rate at the end of the period. Foreign currency transactions are the result of
settling (realized) or valuing (unrealized) assets or liabilities expressed in
foreign currencies into U.S. dollars. Realized and unrealized gains or losses
from investments include the effects of foreign exchange rates on investments.
The Fund invests in foreign securities, which may involve a number of risk
factors and special considerations not present with investments in securities of
U.S. corporations.
(c) Derivative financial instruments -- The Fund may engage in various portfolio
investment strategies both to increase the return of the Fund and to hedge, or
protect, its exposure to interest rate movements and movements in the securities
markets. Losses may arise due to changes in the value of the contract or if the
counterparty does not perform under the contract.
o Options -- The Fund may write and purchase call and put options. When the
Fund writes an option, an amount equal to the premium received by the Fund
is reflected as an asset and an equivalent liability. The amount of the
liability is subsequently marked-to-market to reflect the current market
value of the option written. When a security is purchased or sold through
an exercise of an option, the related premium paid (or received) is added
to (or deducted from) the basis of the security acquired or deducted from
(or added to) the proceeds of the security sold. When an option expires
(or the Fund enters into a closing transaction), the Fund realizes a gain
or loss on the option to the extent of the premiums received or paid (or
gain or loss to the extent the cost of the closing transaction exceeds the
premium paid or received).
Written and purchased options are non-income producing investments.
o Forward foreign exchange contracts -- The Fund may enter into forward
foreign exchange contracts as a hedge against either specific transactions
or portfolio positions. The contract is marked-to-market daily and the
change in market value is recorded by the Fund as an unrealized gain or
loss. When the contract is closed, the Fund records a realized gain or
loss equal to the difference between the value at the time it was opened
and the value at the time it was closed.
o Foreign currency options and futures -- The Fund may purchase or sell
listed or OTC foreign currency options, foreign currency futures and
related options on foreign currency futures as a short or long hedge
against possible variations in foreign exchange rates. Such transactions
may be effected with respect to hedges on non-U.S. dollar-denominated
securities owned by the Fund, sold by the Fund but not yet delivered, or
committed or anticipated to be purchased by the Fund.
o Financial futures contracts -- The Fund may purchase or sell financial
futures contracts and options on such financial futures contracts.
Financial futures contracts are contracts for delayed delivery of
securities at a specific future date and at a specific price or yield.
Upon entering into a contract, the Fund deposits and maintains as
collateral such initial margin as required by the exchange on which the
transaction is effected. Pursuant to the contract, the Fund agrees to
receive from or pay to the broker an amount of cash equal to the daily
fluctuation in value of the contract. Such receipts or payments are known
as variation margin and are recorded by the Fund as unrealized gains or
losses. When the contract is closed, the Fund records a realized gain or
loss equal to the difference between the value of the contract at the time
it was opened and the value at the time it was closed.
(d) Income taxes -- It is the Fund's policy to comply with the requirements of
the Internal Revenue Code applicable to regulated investment companies and to
distribute substantially all of its taxable income to its shareholders.
Therefore, no federal income tax provision is required. Under the applicable
foreign tax law, a withholding tax may be imposed on interest, dividends and
capital gains at various rates.
(e) Security transactions and investment income -- Security transactions are
recorded on the dates the transactions are entered into (the trade dates).
Realized gains and losses on security transactions are determined on the
identified cost basis. Dividend income is recorded on the ex-dividend dates.
Dividends from foreign securities where the ex-dividend date may have passed are
subsequently recorded when the Fund has determined the ex-dividend date.
Interest income is recognized on the accrual basis.
18 BLACKROCK LATIN AMERICA FUND, INC. NOVEMBER 30, 2006
Notes to Consolidated Financial Statements (continued)
(f) Prepaid registration fees -- Prepaid registration fees are charged to
expense as the related shares are issued.
(g) Dividends and distributions -- Dividends and distributions paid by the Fund
are recorded on the ex-dividend dates.
(h) Securities lending -- The Fund may lend securities to financial institutions
that provide cash or securities issued or guaranteed by the U.S. government as
collateral, which will be maintained at all times in an amount equal to at least
100% of the current market value of the loaned securities. The market value of
the loaned securities is determined at the close of business of the Fund and any
additional required collateral is delivered to the Fund on the next business
day. Where the Fund receives securities as collateral for the loaned securities,
it collects a fee from the borrower. The Fund typically receives the income on
the loaned securities but does not receive the income on the collateral. Where
the Fund receives cash collateral, it may invest such collateral and retain the
amount earned on such investment, net of any amount rebated to the borrower.
Loans of securities are terminable at any time and the borrower, after notice,
is required to return borrowed securities within five business days. The Fund
may pay reasonable finder's, lending agent, administrative and custodial fees in
connection with its loans. In the event that the borrower defaults on its
obligation to return borrowed securities because of insolvency or for any other
reason, the Fund could experience delays and costs in gaining access to the
collateral. The Fund also could suffer a loss where the value of the collateral
falls below the market value of the borrowed securities, in the event of
borrower default or in the event of losses on investments made with cash
collateral.
(i) Basis of consolidation -- The accompanying consolidated financial statements
include the accounts of Merrill Lynch Latin America Fund Chile Ltd., a wholly
owned subsidiary, which primarily invests in Chilean securities. Intercompany
accounts and transactions have been eliminated.
(j) Recent accounting pronouncements -- In July 2006, the Financial Accounting
Standards Board ("FASB") issued Interpretation No. 48 ("FIN 48"), "Accounting
for Uncertainty in Income Taxes -- an interpretation of FASB Statement No. 109."
FIN 48 prescribes the minimum recognition threshold a tax position must meet in
connection with accounting for uncertainties in income tax positions taken or
expected to be taken by an entity including mutual funds before being measured
and recognized in the financial statements. Adoption of FIN 48 is required for
fiscal years beginning after December 15, 2006. The impact on the Fund's
financial statements, if any, is currently being assessed.
In addition, in September 2006, Statement of Financial Accounting Standards No.
157, "Fair Value Measurements" ("FAS 157"), was issued and is effective for
fiscal years beginning after November 15, 2007. FAS 157 defines fair value,
establishes a framework for measuring fair value and expands disclosures about
fair value measurements. Management is currently evaluating the implications of
FAS 157. At this time its impact on the Fund's financial statements has not been
determined.
(k) Bank overdraft -- The Fund recorded a bank overdraft, which resulted from
management estimates of available cash.
(l) Reclassification -- U.S. generally accepted accounting principles require
that certain components of net assets be adjusted to reflect permanent
differences between financial and tax reporting. Accordingly, during the current
year, $442,377 has been reclassified between accumulated net realized capital
losses and undistributed net investment income as a result of permanent
differences attributable to passive foreign investment companies and foreign
currency transactions. This reclassification had no effect on net assets or net
asset values per share.
2. Investment Advisory Agreement and Transactions with Affiliates:
On September 29, 2006, BlackRock, Inc. and Merrill Lynch & Co., Inc. ("Merrill
Lynch") combined Merrill Lynch's investment management business, Merrill Lynch
Investment Managers, L.P. ("MLIM"), and its affiliates, with BlackRock, Inc. to
create a new independent company. Merrill Lynch has a 49.8% economic interest
and a 45% voting interest in the combined company and The PNC Financial Services
Group, Inc. ("PNC"), has approximately a 34% economic and voting interest. The
new company operates under the BlackRock name and is governed by a board of
directors with a majority of independent members.
On August 15, 2006, shareholders of the Fund approved a new Investment Advisory
Agreement with BlackRock Advisors, Inc. (the "Manager"), an indirect, wholly
owned subsidiary of BlackRock, Inc. BlackRock Advisors, Inc. was recently
reorganized into a limited liability company and renamed BlackRock Advisors,
LLC. The new Investment Advisory Agreement between the Fund and the Manager
became effective on September 29, 2006. Prior to September 29, 2006, MLIM was
the Fund's Manager. The general partner of MLIM is
BLACKROCK LATIN AMERICA FUND, INC. NOVEMBER 30, 2006 19
Notes to Consolidated Financial Statements (continued)
Princeton Services, Inc.("PSI"), an indirect, wholly owned subsidiary of Merrill
Lynch, which is the limited partner. The Fund has also entered into separate
Distribution Agreements and Distribution Plans with FAM Distributors, Inc.
("FAMD") and BlackRock Distributors, Inc. ("BDI") (collectively, the
"Distributor"). FAMD is a wholly owned subsidiary of Merrill Lynch Group, Inc.
and BDI is an affiliate of BlackRock, Inc.
The Manager is responsible for the management of the Fund's portfolio and
provides the necessary personnel, facilities, equipment and certain other
services necessary to the operations of the Fund. For such services, the Fund
pays a monthly fee of 1.0%, on an annual basis, of the average daily value of
the Fund's net assets. In addition, the Manager has entered into sub-advisory
agreements with BlackRock Investment Management, LLC ("BIM") and BlackRock Asset
Management U.K. Limited, both affiliates of the Manager, under which the Manager
pays each Sub-Adviser for services it provides a fee that is a percentage of the
management fee paid by the Fund to the Manager. Prior to September 29, 2006,
MLIM had a Sub-Advisory Agreement with Merrill Lynch Asset Management U.K.
Limited ("MLAM U.K."), an affiliate of MLIM.
Pursuant to the Distribution Plans adopted by the Fund in accordance with Rule
12b-1 under the Investment Company Act of 1940, the Fund pays the Distributor
ongoing account maintenance fees ("service fees") and distribution fees. The
fees are accrued daily and paid monthly at annual rates based upon the average
daily net assets of the shares as follows:
- --------------------------------------------------------------------------------
Distribution
Service Fee Fee
- --------------------------------------------------------------------------------
Investor A ............................. .25% --
Investor B ............................. .25% .75%
Investor C ............................. .25% .75%
- --------------------------------------------------------------------------------
Pursuant to sub-agreements with each Distributor, broker-dealers, including
Merrill Lynch, Pierce, Fenner & Smith Incorporated ("MLPF&S"), a wholly owned
subsidiary of Merrill Lynch, and an affiliate of the Distributor, provides
account maintenance and distribution services to the Fund. The ongoing service
fee compensates the Distributor and each broker-dealer (including MLPF&S) for
providing account maintenance services to Investor A, Investor B and Investor C
shareholders. The ongoing distribution fee compensates the Distributor and the
broker-dealers for providing shareholder and distribution-related services to
Investor B and Investor C shareholders.
For the year ended November 30, 2006, FAMD, the Fund's sole Distributor until
September 29, 2006, and BDI earned underwriting discounts and direct commissions
and MLPF&S earned dealer concessions on sales of the Fund's Institutional and
Investor A Shares as follows:
- --------------------------------------------------------------------------------
FAMD MLPF&S BDI
- --------------------------------------------------------------------------------
Institutional ............... $ 68 $ 43 --
Investor A .................. $ 31,545 $453,859 $ 576
- --------------------------------------------------------------------------------
For the year ended November 30, 2006, MLPF&S received contingent deferred sales
charges of $1,640 and $5,155 relating to transactions in Investor B and Investor
C Shares, respectively. Furthermore, MLPF&S received contingent deferred sales
charges of $661 relating to transactions subject to front-end sales charge
waivers in Investor A Shares.
BlackRock maintains a call center, which is responsible for providing certain
shareholder services to the Fund, such as responding to shareholder inquiries
and processing transactions based upon instructions from shareholders with
respect to the subscription and redemption of Fund shares. During the period
September 29, 2006 to November 30, 2006, the following amounts have been accrued
by the Fund to reimburse BlackRock for costs incurred running the call center,
which are a component of the transfer agent fees in the accompanying
Consolidated Statement of Operations.
- --------------------------------------------------------------------------------
Call Center Fees
- --------------------------------------------------------------------------------
Institutional .......................................... $ 235
Investor A ............................................. $1,794
Investor B ............................................. $ 205
Investor C ............................................. $ 483
- --------------------------------------------------------------------------------
The Fund has received an exemptive order from the Securities and Exchange
Commission permitting it to lend portfolio securities to MLPF&S or its
affiliates. As of November 30, 2006, the Fund lent securities with a value of
$599,589 to MLPF&S or its affiliates. Pursuant to that order, the Fund has
retained BIM, an affiliate of the Manager, as the securities lending agent for a
fee based on a share of the returns on investment of cash collateral. Prior to
September 29, 2006, BIM was organized as Merrill Lynch Investment Managers, LLC
("MLIM, LLC"), an affiliate of MLIM, and MLIM, LLC was the Fund's securities
lending agent. BIM may, on behalf of the Fund, invest cash collateral received
by the Fund for such loans, among other things, in a private investment company
managed by the Manager or in registered money market funds advised by the
Manager or its affiliates. For the year ended November 30, 2006, BIM received
$17,891 in securities lending agent fees.
For the year ended November 30, 2006, the Fund reimbursed MLIM and the Manager
$7,217 and $1,260, respectively, for certain accounting services.
20 BLACKROCK LATIN AMERICA FUND, INC. NOVEMBER 30, 2006
Notes to Consolidated Financial Statements (continued)
In addition, MLPF&S received $85,047 in commissions on the execution of
portfolio security transactions for the Fund for the year ended November 30,
2006.
Effective September 29, 2006, PFPC, Inc., an indirect, wholly owned subsidiary
of PNC and an affiliate of the Manager, became the Fund's transfer agent. Prior
to September 29, 2006, the Fund's transfer agent was Financial Data Services,
Inc. ("FDS"), a wholly owned subsidiary of Merrill Lynch.
Prior to September 29, 2006 certain officers and/or directors of the Fund were
officers and/or directors of MLIM, PSI, MLAM U.K., FDS, FAMD, Merrill Lynch,
and/or MLIM, LLC.
Commencing September 29, 2006, certain officers and/or directors of the Fund are
officers and/or directors of BlackRock, Inc. or its affiliates.
3. Investments:
Purchases and sales of investments, excluding short-term securities, for the
year ended November 30, 2006 were $219,594,253 and $190,188,227, respectively.
4. Capital Share Transactions:
Net increase in net assets derived from capital share transactions was
$23,702,211 and $54,977,709 for the years ended November 30, 2006 and November
30, 2005, respectively.
Transactions in capital shares for each class were as follows:
- -------------------------------------------------------------------------------
Institutional Shares for the Year Dollar
Ended November 30, 2006 Shares Amount
- -------------------------------------------------------------------------------
Shares sold ............................ 2,731,034 $ 118,157,152
Shares issued to shareholders in
reinvestment of dividends ............ 56,724 2,065,916
---------------------------------
Total issued ........................... 2,787,758 120,223,068
Shares redeemed ........................ (2,646,317) (111,757,237)
---------------------------------
Net increase ........................... 141,441 $ 8,465,831
=================================
- -------------------------------------------------------------------------------
Institutional Shares for the Year Dollar
Ended November 30, 2005 Shares Amount
- -------------------------------------------------------------------------------
Shares sold ............................ 2,655,231 $ 76,713,225
Shares issued to shareholders in
reinvestment of dividends ............ 37,478 873,985
---------------------------------
Total issued ........................... 2,692,709 77,587,210
Shares redeemed ........................ (1,179,987) (32,591,963)
---------------------------------
Net increase ........................... 1,512,722 $ 44,995,247
=================================
- -------------------------------------------------------------------------------
Investor A Shares for the Year Dollar
Ended November 30, 2006 Shares Amount
- -------------------------------------------------------------------------------
Shares sold ............................ 1,196,710 $ 50,898,034
Automatic conversion of shares ......... 63,583 2,644,612
Shares issued to shareholders in
reinvestment of dividends ............ 44,238 1,600,540
---------------------------------
Total issued ........................... 1,304,531 55,143,186
Shares redeemed ........................ (1,259,090) (52,899,678)
---------------------------------
Net increase ........................... 45,441 $ 2,243,508
=================================
- -------------------------------------------------------------------------------
Investor A Shares for the Year Dollar
Ended November 30, 2005 Shares Amount
- -------------------------------------------------------------------------------
Shares sold ............................ 1,485,104 $ 40,057,939
Automatic conversion of shares ......... 206,329 5,718,018
Shares issued to shareholders in
reinvestment of dividends ............ 46,522 1,077,449
---------------------------------
Total issued ........................... 1,737,955 46,853,406
Shares redeemed ........................ (1,624,528) (43,327,517)
---------------------------------
Net increase ........................... 113,427 $ 3,525,889
=================================
- -------------------------------------------------------------------------------
Investor B Shares for the Year Dollar
Ended November 30, 2006 Shares Amount
- -------------------------------------------------------------------------------
Shares sold ............................ 199,572 $ 8,247,622
Shares issued to shareholders in
reinvestment of dividends ............ 1,877 66,196
---------------------------------
Total issued ........................... 201,449 8,313,818
---------------------------------
Automatic conversion of shares ......... (66,225) (2,644,612)
Shares redeemed ........................ (189,174) (7,699,053)
---------------------------------
Total redeemed ......................... (255,399) (10,343,665)
---------------------------------
Net decrease ........................... (53,950) $ (2,029,847)
=================================
- -------------------------------------------------------------------------------
Investor B Shares for the Year Dollar
Ended November 30, 2005 Shares Amount
- -------------------------------------------------------------------------------
Shares sold ............................ 158,749 $ 4,289,555
Shares issued to shareholders in
reinvestment of dividends ............ 3,129 69,840
---------------------------------
Total issued ........................... 161,878 4,359,395
---------------------------------
Automatic conversion of shares ......... (214,990) (5,718,018)
Shares redeemed ........................ (139,045) (3,746,823)
---------------------------------
Total redeemed ......................... (354,035) (9,464,841)
---------------------------------
Net decrease ........................... (192,157) $ (5,105,446)
=================================
- -------------------------------------------------------------------------------
Investor C Shares for the Year Dollar
Ended November 30, 2006 Shares Amount
- -------------------------------------------------------------------------------
Shares sold ............................ 823,696 $ 33,675,697
Shares issued to shareholders in
reinvestment of dividends ............ 7,792 269,785
---------------------------------
Total issued ........................... 831,488 33,945,482
Shares redeemed ........................ (478,645) (18,922,763)
---------------------------------
Net increase ........................... 352,843 $ 15,022,719
=================================
BLACKROCK LATIN AMERICA FUND, INC. NOVEMBER 30, 2006 21
Notes to Consolidated Financial Statements (concluded)
- -------------------------------------------------------------------------------
Investor C Shares for the Year Dollar
Ended November 30, 2005 Shares Amount
- -------------------------------------------------------------------------------
Shares sold ............................ 560,993 $ 15,756,268
Shares issued to shareholders in
reinvestment of dividends ............ 2,999 66,431
---------------------------------
Total issued ........................... 563,992 15,822,699
Shares redeemed ........................ (160,291) (4,260,680)
---------------------------------
Net increase ........................... 403,701 $ 11,562,019
=================================
The Fund charges a 2% redemption fee on the proceeds (calculated at market
value) of a redemption (either by sale or exchange) of Fund shares made within
30 days of purchase or exchange. The redemption fee is paid to the Fund and is
intended to offset the trading costs, market impact and other costs associated
with short-term trading into and out of the Fund.
5. Short-Term Borrowings:
The Fund, along with certain other funds managed by the Manager and its
affiliates (or MLIM and its affiliates), is party to a $500,000,000 credit
agreement with a group of lenders. The Fund may borrow under the credit
agreement to fund shareholder redemptions and for other lawful purposes other
than for leverage. The Fund may borrow up to the maximum amount allowable under
the Fund's current prospectus and statement of additional information, subject
to various other legal, regulatory or contractual limits. The Fund pays a
commitment fee of .06% per annum based on the Fund's pro rata share of the
unused portion of the credit agreement. Amounts borrowed under the credit
agreement bear interest at a rate equal to, at each portfolio's election, the
federal funds rate plus .35% or a base rate as defined in the credit agreement.
The Fund did not borrow under the credit agreement during the year ended
November 30, 2006. On November 22, 2006, the credit agreement was renewed for
one year under substantially the same terms.
6. Commitments:
At November 30, 2006, the Fund had entered into foreign exchange contracts under
which it had agreed to purchase a foreign currency with an approximate value of
$1,144,000.
7. Distributions to Shareholders:
The tax character of distributions paid during the fiscal years ended November
30, 2006 and November 30, 2005 was as follows:
- --------------------------------------------------------------------------------
11/30/2006 11/30/2005
- --------------------------------------------------------------------------------
Distributions paid from:
Ordinary income ........................ $4,503,634 $2,426,627
-----------------------------
Total taxable distributions .............. $4,503,634 $2,426,627
=============================
As of November 30, 2006, the components of accumulated earnings on a tax basis
were as follows:
- -----------------------------------------------------------------------------
Undistributed ordinary income -- net ................... $ 5,470,399
Undistributed long-term capital gains -- net ........... --
-------------
Total undistributed earnings -- net .................... 5,470,399
Capital loss carryforward .............................. (24,001,844)*
Unrealized gains -- net ................................ 147,027,924**
-------------
Total accumulated earnings -- net ...................... $ 128,496,479
=============
* On November 30, 2006, the Fund had a net capital loss carryforward of
$24,001,844, of which $13,033,086 expires in 2010 and $10,968,758 expires
in 2011. This amount will be available to offset like amounts of any
future taxable gains.
** The difference between book-basis and tax-basis net unrealized gains is
attributable primarily to the tax deferral of losses on wash sales, the
realization for tax purposes of unrealized gains (losses) on certain
foreign currency contracts, the deferral of post-October capital losses
for tax purposes, the realization for tax purposes of unrealized gains on
investments in passive foreign investment companies, and other book/tax
temporary differences.
8. Subsequent Event:
The Fund paid an ordinary income dividend in the amount of $.718615 per
Institutional Share, $.607510 per Investor A Share, $.208691 per Investor B
Share and $.325287 per Investor C Share on December 20, 2006 to shareholders of
record on December 18, 2006.
22 BLACKROCK LATIN AMERICA FUND, INC. NOVEMBER 30, 2006
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Directors of BlackRock Latin America Fund,
Inc.:
We have audited the accompanying consolidated statement of assets and
liabilities, including the consolidated schedule of investments, of BlackRock
Latin America Fund, Inc. (formerly Merrill Lynch Latin America Fund, Inc.) and
its subsidiary as of November 30, 2006, and the related consolidated statement
of operations for the year then ended, the consolidated statements of changes in
net assets for each of the two years in the period then ended, and the
consolidated financial highlights for each of the five years in the period then
ended. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. The Fund
is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audits included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Fund's internal control over
financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. Our procedures included confirmation
of securities owned as of November 30, 2006, by correspondence with the
custodian and brokers; where replies were not received from brokers, we
performed other auditing procedures. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements and consolidated financial
highlights referred to above present fairly, in all material respects, the
financial position of BlackRock Latin America Fund, Inc. and its subsidiary as
of November 30, 2006, the results of their operations for the year then ended,
the changes in their net assets for each of the two years in the period then
ended, and their financial highlights for each of the five years in the period
then ended, in conformity with accounting principles generally accepted in the
United States of America.
Deloitte & Touche LLP
Princeton, New Jersey
January 19, 2007
Important Tax Information (unaudited)
The following information is provided with respect to the ordinary income
distribution paid by BlackRock Latin America Fund, Inc. during the taxable year
ended November 30,2006:
- --------------------------------------------------------------------------------
Payable Date
12/22/05 4/28/06
- --------------------------------------------------------------------------------
Qualified Dividend Income for Individuals .......... 100% 90.37%
Foreign Source Income .............................. 91.19%* 91.19%*
Foreign Taxes Paid Per Share ....................... $.068378 --
- --------------------------------------------------------------------------------
* Expressed as a percentage of the distribution grossed-up for foreign
taxes. The Fund hereby designates the percentage indicated above or the
maximum amount allowable by law.
The foreign taxes paid represent taxes incurred by the Fund on income received
by the Fund from foreign sources. Foreign taxes paid may be included in taxable
income with an offsetting deduction from gross income or may be taken as a
credit for taxes paid to foreign governments. You should consult your tax
advisor regarding the appropriate treatment of foreign taxes paid.
BLACKROCK LATIN AMERICA FUND, INC. NOVEMBER 30, 2006 23
Disclosure of Investment Advisory Agreement
BlackRock Investment Advisory Agreement -- Matters Considered by the Board
The following disclosure appeared in the May 31, 2006 Semi-Annual Report of the
Fund and is the discussion referred to in "New BlackRock Sub-Advisory Agreements
- -- Matters Considered by the Board" below.
In connection with the Transaction between Merrill Lynch and BlackRock, the
Fund's Board of Directors considered a new investment advisory agreement (the
"New Investment Advisory Agreement") between the Fund and BlackRock Advisors,
Inc. or its successor ("BlackRock Advisors"). If the New Investment Advisory
Agreement is approved by the Fund's shareholders, it will become effective upon
the closing of the Transaction, which is expected in the third quarter of 2006.
The Board discussed the New Investment Advisory Agreement at telephonic and
in-person meetings held during April and May 2006. The Board, including the
independent directors, approved the New Investment Advisory Agreement at a
meeting held on May 12, 2006.
To assist the Board in its consideration of the New Investment Advisory
Agreement, BlackRock provided materials and information about BlackRock,
including its financial condition and asset management capabilities and
organization, and Merrill Lynch provided materials and information about the
Transaction. The independent directors, through their independent legal counsel,
also requested and received additional information from Merrill Lynch and
BlackRock in connection with their consideration of the New Investment Advisory
Agreement. The additional information was provided in advance of the May 12,
2006 meeting. In addition, the independent directors consulted with their
counsel and Fund counsel on numerous occasions, discussing, among other things,
the legal standards and certain other considerations relevant to the directors'
deliberations.
At the Board meetings, members of the Board discussed with Merrill Lynch
management and certain BlackRock representatives the Transaction, its strategic
rationale and BlackRock's general plans and intentions regarding the Fund. At
these Board meetings, representatives of Merrill Lynch and BlackRock made
presentations to and responded to questions from the Board. The directors also
inquired about the plans for and anticipated roles and responsibilities of
certain employees and officers of the Investment Adviser and certain affiliates
being transferred to BlackRock in connection with the Transaction. The
independent directors of the Board also conferred separately and with their
counsel about the Transaction and other matters related to the Transaction on a
number of occasions, including in connection with the April and May 2006
meetings. After the presentations and after reviewing the written materials
provided, the independent directors met in executive sessions with their counsel
to consider the New Investment Advisory Agreement.
In connection with the Board's review of the New Investment Advisory Agreement,
Merrill Lynch and/or BlackRock advised the directors about a variety of matters.
The advice included the following, among other matters:
o that there is not expected to be any diminution in the nature, quality and
extent of services provided to the Fund and its shareholders by BlackRock
Advisors, including compliance services;
o that operation of New BlackRock as an independent investment management
firm will enhance its ability to attract and retain talented
professionals;
o that the Fund should benefit from having access to BlackRock's state of
the art technology and risk management analytic tools, including
investment tools, provided under the BlackRock Solutions(R) brand name;
o that BlackRock has no present intention to alter any applicable expense
waivers and reimbursements currently in effect and, while it reserves the
right to do so in the future, it would seek the approval of the Board
before making any changes;
o that BlackRock and Merrill Lynch will enter into an agreement, for an
initial three-year period and automatically renewable from year to year
thereafter, in connection with the Transaction under which Merrill
Lynch-affiliated broker-dealers will continue to offer the Fund as an
investment product;
o that BlackRock Advisors will have substantially the same access to the
Merrill Lynch sales force when distributing shares of the Fund as is
currently provided to the Investment Adviser and that other arrangements
between the Investment Adviser and Merrill Lynch sales channels will be
preserved;
o that the Fund will have access to BlackRock's network of third party
brokers, retirement plan platforms and registered investment advisers;
o that under the Transaction Agreement, Merrill Lynch and BlackRock have
agreed to conduct, and use reasonable
24 BLACKROCK LATIN AMERICA FUND, INC. NOVEMBER 30, 2006
best efforts to cause their respective affiliates to conduct, their
respective businesses in compliance with the conditions of Section 15(f)
of the Investment Company Act of 1940 (the "1940 Act") in relation to any
public funds advised by BlackRock or the Investment Adviser (or its
affiliates), respectively; and
o that Merrill Lynch and BlackRock would derive benefits from the
Transaction and that, as a result, they have a different financial
interest in the matters that were being considered than do Fund
shareholders;
The directors considered the information provided by Merrill Lynch and BlackRock
above, and, among other factors, the following:
o the potential benefits to Fund shareholders from being part of a combined
fund family with BlackRock-sponsored funds, including possible economies
of scale and access to investment opportunities;
o the potential for expanding distribution of Fund shares through improved
access to third party distribution;
o the reputation, financial strength and resources of BlackRock and its
investment advisory subsidiaries and the anticipated financial strength
and resources of New BlackRock;
o the compliance policies and procedures of BlackRock Advisors;
o the terms and conditions of the New Investment Advisory Agreement,
including the fact that the schedule of the Fund's total advisory fees
will not increase by virtue of the New Investment Advisory Agreement, but
will remain the same;
o that within the past year the Board performed a full annual review of the
investment advisory agreement currently in effect for the Fund (the
"Current Investment Advisory Agreement") as required by the 1940 Act and
has determined that the Investment Adviser has the capabilities, resources
and personnel necessary to provide the advisory and administrative
services currently provided to the Fund; and that the advisory and/or
management fees paid by the Fund, taking into account any
applicableagreed-upon fee waivers and breakpoints, represent reasonable
compensation to the Investment Adviser in light of the services provided,
the costs to the Investment Adviser of providing those services, economies
of scale, the fees and other expenses paid by similar funds (including
information provided by Lipper, Inc. ["Lipper"]), and such other matters
as the directors have considered relevant in the exercise of their
reasonable judgment (the Board had most recently performed a full annual
review of the Current Investment Advisory Agreement in May 2005); and
o that Merrill Lynch agreed to pay all expenses of the Fund in connection
with the Board's consideration of the New Investment Advisory Agreement
and related agreements and all costs of shareholder approval of the New
Investment Advisory Agreement and as a result the Fund would bear no costs
in obtaining shareholder approval of the New Investment Advisory
Agreement.
Certain of these considerations are discussed in more detail below.
In its review of the New Investment Advisory Agreement, the Board assessed the
nature, scope and quality of the services to be provided to the Fund by the
personnel of BlackRock Advisors and its affiliates, including administrative
services, shareholder services, oversight of fund accounting, marketing services
and assistance in meeting legal and regulatory requirements. In its review of
the New Investment Advisory Agreement, the Board also considered a range of
information in connection with its oversight of the services to be provided by
BlackRock Advisors and its affiliates.Among the matters considered were: (a)
fees (in addition to management fees) to be paid to BlackRock Advisors and its
affiliates by the Fund; (b) Fund operating expenses paid to third parties; (c)
the resources devoted to and compliance reports relating to the Fund's
investment objective, policies and restrictions, and its compliance with its
Code of Ethics and BlackRock Advisors' compliance policies and procedures; and
(d) the nature, cost and character of non-investment management services to be
provided by BlackRock Advisors and its affiliates.
In the period prior to the Board meetings to consider renewal of the Current
Investment Advisory Agreement, the Board had requested and received materials
specifically relating to the agreement. These materials included (a) information
compiled by Lipper on the fees and expenses and the investment performance of
the Fund as compared to a comparable group of funds as classified by Lipper; (b)
a discussion by the Fund's portfolio management team on investment strategies
used by the Fund during its most recent fiscal year; (c) information on the
profitability to the Investment Adviser of the Current Investment Advisory
Agreement and other payments
BLACKROCK LATIN AMERICA FUND, INC. NOVEMBER 30, 2006 25
Disclosure of Investment Advisory Agreement (continued)
received by the Investment Adviser and its affiliates from the Fund; and (d)
information provided by the Investment Adviser concerning services related to
the valuation and pricing of Fund portfolio holdings, allocation of Fund
brokerage fees, the Fund's portfolio turnover statistics, and direct and
indirect benefits to the Investment Adviser and its affiliates from their
relationship with the Fund.
In their deliberations, the directors considered information received in
connection with their most recent continuation of the Current Investment
Advisory Agreement, in addition to information provided by BlackRock and
BlackRock Advisors in connection with their evaluation of the terms and
conditions of the New Investment Advisory Agreement. The directors did not
identify any particular information that was all-important or controlling, and
each director attributed different weights to the various factors. The
directors, including a majority of the independent directors, concluded that the
terms of the New Investment Advisory Agreement are appropriate, that the fees to
be paid are reasonable in light of the services to be provided to the Fund, and
that the New Investment Advisory Agreement should be approved and recommended to
Fund shareholders.
Nature, Quality and Extent of Services Provided -- The Board reviewed the
nature, extent and quality of services provided by the Investment Adviser,
including the investment advisory services and the resulting performance of the
Fund, as well as the nature, quality and extent of services expected to be
provided by BlackRock Advisors. The Board focused primarily on the Investment
Adviser's investment advisory services and the Fund's investment performance,
but also considered certain areas in which both the Investment Adviser and the
Fund receive services as part of the Merrill Lynch complex. The Board compared
the Fund's performance -- both including and excluding the effects of the Fund's
fees and expenses -- to the performance of a comparable group of mutual funds,
and the performance of a relevant index or combination of indexes. While the
Board reviews performance data at least quarterly, consistent with the
Investment Adviser's investment goals, the Board attaches more importance to
performance over relatively long periods of time, typically three to five years.
In evaluating the nature, quality and extent of the services to be provided by
BlackRock Advisors under the New Investment Advisory Agreement, the directors
considered, among other things, the expected impact of the Transaction on the
operations, facilities, organization and personnel of New BlackRock and how it
would affect the Fund; the ability of BlackRock Advisors to perform its duties
after the Transaction; and any anticipated changes to the current investment and
other practices of the Fund.
The directors were given information with respect to the potential benefits to
the Fund and its shareholders from having access to BlackRock's state of the art
technology and risk management analytic tools, including the investment tools
provided under the BlackRock Solutions brand name.
The directors were advised that, as a result of Merrill Lynch's equity interest
in BlackRock after the Transaction, the Fund will continue to be subject to
restrictions concerning certain transactions involving Merrill Lynch affiliates
(for example, transactions with a Merrill Lynch broker-dealer acting as
principal) absent revised or new regulatory relief. The directors were advised
that a revision of existing regulatory relief with respect to these restrictions
was being sought from the Securities and Exchange Commission and were advised of
the possibility of receipt of such revised regulatory relief. There can be no
assurance that such relief will be obtained.
Based on their review of the materials provided and the assurances they had
received from the management of Merrill Lynch and of BlackRock, the directors
determined that the nature and quality of services to be provided to the Fund
under the New Investment Advisory Agreement were expected to be as good or
better than that provided under the Current Investment Advisory Agreement. It
was noted, however, that it is expected that there will be changes in personnel
following the Transaction and the combination of the operations of the
Investment Adviser and its affiliates with those of BlackRock. The directors
noted that if current portfolio managers or other personnel cease to be
available, the Board would consider all available options, which could include
seeking the investment advisory or other services of BlackRock affiliates.
Accordingly, the directors concluded that, overall, they were satisfied at the
present time with assurances from BlackRock and BlackRock Advisors as to the
expected nature, extent and quality of the services to be provided to the Fund
under the New Investment Advisory Agreement.
Costs of Services Provided and Profitability -- It was noted that, in
conjunction with the recent review of the Current Investment Advisory Agreement,
the directors had received, among other things, a report from Lipper comparing
the Fund's fees, expenses and performance to those of a peer group selected by
Lipper, and information as to the fees charged by the Investment Adviser or its
affiliates to other registered investment company clients for investment
management
26 BLACKROCK LATIN AMERICA FUND, INC. NOVEMBER 30, 2006
services. The Board reviewed the Fund's contractual management fee rate and
actual management fee rate as a percentage of total assets at common asset
levels -- the actual rate includes advisory fees and the effects of any fee
waivers -- compared to the other funds in its Lipper category. They also
compared the Fund's total expenses to those of other comparable funds. The
information showed that the Fund had fees and expenses within the range of fees
and expenses of comparable funds. The Board considered the services to be
provided by and the fees to be charged by BlackRock Advisors to other funds with
similar investment mandates and noted that the fees charged by BlackRock
Advisors in those cases, including fee waivers and expense reimbursements, were
generally comparable to those being charged to the Fund. The Board also noted
that, as a general matter, according to the information provided by BlackRock,
fees charged to institutional clients were lower than the fees charged to the
Fund, but BlackRock Advisors provided less extensive services to such clients.
The Board concluded that the Fund's management fee and fee rate and overall
expense ratio are reasonable compared to those of other comparable funds.
In evaluating the costs of the services to be provided by BlackRock Advisors
under the New Investment Advisory Agreement, the directors considered, among
other things, whether advisory fees or other expenses would change as a result
of the Transaction. Based on their review of the materials provided and the fact
that the New Investment Advisory Agreement is substantially similar to the
Current Investment Advisory Agreement in all material respects, including the
rate of compensation, the directors determined that the Transaction should not
increase the total fees payable, including any fee waivers and expense
reimbursements, for advisory and administrative services. The directors noted
that it was not possible to predict how the Transaction would affect BlackRock
Advisors' profitability from its relationship with the Fund.
The directors discussed with BlackRock Advisors its general methodology to be
used in determining its profitability with respect to its relationship with the
Fund. The directors noted that they expect to receive profitability information
from BlackRock Advisors on at least an annual basis and thus be in a position to
evaluate whether any adjustments in Fund fees and/or fee breakpoints would be
appropriate.
Fees and Economies of Scale -- The Board considered the extent to which
economies of scale might be realized as the assets of the Fund increase and
whether there should be changes in the management fee rate or structure in order
to enable the Fund to participate in these economies of scale. The Board
determined that changes were not currently necessary and that the Fund
appropriately participated in these economies of scale.
In reviewing the Transaction, the directors considered, among other things,
whether advisory fees or other expenses would change as a result of the
Transaction. Based on the fact that the New Investment Advisory Agreement is
substantially similar to the Current Investment Advisory Agreement in all
material respects, including the rate of compensation, the directors determined
that as a result of the Transaction, the Fund's total advisory fees would be no
higher than the fees under its Current Investment Advisory Agreement. The
directors noted that in conjunction with their most recent deliberations
concerning the Current Investment Advisory Agreement, the directors had
determined that the total fees for advisory and administrative services for the
Fund were reasonable in light of the services provided. It was noted that in
conjunction with the recent review of the Current Investment Advisory Agreement,
the directors had received, among other things, a report from Lipper comparing
the Fund's fees, expenses and performance to those of a peer group selected by
Lipper, and information as to the fees charged by the Investment Adviser to
other registered investment company clients for investment management services.
The directors concluded that, because the rates for advisory fees for the Fund
would be no higher than its current fee rates, the proposed management fee
structure, including any fee waivers, was reasonable and that no additional
changes were currently necessary.
Fall-Out Benefits -- In evaluating the fall-out benefits to be received by
BlackRock Advisors under the New Investment Advisory Agreement, the directors
considered whether the Transaction would have an impact on the fall-out benefits
received by the Investment Adviser by virtue of the Current Investment Advisory
Agreement. Based on their review of the materials provided, including materials
received in connection with their most recent approval or continuance of the
Current Investment Advisory Agreement, and their discussions with management of
the Investment Adviser and BlackRock, the directors determined that those
benefits could include increased ability for BlackRock to distribute shares of
its funds and other investment products and, where applicable, to obtain
research services using the Fund's portfolio transaction brokerage commissions.
The directors noted that any such benefits were difficult to quantify with
certainty at this time, and indicated that they would continue to evaluate them
going forward.
BLACKROCK LATIN AMERICA FUND, INC. NOVEMBER 30, 2006 27
Disclosure of Investment Advisory Agreement (concluded)
Investment Performance -- The directors considered investment performance for
the Fund. The directors compared the Fund's performance -- both including and
excluding the effects of the Fund's fees and expenses -- to the performance of a
comparable group of mutual funds, and the performance of a relevant index or
combination of indexes. The comparative information received from Lipper showed
Fund performance at various levels within the range of performance of comparable
funds over different time periods. While the Board reviews performance data at
least quarterly, consistent with the Investment Adviser's investment goals, the
Board attaches more importance over relatively long periods of time, typically
three to five years. The directors believed the Fund's performance was
satisfactory. Also, the directors took into account the investment performance
of funds currently advised by BlackRock Advisors. The Board considered
comparative information from Lipper which showed that the performance of the
funds advised by BlackRock Advisors was within the range of performance of
comparable funds over different time periods. The Board noted BlackRock's
considerable investment management experience and capabilities, but were unable
to predict what effect, if any, consummation of the Transaction would have on
the future performance of the Fund.
Conclusion -- After the independent directors of the Fund deliberated in
executive session, the entire Board, including the independent directors,
approved the New Investment Advisory Agreement, concluding that the advisory fee
rate was reasonable in relation to the services provided and that the New
Investment Advisory Agreement was in the best interests of the shareholders. In
approving the New Investment Advisory Agreement, the Board noted that it
anticipated reviewing the continuance of the agreement in advance of the
expiration of the initial two-year period.
Contingent BlackRock Sub-Advisory Agreement -- Matters Considered by the Board
At the telephonic and in-person meetings held during April and May 2006 at which
the Board of Directors discussed and approved the New Investment Advisory
Agreement, the Board, including the independent directors, also discussed and
approved a contingent sub-advisory agreement (the "Contingent Sub-Advisory
Agreement") between the Investment Adviser and BlackRock Advisors (the
"BlackRock Sub-Adviser"). The Contingent Sub-Advisory Agreement is intended to
ensure that the Fund operates with efficient portfolio management services until
the closing of the Transaction, in the event that the Board deems it necessary
and in the best interests of the Fund and its shareholders that the BlackRock
Sub-Adviser assist in managing the operations of the Fund during the interim
period until the closing of the Transaction. If shareholders approve the
Contingent Sub-Advisory Agreement, it will take effect only upon recommendation
from the Investment Adviser and upon subsequent approval of the Board in the
period up to the closing of the Transaction. The effectiveness of the Contingent
Sub-Advisory Agreement, therefore, would be contingent on further Board approval
after shareholders approve it. Pursuant to the Contingent Sub-Advisory
Agreement, the BlackRock Sub-Adviser would receive a monthly fee from the
Investment Adviser equal to 50% of the advisory fee received by the Investment
Adviser. The Investment Adviser would pay the BlackRock Sub-Adviser out of its
own resources. There would be no increase in Fund expenses as a result of the
Contingent Sub-Advisory Agreement.
In making its approval, the Board considered the Contingent Sub-Advisory
Agreement in conjunction with the New Investment Advisory Agreement and reviewed
the same information and factors discussed above, and came to the same
conclusions. The Board also considered in conjunction with the Contingent
Sub-Advisory Agreement the necessity of ensuring that the Fund operates with
effective management services until the closing of the Transaction. In reviewing
the sub-advisory fee rate provided in the Contingent Sub-Advisory Agreement, the
Board took note of the fact that both the Investment Adviser and the BlackRock
Sub-Adviser would have significant responsibilities under their respective
advisory agreements. The Investment Adviser would remain responsible for
oversight of the Fund's operations and administration and the BlackRock
Sub-Adviser would provide advisory services to the Fund under the Contingent
Sub- Advisory Agreement. The Board also took into account the expected short
duration of the term of any Contingent Sub-Advisory Agreement and the fact that
total advisory fees paid by the Fund would not increase as a result of the
Contingent Sub-Advisory Agreement. Under all of the circumstances, the Board
concluded that it was a reasonable allocation of fees for the BlackRock
Sub-Adviser to receive 50% of the advisory fee paid by the Fund to the
Investment Adviser.
After the independent directors deliberated in executive session, the entire
Board, including the independent directors, approved the Contingent Sub-Advisory
Agreement, concluding that the advisory fee was reasonable in relation to the
services provided and that the Contingent Sub-Advisory Agreement was in the best
interests of shareholders.
28 BLACKROCK LATIN AMERICA FUND, INC. NOVEMBER 30, 2006
Disclosure of Sub-Advisory Agreement
New BlackRock Sub-Advisory Agreements -- Matters Considered by the Board
At an in-person meeting held on August 14-16, 2006, the Board of Directors,
including the independent directors, discussed and approved the sub-advisory
agreements between BlackRock Advisors and each of BlackRock Investment
Management, LLC and BlackRock Asset Management U.K. Limited, each an affiliate
(the "Sub-Advisers") (the "BlackRock Sub-Advisory Agreements"). The BlackRock
Sub-Advisory Agreements became effective on September 29, 2006, at the same time
the New Investment Advisory Agreement with BlackRock Advisors (which had been
approved by the Fund's shareholders) became effective.
Pursuant to the pertinent BlackRock Sub-Advisory Agreement, each Sub-Adviser
receives a monthly fee from BlackRock Advisors equal to 37% of the advisory fee
received by BlackRock Advisors from the Fund. BlackRock Advisors pays the
Sub-Adviser out of its own resources, and there is no increase in Fund expenses
as a result of the BlackRock Sub-Advisory Agreements.
In approving the BlackRock Sub-Advisory Agreements at the August in-person
meeting, the Board reviewed its considerations in connection with its approval
of the New Investment Advisory Agreement in May 2006. The Board relied on the
same information and considered the same factors as those discussed above in
connection with the approval of the New Investment Advisory Agreement, and came
to the same conclusions. In reviewing the sub-advisory fee rate provided for in
the BlackRock Sub-Advisory Agreements, the Board noted the fact that both
BlackRock Advisors and each Sub-Adviser have significant responsibilities under
their respective advisory agreements. Under the New Investment Advisory
Agreement, BlackRock Advisors remains responsible for the overall management of
the Fund and for oversight of the Fund's operations and administration. Under
the BlackRock Sub-Advisory Agreements, each Sub-Adviser provides advisory
services to the Fund and is responsible for the day-to-day management of the
Fund's portfolio. The Board also took into account the fact that there is no
increase in total advisory fees paid by the Fund as a result of the BlackRock
Sub-Advisory Agreements. Based on its considerations, the Board concluded that
it was a reasonable allocation of fees for each Sub-Adviser to receive 37% of
the advisory fee paid by the Fund to BlackRock Advisors.
After the independent directors deliberated in executive session, the entire
Board, including the independent directors, approved each BlackRock Sub-Advisory
Agreement, concluding that the sub-advisory fee was reasonable in relation to
the services provided and that each BlackRock Sub-Advisory Agreement was in the
best interests of the Fund's shareholders.
BLACKROCK LATIN AMERICA FUND, INC. NOVEMBER 30, 2006 29
Officers and Directors
Number of
Funds and
Portfolios in Other Public
Position(s) Length of Fund Complex Directorships
Held with Time Overseen by Held by
Name Address & Age Fund Served Principal Occupation(s) During Past 5 Years Director Director
====================================================================================================================================
Interested Director
- ------------------------------------------------------------------------------------------------------------------------------------
Robert C. P.O. Box 9011 President 2005 to Vice Chairman and Director of BlackRock, Inc., 122 Funds None
Doll, Jr.* Princeton, NJ and present Global Chief Investment Officer for Equities, 168 Portfolios
08543-9011 Director Chairman of the BlackRock Retail Operating
Age: 52 Committee, and member of the BlackRock Executive
Committee since 2006; President of the Funds
advised by Merrill Lynch Investment Managers, L.P.
("MLIM") and its affiliates ("MLIM/FAM-advised
funds") from 2005 to 2006; President and Chief
Investment Officer of MLIM and Fund Asset
Management, L.P. ("FAM") from 2001 to 2006;
Co-Head (Americas Region) thereof from 2000 to
2001 and Senior Vice President from 1999 to 2001;
President and Director of Princeton Services, Inc.
("Princeton Services") and President of Princeton
Administrators, L.P. ("Princeton Administrators")
from 2001 to 2006; Chief Investment Officer of
OppenheimerFunds, Inc. in 1999 and Executive Vice
President thereof from 1991 to 1999.
------------------------------------------------------------------------------------------------------------------------
* Mr. Doll is a director, trustee or member of an advisory board of certain other investment companies for which
BlackRock Advisors acts as investment adviser. Mr. Doll is an "interested person," as described in the Investment
Company Act, of the Fund based on his current and former positions with BlackRock, Inc. and its affiliates.
Directors serve until their resignation, removal or death, or until December 31 of the year in which they turn 72.
As Fund President, Mr. Doll serves at the pleasure of the Board of Directors.
30 BLACKROCK LATIN AMERICA FUND, INC. NOVEMBER 30, 2006
Officers and Directors (continued)
Number of
Funds and
Portfolios in Other Public
Position(s) Length of Fund Complex Directorships
Held with Time Overseen by Held by
Name Address & Age Fund Served Principal Occupation(s) During Past 5 Years Director Director
====================================================================================================================================
Independent Directors*
- ------------------------------------------------------------------------------------------------------------------------------------
Ronald W. P.O. Box 9095 Director 2000 to Professor Emeritus of Finance, School of Business, 47 Funds None
Forbes** Princeton, NJ present State University of New York at Albany since 2000 49 Portfolios
08543-9095 and Professor thereof from 1989 to 2000;
Age: 66 International Consultant, Urban Institute,
Washington, D.C. from 1995 to 1999.
- ------------------------------------------------------------------------------------------------------------------------------------
Cynthia A. P.O. Box 9095 Director 2000 to Professor, Harvard Business School since 1989; 47 Funds Newell
Montgomery Princeton, NJ present Associate Professor, J.L. Kellogg Graduate School 49 Portfolios Rubbermaid,
08543-9095 of Management, Northwestern University from 1985 Inc.
Age: 54 to 1989; Associate Professor, Graduate School of (manufactur-
Business Administration, University of Michigan ing)
from 1979 to 1985; Director, Harvard Business
School Publishing since 2005; Director, McLean
Hospital since 2005.
- ------------------------------------------------------------------------------------------------------------------------------------
Jean Margo P.O. Box 9095 Director 2004 to Self-employed consultant since 2001; Counsel of 47 Funds None
Reid Princeton, NJ present Alliance Capital Management (investment adviser) 49 Portfolios
08543-9095 in 2000; General Counsel, Director and Secretary
Age: 61 Sanford C. Bernstein & Co., Inc. (investment
adviser/broker-dealer) from 1997 to 2000;
Secretary, Sanford C. Bernstein Fund, Inc. from
1994 to 2000; Director and Secretary of SCB, Inc.
since 1998; Director and Secretary of SCB
Partners, Inc. since 2000; Director of Covenant
House from 2001 to 2004.
- ------------------------------------------------------------------------------------------------------------------------------------
Roscoe S. P.O. Box 9095 Director 2000 to President, Middle East Institute, from 1995 to 47 Funds None
Suddarth Princeton, NJ present 2001; Foreign Service Officer, United States 49 Portfolios
08543-9095 Foreign Service, from 1961 to 1995 and Career
Age: 71 Minister from 1989 to 1995; Deputy Inspector
General, U.S. Department of State, from 1991 to
1994; U.S. Ambassador to the Hashemite Kingdom of
Jordan from 1987 to 1990.
- ------------------------------------------------------------------------------------------------------------------------------------
Richard R. P.O. Box 9095 Director 1991 to Professor of Finance from 1984 to 1995; Dean from 47 Funds Bowne & Co.,
West Princeton, NJ present 1984 to 1993 and since 1995 Dean Emeritus of New 49 Portfolios Inc.
08543-9095 York University's Leonard N. Stern School of (financial
Age: 68 Business Administration. printers);
Vornado
Realty Trust
(real estate
company);
Alexander's,
Inc. (real
estate
company)
- ------------------------------------------------------------------------------------------------------------------------------------
Edward D. P.O. Box 9095 Director 1994 to Self-employed financial consultant since 1994; 47 Funds None
Zinbarg Princeton, NJ present Executive Vice President of the Prudential 49 Portfolios
08543-9095 Insurance Company of America from 1988 to 1994;
Age: 72 Former Director of Prudential Reinsurance Company
and former Trustee of the Prudential Foundation.
------------------------------------------------------------------------------------------------------------------------
* Directors serve until their resignation, removal or death, or until December 31 of the year in which they turn 72.
** Chairman of the Board of Directors and the Audit Committee.
BLACKROCK LATIN AMERICA FUND, INC. NOVEMBER 30, 2006 31
Officers and Directors (concluded)
Position(s) Length
Held with of Time
Name Address & Age Fund Served Principal Occupation(s) During Past 5 Years
====================================================================================================================================
Fund Officers*
- ------------------------------------------------------------------------------------------------------------------------------------
Donald C. P.O. Box 9011 Vice 1993 to Managing Director of BlackRock, Inc. since 2006; Managing Director of Merrill Lynch
Burke Princeton, NJ President present Investment Managers, L.P. ("MLIM") and Fund Asset Management, L.P. ("FAM") in 2006;
08543-9011 and and First Vice President of MLIM and FAM from 1997 to 2005 and Treasurer thereof from
Age: 46 Treasurer 1999 to 1999 to 2006; Vice President of MLIM and FAM from1990 to 1997.
present
- ------------------------------------------------------------------------------------------------------------------------------------
William P.O. Box 9011 Vice 2002 to Director of BlackRock, Inc. since 2006; Director of MLIM from 2004 to 2006; Vice
Landers Princeton, NJ President present President of MLIM from 2002 to 2004; Latin American research analyst at Credit
08543-9011 Suisse First Boston from 1999 to 2001.
Age: 37
- ------------------------------------------------------------------------------------------------------------------------------------
Jeffrey P.O. Box 9011 Fund Chief 2004 to Managing Director of BlackRock, Inc. and Fund Chief Compliance Officer since 2006;
Hiller Princeton, NJ Compliance present Chief Compliance Officer of the MLIM/FAM-advised funds and First Vice President and
08543-9011 Officer Chief Compliance Officer of MLIM (Americas Region) from 2004 to 2006; Chief
Age: 55 Compliance Officer of the IQ Funds since 2004; Global Director of Compliance at
Morgan Stanley Investment Management from 2002 to 2004; Managing Director and
Global Director of Compliance at Citigroup Asset Management from 2000 to 2002;
Chief Compliance Officer at Soros Fund Management in 2000; Chief Compliance Officer
at Prudential Financial from 1995 to 2000; Senior Counsel in the Securities and
Exchange Commission's Division of Enforcement in Washington, D.C. from 1990 to
1995.
- ------------------------------------------------------------------------------------------------------------------------------------
Alice A. P.O. Box 9011 Secretary 2004 to Director of BlackRock, Inc. since 2006; Director (Legal Advisory) of MLIM from 2002
Pellegrino Princeton, NJ present to 2006; Vice President of MLIM from 1999 to 2002; Attorney associated with MLIM
08543-9011 from 1997 to 2006; Secretary of MLIM, FAM, FAM Distributors, Inc. and Princeton
Age: 46 Services from 2004 to 2006.
------------------------------------------------------------------------------------------------------------------------
* Officers of the Fund serve at the pleasure of the Board of Directors.
- ------------------------------------------------------------------------------------------------------------------------------------
Further information about the Fund's Officers and Directors is available in the Fund's Statement of Additional
Information, which can be obtained without charge by calling 1-800-441-7762.
- ------------------------------------------------------------------------------------------------------------------------------------
Custodian
Brown Brothers Harriman & Co.
40 Water Street
Boston, MA 02109-3661
Transfer Agent
PFPC Inc.
Wilmington, DE 19809
- --------------------------------------------------------------------------------
Effective January 1, 2007, Edward D. Zinbarg retired as Director of BlackRock
Latin America Fund, Inc. The Fund's Board of Directors wishes Mr. Zinbarg well
in his retirement.
- --------------------------------------------------------------------------------
Proxy Results
During the six-month period ended November 30, 2006, BlackRock Latin America
Fund, Inc.'s shareholders voted on the following proposals, which were approved
at a special shareholders' meeting on August 15, 2006. A description of the
proposals and number of shares voted were as follows:
- ------------------------------------------------------------------------------------------------------------------------------------
Shares Voted Shares Voted Shares Voted
For Against Abstain
- ------------------------------------------------------------------------------------------------------------------------------------
To approve a new investment advisory agreement
with BlackRock Advisors, Inc. 5,380,722 145,132 111,518
- ------------------------------------------------------------------------------------------------------------------------------------
To approve a contingent subadvisory agreement
with BlackRock Advisors, Inc. 5,373,324 148,133 115,915
- ------------------------------------------------------------------------------------------------------------------------------------
32 BLACKROCK LATIN AMERICA FUND, INC. NOVEMBER 30, 2006
BlackRock Funds
BlackRock Privacy Principles
BlackRock is committed to maintaining the privacy of its current and former fund
investors and individual clients (collectively, "Clients") and to safeguarding
their nonpublic personal information. The following information is provided to
help you understand what personal information BlackRock collects, how we protect
that information and why in certain cases we share such information with select
parties.
If you are located in a jurisdiction where specific laws, rules or regulations
require BlackRock to provide you with additional or different privacy-related
rights beyond what is set forth below, then BlackRock will comply with those
specific laws, rules or regulations.
BlackRock obtains or verifies personal nonpublic information from and about you
from different sources, including the following: (i) information we receive from
you or, if applicable, your financial intermediary, on applications, forms or
other documents; (ii) information about your transactions with us, our
affiliates, or others; (iii) information we receive from a consumer reporting
agency; and (iv) from visits to our Web sites.
BlackRock does not sell or disclose to nonaffiliated third parties any nonpublic
personal information about its Clients, except as permitted by law or as is
necessary to service Client accounts. These nonaffiliated third parties are
required to protect the confidentiality and security of this information and to
use it only for its intended purpose.
We may share information with our affiliates to service your account or to
provide you with information about other BlackRock products or services that may
be of interest to you. In addition, BlackRock restricts access to nonpublic
personal information about its Clients to those BlackRock employees with a
legitimate business need for the information. BlackRock maintains physical,
electronic and procedural safeguards that are designed to protect the nonpublic
personal information of its Clients, including procedures relating to the proper
storage and disposal of such information.
Availability of Additional Information
Electronic copies of most financial reports and prospectuses are available on
the Fund's Web site or shareholders can sign up for e-mail notifications of
quarterly statements, annual and semi-annual reports and prospectuses by
enrolling in the Fund's electronic delivery program.
To enroll:
Shareholders Who Hold Accounts with Investment Advisers, Banks or Brokerages:
Please contact your financial adviser. Please note that not all investment
advisers, banks or brokerages may offer this service.
Shareholders Who Hold Accounts Directly with BlackRock:
1) Access the BlackRock Web site at http://www.blackrock.com/edelivery
2) Select eDelivery under the More Information section
3) Log into your account
The Fund will mail only one copy of shareholder documents, including
prospectuses, annual and semi-annual reports and proxy statements, to
shareholders with multiple accounts at the same address. This practice is
commonly called "householding" and it is intended to reduce expenses and
eliminate duplicate mailings of shareholder documents. Mailings of your
shareholder documents may be householded indefinitely unless you instruct us
otherwise. If you do not want the mailing of these documents to be combined with
those for other members of your household, please contact the Fund at (800)
441-7762.
BLACKROCK LATIN AMERICA FUND, INC. NOVEMBER 30, 2006 33
BlackRock Funds (concluded)
Availability of Additional Information (concluded)
Availability of Proxy Voting Policies and Procedures
The Fund has delegated proxy voting responsibilities to BlackRock and its
affiliates, subject to the general oversight of the Fund's Board of Directors. A
description of the policies and procedures that BlackRock and its affiliates use
to determine how to vote proxies relating to portfolio securities is available
without charge, upon request, on our Web site at www.blackrock.com, by calling
(800) 441-7762, or on the Web site of the Securities and Exchange Commission
(the"Commission") at http://www.sec.gov.
Availability of Proxy Voting Record
Information on how proxies relating to the Fund's voting securities were voted
(if any) by BlackRock during the most recent 12-month period ended June 30 is
available, upon request and without charge, on our Web site at
www.blackrock.com, by calling (800) 441-7762 or on the Web site of the
Commission at http://www.sec.gov.
Availability of Quarterly Portfolio Schedule
The Fund files its complete schedule of portfolio holdings for the first and
third quarters of its fiscal year with the Commission on Form N-Q. The Fund's
Forms N-Q are available on the Commission's Web site at http://www.sec.gov and
may be reviewed and copied at the Commission's Public Reference Room in
Washington, D.C. Information regarding the operation of the Public Reference
Room may be obtained by calling (800) SEC-0330. The Fund's Forms N-Q may also be
obtained upon request, without charge, by calling (800) 441-7762.
Shareholder Privileges
Account Information
Call us at (800) 441-7762 8:00 AM - 6:00 PM EST to get information about your
account balances, recent transactions and share prices. You can also reach us on
the web at www.blackrock.com.
Automatic Investment Plans
Investor Class shareholders who want to invest regularly can arrange to have $50
or more automatically deducted from their checking or savings account and
invested in any of the BlackRock portfolios.
Systematic Withdrawal Plans
Investor Class shareholders can establish a systematic withdrawal plan and
receive periodic payments of $50 or more from their BlackRock portfolios, as
long as their account is at least $10,000.
Retirement Plans
Shareholders may make investments in conjunction with Traditional, Rollover,
Roth, Coverdell, Simple IRAs, SEP IRAs and 403(b) Plans.
34 BLACKROCK LATIN AMERICA FUND, INC. NOVEMBER 30, 2006
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BlackRock Equity Dividend Fund
BlackRock EuroFund
BlackRock Focus Twenty Fund
BlackRock Focus Value Fund
BlackRock Fundamental Growth Fund
BlackRock Global Allocation Fund+
BlackRock Global Dynamic Equity Fund
BlackRock Global Financial Services Fund
BlackRock Global Growth Fund
BlackRock Global Opportunities Portfolio
BlackRock Global Resources Portfolio*
BlackRock Global Science & Technology Opportunities Portfolio
BlackRock Global SmallCap Fund
BlackRock Global Technology Fund
BlackRock Global Value Fund
BlackRock Healthcare Fund
BlackRock Health Sciences Opportunities Portfolio
BlackRock Index Equity Portfolio*
BlackRock International Fund
BlackRock International Index Fund
BlackRock International Opportunities Portfolio*
BlackRock International Value Fund
BlackRock Investment Trust
BlackRock Large Cap Core Fund
BlackRock Large Cap Growth Fund
BlackRock Large Cap Value Fund
BlackRock Latin America Fund
BlackRock Legacy Portfolio
BlackRock Mid-Cap Growth Equity Portfolio
BlackRock Mid-Cap Value Equity Portfolio
BlackRock Mid Cap Value Opportunities Fund
BlackRock Natural Resources Trust
BlackRock Pacific Fund
BlackRock Small Cap Core Equity Portfolio
BlackRock Small Cap Growth Equity Portfolio
BlackRock Small Cap Growth Fund II
BlackRock Small Cap Index Fund
BlackRock Small Cap Value Equity Portfolio*
BlackRock Small/Mid-Cap Growth Portfolio
BlackRock S&P 500 Index Fund
BlackRock U.S. Opportunities Portfolio
BlackRock Utilities and Telecommunications Fund
BlackRock Value Opportunities Fund
Fixed Income Portfolios
BlackRock Bond Fund
BlackRock Enhanced Income Portfolio
BlackRock GNMA Portfolio
BlackRock Government Income Portfolio
BlackRock High Income Fund
BlackRock High Yield Bond Portfolio
BlackRock Inflation Protected Bond Portfolio
BlackRock Intermediate Bond Portfolio
BlackRock Intermediate Bond Portfolio II
BlackRock Intermediate Government Bond Portfolio
BlackRock International Bond Portfolio
BlackRock Low Duration Bond Portfolio
BlackRock Managed Income Portfolio
BlackRock Real Investment Fund
BlackRock Short-Term Bond Fund
BlackRock Total Return Portfolio
BlackRock Total Return Portfolio II
BlackRock World Income Fund
Municipal Bond Portfolios
BlackRock AMT-Free Municipal Bond Portfolio
BlackRock California Insured Municipal Bond Fund
BlackRock Delaware Municipal Bond Portfolio
BlackRock Florida Municipal Bond Fund
BlackRock High Yield Municipal Fund
BlackRock Intermediate Municipal Fund
BlackRock Kentucky Municipal Bond Portfolio
BlackRock Municipal Insured Fund
BlackRock National Municipal Fund
BlackRock New Jersey Municipal Bond Fund
BlackRock New York Municipal Bond Fund
BlackRock Ohio Municipal Bond Portfolio
BlackRock Pennsylvania Municipal Bond Fund
BlackRock Short-Term Municipal Fund
Money Market Portfolios
BlackRock Money Market Portfolio
BlackRock Municipal Money Market Portfolio++
BlackRock NC Municipal MM Portfolio++
BlackRock NJ Municipal MM Portfolio++
BlackRock OH Municipal MM Portfolio++
BlackRock PA Municipal MM Portfolio++
BlackRock Summit Cash Reserves Fund*
BlackRock U.S. Treasury MM Portfolio
BlackRock VA Municipal MM Portfolio++
* See the prospectus for information on specific limitations on investments
in the fund.
+ Mixed asset fund.
++ Tax-exempt fund.
BlackRock mutual funds are distributed by BlackRock Distributors, Inc. and
certain funds are also distributed by FAM Distributors, Inc. You should consider
the investment objectives, risks, charges and expenses of the funds under
consideration carefully before investing. Each fund's prospectus contains this
and other information and is available at www.blackrock.com or by calling
800-882-0052 or from your financial advisor. The prospectus should be read
carefully before investing.
BLACKROCK LATIN AMERICA FUND, INC. NOVEMBER 30, 2006 35
This report is transmitted to shareholders only. It is not authorized for use as
an offer of sale or a solicitation of an offer to buy shares of the Fund unless
accompanied or preceded by the Fund's current prospectus. Past performance
results shown in this report should not be considered a representation of future
performance. Investment return and principal value of shares will fluctuate so
that shares, when redeemed, may be worth more or less than their original cost.
Statements and other information herein are as dated and are subject to change.
Investing in emerging market securities involves a number of risk factors and
special considerations, including restrictions on foreign investments and on
repatriation of capital invested in emerging markets, currency fluctuations, and
potential price volatility and less liquidity of securities traded in emerging
markets. In addition, there may be less publicly available information about the
issuers of securities, and such issuers may not be subject to accounting,
auditing and financial reporting standards and requirements comparable to those
to which U.S. companies are subject. Therefore, the Fund is designed as a
long-term investment for investors capable of assuming the risks of investing in
emerging markets. The Fund should be considered as a vehicle for diversification
and not as a complete investment program. Please refer to the prospectus for
details.
BlackRock Latin America Fund, Inc.
P.O. Box 9011
Princeton, NJ 08543-9011
BLACKROCK
#16140-11/06
Item 2 - Code of Ethics - The registrant has adopted a code of ethics, as of the
end of the period covered by this report, that applies to the
registrant's principal executive officer, principal financial officer
and principal accounting officer, or persons performing similar
functions. A copy of the code of ethics is available without charge at
www.blackrock.com.
Item 3 - Audit Committee Financial Expert - The registrant's board of directors
has determined that (i) the registrant has the following audit
committee financial experts serving on its audit committee and (ii)
each audit committee financial expert is independent: (1) Ronald W.
Forbes, (2) Richard R. West, and (3) Edward D. Zinbarg (retired as of
December 31, 2006).
Item 4 - Principal Accountant Fees and Services
(a) Audit Fees - Fiscal Year Ending November 30, 2006 - $35,700
Fiscal Year Ending November 30, 2005 - $35,000
(b) Audit-Related Fees - Fiscal Year Ending November 30, 2006 - $0
Fiscal Year Ending November 30, 2005 - $0
(c) Tax Fees - Fiscal Year Ending November 30, 2006 - $6,000
Fiscal Year Ending November 30, 2005 - $7,400
The nature of the services include tax compliance, tax advice and tax
planning.
(d) All Other Fees - Fiscal Year Ending November 30, 2006 - $0
Fiscal Year Ending November 30, 2005 - $0
(e)(1) The registrant's audit committee (the "Committee") has adopted
policies and procedures with regard to the pre-approval of services.
Audit, audit-related and tax compliance services provided to the
registrant on an annual basis require specific pre-approval by the
Committee. The Committee also must approve other non-audit services
provided to the registrant and those non-audit services provided to the
registrant's affiliated service providers that relate directly to the
operations and the financial reporting of the registrant. Certain of
these non-audit services that the Committee believes are a) consistent
with the SEC's auditor independence rules and b) routine and recurring
services that will not impair the independence of the independent
accountants may be approved by the Committee without consideration on a
specific case-by-case basis ("general pre-approval"). However, such
services will only be deemed pre-approved provided that any individual
project does not exceed $5,000 attributable to the registrant or
$50,000 for all of the registrants the Committee oversees. Any proposed
services exceeding the pre-approved cost levels will require specific
pre-approval by the Committee, as will any other services not subject
to general pre-approval (e.g., unanticipated but permissible services).
The Committee is informed of each service approved subject to general
pre-approval at the next regularly scheduled in-person board meeting.
(e)(2) 0%
(f) Not Applicable
(g) Fiscal Year Ending November 30, 2006 - $3,138,117
Fiscal Year Ending November 30, 2005 - $5,738,110
(h) The registrant's audit committee has considered and determined that
the provision of non-audit services that were rendered to the
registrant's investment adviser and any entity controlling, controlled
by, or under common control with the investment adviser that provides
ongoing services to the registrant that were not pre-approved pursuant
to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible
with maintaining the principal accountant's independence.
Regulation S-X Rule 2-01(c)(7)(ii) - $1,739,500, 0%
Item 5 - Audit Committee of Listed Registrants - Not Applicable
Item 6 - Schedule of Investments - Not Applicable
Item 7 - Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies - Not Applicable
Item 8 - Portfolio Managers of Closed-End Management Investment Companies - Not
Applicable
Item 9 - Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers - Not Applicable
Item 10 - Submission of Matters to a Vote of Security Holders - Not Applicable
Item 11 - Controls and Procedures
11(a) - The registrant's certifying officers have reasonably designed such
disclosure controls and procedures to ensure material information
relating to the registrant is made known to us by others particularly
during the period in which this report is being prepared. The
registrant's certifying officers have determined that the registrant's
disclosure controls and procedures are effective based on our evaluation
of these controls and procedures as of a date within 90 days prior to
the filing date of this report.
11(b) - As of September 29, 2006, with the conclusion of the combination of
Merrill Lynch's asset management business with BlackRock, the registrant
was migrated to BlackRock's trading and compliance monitoring systems,
and various personnel changes occurred. In conjunction with these
business improvements, there were no changes in the registrants internal
control over financial reporting (as defined in Rule 30a-3(d) under Act
(17 CFR 270.30a-3(d)) that occurred during the last fiscal half-year of
the period covered by this report that has materially affected, or is
reasonably likely to affect, the registrant's internal control over
financial reporting.
Item 12 - Exhibits attached hereto
12(a)(1) - Code of Ethics - See Item 2
12(a)(2) - Certifications - Attached hereto
12(a)(3) - Not Applicable
12(b) - Certifications - Attached hereto
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
BlackRock Latin America Fund, Inc.
By: /s/ Robert C. Doll, Jr
---------------------------------
Robert C. Doll, Jr.
Chief Executive Officer of
BlackRock Latin America Fund, Inc.
Date: January 29, 2007
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /s/ Robert C. Doll, Jr
---------------------------------
Robert C. Doll, Jr.
Chief Executive Officer of
BlackRock Latin America Fund, Inc.
Date: January 29, 2007
By: /s/ Donald C. Burke
---------------------------------
Donald C. Burke,
Chief Financial Officer of
BlackRock Latin America Fund, Inc.
Date: January 29, 2007