<PAGE>
MERRILL LYNCH LATIN AMERICA FUND, INC.
FUND LOGO
Annual Report November 30, 1993
This report 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.
Merrill Lynch
Latin America Fund, Inc.
Box 9011
Princeton, NJ
08543-9011
MERRILL LYNCH LATIN AMERICA FUND, INC.
Asset Allocation
As a Percentage
Of Equities &
Fixed-Income
Securities as of
November 30, 1993
GRAPHIC MATERIAL APPEARS HERE. SEE APPENDIX: ITEM 1.
DEAR SHAREHOLDER
The Fiscal Year in Review
During the past 12 months, the main changes in the Fund's
structure have been the reduction of fixed-income investments
from 9.0% of net assets to 1.0%; increases in Argentinean
equities from 7.9% to 11.7%; substantial increases in Brazilian
equities from 9.6% to 14.3%; and the introduction of stock
investments in Colombia and Peru. These changes have benefited
the Fund's performance during the 12-month period ended November
30, 1993.
Throughout the past year, Mexico has been our single most
important country investment, with more than 50% on average of
the Fund's assets invested in Mexican stocks. The basis for this
overweighting was our expectation that the North American Free
Trade Agreement (NAFTA) would be passed and, in the event that it
were not, that the Mexican market's long-term prospects would
still have been attractive. During most of the year, the Fund's
performance was restrained by the uncertainties of NAFTA's
approval process, but now has been strengthened by its
ratification.
<PAGE>
During the November quarter, we increased the Fund's position in
Mexico through the purchase of companies such as Grupo Tribasa
S.A. de C.V., one of Mexico's dominant construction companies;
Farmacias Benavides, S.A. de C.V., a distributor of pharmaceuticals
and personal care products; and Grupo Simec, S.A. de C.V., a steel
mini-mill operator. We also added to our existing positions in Grupo
Situr, S.A. de C.V., a hotel property and resort developer, and Cifra,
S.A. de C.V., the leading Mexican retailer.
Investment Overview
For the Latin American countries in which we invest, 1993 has
been a quiet year. There have been no government announcements of
sweeping economic programs, no price control experiments to curb
inflation, and no political coups or coup attempts. Moreover, the
performance of the region's stock markets has been relatively
subdued, compared to the turbulent market swings of recent years.
In fact, of the major stock markets in the region, only Brazil
has returned more than 30% so far this year.
However, despite the somewhat subdued performance thus far, 1993
may be a pivotal year for Latin American equity markets, marking
the beginning of a more sustained rally in the coming years. The
reason for this optimism is our belief that the lack of dramatic
events and governmental intervention in 1993 provides evidence
that the free market reforms that have been put into place over
the last several years are likely to be lasting. These reforms
include the lowering of trade barriers, fiscal policies to reduce
debt and inflation, the privatization of state-owned enterprises,
and capital market reforms. In terms of trade, negotiations are
ongoing throughout the region, which is serving to improve the
climate for business activity between countries. For example,
trade is flourishing between Venezuela and Colombia, two members
of the Andean Pact. In addition, NAFTA has already fostered a
surge in trade and investment between the United States and
Mexico.
The Latin American countries which have implemented serious
fiscal reforms over the past several years are winning the battle
against inflation. In fact, Argentina and Mexico are experiencing
single-digit inflation rates for the first time in 20 years.
Reducing inflation is critically important for developing
countries because boosting purchasing power has a direct impact
on the broad population, not just on the lives of certain groups.
Consequently, it can serve as a powerful legitimizing force for
ensuring the continuance of reforms.
The pension reforms and privatizations of state-owned enterprises
that have been implemented in several countries are also having a
positive effect. By broadening the investor base locally, and
through the issuance of American Depositary Receipts overseas,
these free market measures have helped attract new capital and
advance stock market development. Just this year, Peru and
Argentina have privatized their pension systems, which will
provide an important source of new funds for their respective
stock markets.
<PAGE>
In most of the countries in which we invest, there is a new
political mind-set that embraces free market reforms. For
example, in the recent Congressional elections in Argentina, the
Peronist Party's victory confirmed support for President Menem's
economic programs. In Peru, President Fujimori, who last year
dismissed Congress in order to push through his economic reform
scheme, is ranking high in the popularity polls.
All of these developments set the stage for more sustainable
positive stock market performance in the coming years. We believe
that valuations will expand in most of the Latin American
markets, and we expect to be fully invested. We will emphasize
markets expected to benefit from the US economic recovery, such
as Mexico, and those such as Brazil and Venezuela where stock
valuations have been overly suppressed by negative sentiment
regarding politics.
In Conclusion
Despite our favorable outlook, we expect some volatility to
continue, given that these markets are smaller, less liquid and
less efficient than the more mature markets of western Europe and
Asia. As long-term investors, we need to recognize that this
volatility may be simply part of a longer-term upward trend,
providing us with opportunities in which we may seek to take
advantage of the values that emerge during the turbulence.
We appreciate your ongoing interest in Merrill Lynch Latin
America Fund, Inc., and we look forward to assisting you with
your financial needs and objectives in the months and years
ahead.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Grace Pineda)
Grace Pineda
Vice President and Portfolio Manager
January 5, 1994
Officers and Directors
Arthur Zeikel, President and Director
Donald Cecil, Director
Edward H. Meyer, Director
Charles C. Reilly, Director
Richard R. West, Director
Terry K. Glenn, Executive Vice President
Norman R. Harvey, Senior Vice President
Donald C. Burke, Vice President
Grace Pineda, Vice President
Gerald M. Richard, Treasurer
Mark B. Goldfus, Secretary
<PAGE>
Custodian
The Chase Manhattan Bank, N.A.
Global Securities Services
Chase MetroTech Center
Brooklyn, New York 11245
Transfer Agent
Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, Florida 32246-6484
(800) 637-3863
PERFORMANCE DATA
None of the past results shown should be considered a representation
of future performance. Investment return and principal value of Class
A and Class B Shares will fluctuate so that shares, when redeemed,
may be worth more or less than their original cost.
Total Return
Based on a
$10,000
Investment
GRAPHIC MATERIAL APPEARS HERE. SEE APPENDIX: ITEM 2.
Average Annual
Total Return
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 9/30/93 +36.19% +28.19%
Inception (9/27/91) through 9/30/93 +14.88 +12.56
[FN]
*Maximum sales charge is 4%. Maximum redemption fee is 2% and is
reduced to 0% after one year.
**Assuming maximum sales charge.
<PAGE>
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 9/30/93 +35.11% +28.46%
Inception (9/27/91) through 9/30/93 +13.97 +12.65
[FN]
*Maximum contingent deferred sales charge is 4% and is reduced to 0%
after 4 years. Maximum redemption fee is 2% and is reduced to 0% after
one year.
**Assuming payment of applicable contingent deferred sales charge.
<TABLE>
Performance Summary--Class A Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<C> <C> <C> <C> <C> <C>
9/27/91-12/31/91 $10.00 $10.31 -- $0.125 + 4.40%
1992 10.31 10.19 -- 0.326 + 2.15
1/1/93-11/30/93 10.19 14.45 -- -- +41.81
------
Total $0.451
Cumulative total return as of 11/30/93: +51.23%**
<FN>
*Figures may include short-term capital gains distributions.
**Figures assume reinvestment of all dividends and capital gains distributions at net
asset value on the ex-dividend date, and do not include sales charge; results would be
lower if sales charge was included.
</TABLE>
<TABLE>
Performance Summary--Class B Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<C> <C> <C> <C> <C> <C>
9/27/91-12/31/91 $10.00 $10.32 -- $0.098 + 4.22%
1992 10.32 10.22 -- 0.227 + 1.34
1/1/93-11/30/93 10.22 14.39 -- -- +40.80
------
Total $0.325
Cumulative total return as of 11/30/93: +48.71%**
<FN>
*Figures may include short-term capital gains distributions.
**Figures assume reinvestment of all dividends and capital gains distributions at net
asset value on the ex-dividend date, and do not reflect deduction of any sales charge;
results would be lower if sales charge was deducted.
</TABLE>
<PAGE>
<TABLE>
Recent Performance Results*
<CAPTION>
12 Month 3 Month
11/30/93 8/31/93 11/30/92 % Change % Change
<S> <C> <C> <C> <C> <C>
Class A Shares $14.45 $12.37 $9.90 +45.96% +16.81%
Class B Shares 14.39 12.34 9.83 +46.39 +16.61
Class A Shares--Total Return +50.86(1) +16.81
Class B Shares--Total Return +49.80(2) +16.61
<FN>
*Investment results shown for the 3-month and 12-month periods are before the deduction of any
sales charges or redemption fees.
(1)Percent change includes reinvestment of $0.326 per share ordinary income dividends.
(2)Percent change includes reinvestment of $0.227 per share ordinary income dividends.
</TABLE>
<TABLE>
CONSOLIDATED SCHEDULE OF INVESTMENTS (in US dollars)
<CAPTION>
Shares Held/ Value Percent of
Industries Face Amount Long-Term Investments Cost (Note 1a) Net Assets
<S> <C> <S> <C> <C> <C>
COUNTRY
Argentina
Banking 51,750 Banco de Galicia y Buenos Aires S.A. (Preferred) $ 1,049,513 $ 1,630,125 0.4%
521,826 Banco de Galicia y Buenos Aires S.A. (ADR)(2) 3,250,066 4,157,249 1.1
658,181 Banco Frances del Rio de la Plata S.A. 3,854,286 6,496,720 1.7
------------ ------------ -----
8,153,865 12,284,094 3.2
Beverage 1,746 Buenos Aires Embotelladora S.A. (BAESA) 1,759,894 3,044,433 0.8
55,000 Buenos Aires Embotelladora S.A. (BAESA) (ADR) (2) 1,041,250 1,925,000 0.5
------------ ------------ -----
2,801,144 4,969,433 1.3
Food 11,593 ++Quilmes Industrial S.A. 2,433,587 4,057,550 1.1
Oil & Related 1,501,341 Astra Compania Argentina de Petroleo S.A. 3,634,208 3,009,000 0.8
66,700 Compania Naviera Perez Companc S.A.C.F.I.M.F.A. 341,587 377,649 0.1
10,000 Yacimientos Petroliferos Fiscales S.A.--
Sponsored (ADR) (2) 211,850 247,500 0.1
------------ ------------ -----
4,187,645 3,634,149 1.0
<PAGE>
Real Estate 1,193,565 Inversiones y Representaciones S.A. (IRSA) 3,102,196 3,289,211 0.9
Tobacco 49,980 Massalin Particulares S.A. 508,374 626,065 0.2
Utilities 400,000 Telecom Argentina Stet--France Telecom S.A. 1,968,257 1,883,956 0.5
145,580 ++Telecom Argentina Stet--France Telecom S.A.
(ADR)(2) 5,967,281 6,805,865 1.8
525,000 Telefonica de Argentina S.A. 3,009,246 2,862,010 0.7
70,276 ++Telefonica de Argentina S.A. (ADR)(2) 2,132,935 3,794,904 1.0
------------ ------------ -----
13,077,719 15,346,735 4.0
Total Long-Term Investments in Argentina 34,264,530 44,207,237 11.7
Brazil
Appliances 10,490,500 Brasmotor Group S.A. (Preferred) 713,244 2,045,019 0.5
1,016,000 Consul S.A. 527,444 796,542 0.2
------------ ------------ -----
1,240,688 2,841,561 0.7
Banking 59,722,189 Banco Bradesco S.A. 794,054 1,543,863 0.4
9,760,400 Banco Itau S.A. (Preferred) 1,028,419 1,861,330 0.5
73,706,300 Banco Nacional S.A. 2,644,793 4,151,192 1.1
5,170,000 Uniao de Bancos Brasileiros S.A. (UNIBANCO) 356,424 339,598 0.1
------------ ------------ -----
4,823,690 7,895,983 2.1
Beverage 18,467,072 Companhia Cervejaria Brahma S.A. (Preferred) 3,657,137 3,443,451 0.9
1,880,905 Companhia Cervejaria Brahma S.A. (Warrants)(a) 48,935 26,555 0.0
------------ ------------ -----
3,706,072 3,470,006 0.9
Building &
Construction 547,000 Companhia Cimento Portland Itau S.A. PN 134,354 143,722 0.1
Coal 55,496,800 Companhia Vale do Rio Doce S.A. (CVRD) (Preferred) 3,529,496 4,633,161 1.2
Electrical &
Electronics 675,841 Companhia Energetica de Sao Paulo S.A. (CESP) 416,613 973,793 0.3
Food 638,246,001 Sadia Concordia S.A. Industria e Comercio (Preferred) 4,833,210 4,408,785 1.2
Paper 243,234 Aracruz Celulose S.A. (Preferred) 647,358 494,776 0.1
Retail 732,100 Lojas Americanas S.A. 730,568 853,191 0.2
Steel 2,317,000 Acos Industria Villares S.A. 549,535 407,490 0.1
55,358,100 Companhia Siderurgica Nacional S.A.--CSN 1,013,994 1,219,910 0.3
8,254,882,013 Usinas Siderurgicas de Minas Gerais--Usiminas S.A.
(Preferred) 3,781,337 5,772,152 1.5
------------ ------------ -----
5,344,866 7,399,552 1.9
<PAGE>
Telecommunications 207,918,300 Telecomunicacoes Brasileiras S.A.--Telebras
(Preferred) 4,527,250 7,278,066 1.9
31,300,000 Telecomunicacoes Brasileiras S.A.--Telebras 900,525 875,450 0.2
13,779,600 Telecomunicacoes de Sao Paulo S.A.--TELESP
(Preferred) 2,407,403 4,788,436 1.3
4,430,936 Telecomunicacoes Parana S.A.--TELEPAR
(Preferred) 754,996 1,126,652 0.3
------------ ------------ -----
8,590,174 14,068,604 3.7
Transportation 165,000 Marcopolo S.A. Carrocerias E Onibus 'B' (Preferred) 25,066 28,319 0.0
Utilities 25,220,700 Centrais Eletricas Brasileiras S.A.--Eletrobras 'B'
(Preferred) 3,534,189 3,783,586 1.0
4,387,500 Centrais Eletricas da Santa Catarina S.A. (CELESC) 764,541 2,063,875 0.5
858,500,000 Companhia Energetica de Minas Gerais S.A. (CEMIG) 507,838 1,393,421 0.4
------------ ------------ -----
4,806,568 7,240,882 1.9
Total Long-Term Investments in Brazil 38,828,723 54,452,335 14.3
Chile
Apparel 3,470,235 Bata Chile S.A. 979,375 960,963 0.2
Beverage 2,704,625 Vina Concha y Toro S.A. 1,176,792 1,078,234 0.3
Building &
Construction 299,173 Empresas Pizarreno S.A. 571,715 544,211 0.2
285,200 Maderas y Sinteticos S.A. (MASISA) (ADR)
(Foreign) (2) 4,497,944 5,668,350 1.5
128,445 Maderas y Sinteticos S.A. (MASISA) (Ordinary) 57,151 84,322 0.0
------------ ------------ -----
5,126,810 6,296,883 1.7
Chemicals 16,000 Sociedad Quimica y Minera de Chile S.A. (ADR) (2) 412,960 380,000 0.1
Closed-End Funds 194,984 The Chile Fund, Inc. 5,611,483 6,897,559 1.8
Pharmaceutical 1,892,536 Laboratorio Chile S.A. (LABCHILE) 1,166,264 1,265,004 0.3
Telecommunications 213,118 Empresa Nacional de Telecomunicaciones S.A. (Entel) 1,449,275 1,780,647 0.4
Utilities 15,825 Compania de Telefonos de Chile S.A. (ADR) (2) 873,174 1,329,300 0.4
144,000 ++Distribuidora Chilectra Metropolitana S.A.
(Chilectra) (ADR)(2) 3,815,919 4,482,000 1.2
5,531,748 Empresa Nacional de Electricidad S.A.--ENDESA 2,255,686 2,399,424 0.6
33,000 Enersis S.A. (ADR) (2) 594,000 647,625 0.2
------------ ------------ -----
7,538,779 8,858,349 2.4
Total Long-Term Investments in Chile 23,461,738 27,517,639 7.2
<PAGE>
Colombia
Banking 379,378 Banco de Bogota 1,343,582 1,822,742 0.5
Retail 530,129 Gran Cadena de Almacenes Colombianos (CADENALCO) 994,422 966,566 0.2
Total Long-Term Investments in Colombia 2,338,004 2,789,308 0.7
</TABLE>
<TABLE>
CONSOLIDATED SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Shares Held/ Value Percent of
Industries Face Amount Long-Term Investments Cost (Note 1a) Net Assets
<S> <C> <S> <C> <C> <C>
COUNTRY
Mexico
Banking 130,100 ++Grupo Financiero Bancomer, S.A. de C.V. (ADR) (2) $ 3,758,586 $ 4,586,025 1.2%
736,000 Grupo Financiero Probursa, S.A. de C.V. 806,262 795,227 0.2
403,500 ++Servicios Financieros Quadrum, S.A. de C.V.
(ADR) (2) 5,138,911 9,835,313 2.6
------------ ------------ -----
9,703,759 15,216,565 4.0
Beverages & Tobacco 25,600 Coca-Cola Femsa S.A. (ADR) (2) 543,499 729,600 0.2
449,000 ++Fomento Economico Mexicano, S.A. de C.V. (Femsa)
(ADR) (2) 2,483,860 2,694,000 0.7
683,500 Fomento Economico Mexicano, S.A. de C.V. (Femsa)
(Ordinary) 2,530,446 4,133,406 1.1
192,000 ++Grupo Embotellador de Mexico, S.A. de C.V. (GGEMEX) 3,331,200 5,808,000 1.5
------------ ------------ -----
8,889,005 13,365,006 3.5
Building &
Construction 952,000 Apasco, S.A. de C.V. 'A' 3,981,144 8,044,638 2.1
67,500 Bufete Industrial, S.A. (ADR) (2) 1,552,500 1,873,125 0.5
275,000 Cementos Mexicanos, S.A. de C.V. Nom 'B' (Cemex) 4,746,384 7,166,586 1.9
349,000 Grupo Tribasa, S.A. de C.V. (ADR) (2) 5,462,336 8,550,500 2.3
126,795 Internacional de Ceramica, S.A. de C.V. 'B' 433,309 797,453 0.2
251,000 Internacional de Ceramica, S.A. de C.V. 'C' 1,040,715 1,619,094 0.4
703,500 Tolmex, S.A. de C.V. 'B' 4,293,222 8,349,879 2.2
------------ ------------ -----
21,509,610 36,401,275 9.6
Chemicals 734,800 Grupo Cydsa, S.A. de C.V. 2,492,625 2,512,137 0.7
Diversified 1,576,000 Grupo Carso, S.A. de C.V. 10,273,427 13,927,560 3.7
Food 1,523,846 Grupo Herdez, S.A. de C.V. 'A' 1,251,352 1,366,325 0.3
1,382,461 Grupo Herdez, S.A. de C.V. 'B' 1,369,376 1,395,615 0.4
3,069,189 Grupo Industrial Maseca, S.A. de C.V. 'B2' 2,231,532 4,078,393 1.1
------------ ------------ -----
4,852,260 6,840,333 1.8
<PAGE>
Glass Manufacturing 65,200 Vitro, S.A. (ADR)(2) 1,250,211 1,198,050 0.3
Health & Personal
Care 134,500 Controladora de Farmacias, S.A. de C.V. (COFAR) 199,608 243,796 0.1
733,750 Kimberly-Clark de Mexico, S.A. de C.V. 'A' 6,854,135 11,951,097 3.1
650,500 Nacional de Dragos, S.A. de C.V. (Nadro) 'L' 1,914,494 3,147,073 0.8
------------ ------------ -----
8,968,237 15,341,966 4.0
Leisure 356,500 ++Grupo Posadas, S.A. de C.V. (GDS)(3) 5,231,508 5,704,000 1.5
522,040 ++Grupo Situr, S.A. de C.V. (ADR)(2) 6,889,491 10,440,800 2.8
------------ ------------ -----
12,120,999 16,144,800 4.3
Merchandising 656,000 Farmacias Benavides, S.A. de C.V. 2,926,674 3,215,998 0.8
Retail 4,650,000 Cifra, S.A. de C.V. 'C' 9,166,230 12,897,920 3.3
1,390,000 Controladora Comercial Mexicana, S.A. de C.V.
(COMERCI) 1,983,402 2,842,316 0.7
2,130,000 El Puerto de Liverpool, S.A. de C.V. (Non-Voting)
(Series C1) 2,564,569 3,778,423 1.0
7,020,000 Grupo Gigante, S.A. de C.V. 5,412,800 5,139,623 1.4
115,000 Sears Roebuck de Mexico, S.A. de C.V. 'B' 847,388 1,713,595 0.5
------------ ------------ -----
19,974,389 26,371,877 6.9
Steel 367,000 Grupo Industrial Alfa, S.A. de C.V. 3,411,561 2,367,360 0.6
120,000 Grupo Simec, S.A. de C.V. (ADR) (2) 1,763,700 2,595,000 0.7
1,830,000 Grupo Simec, S.A. de C.V. (Ordinary) 1,645,949 2,030,382 0.5
290,000 Tubos de Acero de Mexico, S.A. de C.V. (Tamsa) 2,825,918 1,459,119 0.4
65,000 Tubos de Acero de Mexico, S.A. de C.V. (Tamsa)
(ADR) (2) 361,385 316,875 0.1
------------ ------------ -----
10,008,513 8,768,736 2.3
Telecommunications 100,000 Alcatel Indetel, S.A. de C.V. 'B' 1,071,575 709,563 0.2
Transportation 232,000 Transportacion Maritima Mexicana, S.A.
de C.V. 'L' (TMM) 2,281,781 2,570,295 0.7
Utilities 241,500 Empresas ICA Sociedad Controladora, S.A. de
C.V. (ADR)(2) 4,632,397 5,856,375 1.6
350,400 Telefonos de Mexico, S.A. de C.V. (Telmex) (ADR)(2) 18,289,088 19,534,800 5.1
------------ ------------ -----
22,921,485 25,391,175 6.7
Total Long-Term Investments in Mexico 139,244,550 187,975,336 49.5
Panama
Banking 80,000 Banco Latinoamericano de Exportaciones S.A.
("BLADEX") 'E' 1,992,245 3,240,000 0.8
Beverages & Tobacco 40,600 PanAmerican Beverages Inc. 1,172,475 1,476,825 0.4
Total Long-Term Investments in Panama 3,164,720 4,716,825 1.2
<PAGE>
Peru
Banking 1,483,812 Banco de Credito de Peru S.A. 2,033,580 2,625,914 0.7
176,993 Banco Wiese Limitado 939,004 1,374,940 0.4
------------ ------------ -----
2,972,584 4,000,854 1.1
Beverages 994,226 Compania Nacional de Cerveza S.A. 1,305,585 781,488 0.2
Building &
Construction 442,517 Cementos Lima S.A. 834,883 935,683 0.2
Mining 169,225 Southern Peru Copper Corp. S.A. 536,856 373,376 0.1
Total Long-Term Investments in Peru 5,649,908 6,091,401 1.6
Venezuela
Building &
Construction 463,548 Corporacion Ceramica Carabobo 'B' 1,552,286 1,077,184 0.3
527,096 Corporacion Ceramica Carabobo C.A. 2,093,848 1,275,891 0.3
--------- --------- ---
3,646,134 2,353,075 0.6
Cement 200,000 Venezolana de Cementos S.A.C.A. (Vencemos) 293,183 336,948 0.1
Food & Household
Products 7,539,674 Mavesa S.A. 2,587,936 3,358,104 0.9
50,000 ++Mavesa S.A. (ADR) (2) 381,250 437,500 0.1
------------ ------------ -----
2,969,186 3,795,604 1.0
Foreign Government US$ 5,750,000 Republic of Venezuela, Floating Rate Notes,
Obligations 4.312% due 12/18/2007(1) 4,300,625 3,852,500 1.0
Multi-Industry 1,837,882 Venaseta S.A. 711,151 427,083 0.1
918,941 Venaseta S.A. 'B' Shares 178,228 177,952 0.1
------------ ------------ -----
889,379 605,035 0.2
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED SCHEDULE OF INVESTMENTS (concluded) (in US dollars)
<CAPTION>
Shares Held/ Value Percent of
Industries Face Amount Long-Term Investments Cost (Note 1a) Net Assets
<S> <C> <S> <C> <C> <C>
COUNTRY
Venezuela (concluded)
Steel 216,000 ++Siderurgica Venezolana SIVENSA, S.A.I.C.A.
-S.A.C.A. (ADR)(2) $ 1,231,384 $ 270,000 0.1%
168,500 ++Venezolana de Prerreducidos Caroni 'Venprecar' C.A.
(GDS)(3) 1,230,050 926,750 0.2
------------ ------------ -----
2,461,434 1,196,750 0.3
Utilities 1,316,450 C.A. La Electricidad de Caracas S.A.I.C.A.
-S.A.C.A. 5,131,583 4,544,098 1.2
Total Long-Term Investments in Venezuela 19,691,524 16,684,010 4.4
Total Long-Term Investments in Latin America 266,643,697 344,434,091 90.6
<CAPTION>
Short-Term Investments
<S> <C> <S> <C> <C> <C>
United States
Commercial Paper* US$ 7,000,000 Allergan, Inc., 3.09% due 12/29/1993 6,983,177 6,983,177 1.8
7,000,000 B.A.T. Capital Corp., 3.10% due 12/07/1993 6,996,383 6,996,383 1.8
9,883,000 General Electric Capital Corp., 3.25% due 9/01/1993 9,883,000 9,883,000 2.6
6,000,000 Preferred Receivables Funding Corp., 3.11%
due 12/15/1993 5,992,743 5,992,743 1.6
Total Short-Term Investments in the United States 29,855,303 29,855,303 7.8
Total Investments $296,499,000 374,289,394 98.4
============
Other Assets Less Liabilities 6,096,248 1.6
------------ -----
Net Assets $380,385,642 100.0%
============ =====
<FN>
(1)The interest rate is subject to change periodically based on the change in the LIBOR
(London Interbank Offered Rate). The interest rate shown is the rate in effect as of
November 30, 1993.
(2)American Depositary Receipt (ADR).
(3)Global Depositary Shares (GDS).
*Commercial Paper is traded on a discount basis; the interest rate shown is the discount
rate paid at the time of purchase by the Fund.
(a)Warrants entitle the Fund to purchase a predetermined number of shares of Common Stock.
The purchase price and number of shares are subject to adjustment under certain conditions
until the expiration date.
++Restricted securities as to resale. The value of the Fund's investment in restricted
securities was approximately $59,843,000, representing 15.7% of net assets.
<PAGE>
<CAPTION>
Acquisition Value
Issue Date Cost (Note 1a)
<S> <C> <C> <C>
Distribuidora Chilectra Metropolitana S.A. (Chilectra) (ADR) 2/12/1992 $ 3,815,919 $ 4,482,000
Fomento Economico Mexicano, S.A. de C.V. (Femsa) (ADR) 6/21/1993 2,483,860 2,694,000
Grupo Embotellador de Mexico, S.A. de C.V. (GGEMEX) 12/11/1992 3,331,200 5,808,000
Grupo Financiero Bancomer, S.A. de C.V. (ADR) 3/16/1992 3,758,586 4,586,025
Grupo Posadas, S.A. de C.V. (GDS) 3/23/1992 5,231,508 5,704,000
Grupo Situr, S.A. de C.V. (ADR) 12/03/1991 6,889,491 10,440,800
Mavesa S.A. (ADR) 10/13/1993 381,250 437,500
Quilmes Industrial S.A. 6/11/1992 2,433,587 4,057,550
Servicios Financieros Quadrum, S.A. de C.V. (ADR) 7/28/1993 5,138,911 9,835,313
Siderurgica Venezolana SIVENSA, S.A.I.C.A.-S.A.C.A. (ADR) 10/8/1991 1,231,384 270,000
Telecom Argentina Stet--France Telecom S.A. (ADR) 3/23/1992 5,967,281 6,805,865
Telefonica de Argentina S.A. (ADR) 1/29/1992 2,132,935 3,794,904
Venezolana de Prerreducidos Caroni 'Venprecar' C.A. (GDS) 2/13/1992 1,230,050 926,750
Total $44,025,962 $59,842,707
=========== ===========
See Notes to Financial Statements.
</TABLE>
<TABLE>
CONSOLIDATED STATEMENT OF ASSETS AND LIABILITIES
<CAPTION>
As of November 30, 1993
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$296,499,000) (Note 1a) $374,289,394
Foreign cash 1,390,824
Receivables:
Capital shares sold $ 8,274,098
Interest 112,467
Dividends 108,353 8,494,918
------------
Deferred organization expenses (Note 1g) 65,924
Prepaid registration fees and other assets (Note 1g) 39,603
------------
Total assets 384,280,663
------------
Liabilities: Payables:
Capital shares redeemed 1,617,264
Securities purchased 1,484,403
Distributor (Note 2) 254,080
Investment adviser (Note 2) 250,585 3,606,332
------------
Accrued expenses and other liabilities 288,689
------------
Total liabilities 3,895,021
------------
Net Assets: Net assets $380,385,642
============
<PAGE>
Net Assets Class A Common Stock, $0.10 par value, 100,000,000 shares authorized $ 519,689
Consist of: Class B Common Stock, $0.10 par value, 100,000,000 shares authorized 2,121,450
Paid-in capital in excess of par 301,032,004
Undistributed investment income--net 1,851,058
Accumulated realized capital losses and foreign currency transactions--net (Note 5) (2,911,311)
Unrealized appreciation on investments and foreign currency transactions--net 77,772,752
------------
Net assets $380,385,642
============
Net Asset Value: Class A--Based on net assets of $75,084,669 and 5,196,890 shares outstanding $ 14.45
============
Class B--Based on net assets of $305,300,973 and 21,214,500 shares outstanding $ 14.39
============
See Notes to Financial Statements.
</TABLE>
<TABLE>
CONSOLIDATED STATEMENT OF OPERATIONS
<CAPTION>
For the Year Ended November 30, 1993
<S> <S> <C> <C>
Investment Dividends (net of $605,085 foreign withholding tax) $ 5,858,377
Income Interest and discount earned 1,818,197
(Notes 1e &1f): ------------
Total income 7,676,574
------------
Expenses: Investment advisory fees (Note 2) 2,091,529
Distribution fees--Class B (Note 2) 1,673,753
Custodian fees 386,602
Transfer agent fees--Class B (Note 2) 273,426
Printing and shareholder reports 137,341
Accounting services 130,471
Account maintenance fees--Class A (Note 2) 104,444
Registration fees (Note 1g) 91,418
Professional fees 71,411
Transfer agent fees--Class A (Note 2) 62,999
Directors' fees and expenses 31,137
Amortization of organization expenses (Note 1g) 23,267
Other 14,344
------------
Total expenses 5,092,142
------------
Investment income--net 2,584,432
------------
<PAGE>
Realized & Realized gain (loss) from:
Unrealized Gain Investments--net $ 5,104,774
(Loss) on Foreign currency transactions (1,807,195) 3,297,579
Investments and ------------
Foreign Currency Change in unrealized appreciation/depreciation on:
Transactions--Net Investments--net 88,035,792
(Notes 1c, 1f & 3): Foreign currency transactions (18,861) 88,016,931
------------ ------------
Net realized and unrealized gain on investments and foreign currency transactions 91,314,510
------------
Net Increase in Net Assets Resulting from Operations $ 93,898,942
============
See Notes to Financial Statements.
</TABLE>
<TABLE>
CONSOLIDATED STATEMENTS OF CHANGES OF NET ASSETS
<CAPTION>
For the Year Ended November 30,
Increase (Decrease) in Net Assets: 1993 1992
<S> <S> <C> <C>
Operations: Investment income--net $ 2,584,432 $ 1,213,990
Realized gain (loss) on investments and foreign currency transactions--net 3,297,579 (3,854,316)
Change in unrealized appreciation/depreciation on investments and foreign
currency transactions--net 88,016,931 (8,092,294)
------------ ------------
Net increase (decrease) in net assets resulting from operations 93,898,942 (10,732,620)
------------ ------------
Dividends & Investment income--net:
Distributions to Class A (714,383) (230,346)
Shareholders Class B (1,699,059) (634,408)
(Note 1h): Realized gain on investments--net:
Class A (289,614) (2,877)
Class B (1,200,960) (10,102)
------------ ------------
Net decrease in net assets resulting from dividends and distributions
to shareholders (3,904,016) (877,733)
------------ ------------
Capital Share Net increase in net assets derived from capital share transactions 133,361,981 87,553,452
Transactions ------------ ------------
(Note 4):
Net Assets: Total increase in net assets 223,356,907 75,943,099
Beginning of year 157,028,735 81,085,636
------------ ------------
End of year* $380,385,642 $157,028,735
============ ============
<PAGE>
<FN>
*Undistributed investment income--net $ 1,851,058 $ 1,680,068
============ ============
See Notes to Financial Statements.
</TABLE>
<TABLE>
CONSOLIDATED FINANCIAL HIGHLIGHTS
<CAPTION>
Class A Class B
For the For the
Period Period
The following per share data and ratios have been derived For the Sept. 27, For the Sept. 27,
from information provided in the financial statements. Year Ended 1991++ to Year Ended 1991++ to
November 30, Nov. 30, November 30, Nov. 30,
Increase (Decrease) in Net Asset Value: 1993 1992 1991 1993 1992 1991
<S> <S> <C> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 9.90 $ 9.81 $ 10.00 $ 9.83 $ 9.80 $ 10.00
Operating ------- ------- ------- -------- -------- -------
Performance: Investment income--net .18 .15 .06 .10 .08 .04
Realized and unrealized gain (loss) on
investments and foreign currency
transactions--net (1) 4.69 .06 (.25) 4.68 .05 (.24)
------- ------- ------- -------- -------- -------
Total from investment operations 4.87 .21 (.19) 4.78 .13 (.20)
------- ------- ------- -------- -------- -------
Less dividends and distributions:
Investment income--net (.23) (.12) -- (.13) (.10) --
Realized gain on investments--net (.09) --++++ -- (.09) --++++ --
------- ------- ------- -------- -------- -------
Total dividends and distributions (.32) (.12) -- (.22) (.10) --
------- ------- ------- -------- -------- -------
Net asset value, end of period $ 14.45 $ 9.90 $ 9.81 $ 14.39 $ 9.83 $ 9.80
======= ======= ======= ======== ======== =======
Total Investment Based on net asset value per share 50.86% 2.19% (1.90%)+++ 49.80% 1.30% (2.00%)+++
Return:** ======= ======= ======= ======== ======== =======
Ratios to Average Expenses, excluding account maintenance and
Net Assets: distribution fees 1.58% 1.64% 1.72%* 1.59% 1.65% 1.73%*
======= ======= ======= ======== ======== =======
Expenses 1.83% 1.89% 1.97%* 2.59% 2.65% 2.73%*
======= ======= ======= ======== ======== =======
Investment income--net 1.83% 2.18% 4.05%* 1.09% 1.30% 3.28%*
======= ======= ======= ======== ======== =======
Supplemental Net assets, end of period (in thousands) $75,085 $30,685 $18,074 $305,301 $126,344 $63,012
Data: ======= ======= ======= ======== ======== =======
Portfolio turnover 24.74% 36.50% 0% 24.74% 36.50% 0%
======= ======= ======= ======== ======== =======
<PAGE>
<FN>
*Annualized.
**Total investment returns exclude the effects of sales loads.
++Commencement of Operations.
++++Amount less than $.01 per share.
+++Aggregate total investment return.
(1)Foreign currency transactions amounts have been reclassified to conform to the 1993 presentation.
See Notes to Financial Statements.
</TABLE>
CONSOLIDATED NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
Merrill Lynch Latin America Fund, Inc. (the "Fund") is
registered under the Investment Company Act of 1940 as a non-
diversified, open-end management investment company. The shares
of the Fund are divided into Class A Shares and Class B Shares.
Class A Shares are sold with a front-end sales charge. Class B
Shares may be subject to a contingent deferred sales charge. Both
classes of shares have identical voting, dividend, liquidation
and other rights and the same terms and conditions, except that
Class A Shares bear the expenses of the ongoing account
maintenance fee and except that Class B Shares bear certain
expenses related to the distribution of such shares and have
exclusive voting rights with respect to matters relating to such
distribution expenditures. The following is a summary of
significant accounting policies followed by the Fund.
(a) Valuation of investments--Portfolio securities which are
traded on stock exchanges are valued at their last sale price on
the principal market on which such securities are traded as of
the close of business on the day the securities are being valued
or, lacking any sales, at the last available bid price. Securities
traded in the over-the-counter market are valued at the last available
bid prices obtained from one or more dealers in the over-the-counter
market prior to the time of valuation. Portfolio securities which are
traded both in the over-the-counter market and on a stock exchange
are valued according to the broadest and most representative market.
Short-term securities with a remaining maturity of sixty days or
less are valued at amortized cost, which approximates market value.
Options written by the Fund are valued at the last asked price in
the case of exchange-traded options or, in the case of options traded
in the over-the-counter market, the average of the last asked price
as obtained from one or more dealers. Options purchased by the Fund
are valued at the last bid price in the case of exchange-traded options
or, in the case of options traded in the over-the-counter market, the
average of the last bid price as obtained from two or more dealers
unless there is only one dealer, in which case that dealer's price is
used. Other investments, including futures contracts and related options,
are stated at market value. 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.
<PAGE>
(b) Repurchase agreements--The Fund invests in US Government
securities pursuant to repurchase agreements with a member bank
of the Federal Reserve System or a primary dealer in US Government
securities. Under such agreements, the bank or primary dealer agrees
to repurchase the security at a mutually agreed upon time and price.
The Fund takes possession of the underlying securities, marks to
market such securities and, if necessary, receives additions to such
securities daily to ensure that the contract is fully collateralized.
(c) Foreign currency transactions--Transactions denominated in
foreign currencies are recorded in 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) such transactions expressed in
foreign currencies into US dollars. Realized and unrealized gains
or losses from investments include the effects of foreign exchange
rates on investments.
The Fund is authorized to enter into forward foreign exchange
contracts as a hedge against either specific transactions or
portfolio positions. Such contracts are not entered on the Fund's
records. However, the effect on net assets is recorded from the date
the Fund enters into such contracts. Premium or discount is amortized
over the life of the contracts.
(d) Options--When the Fund sells 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 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 is less than or exceeds the
premiums paid or received).
Written and purchased options are non-income producing
investments.
(e) 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.
<PAGE>
(f) Security transactions and investment income--Security trans-
actions are recorded on the dates the transactions are entered
into (the trade dates). Dividend income is recorded on the ex-dividend
date except that if the ex-dividend date has passed, certain
dividends from foreign securities are recorded as soon as the
Fund is informed of the ex-dividend date. Interest income
including amortization of discount is recognized on the accrual
basis. Realized gains and losses on security transactions are
determined on the identified cost basis.
(g) Deferred organization expenses and prepaid registration
fees--Deferred organization expenses are charged to expense on a
straight-line basis over a five-year period. Prepaid registration
fees are charged to expense as the related shares are issued.
(h) Dividends and distributions--Dividends and distributions paid
by the Fund are recorded on the ex-dividend dates.
(i) Basis of consolidation--The accompanying consolidated finan-
cial statements include the accounts of ML Latin America Fund
Chile Ltd., a wholly-owned subsidiary, which primarily invests in
Chilean securities. Intercompany accounts and transactions have
been eliminated.
(j) Reclassifications--Certain 1992 amounts have been reclassified
to conform to the 1993 presentation.
2. Investment Advisory Agreement and Transactions with
Affiliates:
The Fund has entered into an Investment Advisory Agreement with
Merrill Lynch Asset Management ("MLAM"). MLAM is the name under
which Merrill Lynch Investment Management, Inc. ("MLIM") does
business. MLIM is an indirect wholly-owned subsidiary of Merrill
Lynch & Co., Inc. The Fund has also entered into a Distribution
Agreement and Distribution Plans with Merrill Lynch Funds
Distributor, Inc. ("MLFD" or "Distributor"), a wholly-owned
subsidiary of MLIM.
MLAM 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. Certain of the states in which the shares of the Fund are
qualified for sale impose limitations on the expenses of the
Fund. The most restrictive annual expense limitation requires
that the Investment Adviser reimburse the Fund to the extent the
Fund's expenses (excluding interest, taxes, distribution fees,
brokerage fees and commissions, and extraordinary items) exceed
2.5% of the Fund's first $30 million of average daily net assets,
2.0% of the next $70 million of average daily net assets and 1.5%
of the average daily net assets in excess thereof. No fee payment
will be made to MLAM during any fiscal year which will cause such
expenses to exceed the expense limitations at the time of such
payment.
<PAGE>
Effective January 1, 1994, the investment advisory business of
MLAM reorganized from a corporation to a limited partnership. The
general partner of MLAM is Princeton Services, Inc., an indirect
wholly-owned subsidiary of Merrill Lynch & Co.
The Fund has adopted separate Plans of Distribution (the
"Distribution Plans") for Class A and Class B Shares pursuant
to Rule 12b-1 under the Investment Company Act of 1940 pursuant
to which MLFD receives from the Fund at the end of each month (a)
an account maintenance fee, at an annual rate of 0.25% of the
average daily net assets of the Fund's Class A Shares in order to
compensate the Distributor in connection with account maintenance
activities, and (b) a distribution fee at an annual rate of 1.0%
of the average daily net assets of the Fund's Class B Shares in
order to compensate the Distributor for the services it provides
and the expenses borne by the Distributor under the Distribution
Agreement. As authorized by the Distribution Plans, the
Distributor has entered into an agreement with Merrill Lynch,
Pierce, Fenner & Smith Inc. ("MLPF&S"), which provides for the
compensation of MLPF&S in connection with account maintenance
activities for Class A Shares and for providing distribution-
related services to the Fund for Class B Shares. For the year
ended November 30, 1993, MLFD earned $104,444 and $1,673,753 for
Class A and Class B Shares, respectively, under the Distribution
Plans, all of which was paid to MLPF&S pursuant to the agreement.
For the year ended November 30, 1993, MLFD earned underwriting
discounts of $52,202, and MLPF&S earned dealer concessions of
$640,928 on sales of the Fund's Class A Shares.
For the year ended November 30, 1993, MLPF&S received contingent
deferred sales charges of $641,317 relating to transactions in
Class B Shares and $23,983 in commissions on the execution of
portfolio security transactions for the Fund during the year.
Financial Data Services, Inc. ("FDS"), a wholly-owned
subsidiary of Merrill Lynch & Co., Inc., is the Fund's transfer
agent.
Accounting services are provided to the Fund by MLAM at cost.
Certain officers and/or directors of the Fund are officers and/or
directors of MLIM, MLPF&S, FDS, MLFD, and/or Merrill Lynch
& Co., Inc.
3. Investments:
Purchases and sales of investments, excluding short-term
securities, for the year ended November 30, 1993 were
$152,808,837 and $48,508,790, respectively.
<PAGE>
Net realized and unrealized gains (losses) as of November 30,
1993 were as follows:
Realized Unrealized
Gains Gains
(Losses) (Losses)
Long-term investments $ 5,104,717 $77,790,394
Short-term investments 57 --
Foreign currency transactions (1,807,195) (17,642)
----------- -----------
Total $ 3,297,579 $77,772,752
=========== ===========
As of November 30, 1993, net unrealized appreciation for Federal
income tax purposes aggregated $77,790,394, of which $87,568,616
related to appreciated securities and $9,778,222 related to
depreciated securities. At November 30, 1993, the aggregate cost
of investments for Federal income tax purposes was $296,499,000.
4. Capital Share Transactions:
Net increase in net assets derived from capital share
transactions was $133,361,981 and $87,553,452 for the years ended
November 30, 1993 and November 30, 1992, respectively.
Transactions in capital shares for Class A and Class B Shares
were as follows:
Class A Shares for the Year Ended Dollar
November 30, 1993 Shares Amount
Shares sold 2,937,106 $ 36,285,613
Shares issued to shareholders in reinvestment
of dividends and distributions 91,657 890,902
---------- ------------
Total issued 3,028,763 37,176,515
Shares redeemed (932,700) (10,899,696)
---------- ------------
Net increase 2,096,063 $ 26,276,819
========== ============
Class A Shares for the Year Dollar
Ended November 30, 1992 Shares Amount
Shares sold 1,932,748 $ 21,799,197
Shares issued to shareholders in reinvestment
of dividends and distributions 20,664 204,983
---------- ------------
Total issued 1,953,412 22,004,180
Shares redeemed (695,040) (7,709,783)
---------- ------------
Net increase 1,258,372 $ 14,294,397
========== ============
<PAGE>
Class B Shares for the Year Ended Dollar
November 30, 1993 Shares Amount
Shares sold 10,861,570 $136,390,183
Shares issued to shareholders in reinvestment
of dividends and distributions 253,359 2,472,784
---------- ------------
Total issued 11,114,929 138,862,967
Shares redeemed (2,748,458) (31,777,805)
---------- ------------
Net increase 8,366,471 $107,085,162
========== ============
Class B Shares for the Year Dollar
Ended November 30, 1992 Shares Amount
Shares sold 7,458,315 $ 84,216,625
Shares issued to shareholders in reinvestment
of dividends and distributions 55,565 551,761
---------- ------------
Total issued 7,513,880 84,768,386
Shares redeemed (1,097,798) (11,509,331)
---------- ------------
Net increase 6,416,082 $ 73,259,055
========== ============
5. Capital Loss Carryforward:
At November 30, 1993, the Fund had a capital loss carryforward of
approximately $1,104,000, all of which expires in 2001 and will
be available to offset like amounts of any future taxable gains.
6. Subsequent Event:
On December 15, 1993, the Board of Directors declared an ordinary
income dividend of $0.108476 per Class A Share and $0.048488 per
Class B Share, payable on December 22, 1993 to shareholders of
record as of December 14,1993.
<AUDIT-REPORT>
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders,
Merrill Lynch Latin America Fund, Inc.
We have audited the accompanying consolidated statement of assets
and liabilities, including the consolidated schedule of
investments, of Merrill Lynch Latin America Fund, Inc. and its
subsidiary as of November 30, 1993, the related consolidated
statements of operations for the year then ended and consolidated
changes in net assets for each of the years in the two-year
period then ended, and the consolidated financial highlights for
the two-year period then ended and the period September 27, 1991
(commencement of operations) to November 30, 1991. These
consolidated financial statements and the consolidated financial
highlights are the responsiblity of the Fund's management. Our
responsibility is to express an opinion on these consolidated
financial statements and the consolidated financial highlights
based on our audits.
<PAGE>
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements and the financial highlights are free of
material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
consolidated financial statements. Our procedures included
confirmation of securities owned at November 30, 1993 by
correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
consolidated financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, such consolidated financial statements and
consolidated financial highlights present fairly, in all material
respects, the financial position of Merrill Lynch Latin America
Fund, Inc. and its subsidiary as of November 30, 1993, the
results of their operations, the changes in their net assets, and
the consolidated financial highlights for the respective stated
periods in conformity with generally accepted accounting
principles.
Deloitte & Touche
Princeton, New Jersey
January 14, 1994
</AUDIT-REPORT>
PORTFOLIO CHANGES
For the Quarter Ended November 30, 1993
Additions
Banco Wiese Limitado
Bata Chile S.A.
Bufete Industrial S.A.
Coca-Cola Femsa S.A. (ADR)
Enersis S.A. (ADR)
Farmacias Benavides, S.A. de C.V.
Grupo Financiero Probursa, S.A. de C.V.
Grupo Simec, S.A. de C.V. (Ordinary)
Grupo Tribasa, S.A. de C.V. (ADR)
Inversiones y Representaciones S.A. (IRSA)
Mavesa S.A.
Mavesa S.A. (ADR)
PanAmerican Beverages Inc.
Sociedad Quimica y Minera de Chile S.A.
Telecom Argentina Stet--France Telecom S.A.
Telefonica de Argentina S.A.
Tubos de Acero de Mexico, S.A. de C.V. (Tamsa) (ADR)
Venaseta S.A. 'B' Shares
<PAGE>
Deletions
Bonos de Inversion y Crecimento (Investment and Growth Bonds--Fifth Series)
Companhia Cervejaria Brahma S.A. (Rights)
Republic of Panama Unrestructured Syndicated Loan Agreement
(Promissory Note Dated 6/10/1982), 3.718% due 12/28/1999
Sao Paulo Alpargatas S.A. PN
<TABLE>
IMPORTANT TAX INFORMATION (unaudited)
The following information summarizes all per share distributions
paid by Merrill Lynch Latin America Fund, Inc. during the fiscal
year ended November 30, 1993:
<CAPTION>
Qualifying Non-Qualifying Foreign
Domestic Domestic Foreign Total Taxes Long-Term
Record Payable Ordinary Ordinary Source Ordinary Paid or Capital
Date Date Income Income Income Income Withheld Gains
<S> <C> <C> <C> <C> <C> <C> <C> <S>
Class A Shares: 12/15/92 12/23/92 $0.008624 $0.118709 $0.199006 $0.326339 $0.010721 None
Class B Shares: 12/15/92 12/23/92 $0.006007 $0.082688 $0.138620 $0.227315 $0.010721 None
The qualifying domestic ordinary income qualifies for the
dividends received deduction for corporations. Substantially all
of the foreign taxes paid or withheld represent taxes incurred by
the Fund on dividends received by the Fund from foreign sources.
Foreign taxes paid or withheld should be included in taxable
income with an offsetting deduction from gross income or as a
credit for taxes paid to foreign governments. You should consult
your tax adviser regarding the appropriate treatment of foreign
taxes paid.
Please retain this information for your records.
</TABLE>
PORTFOLIO INFORMATION
Ten Largest Equity Holdings Percent of
As of November 30, 1993 Net Assets
Telefonos de Mexico, S.A. de C.V. (Telmex) (ADR) 5.1%
Grupo Carso, S.A. de C.V. 3.7
Cifra, S.A. de C.V. 'C' 3.3
Kimberly-Clark de Mexico, S.A. de C.V. 'A' 3.1
Grupo Situr, S.A. de C.V. (ADR) 2.8
Servicios Financieros Quadrum, S.A. de C.V. (ADR) 2.6
Grupo Tribasa, S.A. de C.V. (ADR) 2.3
Tolmex, S.A. de C.V. 'B' 2.2
Apasco, S.A. de C.V. 'A' 2.1
Telecomunicacoes Brasileiras S.A.--Telebras (Preferred) 1.9
<PAGE>
APPENDIX. Item 1. Asset Allocation as a Percentage of Equities & Fixed-Income
Securities as of November 30, 1993
A map illustrating the following percentages:
Mexico 55.3
Panama 1.0
Venezuela 4.7
Colombia 0.8
Peru 1.8
Brazil 15.8
Argentina 12.9
Chile 7.7
Item 2. Total Return Based on a $10,000 Investment
A line graph depicting the growth of an investment in the Fund's
Class A Shares and Class B Shares compared to growth of an
investment in the Emerging Markets Free Latin America Index.
Beginning and ending values are:
9/27/91** 11/30/93
ML Latin America Fund, Inc.++--
Class A Shares* $ 9,600 $14,518
ML Latin America Fund, Inc.++--
Class B Shares* $10,000 $14,671
Emerging Markets Free Latin
America Index++++ $10,000 $17,901
[FN]
*Assuming maximum sales charge, transaction costs and other
operating expenses, including advisory fees.
**Commencement of Operations.
++ML Latin America Fund, Inc. 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 and which are
freely purchasable by foreign investors.
