Half-yearly Report

BlackRock Commodities Income Investment Trust plc Half yearly financial report The Company's objectives are to achieve an annual dividend target and, over the long term, capital growth by investing primarily in securities of companies operating in the mining and energy sectors. Financial Highlights Attributable 31 30 to May November ordinary 2013 2012 Change shareholders (unaudited) (audited) % Assets Net assets (£'000) 109,261 111,663 -2.2 Net asset value per ordinary share 115.92p 118.47p -2.2 - with income reinvested - - +0.4 Ordinary share price (mid-market) 117.50p 122.75p -4.3 - with income reinvested - - -1.8 For For the the six six months months ended ended 31 31 May May 2013 2012 Change (unaudited) (unaudited) % Revenue Net revenue after taxation (£'000) 2,931 2,833 +3.5 Revenue return per ordinary share 3.11p 3.09p +0.6 Interim Dividends 1st interim dividend 1.475p 1.400p +5.4 2nd interim dividend* 1.475p 1.400p +5.4 *to be paid on 26 July 2013 Performance Record Performance to 31 May 2013 Six One Five months year years Net asset value per ordinary share - with income reinvested 0.4% 10.0% -19.5% Ordinary share price (mid-market) - with income reinvested -1.8% 8.7% -18.6% Source: BlackRock. Chairman's Statement Performance During the period under review energy equities have performed well, benefiting from the encouraging macroeconomic background in the US. The mining sector has been much more challenging however, on fears that economic growth rates in China have been slowing. During the six month period ended 31 May 2013 the Company's net asset value ("NAV") per share increased by 0.4% and the share price decreased by 1.8% (both percentages in sterling terms with income reinvested). Further information on investment performance is given in the Investment Manager's Report. Since the period end, the Company's NAV has decreased by 3.3% and the share price has fallen by 4.3% (with income reinvested). Revenue return and dividends Revenue return per share for the six month period was 3.11 pence (six months to 31 May 2012: 3.09 pence). The target for the year ending 30 November 2013 is to pay dividends amounting to at least 5.90 pence per share in total (this is a target and should not be interpreted as a profit or dividend forecast) (2012: target of 5.75 pence). The first quarterly dividend of 1.475 pence per share was paid on 17 April 2013 and the second quarterly dividend of 1.475 pence per share will be paid on 26 July 2013 to Shareholders on the register on 28 June 2013 (2012: three interim dividends each of 1.4375 pence per share and a fourth interim dividend of 1.5875 pence per share). Board We were very pleased to welcome Ed Warner to the Board with effect from 1 July 2013. Ed will also join the Company's Audit and Management Engagement Committee and the Nomination Committee. Ed is chairman of UK Athletics Limited, LMAX and Panmure Gordon & Co. and a non-executive director of Clarkson PLC and Grant Thornton UK LLP. He has extensive investment experience and is also chairman of Standard Life European Private Equity Trust PLC. Tender offer The Directors of the Company have the discretion to make semi-annual tender offers in February and August of each year at the prevailing NAV, less 2%, for up to 20% of the Company's issued share capital. The Directors announced on 19 June 2013 that over the six month period to 31 May 2013 the Company's shares had traded at an average premium to NAV of 0.7%. Given that the average is better than a discount of 2% to NAV, the price at which any tender offer would be made, the Board concluded that it was not in the interests of shareholders to implement the tender offer as at 31 August 2013. Share issues No shares were issued during the period under review. Since the period end 500,000 ordinary shares have been issued under the Company's blocklisting facility at a price of 108.5 pence per share for a total consideration of £541,000 net of issue costs. The shares were issued at a premium to the Company's NAV at the time of issue. There are no shares currently held in treasury. Gearing The Company operates a flexible gearing policy which depends on prevailing market conditions. Gearing will not exceed 20% of the gross assets of the Company. The maximum gearing used during the period was 9.6%, and at 31 May 2013 gearing was 8.1%. Alternative Investment Fund Manager's Directive The Alternative Investment Fund Managers' Directive ("the Directive") is a European directive which seeks to reduce potential systemic risk by regulating alternative investment fund managers ("AIFMs"). AIFMs are responsible for investment products that fall within the category of Alternative Investment Funds ("AIFs") and investment companies are included in this. The Directive was implemented on 22 July 2013 although it has now been confirmed that the Financial Conduct Authority ("FCA") will permit a transitional period of one year within which UK AIFMs must seek authorisation. The Board is taking independent advice on the consequences for the Company and has agreed in principle to appoint BlackRock as its AIFM in advance of the end of the transitional period on 22 July 2014. Prospects While the energy sector has benefited from the modest recovery in the US economy, the share prices of mining companies have suffered in recent months. Concerns over Chinese economic growth have coincided with nervousness about the impact on securities markets of an eventual withdrawal by the US Federal Reserve of Quantitative Easing. In addition, higher cost inflation has meant the free cash flows generated by the sector have not been as good as market participants had originally expected. In this environment our Fund Manager has focused the portfolio in companies which are exposed to commodities where the supply and demand outlook is supportive for prices, and on those companies with lower than average costs, strong cash flow generation and the potential for self-funded growth. It is encouraging that the US economy has shown positive signs of recovery. Coupled with a greater focus on capital discipline by the resources companies themselves and a reduction in the concerns over Chinese growth, this should provide an improving environment for industrial commodities in the medium-term. Alan Hodson 24 July 2013 Interim Management Report and Responsibility Statement The Chairman's Statement and the Investment Manager's Report give details of the important events which have occurred during the period and their impact on the financial statements. Principal risks and uncertainties The principal risks faced by the Company can be divided into various areas as follows: - Performance; - Income/dividend; - Regulatory; - Operational; - Market; - Liquidity; - Financial; - Sector; and - Third party service provider. The Board reported on the principal risks and uncertainties faced by the Company in the Annual Report and Financial Statements for the year ended 30 November 2012. A detailed explanation can be found in the Directors' Report on pages 19 and 20 and in note 19 on pages 49 to 55 of the Annual Report and Financial Statements which are available on the website maintained by the Investment Manager, BlackRock Investment Management (UK) Limited, at www.blackrock.co.uk/brci. In the view of the Board, there have not been any changes to the fundamental nature of these risks since the previous report and these principal risks and uncertainties are equally applicable to the remaining six months of the financial year as they were to the six months under review. Related party disclosure transactions with the Investment Manager The Investment Manager is regarded as a related party under the Listing Rules and details of the management fees payable are set out in note 4 and note 9. The related party transactions with the Directors are also set out in note 8. Going Concern The Directors are satisfied that the Company has adequate resources to continue in operational existence for the foreseeable future and is financially sound. The Company has a portfolio of investments which is considered to be readily realisable and is able to meet all of its liabilities from its assets and the income generated from these assets. Directors' responsibility statement The Disclosure and Transparency Rules ("DTR") of the UK Listing Authority require the Directors to confirm their responsibilities in relation to the preparation and publication of the Interim Management Report and Financial Statements. The Directors confirm to the best of their knowledge that: - the condensed set of financial statements contained within the half yearly financial report has been prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting'; and - the Interim Management Report together with the Chairman's Statement and Investment Manager's Report, include a fair review of the information required by 4.2.7R and 4.2.8R of the FCA's Disclosure and Transparency Rules. This half yearly report has been reviewed by the Company's Auditor. The half yearly financial report was approved by the Board on 24 July 2013 and the above responsibility statement was signed on its behalf by the Chairman. Alan Hodson For and on behalf of the Board 24 July 2013 Investment Manager's Report Summary In the six month period to 31 May 2013, the Company's NAV returned 0.4% and the share price fell by 1.8%. Over the same period, the HSBC Global Mining Index fell by 13.4% and the MSCI World Energy Index gained 13.9% (in sterling terms with income reinvested). Commodity Market Overview Macroeconomic events bifurcated the Company's investment universe during the period. On the one hand, a nascent recovery of the US economy stoked a rally in domestic equity markets and also helped to lift West Texas Intermediate ("WTI") oil prices, which had positive implications for the generally US centric energy shares. Mining equities went in the opposite direction, however, as a worsening outlook for the Chinese economy weighed heavily on the sector. Energy and mining commodities displayed a broadly similar trend to their equity counterparts, although the divergence in their performances was less pronounced. The following table shows the six month performance of commodity markets. 30 31 November May % Commodity 2012 2013 Change Base Metals (US$/tonne) Aluminium 2,094 1,878 -10.3 Copper 7,979 7,281 -8.7 Lead 2,258 2,208 -2.2 Nickel 17,598 14,752 -16.2 Tin 21,862 20,850 -4.6 Zinc 2,029 1,894 -6.7 Precious Metals (US$/oz) Gold 1,718 1,393 -18.9 Silver (USc/oz) 3,428 2,257 -34.2 Platinum 1,612 1,459 -9.5 Palladium 685 744 +8.6 Energy Oil (WTI) (US$/Bbl) 1 88.5 91.9 +3.8 Oil (Brent) (US$/Bbl) 2 110.7 100.5 -9.2 Natural Gas (US$/MMBTU) 3 3.4 4.0 +17.6 Uranium (US$/lb) 4 41.8 40.5 -3.1 Bulk Commodities (US$/tonne) Iron ore 5 119.0 110.4 -7.2 Coking coal 6 161.0 137.3 -14.7 Thermal coal 7 90.9 87.8 -3.4 Potash (US$/st) 8 505.0 410.0 -18.8 Equity Indices HSBC Global Mining Index (US$) 515.2 416.0 -19.3 HSBC Global Mining Index (£) 321.5 274.4 -14.7 MSCI World Energy Index (US$) 237.4 252.0 +6.1 MSCI World Energy Index (£) 148.1 166.2 +12.2 1. West Texas Intermediate 2. Brent 3. Henry Hub 4. Nuexco Restricted, U3O8 5. CFR China (Bloomberg) 6. Spot HCC (Macquarie) 7. FOB Newcastle (Macquarie) 8. Standard Muriate, Saskatchewan Source: Datastream. Data are on a capital only basis. In the mining sector, metal prices (with the exception of gold and silver) fared somewhat better than the equities. Copper, for example, closed the period down by 8.7% and continues to trade above the US$3/lb level. Several disruptions to supply occurred during the period including a pitwall failure at Rio Tinto's giant Bingham Canyon mine in Utah and the temporary closure of Freeport McMoRan Copper & Gold's Grasberg mine in Indonesia, the world's largest copper and gold producer, following a fatal accident. While these provided some support for the market, there has been a large increase in London Metal Exchange inventories to 617,225 tonnes, up by 146% over the six month period. Total inventories rose to 1.56 million tonnes which represents 4 weeks of global demand (up from 2.8 weeks since November 2012). Clearly, some of the tightness in the market has dissipated and this is reflected in the futures curve moving into a contango. With the metal continuing to trade at a premium to the marginal cost of production, we believe copper prices could be vulnerable in the near-term, particularly if Chinese economic data continues to disappoint. Accordingly, the Manager wrote call options against some of the Company's copper producers towards the end of the period under review. The other base metals were also weaker during the period under review, reflecting the fact that supply-demand balances are less supportive than they were last year. Aluminium fell 10.3% as growing Chinese production offset the capacity curtailments announced by some of the big producers, while inventories also stand at relatively high levels. However, demand growth looks reasonably positive and prices are trading below the top of the cost curve. Nickel and zinc prices fell by 16.2% and 6.7% respectively during the period. Inventories remain relatively high for both metals. The Company's exposure to the base metals is 11.7%. This is dominated by copper (7.0% of total investments), which, in the Manager's opinion, has the best medium-term fundamentals. The Company's copper producers include Antofagasta, Freeport McMoRan Copper & Gold, Southern Copper and Southern Peru Copper. Elsewhere, our base metal exposure includes: Alcoa and Alumina (aluminium); Vale Indonesia and Norilsk Nickel (nickel); Minsur (tin); and Nyrstar (zinc). In the bulk commodity markets, iron ore prices began the year strongly, trading back above the US$150/tonne level in a move driven by restocking at the Chinese steel mills and temporary port closures in Western Australia. However, by the end of the period under review, prices had drifted back to US$110/tonne over fears that weaker growth in the Chinese steel market could trigger an iron ore destocking cycle. Diversified miners BHP Billiton and Rio Tinto operate low cost iron ore assets in Western Australia, as does Fortescue Metals, a relative new-comer to the industry. As well as BHP Billiton and Rio Tinto, the Company's other key diversified holding is GlencoreXstrata, formed by the merger of Glencore and Xstrata which was completed during the period under review. These companies' relatively strong margins are well protected as the high cost marginal Chinese suppliers have reacted quickly to falling prices by closing capacity. In the precious metal markets, gold registered its worst two day performance for 30 years when a sizeable transaction in the futures market triggered stop loss selling, which in turn drove redemptions out of the gold Exchange Traded Funds and on 16 April 2013 the metal traded as low as US$1,322/oz. Conjecture over the sustainability of the US Federal Reserve's monetary stimulus programme and rumours of a bullion sale by the Cypriot Central Bank were cited as catalysts for the rout. Prices recovered some of these losses on the back of a surge in physical demand for the metal, notably in Asia where some dealers reported levels of demand not seen since the late 1980s. Gold equities, not surprisingly, came under severe pressure in this environment and the FTSE Gold Mines Index closed the period down by 37.5%. Given that the index has previously traded at these levels when gold prices were less than US$900/oz, its current value reflects the extent to which the sector has been derated. For some time now the Company has been underweight gold shares (relative to a hybrid benchmark consisting of 50% weightings in the MSCI World Energy Index and the HSBC Global Mining Index). In response to their under performance we have written put options in some of the gold equities as part of a strategy to increase the Company's gold equity exposure. Our holdings include Barrick Gold, Yamana, Kinross, Eldorado Gold and Goldcorp. Silver, gold's so-called "poor cousin", fell by 34.2% during the period. We purchased shares in Fresnillo, the London listed Mexican silver producer, on the pull back in the silver market. Platinum closed the period down by 9.5% after Anglo Platinum, the world's leading primary producer of Platinum Group Metals scaled back its plans to curtail production, a decision which moved the market into an estimated surplus for the year. Platinum prices closed the period down by 9.5% as European auto sales continued to decline. The European auto sector is dominated by diesel engines and represents around 20% of global platinum demand. With growing vehicle sales in the US and China, mostly gasoline vehicles that use palladium based catalysts, palladium prices gained 8.6% during the period. The Company owns two PGM producers, Impala Platinum, based in South Africa and Russia's Norilsk Nickel. Some of the Company's better performing investments in the mining sector have been the fertilizer companies. Compared with the metal and bulk commodity producers, their businesses are not dependent on Chinese GDP growth. Fertilizer demand is driven by farming profitability which has risen to record levels in response to firmer crop prices. At the end of the period under review, the Company held three fertilizer producers, making up 2.8% of total investments. The best performer was Mosaic, which gained 12.5% over the period. In the energy markets, West Texas Intermediate ("WTI") rose by 3.8%, buoyed by the relative strength of the US economy. Brent, the international crude benchmark, fell 9.2% as economic data outside the US was relatively disappointing. Supply and demand appear relatively well balanced in the current environment and concerns around supply side risk (relating to Iran, for example), whilst they have not disappeared, have eased. Thus, the longstanding discount between North American crude and international blends has narrowed. At the end of the period under review the spread stood at US$8.6/Bbl, having peaked at US$30/Bbl in September 2011. While a better performing US economy is one factor in reducing this discount, the key reason has been the fall in inventories at Cushing in Oklahoma (the point of delivery for the WTI contract). The key driver for this shift has been the construction of several pipelines which facilitate the delivery of crude directly to refineries on the Gulf coast rather than to Cushing. At the end of May, inventories at Cushing were at 50.5 million barrels, down from a record 51.9 million barrels in January. In May, OPEC met in Vienna and decided to maintain the production level ceiling at 30 million Bbl/day, reflecting the cartel's comfort with current oil prices. Fiscal break-even for some members could come under pressure if prices fall and remain below US$100/Bbl. The bulk of the Company's energy exposure is invested in the integrated oil and gas companies, including Chevron and Exxon, our two largest holdings. Both companies have an exemplary track record in growing dividends over the long-term. Our key exploration and production company is Anadarko Petroleum. During the period, the company announced back-to-back discoveries in the Gulf of Mexico, which exceeded market expectations for the basin. The stock also benefited from Eni's announcement that it had secured a farm-down agreement for a stake in its Mozambique gas discovery - Eni and Anadarko are the leading energy companies operating offshore Mozambique. Anadarko gained 19.5% over the period. Natural gas was the top performing commodity during the period with Henry Hub, the benchmark US domestic price, gaining 16.2%. Gas was helped by the cold winter in the northern hemisphere which pushed gas inventories below their 5-year average. The result was a rally in natural gas prices to US$4.40/MMBTU, before easing back with the onset of the spring shoulder season (gas consumption is typically stronger in winter and summer months, driven by increased usage of heating systems and air conditioners respectively). The development of shale gas and oil basins across the US is fundamentally changing the supply-demand dynamic for both oil and natural gas. After years of declining output, North American oil and gas production is rising - the growth in unconventional oil production has already added over 1 million Bbl/day of supply since 2010. In a recent report, the IEA expects the US to become the world's largest producer of oil and oil products by around 2020 and a net exporter by 2030. This environment is presenting investment opportunities for the Company. In the E&P space, our holdings in Noble Energy, Range Resources, Southwestern Energy, EOG Resources and Ultra Petroleum provide exposure to this important long-term theme. Schlumberger, the oil service company, is also directly exposed to the growth in US shale. It is also worth noting that the Company has no US coal companies. Domestic US coal prices have suffered as consumers have switched to gas. Uranium prices fell by 3.1% during the period. The commodity has been weak since the accident at Fukishima in Japan and the subsequent suspension of nuclear power generation, which resulted in significant over-supply. However, with the long-term growth of nuclear power in China and Japanese reactor restarts, the fundamental picture for uranium is beginning to improve. The Manager wrote a put option in Cameco, one of the world's largest publicly traded uranium companies. We view the stock as defensive, as uranium prices have little correlation with global GDP growth. In the commodity equity markets, one of the key themes has been the call for more rigorous capital discipline from the mining industry. Companies are beginning to focus on profitability and efficiency rather than simply expanding production. To this end several large scale expansions and developments have been cancelled and many companies have written-down the value of assets. There have also been several high profile changes at the CEO level at a number of companies including Anglo American, BHP Billiton and Rio Tinto. Meanwhile, the copper industry has seen renewed merger and acquisition activity during the period, including First Quantum's bid for Inmet, neither of which is held by the Company. Freeport McMoRan Copper & Gold disappointed the market in December, however, its intention to acquire Plains Exploration and Production and McMoRan Exploration was then announced, thus diversifying its asset base into oil and gas. Post completion of the deal one third of the enterprise value of the combined entity would be in energy assets. Freeport's marked departure from recent corporate strategy prompted a sharp sell-off in the stock. Towards the end of the period under review, as our short-term view on mining markets became more negative, we wrote a series of call options over some of the mining shares (and two energy companies that performed well). This increased our outstanding positions in options as at 31 May 2013 to 10, which also included puts in Cameco and Goldcorp. Income The Group generated net revenue profit of £2,931,000 during the period to 31 May 2013 (£2,833,000 for the period to 31 May 2012) or 3.11 pence (2012: 3.09 pence per share), this exceeds the first and second interim dividends totalling 2.95 pence per share (2012: 2.875 pence per share). Income from dividends paid by investee companies totalled £2,577,000 for the period ended 31 May 2013 (period to 31 May 2012: £2,587,000), this represents 74.2% of total income (period to 31 May 2012: 77.6%). Dividends from integrated energy companies made up approximately 38% of the total dividends from investee companies. In addition, diversified mining companies and copper producers contributed approximately 18% and 14% respectively. Income generated by option writing accounted for 25.8% of total revenue for the period to 31 May 2013 (period to 31 May 2012: 22.4%). Portfolio review At 31 May 2013, the Company held 58 investments. Asset Allocation as at 31 May 2013 - Geography Country % Global 33.0 Canada 21.4 USA 17.8 Latin America 9.6 Europe 9.2 Asia 5.2 Australia 1.2 Africa 0.9 China 0.9 Russia 0.8 Source: BlackRock Asset Allocation as at 31 May 2013 - Commodity % Energy 59.1 Mining 40.9 Energy Breakdown % Integrated Oil 53.7 Exploration & Production 25.7 Oil Services 10.6 Oil Sands 5.0 Distribution 3.5 Coal 1.5 Mining Breakdown % Diversified 40.0 Gold 18.0 Copper 16.6 Fertilizers 6.8 Iron Ore 4.2 Aluminium 4.1 Nickel 4.0 Silver 2.2 Tin 1.6 Zinc 1.4 Platinum 1.1 Source: BlackRock Outlook The mining sector and other cyclical areas have struggled over the last two years as the market has downgraded global growth expectations. We remain cautious over the near-term outlook for the mining sector, as performance for the sector is likely to be sensitive to macroeconomic indicators, which could deteriorate over the summer. In the medium-term, mining commodity prices are likely to remain at attractive levels as supply and demand have come closer into balance. We expect greater tightness to return for certain commodities, but for now mining companies need to be focused on capital discipline, operational efficiency and growing margins through cost control. In such an environment, well managed mining businesses should be able to generate free cash flow, be in a strong position to return cash to shareholders and should see their share prices rewarded as a result. In the energy sector, we expect oil prices to remain range bound in 2013. Global economic activity is translating into modest demand growth. The high marginal cost of production for oil, OPEC's desire for prices to sit within a relatively high range and the ongoing risk of supply disruption should all be broadly supportive of high oil prices. Over the longer-term, the demand side outlook for oil looks robust. Non-OECD countries currently make up less than half of global oil demand but should provide almost all expected demand growth. Energy consumption per capita in China is, for example, far behind the levels seen in the US and with the Chinese economy slowly transitioning from an investment led to more of a consumption driven economy there is significant scope for increased use of oil and natural gas. The energy industry is also undergoing a series of structural changes, not least with the rapid onset of shale oil and gas production in North America. These changes are creating challenges, but opportunities also abound. The energy equity proposition is arguably more nuanced than it has been in the recent past. We are focusing on companies that show value and offer differentiating, stock-specific fundamentals, both of which should be able to provide good returns in a range bound international oil price environment. Richard Davis BlackRock Investment Management (UK) Limited 24 July 2013 Ten Largest Investments as at 31 May 2013 Chevron - 6.1% (2012: 5.7%, www.chevron.com) is one of the world's leading integrated energy companies engaged in every aspect of the oil, gas and power generation industries. In oil, Chevron is a major producer in the US Gulf of Mexico and has positions in nearly all the key basins around the world. Chevron is engaged in every aspect of the natural gas business, with significant interests in Africa, Australia, Southeast Asia and the Caspian region. The company is one of the world's leading producers of geothermal energy. Headquartered in California, Chevron is one of the world's "Supermajor" oil companies, along with BP, Exxon, Shell and Total. ExxonMobil - 5.9% (2012: 6.2%, www.exxonmobil.com) is the world's largest publicly traded international oil and gas company. Exxon has exploration and production assets, including 28 major development projects, in 36 countries. Chevron is the largest refiner and marketer of petroleum products and in the chemical industry, the company is also a significant producer of plastics and polymers and basic petrochemical building blocks such as aromatics and olefins. A global company, Exxon is based in Texas and has operating or marketing activities in most of the world's countries. BHP Billiton - 4.9% (2012: 5.2%, www.bhpbilliton.com) is the world's largest diversified natural resources company, formed in 2001 from the merger of BHP and Billiton. The company is a major producer of aluminium, iron ore, copper, thermal and metallurgical coal, manganese, uranium, nickel, silver, titanium minerals and diamonds. The company also has significant interests in oil and gas. In 2011, the company took positions in US shale gas through the acquisitions of Chesapeake Energy's Fayetteville Shale and Petrohawk. BHP Billiton is dual listed in London and Australia. Anadarko Petroleum - 3.7% (2012: 3.0%, www.anadarko.com) headquartered in Texas, Anadarko is one of the largest independent oil and gas exploration and production companies in the world. The company is a leading deepwater producer in the Gulf of Mexico and has production in Alaska, Algeria, China and Ghana. Anadarko owns key positions in US onshore shale assets and has exploration activities in West Africa, Mozambique, Kenya, South Africa, New Zealand and China. Total - 3.4% (2012: 3.5%, www.total.com) based in France, Total is one of the world's largest international oil and gas companies with operations covering the entire energy chain, from oil exploration and production to trading, shipping and refining and marketing of petroleum products. The company is also active in power generation and is a major chemicals manufacturer. In the Alternative Energy sector, Total is the majority shareholder in Sunpower, a producer of photovoltaic solar panels. Antofagasta - 3.4% (2012: 2.5%, www.antofagasta.co.uk) is a copper producer with four operating mines in Chile. The company is also active in mineral exploration in Chile and Peru and has interests in transport and water distribution. Antofagasta is listed on the London Stock Exchange. Eni - 3.2% (2012: 3.1%, www.eni.com) based in Italy, Eni is a major integrated energy company with activities in exploration and production, refining and marketing and power generation. In Europe, Eni is a leading utility, with a diversified gas supply portfolio and a key position in the industrial, power generation and retail markets. In the oil services sector, Eni owns a major stake in Saipem, a leading turnkey contractor in the oil and gas industry. GlencoreXstrata - 3.2% (2012: 1.4%*, www.glencorexstrata.com) formed following the merger of Glencore International and Xstrata in May 2013, is one of the world's largest globally diversified natural resource companies. GlencoreXstrata is an integrated producer and marketer of commodities, with activities in every part of the supply chain, from sourcing materials to delivering products to an international customer base. In the mining sector, the company has interests in base metals and iron ore, while its energy portfolio is focused on oil and coal. The company also has storage, handling and processing facilities for grains, oils and oilseeds, cotton and sugar. GlencoreXstrata is one of the biggest companies in the FTSE 100 Index. BP - 3.1% (2012: 2.9%, www.bp.com) is one of the world's leading oil and gas companies active in all areas of the oil and gas industry including exploration and production, refining and marketing, distribution, trading, power generation and petrochemicals. The company also has renewable energy interests in biofuels and wind power. BP is based in the UK and is listed on the London Stock Exchange. Rio Tinto - 3.0% (2012: 4.0%, www.riotinto.com) is one of the world's leading mining companies, combining Rio Tinto plc, a London Stock Exchange listed company and Rio Tinto Limited, listed in Australia. The company produces iron ore, aluminium, copper, diamonds, thermal and metallurgical coal, uranium and gold. The company is also a producer of industrial minerals including borax, titanium dioxide and salt. Rio Tinto has a global reach with key business units in Australia and North America. All percentages reflect the value of the holding as a percentage of total investments. Percentages in brackets represent the value of the holding at 30 November 2012. Together the ten largest investments represent 39.9% of the Company's portfolio (ten largest investments as at 30 November 2012: 41.7%). *The Glencore - Xstrata merger was completed during the period and the combined entity started trading on 2 May 2013. At 30 November 2012, the Company had 1.2% and 0.2% invested in Xstrata and Glencore respectively. Investments as at 31 May 2013 Main Market % geographic value of exposure £'000 investments Integrated Oil Chevron Global 7,207 6.1 ExxonMobil Global 7,042 5.9 Total Global 4,057 3.4 Eni Europe 3,740 3.2 BP Global 3,669 3.1 Occidental Petroleum USA 3,401 2.9 Statoil Europe 2,994 2.5 Royal Dutch Shell Global 2,851 2.4 ConocoPhillips USA 2,225 1.9 BG Global 485 0.4 ------- ----- 37,671 31.8 ------- ----- Diversified Mining BHP Billiton Global 5,804 4.9 GlencoreXstrata Global 3,838 3.2 Rio Tinto Global 3,597 3.0 Teck Resources Canada 3,521 3.0 Vale Latin America 1,826 1.5 Rio Tinto Finance 8.95% 01/05/14 Global 708 0.6 Vedanta Resources Asia 581 0.5 Vedanta Resources call option 21/06/13 Asia (6) - Teck Resources call option 20/07/13 Canada (21) - GlencoreXstrata call option 19/07/13 Global (24) - Rio Tinto call option 19/07/13 Global (35) - ------- ----- 19,789 16.7 ------- ----- Energy Exploration & Production Anadarko Petroleum USA 4,414 3.7 Peyto Exploration & Development Canada 2,456 2.1 Vermilion Energy Canada 2,331 2.0 Crescent Point Energy Trust Units Canada 2,158 1.8 Noble Energy USA 1,597 1.3 Penn West Petroleum Canada 1,513 1.3 Range Resources USA 1,488 1.3 Southwestern Energy USA 1,367 1.1 EOG Resources USA 1,277 1.0 Ultra Petroleum USA 751 0.6 Peyto Exploration & Development call option 20/07/13 Canada (14) - Ultra Petroleum call option 20/07/13 USA (26) - ------- ----- 19,312 16.2 ------- ----- Copper Antofagasta Latin America 4,018 3.4 Freeport McMoRan Copper & Gold Asia 2,150 1.8 Southern Copper Latin America 1,413 1.2 South Peru Copper Latin America 710 0.6 Southern Copper call option 20/07/13 Latin America (18) - ------- ----- 8,273 7.0 ------- ----- Gold Barrick Gold Canada 2,714 2.3 Yamana Latin America 1,520 1.3 Kinross Canada 1,288 1.1 Eldorado Gold Asia 1,213 1.0 Goldcorp Canada 960 0.8 Goldcorp put option 20/07/13 Canada (38) - ------- ----- 7,657 6.5 ------- ----- Oil Services Schlumberger USA 2,625 2.2 Aker Solutions Europe 2,291 1.9 Baker Hughes USA 1,350 1.1 ------- ----- 6,266 5.2 ------- ----- Oil Sands Canadian Oil Sands Canada 1,276 1.1 Suncor Energy Canada 1,121 1.0 Cenovus Energy Canada 1,109 0.9 ------- ----- 3,506 3.0 ------- ----- Fertilizers Yara Europe 1,180 1.0 Potash Corporation of Saskatchewan Canada 1,178 1.0 Mosaic USA 1,003 0.8 ------- ----- 3,361 2.8 ------- ----- Distribution Enbridge Income Fund Trust Canada 2,422 2.0 ------- ----- 2,422 2.0 ------- ----- Iron Ore Labrador Iron Ore Canada 1,130 1.0 Kumba Iron Ore Africa 505 0.4 Fortescue Metals Australia 463 0.4 Labrador Iron Ore call option 20/07/13 Canada (9) - ------- ----- 2,089 1.8 ------- ----- Aluminium Alcoa USA 1,086 0.9 Alumina Australia 935 0.8 ------- ----- 2,021 1.7 ------- ----- Nickel Vale Indonesia Asia 1,010 0.9 JSC MMC Norilsk Russia 954 0.8 ------- ----- 1,964 1.7 ------- ----- Silver Fresnillo Latin America 1,095 0.9 ------- ----- 1,095 0.9 ------- ----- Coal China Shenhua Energy China 1,047 0.9 ------- ----- 1,047 0.9 ------- ----- Tin Minsur Latin America 778 0.7 ------- ----- 778 0.7 ------- ----- Zinc Nyrstar Europe 718 0.6 ------- ----- 718 0.6 ------- ----- Platinum Impala Platinum Africa 554 0.5 ------- ----- 554 0.5 ------- ----- Uranium Cameco put option 20/07/13 Canada (58) - ------- ----- (58) - ------- ----- Portfolio 118,465 100.0 ------- ----- All investments are in ordinary shares unless otherwise stated. The total number of holdings as at 31 May 2013 was 58 (30 November 2012: 54) The total number of open options as at 31 May 2013 was 10 (30 November 2012: 8) The negative valuations of £249,000 in respect of options held represent the notional cost of repurchasing the contracts at market prices as at 31 May 2013. Consolidated Statement of Comprehensive Income for the six months ended 31 May 2013 Revenue £'000 Capital £'000 Total £'000 Six months Six months Year Six months Six months Year Six months Six months Year ended ended ended ended ended ended ended ended ended 31.05.13 31.05.12 30.11.12 31.05.13 31.05.12 30.11.12 31.05.13 31.05.12 30.11.12 Notes (unaudited) (unaudited) (audited) (unaudited) (unaudited) (audited) (unaudited) (unaudited) (audited) Income from investments held at fair value through profit or loss 2 2,577 2,587 4,724 - - - 2,577 2,587 4,724 Other income 2 895 745 1,910 - - - 895 745 1,910 ----- ----- ----- ------ ------ ------ ----- ----- ----- Total revenue 3,472 3,332 6,634 - - - 3,472 3,332 6,634 ----- ----- ----- ------ ------ ------ ----- ----- ----- Losses on investments held at fair value through profit or loss - - - (1,914) (18,464) (10,890) (1,914) (18,464) (10,890) ----- ----- ----- ------ ------ ------ ----- ----- ----- 3,472 3,332 6,634 (1,914) (18,464) (10,890) 1,558 (15,132) (4,256) ----- ----- ----- ------ ------ ------ ----- ----- ----- Expenses Investment management fee 3 (163) (150) (307) (488) (451) (922) (651) (601) (1,229) Other expenses 4 (121) (124) (235) - - - (121) (124) (235) ----- ----- ----- ------ ------ ------ ----- ----- ----- Total operating expenses (284) (274) (542) (488) (451) (922) (772) (725) (1,464) ----- ----- ----- ------ ------ ------ ----- ----- ----- Net profit/ (loss) before finance costs and taxation 3,188 3,058 6,092 (2,402) (18,915) (11,812) 786 (15,857) (5,720) Finance costs (19) (1) (8) (45) (3) (22) (64) (4) (30) ----- ----- ----- ------ ------ ------ ----- ----- ----- Net profit/ (loss) on ordinary activities before taxation 3,169 3,057 6,084 (2,447) (18,918) (11,834) 722 (15,861) (5,750) ----- ----- ----- ------ ------ ------ ----- ----- ----- Taxation (238) (224) (514) - 3 3 (238) (221) (511) Net profit/ (loss) for the period 6 2,931 2,833 5,570 (2,447) (18,915) (11,831) 484 (16,082) (6,261) ----- ----- ----- ------ ------ ------ ----- ----- ----- Earnings/ (loss) per ordinary share 6 3.11p 3.09p 6.10p (2.60p) (20.65p) (12.96p) 0.51p (17.56p) (6.86p) ----- ----- ----- ------ ------ ------ ----- ----- ----- The total column of this statement represents the Group's Consolidated Statement of Comprehensive Income, prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union. The supplementary revenue and capital columns are both prepared under guidance published by the Association of Investment Companies ("AIC"). All items in the above statement derive from continuing operations. No operations were acquired or discontinued during the year. All income is attributable to the equity holders of BlackRock Commodities Income Investment Trust plc. There were no minority interests. The total net gain of the Company for the six months was £484,000 (six months to 31 May 2012: loss £16,082,000; year ended 30 November 2012: loss £6,261,000). The Group does not have any other recognised gains or losses. The net profit/(loss) disclosed above represents the Group's total comprehensive income. Details of dividends paid and payable at the balance sheet date are given in note 5. Consolidated Statement of Changes in Equity for the six months ended 31 May 2013 Called up Share share premium Special Capital Revenue capital account reserve reserves reserve Total Note £'000 £'000 £'000 £'000 £'000 £'000 For the six months ended 31 May 2013 (unaudited) At 30 November 2012 943 25,429 71,223 10,807 3,261 111,663 Total comprehensive income: Net (loss)/profit for the period - - - (2,447) 2,931 484 Transactions with owners, recorded directly to equity: Dividends paid 5(b) - - - - (2,886) (2,886) --- ------ ------ ----- ----- ------- At 31 May 2013 943 25,429 71,223 8,360 3,306 109,261 --- ------ ------ ----- ----- ------- For the six months ended 31 May 2012 (unaudited) At 30 November 2011 905 20,778 71,223 22,638 3,098 118,642 Total comprehensive income: Net (loss)/profit for the period - - - (18,915) 2,833 (16,082) Transactions with owners, recorded directly to equity: Shares issued 25 3,172 - - - 3,197 Dividends paid 5(b) - - - - (2,719) (2,719) --- ------ ------ ----- ----- ------- At 31 May 2012 930 23,950 71,223 3,723 3,212 103,038 --- ------ ------ ----- ----- ------- For the year ended 30 November 2012 (audited) At 30 November 2011 905 20,778 71,223 22,638 3,098 118,642 Total comprehensive income: Net (loss)/profit for the year - - - (11,831) 5,570 (6,261) Transactions with owners, recorded directly to equity: Shares issued 38 4,658 - - - 4,696 Share issue costs - (7) - - - (7) Dividends paid 5(b) - - - - (5,407) (5,407) --- ------ ------ ----- ----- ------- At 30 November 2012 943 25,429 71,223 10,807 3,261 111,663 --- ------ ------ ----- ----- ------- The transaction costs incurred on the acquisition and disposal of investments are included within the capital reserve. Purchase and sale costs amounted to £39,000 and £25,000 respectively for the six months ended 31 May 2013 (six months ended 31 May 2012: £31,000 and £2,000; year ended 30 November 2012: £72,000 and £88,000). Consolidated Statement of Financial Position as at 31 May 2013 31 31 30 May May November 2013 2012 2012 £'000 £'000 £'000 Note (unaudited) (unaudited) (audited) Non current assets Investments held at fair value through profit or loss 118,465 103,132 115,118 ------- ------- ------- Current assets Other receivables 810 2,400 654 Cash and cash equivalents 148 - 75 ------- ------- ------- 958 2,400 729 ------- ------- ------- Total assets 119,423 105,532 115,847 ------- ------- ------- Current liabilities Other payables (1,160) (1,393) (951) Bank overdrafts (9,002) (1,101) (3,233) ------- ------- ------- (10,162) (2,494) (4,184) ------- ------- ------- Net assets 109,261 103,038 111,663 ======= ======= ======= Equity attributable to equity holders Called up share capital 943 930 943 Share premium account 25,429 23,950 25,429 Special reserve 71,223 71,223 71,223 Capital reserves 8,360 3,723 10,807 Revenue reserve 3,306 3,212 3,261 ------- ------- ------- Total equity 109,261 103,038 111,663 ======= ======= ======= Net asset value per ordinary share 6 115.92p 110.78p 118.47p ======= ======= ======= Consolidated Cash Flow Statement for the six months ended 31 May 2013 Six Six months months Year ended ended ended 31 31 30 May May November 2013 2012 2012 £'000 £'000 £'000 Note (unaudited) (unaudited) (audited) Net cash (outflow)/inflow from operating activities (2,805) 568 (249) ----- ----- ----- Financing activities Share issue costs paid - - (7) Shares issued - 3,197 4,696 Equity dividends paid 5(b) (2,886) (2,719) (5,407) ----- ----- ----- Net cash (outflow)/inflow from financing activities (2,886) 478 (718) ----- ----- ----- (Decrease)/increase in cash and cash equivalents (5,691) 1,046 (967) Effect of foreign exchange rate changes (5) (31) (75) ----- ----- ----- Change in cash and cash equivalents (5,696) 1,015 (1,042) Cash and cash equivalents at start of period (3,158) (2,116) (2,116) ----- ----- ----- Cash and cash equivalents at end of period (8,854) (1,101) (3,158) ----- ----- ----- Comprised of: Cash and cash equivalents 148 - 75 Bank overdrafts (9,002) (1,101) (3,233) ----- ----- ----- (8,854) (1,101) (3,158) ===== ===== ===== Reconciliation of net income before taxation to Net Cash Flow from Operating Activities Six Six months months Year ended ended ended 31 31 30 May May November 2013 2012 2012 £'000 £'000 £'000 (unaudited) (unaudited) (audited) Profit/(loss) before taxation 722 (15,861) (5,750) Losses on investments held at fair value through profit or loss including transaction costs 1,914 18,464 10,890 Increase in other receivables (385) (91) (15) Increase in other payables 473 328 252 Decrease/(increase) in amounts due from brokers 266 (1,942) (266) Increase in amounts due to brokers - 465 - Net purchases of investments held at fair value through profit or loss (5,258) (600) (4,972) Taxation (paid)/recovered (279) 5 (16) Taxation on investment income included within gross income (258) (200) (372) ----- ----- ----- Net cash (outflow)/inflow from operating activities (2,805) 568 (249) ===== ===== ===== Notes to the Financial Statements 1. Principal activity The principal activity of the Company is that of an investment trust company within the meaning of sub-sections 1158-1165 of the Corporation Tax Act 2010. The principal activity of the subsidiary, BlackRock Commodities Securities Income Company Limited, is investment dealing and options writing. Basis of preparation The half yearly financial statements have been prepared using the same accounting policies as set out in the Company's annual report and financial statements for the year ended 30 November 2012 (which were prepared in accordance with IFRS as adopted by the EU and as applied in accordance with the provisions of the Companies Act 2006) and in accordance with International Accounting Standard 34. These comprise standards and interpretations of International Accounting Standards and Standard Interpretations Committee as approved by the International Accounting Standards Committee that remain in effect, to the extent that IFRS has been adopted by the European Union. Insofar as the Statement of Recommended Practice ("SORP") for investment trust companies and venture capital trusts issued by the Association of Investment Companies ("AIC"), revised in January 2009 is compatible with IFRS, the financial statements have been prepared in accordance with guidance set out in the SORP. The taxation charge has been calculated by applying an estimate of the annual effective tax rate to any profit for the period. 2. Income Six Six months months Year ended ended ended 31 31 30 May May November 2013 2012 2012 £'000 £'000 £'000 (unaudited) (unaudited) (audited) Investment income: Overseas listed dividends 2,146 2,229 3,979 Fixed interest 29 93 152 UK listed dividends 402 265 593 ----- ----- ----- 2,577 2,587 4,724 ----- ----- ----- Other operating income: Deposit interest - 2 3 Underwriting commission - - 13 Option premium income 895 743 1,894 ----- ----- ----- 895 745 1,910 ----- ----- ----- Total income 3,472 3,332 6,634 ===== ===== ===== Option premium income is stated after deducting transaction costs incurred on the purchase and sale of investments. 3. Investment management fee Six Six months months Year ended ended ended 31 31 30 May May November 2013 2012 2012 £'000 £'000 £'000 (unaudited) (unaudited) (audited) Revenue: Investment management fee 163 150 307 ----- ----- ----- Capital: Investment management fee 488 451 922 ----- ----- ----- Total 651 601 1,229 ===== ===== ===== The investment management fee is levied at a rate of 1.1% of gross assets per annum based on the gross assets on the last day of each quarter and is allocated 25% to the revenue column and 75% to the capital column of the Consolidated Statement of Comprehensive Income. 4. Other expenses Six Six months months Year ended ended ended 31 31 30 May May November 2013 2012 2012 £'000 £'000 £'000 (unaudited) (unaudited) (audited) Custody fee 9 8 18 Auditor's remuneration: - audit services 12 12 24 - other audit services* 6 5 6 Directors' emoluments 39 42 79 Registrar's fee 16 13 25 Other administrative costs 39 44 83 --- --- --- 121 124 235 === === === * Other audit services relate to the review of the half yearly financial report. 5. Dividends (a) Dividends declared Six Six months months Year ended ended ended 31 31 30 May May November 2013 2012 2012 £'000 £'000 £'000 (unaudited) (unaudited) (audited) First interim dividend for the period ended 28 February 2013 of 1.4750p (2012: 1.4375p) 1,390 1,316 1,316 Second interim dividend for the period ended 31 May 2013 of 1.4750p (2012: 1.4375p) 1,390 1,341 1,344 Third interim dividend for the period ended 31 August 2012 of 1.4375p (2011: 1.4000p) - - 1,344 Fourth interim dividend for the period ended 30 November 2012 of 1.5875p (2011: 1.5500p) - - 1,496 ----- ----- ----- 2,780 2,657 5,500 ===== ===== ===== A first interim dividend for the period ended 28 February 2013 of £1,390,000 (1.4750p per share) was paid on 17 April 2013 to shareholders on the register at 22 March 2013. A second interim dividend for the period ended 31 May 2013 of £1,390,000 (1.4750p per ordinary share) is proposed and will be paid on 26 July 2013 to shareholders on the register at 28 June 2013. This dividend has not been accrued in the financial statements for the six months ended 31 May 2013, as under IFRS, interim dividends are not recognised until paid. Dividends are debited directly to reserves. The third and fourth interim dividends will be declared in September 2013 and December 2013 respectively. (b) Dividends paid Under IFRS final dividends, if any, are not recognised until approved by the shareholders. Interim dividends are debited directly to reserves. The dividends disclosed in the table below have been considered in view of the requirements of section 1158 Corporation Tax Act 2010 and section 833 of the Companies Act 2006, and the amounts declared meet the relevant requirements. Amounts recognised as distributions to ordinary shareholders were as follows: Six Six months months Year ended ended ended 31 31 30 May May November 2013 2012 2012 £'000 £'000 £'000 (unaudited) (unaudited) (audited) First interim dividend for the period ended 28 February 2013 of 1.4750p (2012: 1.4375p) 1,390 1,316 1,316 Second interim dividend for the period ended 31 May 2012 of 1.4375p (2011: 1.4000p) - - 1,344 Third interim dividend for the period ended 31 August 2012 of 1.4375p (2011: 1.4000p) - - 1,344 Fourth interim dividend for the period ended 30 November 2012 of 1.5875p (2011: 1.5500p) 1,496 1,403 1,403 ----- ----- ----- 2,886 2,719 5,407 ===== ===== ===== 6. Consolidated earnings per ordinary share and net asset value per ordinary share Six Six months months Year ended ended ended 31 31 30 May May November 2013 2012 2012 £'000 £'000 £'000 (unaudited) (unaudited) (audited) Net revenue profit attributable to ordinary shareholders (£'000) 2,931 2,833 5,570 Net capital loss attributable to ordinary shareholders (£'000) (2,447) (18,915) (11,831) ------- ------- ------- Total earnings/(loss) attributable to ordinary shareholders (£'000) 484 (16,082) (6,261) ------- ------- ------- Equity shareholders' funds (£'000) 109,261 103,038 111,663 ------- ------- ------- The weighted average number of ordinary shares in issue during each period on which the earnings per ordinary share was calculated was: 94,258,000 91,569,792 91,308,022 The actual number of ordinary shares in issue (excluding treasury shares) at the period end on which the net asset value was calculated was: 94,258,000 93,008,000 94,258,000 The number of ordinary shares in issue (including treasury shares) at the period end was: 94,258,000 93,008,000 94,258,000 Revenue earnings per share 3.11p 3.09p 6.10p Capital loss per share (2.60p) (20.65p) (12.96p) ------- ------- ------- Total earnings/(loss) per share 0.51p (17.56p) (6.86p) ------- ------- ------- Net asset value per share 115.92p 110.78p 118.47p Share price (mid-market) 117.50p 113.58p 122.75p ======= ======= ======= 7. Called up share capital Ordinary Treasury Total Nominal shares shares shares value number number number £'000 Allotted, issued and fully paid share capital comprised: Ordinary shares of 1p each Shares in issue at 30 November 2012 94,258,000 - 94,258,000 943 ---------- ---- ---------- --- At 31 May 2013 94,258,000 - 94,258,000 943 ========== ==== ========== === Since the period end 500,000 shares have been issued, for a total consideration of £541,000 net of issue costs. 8. Related party disclosure The Board consists of five non-executive Directors all of whom, with the exception of Mr Ruck Keene, are considered to be independent by the Board. Mr Ruck Keene is an employee of the Investment Manager and is deemed to be interested in the Company's management agreement. None of the Directors has a service contract with the Company. The Chairman receives an annual fee of £32,000, the Chairman of the Audit and Management Engagement Committee receives an annual fee of £24,000 and each other Director receives an annual fee of £21,000, with the exception of Mr Ruck Keene who has waived his entitlement to fees. Mr Ruck Keene devotes a portion of his time employed as Chairman of BlackRock's Specialist Client Group to serve as a Director of the Company. An apportionment of his remuneration on a time served basis from employment by an affiliate of the Investment Manager would materially equate to the fees received by the other Directors of the Company for similar qualifying services. The interests of the Directors in the shares of the Company are shown below and are unchanged at the date of this report. 31 May 2013 A C Hodson 150,000 M R Merton 17,000 J G Ruck Keene 14,000 H van der Klugt 35,000 E Warner* n/a * Mr Warner was appointed as a Director on 1 July 2013. 9. Transactions with the Investment Manager BlackRock Investment Management (UK) Limited ("BlackRock") provides management and administration services to the Company under a contract which is terminable on six months' notice. Details of the fees receivable by BlackRock in relation to these services are set out in note 3. The fees due to BlackRock for the six months ended 31 May 2013 amounted to £651,000 (six months ended 31 May 2012: £601,000 and the year ended 30 November 2012: £1,229,000). At the period end £859,000 was outstanding in respect of these fees (six months ended 31 May 2012: £505,000 and the year ended 30 November 2012: £519,000). 10. Contingent liabilities There were no contingent liabilities at 31 May 2013 (2012: nil). 11. Publication of non-statutory accounts The financial information contained in this half yearly financial report does not constitute statutory accounts as defined in section 435 of the Companies Act 2006. The financial information for the six months ended 31 May 2013 and 31 May 2012 has not been audited. The information for the year ended 30 November 2012 has been extracted from the latest published audited financial statements, which have been filed with the Registrar of Companies. The report of the Auditors on those accounts contained no qualification or statement under sections 498(2) or (3) of the Companies Act 2006. 12. Annual results The Board expects to announce the annual results for the year ended 30 November 2013, as prepared under IFRS, in mid January 2014. Copies of the annual results announcement will be available from the Secretary on 020 7743 3000. The annual report should be available at the beginning of February 2014, with the Annual General Meeting being held in March 2014. Independent Review Report Introduction We have been engaged by the Company to review the condensed set of financial statements in the half yearly financial report for the six months ended 31 May 2013 which comprises the Consolidated Statement of Comprehensive Income, Consolidated Statement of Changes in Equity, Consolidated Statement of Financial Position, Consolidated Cash Flow Statement, Reconciliation of Net Income Before Taxation to Net Cash Flow from Operating Activities, and the related notes. We have read the other information contained in the half yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements. This report is made solely to the Company in accordance with guidance contained in International Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company, for our work, for this report, or for the conclusions we have formed. Directors' responsibilities The half yearly financial report is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the half yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority. As disclosed in note 1, the annual financial statements of the Group are prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union. The condensed set of financial statements included in this half yearly financial report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting". Our responsibility Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half yearly financial report based on our review. Scope of review We conducted our review in accordance with International Standards on Review Engagements (UK and Ireland) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Conclusion Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half yearly financial report for the six months ended 31 May 2013 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority. Ernst & Young LLP London 24 July 2013 For further information, please contact: Jonathan Ruck Keene, Managing Director, Investment Companies, BlackRock Investment Management (UK) Limited Tel: 020 7743 2178 Richard Davis, Natural Resources Team, BlackRock Investment Management (UK) Limited Tel: 020 7743 2668 Emma Phillips, Media & Communication, BlackRock Investment Management (UK) Limited Tel: 020 7743 2922 24 July 2013 12 Throgmorton Avenue London EC2N 2DL END The Half Yearly Financial Report will also be available on the BlackRock Investment Management website at: http://www.blackrock.co.uk/individual/literature/interim-report/blackrock-commodities-income-investment-trust-plc-half-yearly-financial-report-interim-report.pdf Neither the contents of the Manager's website nor the contents of any website accessible from hyperlinks on the Manager's website (or any other website) is incorporated into, or forms part of, this announcement. END

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