Portfolio Update

BLACKROCK SMALLER COMPANIES TRUST plc

All information is at 31 August 2008 and unaudited.

Performance at month end is calculated on a capital only basis

                             One      Three        One     Three       Five      
                           Month     Months       Year     Years      Years     
                                                                                
Net asset value             1.7%     -11.3%     -14.5%     30.0%      90.1%     
                                                                                
Share price                 1.0%     -14.1%     -17.5%     26.5%      85.6%     
                                                                                
HGSC ex Inv Trust + AIM*    3.0%     -12.7%     -24.2%     -8.9%      14.6%   

Sources: BlackRock and Datastream

*With effect from 1 September 2007 the Hoare Govett Smaller Companies plus AIM
(ex Investment companies) Index replaced the FTSE SmallCap Index (ex Investment
Companies) as the Company's benchmark. For the one year, three year and five
year periods above the index has been blended to reflect this.

At month end                                                                  
                                                                              
Net asset value Capital only (debt at par value):           390.56p           
                                                                              
Net asset value Capital only (debt at fair value):          386.08p           
                                                                              
Net asset value incl Income (debt at par value):            394.72p**         
                                                                              
Net asset value incl Income (debt at fair value):           390.24p**         
                                                                              
Share price:                                                315.50p           
                                                                              
Discount to Capital only NAV (debt at par value):           19.2%             
                                                                              
Discount to Capital only NAV (debt at fair value):          18.3%             
                                                                              
Net yield:                                                  1.95%             
                                                                              
Total assets:                                               £207.20m^         
                                                                              
Gearing:                                                    8.3%              
                                                                              
Ordinary shares in issue^:                                  48,509,708^^      

*includes net revenue of 4.16p.
^includes current year revenue.
^^excludes 1,483,815 shares held in treasury.


Ten Largest Sector                                                             
Weightings                                                    % of Total Assets
                                                                               
Support Services                                                           14.0
Software & Computer Services                                               12.7
Industrial Engineering                                                      8.8
Financial Services                                                          8.2
Industrial Metals & Mining                                                  8.0
Aerospace & Defence                                                         7.8
Oil & Gas Producers                                                         7.7
Electronic & Electrical Equipment                                           6.0
Health Care Equipment and Services                                          4.6
Pharmaceuticals & Biotechnology                                             3.5
                                                                           ----
Total                                                                      81.3
                                                                           ====

 
Ten Largest Equity Investments (in alphabetical order)                         
                                                                               
Company                                                                        
                                                                               
Aveva Group                                                                    
Chemring                                                                       
Dechra Pharmaceuticals                                                         
Hill & Smith                                                                   
ITE Group                                                                      
Rathbone Brothers                                                              
Spirax-Sarco Engineering                                                       
Synergy Healthcare                                                             
Ultra Electronic Holdings                                                      
Victrex                                                                        
                                                                               
 
Commenting on the markets, Mike Prentis, representing the Investment Manager
noted:

During August the Company's NAV rose by 1.7%. However, the benchmark index rose
by 3.0% whilst the FTSE100 rose by 4.2%.

In relative terms, the best stock contributions came from London Capital, Axon
and Hill & Smith. London Capital announced interim earnings up 54%, strong cash
generation and good current trading helped by the continued volatility in
financial markets. Axon announced a 600p per share cash bid from Infosys; this
is not a high price for such a good quality company and we remain hopeful of a
higher bid. Hill & Smith also announced good interims with earnings up 21% and
a confident outlook.

The worst relative performers during the month were Albidon and White Young
Green. Albidon shares have been very weak since May despite having brought its
Munali nickel mine into production. This is due to a variety of factors
including a worry about a possible overhang of stock from a 20% shareholder,
the weaker nickel price, and cost inflation. We regard Albidon's management
team highly and whilst the above issues are unhelpful, we consider the share
price fall to be overdone. White Young Green shares fell as the previously
announced offer talks broke down; trading is reported to remain strong.

Activity in the portfolio was at a low level. The largest transaction was the
sale of our remaining holding in Imperial Energy following an approach from
ONGC.

Markets generally remain highly volatile. Since mid July we have experienced a
sharp bounce in more cyclical companies, driven we believe mainly by short
closing, and a sell off in resources stocks, as hedge funds look to reduce
overweight positions. This does not suit our portfolio which is heavily
underweight in cyclicals such as retailers, leisure companies and
housebuilders, and slightly overweight in resources. We think that, on
fundamental grounds, it is too early to buy cyclicals, which we believe face a
protracted period of weak trading.

Latest information is available by typing www.blackrock.co.uk/its on the
internet, "BLRKINDEX" on Reuters, "BLRK" on Bloomberg or "8800" on Topic 3 (ICV
terminal).

18 September 2008