Portfolio Update

BLACKROCK SMALLER COMPANIES TRUST plc

All information is at 31 October 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             -23.9%   -35.7%    -48.5%    -15.8%     18.6%     
                                                                              
Share price                 -30.1%   -40.2%    -52.5%    -23.6%     14.0%     
                                                                              
HGSC ex Inv Trust + AIM*    -22.4%   -33.5%    -52.5%    -39.3%    -27.8%  

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 three year and five year periods the
above index has been blended to reflect this.

At month end                                                                  
                                                                              
Net asset value Capital only (debt at par value):            246.80p           
Net asset value Capital only (debt at fair value):           241.30p           
Net asset value incl Income (debt at par value):             250.53p**         
Net asset value incl Income (debt at fair value):            245.03p**         
Share price:                                                 187.00p           
Discount to Capital only NAV (debt at par value):             -24.2%            
Discount to Capital only NAV (debt at fair value):            -22.5%            
Net yield:                                                      3.3%              
Total assets:                                               £138.43m^         
Gearing incl. income:                                          14.1%             
Ordinary shares in issue:                                 48,509,708^^      

*includes net revenue of 3.73p.
^includes current year revenue.
^^excludes 1,483,815 shares held in treasury.


Ten Largest Sector                                                             
Weightings                                                    % of Total Assets
                                                                               
Support Services                                                           15.4
Software & Computer Services                                               10.6
Financial Services                                                         10.5
Aerospace & Defence                                                         8.0
Industrial Engineering                                                      7.6
Oil & Gas Producers                                                         5.9
Industrial Metals & Mining                                                  5.5
Electronic & Electrical Equipment                                           5.3
Health Care Equipment & Services                                            4.2
Pharmaceuticals & Biotechnology                                             4.0
                                                                           ----
Total                                                                      77.0
                                                                           ====

 

Ten Largest Equity Investments (in alphabetical order)                         
                                                                               
Company                                                                        
                                                                               
Brewin Dolphin Holdings                                                        
Chemring Group                                                                 
Connaught                                                                      
Dechra Pharmaceuticals                                                         
Mouchel Group                                                                  
Rathbone Brothers                                                              
Rotork                                                                         
Spirax-Sarco Engineering                                                       
Ultra Electronics Holdings                                                     
Victrex                                                                        
                                                                               
Commenting on the markets, Mike Prentis, representing the Investment Manager
noted:

October was a very poor month for stockmarkets and for the Company. The
Company's NAV fell by 23.9%, whilst the benchmark index fell by 22.4%. By way
of comparison, the FTSE 100 Index fell by 10.7%. Stockmarket conditions
continued to be affected by nervousness about the state of the world economy,
as data was published that showed the UK, US and some other developed economies
had seen a fall in GDP in the third quarter. Emerging market growth is slowing
rapidly and some more highly indebted emerging markets saw sharp declines in
their currencies and, in certain cases, have sought help from the International
Monetary Fund. Resources prices have fallen further as demand has slowed.

The main reason for relative underperformance during the month was gearing,
impacting relative performance by about 2.5%. Our approach since mid 2003 has
been to maintain gearing at about 10% of shareholders' funds. With the sharp
falls in markets and our NAV in September and October, gearing moved quickly up
towards 15% of shareholders' funds in late October. Although we are quite
highly geared, most of our holdings are not and indeed many core holdings have
net cash.

At the portfolio level we outperformed in October relative to our benchmark. In
relative terms, the best stock contributions came from Dechra Pharmaceuticals,
Mouchel, Axon, Alternative Networks and London Capital. Dechra is very
defensive given its focus on the provision of pharmaceuticals for companion
animals; people tend not to spend less on the pets they already own during
tough economic times. Mouchel has long term contracts with the UK Government
and during October announced full year earnings up 22% and a confident outlook.
Axon agreed a bid from HCL of India. Alternative Networks released a confident
pre-close update, and London Capital continued to benefit from highly volatile
markets.

The worst relative performers during the month were Synergy Healthcare, City of
London Investment Group and Hyder Consulting. Synergy warned that start up
issues on new medium term contracts had led to a fall in gross margins;
earnings were downgraded by 13% for the current year and slightly more
thereafter, but the shares fell by 51% during the month. The share price fall
shows how badly the market reacts when shares which are supposed to be
defensive fail to meet expectations. We met management and came away comforted
enough to continue to hold the shares. City of London manage emerging markets
funds for institutional clients; emerging markets indices have fallen
substantially in recent months, although City of London have outperformed and
if anything seem to be seeing net inflows now. Hyder Consulting shares have
fallen on thin volumes along with most other engineering consultants; it is
strong in the Middle East and that has probably delayed its derating until now.

New holdings in the month included Bellway, Savills and BRIT Insurance; 0.5% of
the portfolio was put into each holding. Although the housing market is in
crisis we regard Bellway as a very well run, lowly geared housebuilder, and
felt it had reached attractive levels at the price we bought stock; we do
expect more bad news from the sector but believe Bellway can find a way through
these problems. Savills is also very well run and a great brand name across its
markets. The BRIT purchase follows our purchase of Hiscox last month. Insurance
rates look to be starting to firm up. We also reduced the size of a number of
holdings including Axon.

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).

25 November 2008