Portfolio Update

BLACKROCK SMALLER COMPANIES TRUST plc

All information is at 30 September 2010 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             15.4%    25.9%      38.3%     10.5%      59.4%    
Share price                 15.3%    23.8%      41.6%      6.4%      52.2%    
HGSC ex Inv Trust + AIM*     8.5%    13.5%      15.0%    -14.5%       0.2%     

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):           494.39p           
Net asset value Capital only (debt at fair value):          490.14p           
Net asset value incl. Income (debt at par value):           500.60p**         
Net asset value incl. Income (debt at fair value):          496.35p**         
Share price:                                                402.25p           
Discount to Capital only NAV (debt at par value):           18.6%             
Discount to Capital only NAV (debt at fair value):          17.9%             
Net yield:                                                  1.2%              
Total assets:                                               £260.4m^          
Gearing incl. Income:                                       8.7%              
Ordinary shares in issue:                                   47,879,792^^      

**includes net revenue of 6.21p.
^includes current year revenue.
^^excludes 2,113,731 shares held in treasury.

Ten Largest Sector                                                         
Weightings                                      % of Total Assets
                                                                           
Industrial Metals & Mining                                   11.8
Software & Computer Services                                 10.6
Oil & Gas Producers                                          10.2
Electronic & Electrical Equipment                             8.8
Financial Services                                            8.1
Support Services                                              7.4
Industrial Engineering                                        6.9
Media                                                         5.2
Pharmaceuticals & Biotechnology                               4.8
Technology Hardware & Equipment                               4.3
                                                             ----
Total                                                        78.1
                                                             ====

Ten Largest Equity Investments (in alphabetical order)

Company

Abcam Group
Aveva Group
City of London Investment Group
Domino Printing Sciences
Fidessa group
Hutchison China Meditech
Rotork
Spirax-Sarco Engineering
Victrex
Western Coal

Commenting on the markets, Mike Prentis, representing the Investment Manager
noted:

September was a very strong month for equities as markets took the view that a
double dip recession was increasingly unlikely. During September, the Company's
NAV per share rose by 15.4% in capital only terms; this was substantially ahead
of the benchmark which rose by 8.5%. The FTSE 100 Index rose by 6.2%.

Our outperformance was derived from stock selection, the majority of our
outperformance, asset allocation and gearing, which accounted for about 0.9% of
the outperformance.

From a stock point of view our relative outperformance was driven by a wide
range of stocks; six holdings contributed more than 0.25% each to relative
outperformance, but the largest contributed only 0.42%. The holdings were
Western Coal, Encore Oil, IQE, Oxford Instruments, Avocet Mining and Eastern
Platinum. Western Coal increased production guidance in early October and
arranged an analyst visit; the shares moved up ahead of the visit, in
expectation of good news. Having drilled the Catcher well in the North Sea and
discovered light oil, which is increasingly looking like one of the largest oil
discoveries in the North Sea in recent years, Encore Oil also drilled an
appraisal well on the Cladhan prospect; this too was successful and is very
material. Compound semiconductor wafer manufacturer IQE made a small
acquisition and confirmed it was trading very well. Oxford Instruments AGM
statement pointed to sustained strengthening of demand in its industrial
division; its house broker increased current year earnings estimates by 33%.
Avocet benefited from the higher gold price and a 16% increase in its resource
base at its Inata mine. Eastern Platinum benefited from the recovery in the
platinum price.

Pleasingly, there was only one poor individual stock, Hutchison China Meditech,
which contributed -0.26% to relative performance. This was not a reflection on
trading but just a quiet period for newsflow following a strong run in the
shares. We remain excited about the long term prospects for this company.

From a sector point of view, our overweight positions in the mining and
electronic & electricals sectors served us well. Unsurprisingly, during a
strong month for markets, our underweight position in food producers also
contributed well.

We sold holdings in two retailers, Halfords and Mothercare. Halfords had
experienced problems with a new distribution centre; Mothercare has been seeing
softer UK trading and we took the view the premium rating was likely to slip.
We also sold our holding in Chaucer, a Lloyds insurer. Pricing trends are not
favouring these companies at present.

We took new holdings in BlueBay Asset Management and Elementis. BlueBay is a
leading specialist manager of fixed income credit. Net fund inflows have been
good and the opportunity in emerging market bonds, among others, looks
attractive. Elementis is a global manufacturer of additives that enhance the
feel, flow and finish of everyday products. Its trading has strengthened
materially, has good growth opportunities, and the valuation remains
attractive.

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).

15 October 2010