Portfolio Update

BLACKROCK SMALLER COMPANIES TRUST plc

All information is at 31 December 2009 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              3.1%      2.9%      58.1%     -15.0%     45.3%     
Share price                 -0.2%     -0.2%      56.2%     -23.7%     36.0%     
HGSC ex Inv Trust + AIM*     2.4%      0.7%      57.3%     -29.8%     -1.9%   

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):              367.85p           
Net asset value Capital only (debt at fair value):             363.61p           
Net asset value incl. Income (debt at par value):              372.33p**         
Net asset value incl. Income (debt at fair value):             368.09p**         
Share price:                                                   283.50p           
Discount to Capital only NAV (debt at par value):                22.9%             
Discount to Capital only NAV (debt at fair value):               22.0%             
Net yield:                                                        1.8%              
Total assets:                                                  £200.2m^          
Gearing incl. Income:                                            11.4%             
Ordinary shares in issue:                                   48,194,792^^      

**includes net revenue of 4.48p.
^includes current year revenue.
^^excludes 1,798,731 shares held in treasury.

Ten Largest Sector                                                             
Weightings                                                    % of Total Assets
                                                                               
Software & Computer Services                                               11.0
Financial Services                                                          9.8
Industrial Metals & Mining                                                  9.2
Oil & Gas Producers                                                         8.8
Industrials Engineering                                                     6.5
Support Services                                                            6.3
Technology Hardware & Equipment                                             5.7
Electronic & Electrical Equipment                                           5.5
Pharmaceuticals & Biotechnology                                             4.3
Media                                                                       4.1
                                                                           ----
Total                                                                      71.2
                                                                           ====

 

Ten Largest Equity Investments (in alphabetical order)                         
                                                                               
Company                                                                        
                                                                               
Abcam Group                                                                    
Aveva Group                                                                    
BATM Advanced Communications                                                   
Brewin Dolphin Holdings                                                        
City of London Investment Group                                                
Domino Printing Sciences                                                       
Fidessa group                                                                  
ITE Group                                                                      
Spirax-Sarco Engineering                                                       
Victrex                                                                        

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

December was a good month with the NAV increasing by 3.1% on a capital only
basis; the benchmark increased by 2.4%. The FTSE 100 Index rose by 4.3%.

The main contributor to relative outperformance was our holding in Aurelian Oil
& Gas. Aurelian shares had been oversold and the new CEO is beginning to
professionalise the business. A few positive analyst reports have been
accompanied by a large increase in reserves. Whilst Aurelian currently has only
very modest production, it has large gas reserves in Eastern Europe and
production growth should be significant over the next few years.

On the negative side, relative performance was impacted by a poor share price
performance from Brewin Dolphin. Brewin Dolphin, a leading independent UK
wealth manager, placed some new shares at almost a 10% discount; this was done
to fund an increased regulatory requirement whilst preserving a strong cash
rich balance sheet. Brewin's September year end results were good with
reasonable levels of net organic funds growth. We believe Brewin is a good way
to play rising stockmarkets.

We sold our holding in Connaught. Connaught has long been a core holding but we
have been reducing it progressively because it is a wholly UK focused business
and within this most of its business is with the public sector, albeit mainly
on a long term basis.

The two largest new holdings were Inchcape and Dialight, each 0.5% of net
assets. Inchcape is an increasingly international distributor of cars; the Far
East is an important market and car sales in this region are likely to grow
strongly over the next decade. Dialight is a small company but is winning some
large contracts to supply high brightness LEDs; applications include telecoms
towers in the US, which need to be well lit, but also with lighting which will
not need changing for a long period. Opportunities for Dialight's lighting
solutions should become more numerous.

After the strong run in markets since March, we believe we are now moving into
more of a stockpickers market. Economic newsflow has been improving but the UK
is lagging. This should favour us since most of our portfolio companies have
significant non-UK revenues. Trading statements in late December and early
January have generally been good and we are starting to see earnings upgrades
coming through. We feel our portfolio is well positioned for 2010.

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).

28 January 2010