Portfolio Update

MERRILL LYNCH BRITISH SMALLER COMPANIES TRUST plc

All information is at 31 March 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             -2.4%    -4.1%      -14.2%     44.1%      191.9%    
                                                                                
Share price                 -6.8%    0.5%       -19.8%     33.9%      199.1%    
                                                                                
HGSC ex Inv Trust + AIM*    -3.6%    -7.3%      -18.8%     15.4%      113.9%  

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

At month end                                                         
                                                                     
Net asset value (debt at par value):                398.06p          
                                                                     
Net asset value (debt at fair value):               392.94p          
                                                                     
Share price:                                        317.00p          
                                                                     
Discount to NAV (debt at par value):                20.4%            
                                                                     
Discount to NAV (debt at fair value):               19.3%            
                                                                     
Net yield:                                          1.5%             
                                                                     
Total assets:                                       £209.2m          
                                                                     
Gearing:                                            8.0%             
                                                                     
Ordinary shares in issue^:                          48,509,708       

(^excluding 1,483,815 shares held in treasury)

 

Ten Largest Sector                                                             
Weightings                                                    % of Total Assets
                                                                               
Support Services                                                           14.5
                                                                               
Software & Computer Services                                               13.0
                                                                               
Oil & Gas Producers                                                        11.0
                                                                               
Industrial Engineering                                                      9.5
                                                                               
General Financial                                                           8.5
                                                                               
Industrial Metals & Mining                                                  8.0
                                                                               
Aerospace & Defence                                                         4.8
                                                                               
Electronic & Electrical Equipment                                           3.9
                                                                               
Pharmaceuticals & Biotechnology                                             3.4
                                                                               
Chemicals                                                                   3.3
                                                                               
                                                                           ----
                                                                               
Total                                                                      79.9
                                                                           ====

 

Ten Largest Equity Investments (in alphabetical order)                         
                                                                               
Company                                                                        
                                                                               
Albidon                                                                        
                                                                               
BSS                                                                            
                                                                               
Civica                                                                         
                                                                               
Dechra Pharmaceuticals                                                         
                                                                               
Hill & Smith                                                                   
                                                                               
ITE Group                                                                      
                                                                               
Rathbone Brothers                                                              
                                                                               
Spirax-Sarco                                                                   
                                                                               
Ultra Electronics                                                              
                                                                               
Victrex                                                                        
                                                                               
                                                                               

 

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

During March the Company's NAV fell by 2.4%. The benchmark index fell by 3.6%
and the FTSE100 fell by 3.1%.

In relative terms, the best stock contribution came from Civica, which
attracted a bid from private equity which looks likely to go through. Various
core holdings also performed well including Aveva Group, Rathbone Brothers, WSP
Group, Spirax-Sarco, Ultra Electronics, BSS Group, and Mouchel, all large
holdings. In each case, results or trading updates were good. Emerald Energy
shares also performed well on the back of further good drilling news from its
Syrian acreage, which should be producing oil by the end of the calendar year.

The worst performers during the month were Axon and Fidessa. In both cases poor
share price performances were more driven by worries about possible weakness in
IT spending by the financial sector, rather than any specific newsflow.

There were no new holdings of any size, but we completed the sale of our
holdings in Dunelm and Colliers CRE. Having sold the former we now have no
exposure to general retailers. The latter provides services within the real
estate sector, also a sector in which we are underweight. Our portfolio
positioning is essentially unchanged.

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 April 2008