Annual Financial Report

BlackRock Commodities Income Investment Trust plc
LEI:54930040ALEAVPMMDC31

Annual Results Announcement for the year ended 30 November 2017

PERFORMANCE RECORD

Attributable to ordinary shareholders	30 November 2017	30 November 2016	Change %
Assets
Net assets (Â£â€™000)¹	91,357	98,833	(7.6)
Net asset value per ordinary share	76.92p	83.57p	(8.0)
â€“ with income reinvested²			(3.2)
	--------	--------	--------
Ordinary share price (mid-market)	75.00p	82.75p	(9.4)
â€“ with income reinvested²			(4.4)
	========	========	========

	Year ended 30 November 2017	Year ended 30 November 2016	Change %
Revenue
Net revenue profit after taxation (Â£â€™000)	5,753	5,197	10.7
Revenue return per ordinary share	4.84p	4.43p	9.3
	--------	--------	--------
Interim dividends
1st interim	1.00p	1.50p	(33.3)
2nd interim	1.00p	1.50p	(33.3)
3rd interim	1.00p	1.00p	â€“
4th interim	1.00p	1.00p	â€“
	--------	--------	--------
Total dividends paid and payable	4.00p	5.00p	(20.0)
	--------	--------	--------

1. The change in net assets reflects market movements and the issue of 500,000 shares during the year.
2. Further details of the calculation of performance with income reinvested are given in the glossary in the Annual Report and Financial Statements.

CHAIRMANâ€™S STATEMENT

I am pleased to present the annual report to shareholders of BlackRock Commodities Income Investment Trust plc for the year ended 30 November 2017.

OVERVIEW
Following the resurgence in the commodities sector in 2016, this year has been mixed, with strong performance from mining equities offset by weaker and more varied results in the energy sector. The mining sector was buoyed by strong demand and also by supply-side government reforms in China, aimed at eradicating surplus capacity in heavy industry, which has driven steel and coal prices sharply upward. By contrast, despite a 30% increase in the oil price over the year, driven by an extension to OPEC production cuts and declining inventories, energy equities have lagged behind as markets continue to take a bearish stance on the longer term outlook for the oil price.

Additional information on commodity markets and key contributors and detractors to portfolio performance are set out in the Investment Managersâ€™ report.

PERFORMANCE

	One year %	Three years %	Five years %	Since inception %
Net Asset Value (with income reinvested)¹	-3.2	3.9	-10.1	47.9
Share price (with income reinvested)¹	-4.4	-5.7	-15.3	41.6

1. Further details of the calculation of performance with income reinvested are given in the glossary in the Annual Report and Financial Statements.

During the year, the Companyâ€™s net asset value per share (NAV) fell by 3.2% and the share price fell by 4.4% (all calculations with income reinvested). The Companyâ€™s objectives are to achieve both an annual dividend target and, over the long term, capital growth. The Board does not benchmark performance against mining and energy sector indices as income generation is not within its scope. For illustrative purposes, over the same period, the Euromoney Global Mining Index rose by 8.9% and the MSCI World Energy Index fell by 4.1% in sterling terms. A 50:50 composite of the two indices represented an increase of 2.4% for the year to 30 November 2017. Additional information on the performance of the Company is set out in the performance record above.

Since the year end and up to the close of business on 25 January 2018, the Companyâ€™s NAV has returned 9.1% and the share price has returned 8.6% (all calculations with dividends reinvested).

REVENUE RETURN AND DIVIDENDS
The Companyâ€™s revenue return per share for the year amounted to 4.84 pence (2016: 4.43 pence). This enabled the Board to meet our declared target of paying four quarterly dividends of 1.00 pence, making a total of 4.00 pence for the year. Full details of the dividends paid for the 2016 and 2017 financial years are set out in note 7.

The Boardâ€™s current target is to declare quarterly dividends of at least 1.00 pence in the year to November 2018, making a total of at least 4.00 pence for the year as a whole. This target represents a yield of 5.3% based on the share price as at the close of business on 30 November 2017. The Board is prepared to use revenue reserves to meet this target if portfolio income alone is insufficient.¹

TENDER OFFERS
The Directors of the Company have discretion to make semi-annual tender offers at the prevailing NAV, less 2%, for up to 20% of the issued share capital in August and February of each year.

The Board announced on 13 June 2017 that it had decided not to proceed with a tender offer in August 2017 and on 11 December 2017 that the tender offer in February 2018 would not be implemented. During the year ended 30 November 2017, the Companyâ€™s shares traded at an average discount to NAV of 4.2% compared to a discount of 2.0% to NAV, the price at which any tender offer would be made, therefore it was not in the interests of shareholders for any tender to be implemented.

Resolutions for the renewal of the Companyâ€™s semi-annual tender authorities will be put to shareholders at the forthcoming Annual General Meeting (AGM).

SHARE CAPITAL
The Directors recognise the importance to shareholders that the market price of the Companyâ€™s shares in the stock market does not trade at either a significant premium or discount to the underlying NAV. The Board monitors the Companyâ€™s share rating closely, and is committed to the regular issue of ordinary shares at a premium to NAV as a way of ensuring that any premium to NAV is maintained within a sensible range, to provide ongoing market liquidity and to do so in a manner that is accretive to shareholders. At the forthcoming AGM the Company will be seeking the authority to allot new ordinary shares or sell from treasury ordinary shares representing up to 10% of the Companyâ€™s issued ordinary share capital.

To the extent that shares are trading at a discount, the Board is equally committed to making share purchases in between the bi-annual tender opportunities when necessary to manage the level of discount. The Board will continue to consider whether share purchases should be made and is proposing that the Companyâ€™s existing authority to buy back up to 14.99% of the Companyâ€™s issued share capital, excluding treasury shares, be renewed at the forthcoming Annual General Meeting.

During the financial year ended 30 November 2017, the Company issued 500,000 ordinary shares at a price of 87.60 pence per share for a total consideration of Â£438,000, before the deduction of issue costs. The shares were issued at a premium of 2.04% to the cum income NAV at the close of business on the business day prior to the issue and at a premium to the estimated cum income NAV at the time of the transaction. It should be noted that the issue of new ordinary shares during the year has provided a gross capital uplift of Â£8,750, including income of Â£3,250. Since 30 November 2017, and up to the close of business on 31 January 2017 no additional shares have been issued.

The Company did not buy back any shares during the year under review. Since 30 November 2017 the Company has bought back 52,000 shares at an average price of 82.31 pence per share and at an average discount of 5.2% representing total consideration of Â£43,000. The shares were taken into treasury.

GEARING
The Company operates a flexible gearing policy which depends on prevailing market conditions. The maximum gearing used during the year was 9.6% and at 30 November 2017 net gearing was 3.4%. Gearing has been calculated in accordance with AIC guidelines and on a net basis.

ANNUAL GENERAL MEETING
The Companyâ€™s AGM will be held on Tuesday, 13 March 2018 at 10.30 a.m. at the offices of BlackRock, 12 Throgmorton Avenue, London EC2N 2DL. Details of the business of the meeting are set out in the Notice of Meeting contained within the Annual Report. The portfolio managers will make a presentation to shareholders on the Companyâ€™s progress and the outlook for the year.

OUTLOOK
The recent strength of mined commodity prices looks set to continue into 2018 as high levels of free cash flow in the mining industry translate into capital returns to shareholders rather than into increased capacity. In the energy sector, the equity market remains cautious on the longer term oil prices. However, absolute oil demand is not predicted to peak until at least 2030, and the Manager believes that equities with oil price exposure are undervalued and are due a re-rating.

Looking further forward, there are a wealth of likely changes that would represent a quantum shift in the demands placed on the energy sector, with the growth in the electric vehicle market and increasing output from the alternative energy sector being two. It is perhaps too easy to see only negative impacts on energy companies, but there will be opportunities as well. Some mining companies have exposure to growing demand for raw materials used in, for example, electric vehicles and further investment opportunities will almost certainly arise. The Manager continues to research these trends and regularly reports to the Board on their evolving views. They, as ever, will look to selectively take advantage of the opportunities identified in the coming year.

ED WARNER
Chairman
29 January 2018

1. This is a target and should not be interpreted as a profit or dividend forecast.

STRATEGIC REPORT

The Directors present the Strategic Report of the Company for the year ended 30 November 2017. The aim of the Strategic Report is to provide shareholders with the information required to enable them to assess how the Directors have performed in their duty to promote the success of the Company during the year under review.

BUSINESS AND MANAGEMENT OF THE COMPANY
BlackRock Commodities Income Investment Trust plc (the Company) is an investment trust company that has a premium listing on the London Stock Exchange. Its principal activity is portfolio investment. The Companyâ€™s wholly owned subsidiary is BlackRock Commodities Securities Income Company Limited. Its principal activities are option writing and investment dealing.

Investment trusts, like unit trusts and OEICs, are pooled investment vehicles which allow exposure to a diversified range of assets through a single investment thus spreading, although not eliminating, investment risk.

In accordance with the Alternative Investment Fund Managers Directive (AIFMD) the Company is an Alternative Investment Fund (AIF). BlackRock Fund Managers Limited (the Manager) is the Companyâ€™s Alternative Investment Fund Manager. The management of the investment portfolio and the administration of the Company have been contractually delegated to the Manager. The Manager, operating under guidelines determined by the Board, has direct responsibility for decisions relating to the running of the Company and is accountable to the Board for the investment, financial and operating performance of the Company.

The Company delegates fund accounting services to BlackRock Investment Management (UK) Limited (BIM (UK) or the Investment Manager), which in turn sub-delegates these services to Bank of New York Mellon (International) Limited and also sub-delegates registration services to the Registrar, Computershare Investor Services PLC. Other service providers include the Depositary, The Bank of New York Mellon (International) Limited. Prior to 1 November 2017, the entity appointed as the Companyâ€™s Depository was BNY Mellon Trust & Depositary (UK) Limited. Details of the contractual terms with these service providers are set out in the Directorsâ€™ Report contained within the Annual Report.

BUSINESS MODEL
The Company invests in accordance with the investment objective. The Board is collectively responsible to shareholders for the long term success of the Company and is its governing body. There is a clear division of responsibility between the Board and the Manager. Matters reserved for the Board include setting the Companyâ€™s strategy, including its investment objective and policy, setting limits on gearing, capital structure, governance, and appointing and monitoring of the performance of service providers, including the Manager.

As the Companyâ€™s business model follows that of an externally managed investment trust, it does not have any employees and outsources its activities to third party service providers including the Manager who is the principal service provider.

INVESTMENT OBJECTIVE
The Companyâ€™s objectives are to achieve an annual dividend target and, over the long term, capital growth by investing primarily in securities of companies operating in the mining and energy sectors.

INVESTMENT POLICY AND STRATEGY
The Company seeks to achieve its objectives through a focused portfolio, consisting of approximately thirty to one hundred and fifty securities.

Although the Company has the flexibility to invest within this wide range, at 30 November 2017 the portfolio consisted of 53 investments, and the detailed portfolio listing is provided below.

There are no restrictions on investment in terms of geography or sub-sector and, in addition to equities, other types of securities, such as convertible bonds and debt issued primarily by mining or energy companies, may be acquired. Although most securities will be quoted, listed or traded on an investment exchange, up to 10% of the gross assets of the Company and its subsidiary (the Group), at the time of investment, may be invested in unquoted securities.

Investment in securities may be either direct or through other funds, including other funds managed by BlackRock or its associates, with up to 15% of the portfolio being invested in other listed investment companies, including listed investment trusts.

Up to 10% of the gross assets of the Group, at the time of investment, may be invested in physical assets, such as gold and in securities of companies that operate in the commodities sector other than the mining and energy sectors.

No more than 15% of the gross assets of the Group will be invested in any one company as at the date any such investment is made and the portfolio will not own more than 15% of the issued shares of any one company, other than the Companyâ€™s subsidiary.

The Group may deal in derivatives, including options and futures, up to a maximum of 30% of the Groupâ€™s assets for the purposes of efficient portfolio management and to enhance portfolio returns. In addition, the Company is also permitted to enter into stock lending arrangements up to a maximum of 33¹/₃% of the total asset value of the portfolio.

The Group may from time to time, use borrowings to gear its investment policy or in order to fund the market purchase of its own ordinary shares. This gearing typically is in the form of an overdraft or short term facility, which can be repaid at any time. Under the Companyâ€™s Articles of Association, the Board is obliged to restrict the borrowings of the Company to an aggregate amount equal to 40% of the value of the gross assets of the Group. However, borrowings are not anticipated to exceed 20% of the Companyâ€™s gross assets at the time of drawdown of the relevant borrowings.

The Groupâ€™s financial statements are maintained in sterling. Although many investments are denominated and quoted in currencies other than sterling, the Company does not intend to employ a hedging policy against fluctuations in exchange rates, but may do so in the future if circumstances warrant implementing such a policy.

No material change will be made to the investment policy without shareholder approval.

PERFORMANCE
Details of the Companyâ€™s performance for the year are given in the Chairmanâ€™s Statement.The Investment Managerâ€™s Report includes a review of the main developments during the year, together with information on investment activity within the Companyâ€™s portfolio.

RESULTS AND DIVIDENDS
The Companyâ€™s revenue earnings for the year amounted to 4.84p per share (2016: 4.43p).

Details of dividends paid and declared in respect of the year, together with the Companyâ€™s dividend policy, are set out in the Chairmanâ€™s Statement.

KEY PERFORMANCE INDICATORS
A number of performance indicators (KPIs) are used to monitor and assess the Companyâ€™s success in achieving its objectives and to measure its progress and performance.

The principal KPIs are described below:

Performance
At each meeting the Board reviews the performance of the portfolio as well as the net asset value and share price for the Company and compares this to the performance of other companies in the peer group. The Company does not have a benchmark; however the Board also review performance in the context of the performance of the Euromoney Global Mining Index and the MSCI World Energy Index and a 50:50 composite of both indices.

Information on the Companyâ€™s performance is given in the performance record and the Chairmanâ€™s Statement and Investment Managersâ€™ Report.

Premium/discount to NAV
The Board monitors the level of the Companyâ€™s premium or discount to NAV on an ongoing basis and considers strategies for managing any premium or discount.

In the year to 30 November 2017, the Companyâ€™s share price to NAV traded in the range of a premium of 5.0% to a discount of 9.6% on a cum income basis. The Company issued a total of 500,000 shares during the year and further details are given in the Chairmanâ€™s Statement. No shares were bought back during the year. Details of shares issued and bought back since the year end date are given in note 9.

Further details setting out how the discount or premium at which the Companyâ€™s shares trade is calculated are included in the glossary contained within the Annual Report and accounts.

Ongoing charges
The ongoing charges represent the Companyâ€™s management fee and all other recurring operating and investment management expenses, excluding finance costs, expressed as a percentage of average net assets.

The ongoing charges are based on actual costs incurred in the year as being the best estimate of future costs. The Board reviews the ongoing charges and monitors the expenses incurred by the Company on an ongoing basis. A definition setting out in detail how the operating charges ratio is calculated is included in the glossary in the Annual Report.

Performance (Dividend target)
The level of income is considered at each meeting and the Board receives detailed income forecasts. The Board also monitors performance relative to a peer group of commodities and natural resources focused open and closed-end funds and also regularly reviews the Companyâ€™s performance attribution analysis to understand how performance was achieved. This provides an understanding of how components such as sector exposure, stock selection and asset allocation impacted performance. Further details are provided in the Investment Managerâ€™s Report.

	Year ended 30 November 2017	Year ended 30 November 2016
Net asset value movement¹	(3.2%)	51.9%
Share price movement²	(4.4%)	51.4%
Discount to net asset value (at year end)	2.5%	1.0%
Revenue return per share	4.84p	4.43p
Ongoing charges³	1.36%	1.39%

1. Calculated in accordance with AIC guidelines.

2. Calculated on a mid to mid basis with income reinvested.

3. Ongoing charges represent the management fee and all other recurring operating and investment management expenses excluding finance costs expressed as a percentage of average net assets.

PRINCIPAL RISKS
The Company is exposed to a variety of risks and uncertainties. The Board has in place a robust process to identify, assess and monitor the principal risks of the Company. A core element of this process is the Companyâ€™s risk register which identifies the risks facing the Company and assesses the likelihood and potential impact of each risk and the controls established for mitigation. A residual risk rating is then calculated for each risk.

The risk register is regularly reviewed and the risks re-assessed. The risk environment in which the Company operates is also monitored and regularly appraised. New risks are also added to the register as they are identified which ensures that the document continues to be an effective risk management tool.

The risk register, its method of preparation and the operation of key controls in the Managerâ€™s and third party service providers systems of internal control are reviewed on a regular basis by the Audit and Management Engagement Committee. In order to gain a more comprehensive understanding of the Managerâ€™s and other third party service providersâ€™ risk management processes, and how these apply to the Companyâ€™s business, BlackRockâ€™s internal audit department provides an annual presentation to the Audit and Management Engagement Committee Chairman setting out the results of testing performed in relation to BlackRockâ€™s internal control processes. The Audit and Management Engagement Committee also periodically receives presentations from BlackRockâ€™s Risk & Quantitative Analysis teams, and reviews Service Organisation Control (SOC 1) reports from BlackRock and from the Companyâ€™s custodian (Bank of New York Mellon (International) Limited). The custodian is appointed by the Companyâ€™s Depositary and does not have a direct contractual relationship with the Company.

The Board has undertaken a robust assessment of the principal risks facing the Company, including those that would threaten its business model, future performance, solvency or liquidity. Those principal risks have been described in the table below together with an explanation of how they are managed and mitigated. The Board will continue to assess these risks on an ongoing basis. In relation to the 2016 update to the UK Corporate Governance Code, the Board is comfortable that the procedures that the Company has in place are sufficient to ensure that the necessary monitoring of risks and controls has been carried out throughout the year under review.

The Companyâ€™s principal risks may be categorised under the following headings:

investment performance;
income/dividend;
gearing;
legal and regulatory compliance;
operational;
market; and
financial.

The principal risks and uncertainties faced by the Company during the financial year, together with the potential effects, controls and mitigating factors, are set out in the following table.

Principal Risk	Mitigation/Control
Investment performance
The returns achieved are reliant primarily upon the performance of the portfolio. The Board is responsible for: - setting the investment strategy to fulfil the Companyâ€™s objective; and - monitoring the performance of the Investment Manager and the implementation of the investment strategy. An inappropriate investment strategy may lead to: - a poor relative performance; - a reduction or permanent loss of capital; and - dissatisfied shareholders and reputational damage.	To manage this risk the Board: - regularly reviews the Company's investment mandate and long term strategy; - has set investment restrictions and guidelines which the Investment Manager montiors and regularly reports on; - receives from the Investment Manager a regular explanation of stock selection decisions, portfolio exposure, gearing and any changes in gearing and the rationale for the composition of the investment portfolio; and - monitors the maintenance of an adequate spread of investments in order to minimise the risk assocated with factors specific to particular sectors, based on the diversification requirements inherent in the investment policy.
Income/dividend
The ability to pay dividends, and future dividend growth, is dependent on a number of factors including the level of dividends earned from the portfolio and income generated from the option writing strategy. Income returns from the portfolio are dependent, among other things, upon the Company successfully pursuing its investment policy. Any change in the tax treatment of dividends or interest received by the Company including as a result of withholding taxes or exchange controls imposed by jurisdictions in which the Company invests may reduce the level of dividends received by shareholders.	The Board monitors this risk through the receipt of detailed income forecasts and considers the level of income at each meeting. The Company also has a revenue reserve which could potentially be used to support the Companyâ€™s dividend if required.
Gearing
The Companyâ€™s investment strategy may involve the use of gearing, including borrowings. Gearing may be generated through borrowing money or increasing levels of market exposure through the use of derivatives. The Company currently has an uncommitted overdraft facility with Bank of New York Mellon(International) Limited. The use of gearing exposes the Company to the risk associated with borrowing. Gearing provides an opportunity for greater returns where the return on the Companyâ€™s underlying assets exceeds the cost of borrowing. It is likely to have the opposite effect where the return on the underlying assets is below the cost of borrowings. Consequently, the use of borrowings by the Company may increase the volatility of the NAV.	The Companyâ€™s Articles of Association limit borrowings to an aggregate amount equal to 40% of the value of the gross assets of the Group. However, to further manage this risk the Board does not anticipate borrowings will exceed 20% of the Companyâ€™s gross assets at the time of drawdown. The use of derivatives, including options and futures has been limited to a maximum of 30% of the Groupâ€™s assets. The Investment Manager will only use gearing when confident that market conditions and opportunities exist to enhance investment returns.
Legal and regulatory compliance
The Company has been accepted by HM Revenue & Customs as an investment trust, subject to continuing to meet the relevant eligibility conditions and operates as an investment trust in accordance with Chapter 4 of Part 24 of the Corporation Tax Act 2010. As such, the Company is exempt from capital gains tax on the profits realised from the sale of its investments. Any breach of the relevant eligibility conditions could lead to the Company losing investment trust status and being subject to corporation tax on capital gains realised within the Companyâ€™s portfolio. Any serious breach could result in the Company and/or the Directors being fined or the subject of criminal proceedings or the suspension of the Companyâ€™s shares which would in turn lead to a breach of the Corporation Tax Act 2010. Amongst other relevant laws and regultions the Company is required to comply with the provisions of the Companies Act 2006, the Alternative Investment Fund Managers Directive, the Market Abuse regulations, the UK Listing Rules and the FCAâ€™s Disclosure & Transparency Rules.	The Investment Manager monitors investment movements and the amount of proposed dividends, if any, to ensure that the provisions of Chapter 4 of Part 24 of the Corporation Tax Act 2010 are not breached. The results are reported to the Board at each meeting. Compliance with the accounting rules affecting investment trusts is carefully and regularly monitored. The Company Secretary and the Companyâ€™s professional advisers provide regular reports to the Board in respect of compliance with all applicable rules and regulation. Following authorisation under the Alternative Investment Fund Managersâ€™ Directive (AIFMD), the Company and its appointed Alternative Investment Fund Manager (AIFM) are subject to the risks that the requirements of this Directive are not correctly complied with. The Board and the AIFM also monitor changes in government policy and legislation which may have an impact on the Company. The Market Abuse Regulation came into force across the EU on 3 July 2016. The Board has taken steps to ensure that individual Directors (and their Persons Closely Associated) are aware of their obligations under the regulation and has updated internal processes, where necessary, to ensure the risk of non-compliance is effectively mitigated.
Operational
The Company relies on the services provided by third parties. Accordingly, it is dependent on the control systems of the Manager and Bank of New York Mellon (International) Limited (who act as both Depositary and Fund Accountant and who maintain the Companyâ€™s assets, settlement and accounting records). The security of the Companyâ€™s assets, dealing procedures, accounting records and adherence to regulatory and legal requirements depend on the effective operation of the systems of the third party service providers. Failure by any service provider to carry out its obligations to the Company could have a material adverse effect on the Companyâ€™s performance. Disruption to the accounting, payment systems or custody records could prevent the accurate reporting and monitoring of the Companyâ€™s financial position.	Due diligence is undertaken before contracts are entered into with third party service providers. Thereafter, the performance of the provider is subject to regular review and reported to the Board. The Fund Accountantâ€™s and the Managerâ€™s internal control processes are regularly tested and monitored throughout the year and are evidenced through their Service Organisation Control (SOC 1) reports, which are subject to review by an Independent Service Assurance Auditor. The SOC 1 reports provide assurance in respect of the effective operation of internal controls. These reports are provided to the Audit and Management Engagement Committee. The Companyâ€™s financial assets are subject to a strict liability regime and in the event of a loss of assets, the Depositary must return assets of an identical type or the corresponding amount, unless able to demonstrate the loss was a result of an event beyond its reasonable control. The Board reviews the overall performance of the Manager, Investment Manager and all other third party service providers on a regular basis. The Board also considers the business continuity arrangements of the Companyâ€™s key service providers.
Market
Market risk arises from volatility in the prices of the Companyâ€™s investments. The price of shares of companies in the mining and energy sectors can be volatile and this may be reflected in the NAV and market price of the Companyâ€™s shares. The Company invests in the mining and energy sectors in many countries globally and will also be subject to country-specific risk. A lack of growth in world or country-specific industrial production may adversely affect metal and energy prices. Companies operating within the sectors in which the Company invests may be impacted by new legislation governing climate change and environmental issues, which may have a negative impact on their valuation and share price. There is the potential for the Company to suffer loss through holding investments in the face of negative market movements.	The Board considers the diversification of the portfolio, asset allocation, stock selection, and levels of gearing on a regular basis and has set investment restrictions and guidelines which are monitored and reported on by the Investment Manager. The Board monitors the implementation and results of the investment process with the Investment Manager.
Financial
The Companyâ€™s investment activities expose it to a variety of financial risks that include interest rate risk and foreign currency risk. The Company invests in both sterling and non-sterling denominated securities. Consequently, the value of investments in the portfolio made in non-sterling currencies will be affected by currency movements.	Details of these risks are disclosed in note 16 in the Annual Report, together with a summary of the policies for managing these risks.

VIABILITY STATEMENT
In accordance with provision C.2.2 of the 2016 UK Corporate Governance Code, the Directors have assessed the prospects of the Company for a period of three years. The Board considers three years to be an appropriate time horizon, being the period generally used to assess potential investments.

In its assessment of the viability of the Company the Directors have noted that:

the Company predominantly invests in highly liquid, large listed companies so its assets are readily realisable;
the Company has limited gearing and no concerns around facilities, headroom or covenants; and
the business model should remain attractive for longer than three years, unless there is significant economic or regulatory change.

The Directors have also reviewed:

the Companyâ€™s principal risks and uncertainties, as previously set out;
the potential impact of the continuation of the fall in commodity equity markets on the value of the Companyâ€™s investment portfolio and underlying dividend income;
the ongoing relevance of the Companyâ€™s investment objective, business model and investment policy in the current environment; and
the level of demand for the Companyâ€™s shares.

The Board has also considered a number of financial metrics in its assessment, including:

the level of ongoing charges, both current and historic;
the level at which the shares trade relative to NAV;
the level of income generated;
future income forecasts; and
99% of the portfolio was capable of being liquidated in less than 20 days.

The Board has concluded that the Company would be able to meet its ongoing operating costs as they fall due as a consequence of:

a liquid portfolio; and
expenses which comprise a small percentage of net assets.

Based on the results of their analysis, the Directors have a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over the period of their assessment.

FUTURE PROSPECTS
The Boardâ€™s main focus is the achievement of an annual dividend target and, over the long term, capital growth. The future of the Company is dependent upon the success of the investment strategy. The outlook for the Company is discussed in both the Chairmanâ€™s Statement and in the Investment Managerâ€™s Report.

EMPLOYEES, SOCIAL, COMMUNITY AND HUMAN RIGHTS ISSUES
The Company has no employees and all the Directors are non-executive, therefore, there are no disclosures to be made in respect of employees.

The Company believes that it is in shareholdersâ€™ interests to consider environmental, social and governance factors and human rights issues when selecting and retaining investments. Details of the Companyâ€™s policy on socially responsible investment are set out in the Corporate Governance Statement contained in the Annual Report.

MODERN SLAVERY ACT
As an investment vehicle the Company does not provide goods or services in the normal course of business, and does not have customers. Accordingly, the Directors consider that the Company is not required to make any slavery or human trafficking statement under the Modern Slavery Act 2015. The Board considers the Companyâ€™s supply chain, dealing predominantly with professional advisers and service providers in the financial services industry, to be low risk in relation to this matter.

DIRECTORS, GENDER REPRESENTATION AND EMPLOYEES
The Directors of the Company on 30 November 2017, all of whom held office throughout the year, are set out in the Governance Structure and Directorsâ€™ biographies section of the Annual Report.

The Board consists of three male Directors and one female Director. The Company does not have any employees.

BY ORDER OF THE BOARD
SARAH BEYNSBERGER FOR AND ON BEHALF OF
BlackRock Investment Management (UK) Limited
Company Secretary
29 January 2018

RELATED PARTY TRANSACTIONS AND TRANSACTIONS WITH THE AIFM AND THE INVESTMENT MANAGER

BlackRock Fund Managers Limited (BFM) was appointed as the Companyâ€™s AIFM with effect from 2 July 2014. The management contract is terminable by either party on six monthsâ€™ notice.

BlackRock Investment Management (UK) Limited (BIM (UK)) acts as the Companyâ€™s Investment Manager under a delegation agreement with BFM. BIM (UK) also acted as the Secretary of the Company throughout the year. BFM receives a management fee of 0.95% on the first Â£250 million of gross assets and 0.90% thereafter. The investment management fee due for the year ended 30 November 2017 amounted to Â£956,000 (2016: Â£803,000). At the year end, Â£387,000 was outstanding in respect of the management fee (2016: Â£382,000). Further details in relation to the management fee are given in note 4. The Board believes that the current fee structure is appropriate for an investment company in this sector.

The Group contributes to a focused investment trust sales and marketing initiative operated by BIM (UK) on behalf of the investment trusts under its management. For the year ended 30 November 2017, the Groupâ€™s contribution to the consortium element of the initiative, which enables the trusts to achieve efficiencies by combining certain sales and marketing activities, represented 0.025% per annum of its net assets (Â£101.2 million) as at 31 December 2016, and this contribution is matched by BIM (UK). The total fees paid or payable for these services for the year ended 30 November 2017 amounted to Â£25,000 excluding VAT (2016: Â£69,000 before writeback of prior year expense of Â£59,000). Marketing fees of Â£23,000 excluding VAT (2016: Â£14,500) were outstanding as at the year end and as at 30 November 2017 an amount of Â£16,500 (excluding VAT) has been invoiced and paid in respect of this initiative. The purpose of the programme is to ensure effective communication with existing shareholders and to attract new shareholders to the Company. This has the benefit of improving liquidity in the Companyâ€™s shares and helps sustain the stock market rating of the Company.

BFM and BIM (UK) are subsidiaries of BlackRock, Inc. which is a publicly traded corporation on the New York Stock Exchange operating as an independent firm. The PNC Financial Services Group, Inc. has a significant economic interest in BlackRock, Inc. PNC Financial Services Group, Inc. is a US public company.

The Board consists of four non-executive Directors, all of whom, with the exception of Mr Ruck Keene, who was an employee of the Manager up until April 2017, are considered to be independent of the Manager by the Board. None of the Directors has a service contract with the Company. For the year ended 30 November 2017, the Chairman received an annual fee of Â£36,000, the Chairman of the Audit and Management Engagement Committee received an annual fee of Â£30,000 and the other Directors received an annual fee of Â£27,000. Mr Ruck Keene waived his fee up to April 2017 when he retired as an employee of BlackRock. He has been paid as a Director from this date.

As at 30 November 2017 and 2016, the Directorsâ€™ interests in the Companyâ€™s Ordinary Shares were as follows:

	30 November 2017	30 November 2016
	Ordinary shares	Ordinary shares

Ed Warner (Chairman)	94,000	94,000
Carol Bell	33,500	33,500
Michael Merton	17,000	17,000
Jonathan Ruck Keene	14,000	14,000

STATEMENT OF DIRECTORSâ€™ RESPONSIBILITIES IN RESPECT OF THE ANNUAL REPORT AND FINANCIAL STATEMENTS

The Directors are responsible for preparing the Annual Report and the Financial Statements in accordance with applicable United Kingdom law and regulations. Company law requires the Directors to prepare financial statements for each financial year. Under that law, the Directors have elected to prepare the financial statements under IFRS as adopted by the European Union.

Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group as at the end of each financial year and of the profit or loss of the Group for that year.

In preparing these Group financial statements, the Directors are required to:

present fairly the financial position, financial performance and cash flows of the Group;
select suitable accounting policies in accordance with IAS 8: Accounting Policies, Changes in Accounting Estimates and Errors and then apply them consistently;
present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;
make judgements and estimates that are reasonable and prudent;
state whether the financial statements have been prepared in accordance with IFRS as adopted by the European Union, subject to any material departures disclosed and explained in the financial statements;
provide additional disclosures when compliance with the specific requirements in IFRS as adopted by the European Union is insufficient to enable users to understand the impact of particular transactions, other events and conditions on the Groupâ€™s financial position and financial performance; and
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in business.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Groupâ€™s transactions and disclose with reasonable accuracy at any time the financial position of the Group and enable them to ensure that the financial statements comply with the Companies Act 2006.

They are also responsible for safeguarding the assets of the Group and for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Directors are also responsible for preparing the Strategic Report, the Directorsâ€™ Report, the Directorsâ€™ Remuneration Report, the Corporate Governance Statement and the Report of the Audit and Management Engagement Committee in accordance with the Companies Act 2006 and applicable regulations, including the requirements of the Listing Rules and the Disclosure and Transparency Rules. The Directors have delegated responsibility to the Manager for the maintenance and integrity of the Groupâ€™s corporate and financial information included on the BlackRock website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Each of the Directors, whose names are listed in the governance structure and directors' biographies section of the Annual Report, confirm to the best of their knowledge that:

the financial statements, which have been prepared in accordance with IFRS as adopted by the European Union, give a true and fair view of the assets, liabilities, financial position and profit of the Group; and
the annual report and financial statements include a fair review of the development and performance of the business and the position of the Group, together with a description of the principal risks and uncertainties that it faces.

The 2016 UK Corporate Governance Code also requires Directors to ensure that the annual report and financial statements are fair, balanced and understandable. In order to reach a conclusion on this matter, the Board has requested that the Audit and Management Engagement Committee advise on whether it considers that the annual report and financial statements fulfils these requirements. The process by which the Committee has reached these conclusions is set out in the Audit and Management Engagement Committeeâ€™s report contained within the Annual Report. As a result, the Board has concluded that the annual report and financial statements for the year ended 30 November 2017, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Groupâ€™s position, performance, business model and strategy.

FOR AND ON BEHALF OF THE BOARD
ED WARNER
Chairman
29 January 2018

INVESTMENT MANAGERâ€™S REPORT

MARKET OVERVIEW
Following a strong recovery in the sector last year, 2017 has been more volatile, but encouragingly finished the year on a positive note with strong underlying momentum in the energy sector. As noted in our half year report, 2017 marked the first period since the global financial crisis that we have seen synchronized growth across the global economy providing an overall supportive back drop for commodity demand. This saw mining equities perform strongly during the year returning 18.0%, with the majority of industrial commodities average prices trading higher year-on-year. In addition to robust demand, Chinaâ€™s supply-side reform program has been a key driver of commodity prices tightening a number of commodity markets somewhat faster than we had originally expected. The upward move in commodity prices saw the mining sector generate close to record levels of free cash flow and importantly companies have remained disciplined. Management teams are choosing to reward shareholders via capital returns (as opposed to increased capital spending) which we believe will continue to drive a re-rating of the sector through 2018.

It has been a more challenging year for energy equities, which despite a 30.0% increase in the oil price finished the year 4.0% higher (both in US Dollar terms), as measured by the MSCI World Energy Index. Oil demand remained strong during 2017 with the IEA estimating that global oil demand grew at 1.5mmbpd. Towards the end of the year we saw signs of tightening in the oil market with inventory levels in the US declining, OPEC extending its production cuts by 9 months and supply concerns rising following geopolitical tensions in the Middle East. This saw the oil price move higher towards the end of the year and we continue to see significant investment opportunities among the energy equities as we move into 2018. We are also encouraged by the changing tone from management teams that are becoming increasingly focused on free cash flow generation and choosing not to reinvest where returns are insufficient for shareholders.

The table below shows the annual performance of the key commodity prices during the year (all in US Dollar terms).

Commodity	30 November 2016	30 November 2017	% change*	2017 on 2016 Average Price % Change (Average of 30/11/15-30/11/16 to 30/11/16-30/11/17)
Base Metals (US$/tonne)
Aluminium	1,731	2,034	17.5	22.3
Copper	5,813	6,735	15.9	26.9
Lead	2,350	2471	5.1	25.4
Nickel	11,196	11,050	-1.3	10.2
Tin	21,320	19,690	-7.6	16.2
Zinc	2,688	3,177	18.2	42.7
Precious Metals (US$/oz)
Gold	1,173.8	1,279.1	9.0	0.6
Silver	16.5	16.3	-1.1	0.8
Platinum	920.0	940.0	2.2	-3.3
Palladium	770.0	1,010.0	31.2	40.3
	--------	--------	--------	--------
Energy
Oil (WTI) (US$/Bbl)	49.4	57.4	16.2	19.9
Oil (Brent) (US$/Bbl)	49.0	63.5	29.5	25.5
Natural Gas (US$/MMBTU)	3.3	2.9	-10.9	28.9
Uranium (US$/lb)	18.2	22.0	20.5	-22.5
	--------	--------	--------	--------
Bulk Commodities (US$/tonne)
Iron ore	74.5	68.5	-8.1	29.6
Coking coal	270.0	178.0	-34.1	52.0
Thermal coal	87.4	96.8	10.7	39.1
Potash (US$/st)	215.0	222.0	3.3	-0.2
	--------	--------	--------	--------
Equity Indices
Euromoney Global Mining Index (US$)	588.2	694.1	18.0	n/a
Euromoney Global Mining Index (Â£)	470.8	512.7	8.9	n/a
MSCI World Energy Index (US$)	313.4	325.7	3.9	n/a
MSCI World Energy Index (Â£)	250.7	248.7	-4.1	n/a
	--------	--------	--------	--------

* Total Return Net of Tax.

Source: Datastream.

INCOME
The Company generated a total of Â£7.1 million in gross income during the year, which enabled total dividends of 4.0p to be declared for the year, split evenly across the four quarterly payments. It also allowed the strengthening of the revenue reserves of the Company from 2.12 pence per share to 2.96 pence per share as at 30 November 2017, which represents just under three quarters of the current annual dividend payment.

The Company's interim report noted a trend of mining companies stepping up returns to shareholders and this has continued during the second half of the year. For example, Glencore, suspended its dividend at the end of 2015, recommenced payments earlier this year and at its recent investor day used strong positive language about prioritising higher future dividend payments.

There have also been positive trends and announcements regarding dividends on the energy side. For example, in November, Royal Dutch Shell announced that after two years of paying part of its dividend in scrip (shares), it was moving back to a fully cash funded dividend. The market was further buoyed by the accompanying news of a $25 billion buyback over the next three years to offset the dilutive effect of the recent scrip dividends and the acquisition of BG.

The second half of the year saw a less attractive environment for option writing as volatility across the sector continued to fall and overall equity market volatility remained around its multi-year lows. As a result, we reduced the volume of option writing during the second half following the brisk start to the year noted in the interim report. The proportion of income from options in 2017 was lower than that in 2016 as dividend income rose. Looking to next year we hope to reduce further the proportion of income from options to below 50% but retain the flexibility to step this up should dividend income disappoint or the environment for options become materially better again.

PORTFOLIO POSITIONING
Throughout the course of 2017 the portfolio has been positioned to benefit from an anticipated rise in the oil price via our holdings in the more oil sensitive US E&P sector, as well as an expected re-rating of the larger mining companies who continue to generate very attractive levels of free cash flow.

As noted in the half year report, the portfolio started the year with a modest tilt to the energy sector which we expected to benefit from the OPEC production cuts announced at the end of 2016. While the Company's energy stocks initially benefited from the announcement, the benefit was relatively short lived, and we subsequently rotated the portfolio towards mining equities following better than expected underlying commodity demand in China.

Following the strong performance of the mining sector in the first half of the year, we took some profits and reduced gearing in the Company. Our expectation of better than anticipated interim results from mining companies, as well as increasingly positive economic data from China ahead of the 19th Communist Party Congress saw us increase our exposure to a number of the large diversified miners, such as Rio Tinto, BHP Billiton and Glencore, towards the end of August, benefiting the portfolio as the sector delivered above the marketâ€™s expectations of cash flow and dividends.

As we finished the year, we looked to further increase our oil exposure via adding to our preferred E&Pâ€™s including EOG and Marathon Oil, as well as selectively increasing our integrated exposure via Royal Dutch Shell & Chevron. We were very encouraged to see that after a difficult year for the energy sector, energy equities finally began to respond to the increase in oil prices with the sector ahead by 12.9% between 21 August 2017 and 30 November 2017. We expect this to continue as we move into 2018 with the market becoming increasingly more comfortable that current oil price levels are sustainable with shale acting more as a floor, rather than a cap, to prices.

ENERGY
2017 was very much a year of two halves for the oil market with second half strength ensuring the year ended on a relative high note. The first half of the year was a tough one as despite robust demand, oil prices fell as supply recovered more strongly than expected in both Libya and Nigeria leaving global oil inventories at high levels. As the year progressed however, demand was consistently higher than supply and, as shown in the table below, inventories of both crude oil and oil products steadily declined towards their five year average.

TABLE OF OECD OIL INVENTORIES VS. THE FIVE-YEAR AVERAGE; IEA OIL MARKET REPORT, NOVEMBER 2017

	Crude = NGL + Feedstocks	Oil Products

Feb 16	225.5	112.3
Mar 16	225.5	131.6
Apr 16	200.0	138.8
May 16	189.8	136.4
Jun 16	189.8	136.4
Jul 16	189.8	138.8
Aug 16	209.2	151.8
Sep 16	193.7	132.5
Oct 16	181.2	112.3
Nov 16	191.3	117.1
Dec 16	179.8	106.0
Jan 17	187.5	71.3
Feb 17	210.6	104.6
Mar 17	205.3	107.0
Apr 17	192.8	79.0
May 17	164.3	114.7
Jun 17	164.3	92.0
Jul 17	149.4	65.0
Aug 17	154.2	48.7
Sep 17	126.3	37.1
Oct 17	124.8	-2.0

Towards the end of the period, the forward curve for Brent moved into backwardation â€“ this is where the price for oil today is higher than that for future delivery. This is usually interpreted as a bullish sign for the near-term market outlook as participants are willing to encourage oil out of inventories by paying a higher price.

Although the oil price rising over the course of the year was in line with our expectations, energy equities did not react in the way we thought they would to this more buoyant commodity price. Typically, when oil prices rise due to a fundamental improvement in the demand / supply picture (rather than, for example, a short term spike from a geopolitical event) oil-exposed E&P companies outperform integrated companies and sub-sectors, such as Oil Services, also do well in anticipation of higher activity levels for them. However, this year integrated companies have outperformed E&P companies. This result occurred despite the rally in E&P shares towards the end of the year which was not enough to offset the dramatic underperformance in the first half of the year. One explanation for this disappointing performance might be the observed fall in expected medium term future oil prices, which is the price level that the equities are usually valued from. Our view is that the market is too bearish about the medium term prospects for oil prices and over the next few years the longer dated part of the futures curve will rise.

One of the key themes in the mining sector over the last 12-18 months has been management teams focusing on â€œvalue over volumeâ€. This shift in strategy has the twin benefits of better free cash flow, as well as the macro effect of constraining supply thereby supporting commodity prices. We are now seeing companies in the oil space adopt similar rhetoric in recent company announcements with â€œvolume growthâ€ being replaced by â€œdisciplineâ€, â€œfree cash flowâ€ and other shareholder friendly phrases. The market has responded well to this change in strategy. As an example, in September when Anadarko Petroleum announced a US$2.5bn buyback programme (over 10% of its market capitalisation) and a 2018 capital expenditure programme that would be fully funded from cash flow at $50/bbl. oil, the companyâ€™s shares rose by 10% on the day.

MINING
It was a strong year for the mining sector with equities up 18.0% (as measured by the Euromoney Global Mining Index (US Dollar)) and the majority of commodities trading higher year on year. The sector began the year strongly with Chinese economic data, particularly in property and infrastructure, surprising to the upside. However, concerns that tighter credit conditions, imposed in March, would lead to a slowdown in economic activity, saw sentiment deteriorate with the sector giving back much of its earlier gains by mid-year. Our view, that the negative sentiment was unwarranted, proved to be correct with economic data from China remaining robust in the lead up to Chinaâ€™s 19th Party Congress in October.

Throughout the course of 2017, policy measures announced by the Chinese Government have had a significant impact on commodity markets. The first of these was Chinaâ€™s supply-side reform program targeted at a range of industries that are in a state of over-capacity. These include the Steel, Aluminium and Coal industries which have, as a result, closed some excess capacity, thereby tightening markets and improving profitability over the course of the year. The second key policy measure has been Chinaâ€™s focus on improving environmental standards throughout the country which has seen polluting capacity curtailed leading to a preference and an increased premium for higher quality products. This has been most notable in the iron ore market, with higher quality iron ore (65% iron grade) trading at a 40-50% premium to lower quality iron ore (58% iron grade). We looked to benefit from this trade, adding to higher quality iron ore producers Vale, BHP & Rio Tinto, whilst exiting our position in the lower grade producer Fortescue during the course of the year.

OUTLOOK
The ongoing strength in mined commodity prices over the course of 2017 has seen almost unprecedented levels of free cash flow generated by the major mining companies. In the absence of both a material slowdown in the Chinese economy in 2018 and any poor capital allocation decisions from management teams, the sector should again deliver strong free cash flows and the table below setting out cashflow expectations for some of the key mining companies illustrates this. We would therefore anticipate a continuation of capital returns to shareholders and the wide valuation gap between mining shares and the rest of the equity market to narrow. The sector was in a similar position in 2010 and embarked upon a wave of M&A and project spending, which led to over supplied commodity markets and poor returns for the equities. Despite these similarities, we see the situation today as being sufficiently different to 2010 and expect to see little change in 2018 to the recent trend of returning cash to shareholders and more disciplined capital spending decisions. The market as a whole though, remains sceptical about the sector given the mistakes of the past and we see this as an opportunity for investors in 2018.

PERCENTAGE OF MINING COMPANIES ENTERPRISE VALUE THAT THEY ARE EXPECTED TO GENERATE IN FREE CASH FLOW OVER THE NEXT 4 YEARS (2017â€“2021E)

(Source: Bank of America Merrill Lynch 4 January 2018)

	Base Case	Spot	2018 FCF Yield Using Spot Prices
BHP	39%	55%	12%
Rio Tinto	38%	50%	10%
Anglo	41%	59%	21%
Glencore	35%	55%	16%
Antofagasta	35%	42%	11%

The recent strength in oil prices has been encouraging and we believe that the underperformance of oil-exposed E&P companies and certain US onshore service companies has opened a tactical investment opportunity. In the medium term we retain the view that the market is too bearish regarding the level of long-run oil prices being used to value equities and so continue in our conviction in our oil exposed holdings. When re-affirming this positive medium term oil view we test it against the teamâ€™s view on electric vehicles. We are optimistic on the outlook for electric vehicles and think adoption rates will be at the high end of market expectations in the next decade. However, even under these optimistic scenarios, absolute oil demand does not peak until at least 2030, offering the opportunity for several market and pricing cycles still to come. That said, we are excited by the breadth of investment opportunities that the decarbonisation of the energy supply chain offers and will look to selectively take advantage of such opportunities in the coming year.

OLIVIA MARKHAM AND TOM HOLL
BlackRock Investment Management (UK) Limited
29 January 2018

DISTRIBUTION OF INVESTMENTS AS AT 30 NOVEMBER 2017

ASSET ALLOCATION â€“ GEOGRAPHY

Global	58.6%
USA	13.2%
Canada	12.1%
Latin America	5.3%
Australia	4.8%
Other	3.4%
Europe	2.6%

Source: Blackrock.

ASSET ALLOCATION â€“ COMMODITY

Mining	54.3%
Energy	45.7%

Mining
Diversified Mining	27.6%
Copper	10.5%
Gold	8.6%
Industrial Minerals & Resources	2.8%
Silver	2.7%
Steel	1.5%
Diamonds	0.6%

Energy
Integrated Oil	23.5%
Exploration & Production	15.1%
Distribution	3.6%
Oil Sands	2.0%
Oil Services	1.5%

Source: BlackRock.

TEN LARGEST INVESTMENTS AS AT 30 NOVEMBER 2017

First Quantum Minerals: 9.4% (2016: 7.3%) is an established and rapidly growing mining company operating seven mines and developing five projects worldwide. The company is a significant copper producer and also produces nickel, gold, zinc and platinum group elements.

Rio Tinto: 6.8% (2016: 5.1%) is one of the worldâ€™s leading mining companies. The companyâ€™s primary product is iron ore, but it also produces aluminium, copper, diamonds, gold, industrial minerals and energy products.

BHP Billiton: 6.7% (2016: 4.7%) is the worldâ€™s largest diversified natural resources company. The company is a major producer of aluminium, iron ore, copper, thermal and metallurgical coal, manganese, uranium, nickel, silver, titanium minerals and diamonds. The company also has significant interests in oil, gas and liquefied natural gas.

Royal Dutch Shell â€˜Bâ€™: 6.2% (2016: 6.5%) is one of the worldâ€™s leading energy companies. The Anglo-Dutch company is active in every area of the oil and gas industry within exploration and production, refining and marketing, power generation and energy trading. The company also has renewable energy interests in biofuels.

Glencore: 5.0% (2016: 2.4%) is a diversified miner with activities in mining, smelting, refining, processing and marketing of metals and minerals, energy products and agricultural products globally. Since mid-2015 the company has been focused on rapidly de-gearing the balance sheet, with net debt falling from US$26bn (Dec-15) to a targeted range of US$10-16bn, to provide greater balance sheet strength and flexibility going forward.

Chevron: 4.8% (2016: 0.9%) is an integrated oil and gas producer engaged in all aspects of the oil and gas industry. The company has both upstream and downstream operations, as well as alternative energy operations including solar, wind and biofuels.

Exxon Mobil: 4.2% (2016: 6.4%) is the worldâ€™s largest publicly traded international oil and gas company and the largest refiner and marketer of petroleum products.

Vale: 3.3% (2016: 3.5%) is one of the largest mining companies in the world, with operations in 30 countries. Vale is the worldâ€™s largest producer of iron ore and iron ore pellets, and the worldâ€™s largest producer of nickel. The company also produces manganese ore, ferroalloys, metallurgical and thermal coal, copper, platinum group metals, gold, silver, cobalt, potash, phosphates and other fertiliser nutrients.

BP: 3.1% (2016: 3.6%) is one of the worldâ€™s leading international oil and gas companies. The company explores for and produces oil and natural gas and refines, markets and supplies petroleum products. It also generates solar energy and manufactures chemicals.

Anadarko Petroleum: 3.1% (2016: 3.0%) is one of the worldâ€™s largest independent oil and natural gas exploration and production companies. Anadarko currently has production assets in the gulf of Mexico, US onshore, West and North Africa. The exploration portfolio includes assets in the production regions as well as East Africa and Colombia.

All percentages reflect the value of the holding as a percentage of total investments. For this purpose, where more than one class of securities is held, these have been aggregated. The percentages in brackets represent the value of the holding as at 30 November 2016. Together, the ten largest investments represent 52.6% of total investments (ten largest investments as at 30 November 2016: 45.9%).

INVESTMENTS AS AT 30 NOVEMBER 2017

	Main geographic exposure	Market value Â£â€™000	% of investments
Diversified Mining
Rio Tinto	Global	6,407	6.8
BHP Billiton	Global	6,370	6.7
Glencore	Global	4,774	5.0
Vale	Latin America	3,128	3.3
South32	Global	1,977	2.1
South32 Call Option 21/12/17	Global	(8)	â€“
Teck Resources	Canada	1,904	2.0
Teck Resources Put Option 15/12/17	Canada	(18)	â€“
Lundin Petroleum	Europe	1,029	1.1
Lundin Mining	Europe	522	0.6
Lundin Mining Put Option 15/12/17	Europe	(19)	â€“
		--------	--------
		26,066	27.6
		--------	--------
Integrated Oil
Royal Dutch Shell 'B'	Global	5,831	6.2
Chevron	Global	4,527	4.8
Chevron Put Option 15/12/17	Global	(3)	â€“
Exxon Mobil	Global	3,936	4.2
BP	Global	2,981	3.1
ConocoPhillips	USA	2,367	2.5
Occidental Petroleum	USA	1,677	1.8
Statoil	Europe	866	0.9
		--------	--------
		22,182	23.5
		--------	--------
Exploration & Production
Anadarko Petroleum	USA	2,902	3.1
Marathon Oil	Global	2,372	2.5
EOG Resources	USA	2,168	2.3
EOG Resources Call Option 15/12/17	USA	(37)	(0.1)
Devon Energy	USA	1,779	1.9
Encana	Canada	1,633	1.7
Noble Energy	Global	1,203	1.3
Hess	Global	898	1.0
Laredo Petroleum	USA	887	0.9
Crescent Point Energy	Canada	471	0.5
		--------	--------
		14,276	15.1
		--------	--------
Copper
First Quantum Minerals 7.25% 15 May 2022	Global	4,602	4.9
First Quantum Minerals	Global	3,578	3.8
First Quantum Minerals 7.5% 1 Apr 2025	Global	362	0.4
First Quantum Minerals 7.25% 1 Apr 2023	Global	348	0.3
Avanco Resources	Latin America	1,044	1.1
		--------	--------
		9,934	10.5
		--------	--------
Gold
Newcrest Mining	Australia	1,914	2.0
Randgold Resources	Mali	1,289	1.4
Nevsun Resources	Africa	1,279	1.4
Agnico Eagle Mines	Canada	1,181	1.2
Newmont Mining	Global	1,073	1.1
Franco-Nevada	Global	986	1.1
Osisko Gold Royalties 4% Cnv 31 Dec 2022	Canada	405	0.4
		--------	--------
		8,127	8.6
		--------	--------
Distribution
Enbridge Income Fund Trust	Canada	2,148	2.3
TransCanada	Canada	1,279	1.3
		--------	--------
		3,427	3.6
		--------	--------
Silver
Wheaton Precious Metals	Global	1,741	1.8
Fresnillo	Latin America	856	0.9
		--------	--------
		2,597	2.7
		--------	--------
Oil Sands
Suncor Energy	Canada	1,860	2.0
		--------	--------
		1,860	2.0
		--------	--------
Industrial Minerals & Resources
Pilgangoora 12% 21 Jun 2022	Australia	1,600	1.7
Iluka Resources	Australia	1,041	1.1
Albemarle Put Option 15/12/17	USA	(13)	â€“
		--------	--------
		2,628	2.8
		--------	--------
Oil Services
Superior Energy Services	USA	805	0.8
Precision Drilling	Canada	633	0.7
		--------	--------
		1,438	1.5
		--------	--------
Steel
Arcelormittal	Global	1,405	1.5
		--------	--------
		1,405	1.5
		--------	--------
Diamonds
Petra Diamonds 7.25% 1 May 2022	Africa	565	0.6
		--------	--------
		565	0.6
		--------	--------
Portfolio		94,505	100.0
		--------	--------
Comprising
Equity and debt investments		94,603	100.1
Derivative financial instruments â€“ written call options		(98)	(0.1)
		--------	--------
		94,505	100.0
		--------	--------

All investments are ordinary shares unless otherwised stated. The total number of holdings (including options) at 30 November 2017 was 53 (30 November 2016: 70).
The total number of open options as at 30 November 2017 was 6 (30 November 2016: 16).
The negative valuations of Â£98,000 in respect of options held represent the notional cost of repurchasing the contracts at market prices as at 30 November 2017.
The equity and debt investment total of Â£94,603,000 above before the deduction of the negative option valuations of Â£98,000 represents the Companyâ€™s total investments held at fair value as reflected in the statement of financial position below. The table above excludes cash and gearing; the level of the Companyâ€™s gearing may be determined with reference to the bank overdraft of Â£5,446,000 and cash and cash equivalents of Â£78,000 that are also disclosed in the statement of financial position. Details of the AIC methodology for calculating gearing are given in the glossary contained in the Annual Report.
As at 30 November 2017, the Company did not hold any equity interests comprising more than 3% of any companyâ€™s share capital.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 NOVEMBER 2017

	Notes	Revenue 2017 Â£â€™000	Revenue 2016 Â£â€™000	Capital 2017 Â£â€™000	Capital 2016 Â£â€™000	Total 2017 Â£â€™000	Total 2016 Â£â€™000
Income from investments held at fair value through profit or loss	3	3,456	2,836	â€“	â€“	3,456	2,836
Other income	3	3,664	3,694	â€“	â€“	3,664	3,694
		--------	--------	--------	--------	--------	--------
Total revenue		7,120	6,530	â€“	â€“	7,120	6,530
		--------	--------	--------	--------	--------	--------
Net (loss)/profit on investments held at fair value through profit or loss		â€“	â€“	(8,066)	29,133	(8,066)	29,133
Net (loss)/profit on foreign exchange		â€“	â€“	(39)	723	(39)	723
		--------	--------	--------	--------	--------	--------
Total		7,120	6,530	(8,105)	29,856	(985)	36,386
		--------	--------	--------	--------	--------	--------
Expenses
Investment management fees	4	(239)	(201)	(717)	(602)	(956)	(803)
Other operating expenses	5	(336)	(279)	(3)	(6)	(339)	(285)
		--------	--------	--------	--------	--------	--------
Total operating expenses		(575)	(480)	(720)	(608)	(1,295)	(1,088)
		--------	--------	--------	--------	--------	--------
Net profit/(loss) before finance costs and taxation		6,545	6,050	(8,825)	29,248	(2,280)	35,298
Finance costs	6	(69)	(64)	(90)	(36)	(159)	(100)
		--------	--------	--------	--------	--------	--------
Net profit/(loss) on ordinary activities before taxation		6,476	5,986	(8,915)	29,212	(2,439)	35,198
Taxation		(723)	(789)	â€“	(146)	(723)	(935)
		--------	--------	--------	--------	--------	--------
Profit/(loss) for the year		5,753	5,197	(8,915)	29,066	(3,162)	34,263
		--------	--------	--------	--------	--------	--------
Earnings/(loss) per ordinary share (pence)	8	4.84	4.43	(7.50)	24.75	(2.66)	29.18
		=====	=====	=====	=====	======	======

The total column of this statement represents the Groupâ€™s Statement of Comprehensive Income, prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union. The supplementary revenue and capital columns are both prepared under guidance published by the Association of Investment Companies (AIC). All items in the above statement derive from continuing operations. No operations were acquired or discontinued during the year. All income is attributable to the equity holders of the Group.

The Group does not have any other comprehensive income. The net profit/(loss) for the year disclosed above represents the Groupâ€™s total comprehensive income.

CONSOLIDATED AND PARENT STATEMENTS OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 NOVEMBER 2017

Group	Notes	Called up share capital Â£â€™000	Share premium account Â£â€™000	Special reserve Â£â€™000	Capital reserves Â£â€™000	Revenue reserve Â£â€™000	Total Â£â€™000
For the year ended 30 November 2017
At 30 November 2016		1,183	46,395	71,223	(22,479)	2,511	98,833
Total comprehensive income:
Net (loss)/profit for the year		â€“	â€“	â€“	(8,915)	5,753	(3,162)
Transaction with owners, recorded directly to equity:
Proceeds from shares issued	9 & 10	5	433	â€“	â€“	â€“	438
Share issue costs	10	â€“	(1)	â€“	â€“	â€“	(1)
Dividends paid*	7	â€“	â€“	â€“	â€“	(4,751)	(4,751)
		--------	--------	--------	--------	--------	--------
At 30 November 2017		1,188	46,827	71,223	(31,394)	3,513	91,357
		========	========	========	========	========	========
For the year ended 30 November 2016
At 30 November 2015		1,156	44,837	71,223	(51,545)	3,759	69,430
Total comprehensive income:
Net profit for the year		â€“	â€“	â€“	29,066	5,197	34,263
Transaction with owners, recorded directly to equity:
Proceeds from shares issued		27	1,559	â€“	â€“	â€“	1,586
Share issue costs		â€“	(8)	â€“	â€“	â€“	(8)
Tender issue costs rebated		â€“	7	â€“	â€“	â€“	7
Dividends paid**	7	â€“	â€“	â€“	â€“	(6,445)	(6,445)
		--------	--------	--------	--------	--------	--------
At 30 November 2016		1,183	46,395	71,223	(22,479)	2,511	98,833
		========	========	========	========	========	========

Company	Notes	Called up share capital Â£â€™000	Share premium account Â£â€™000	Special reserve Â£â€™000	Capital reserves Â£â€™000	Revenue reserve Â£â€™000	Total Â£â€™000
For the year ended 30 November 2017
At 30 November 2016		1,183	46,395	71,223	(21,975)	2,007	98,833
Total comprehensive income:
Net (loss)/profit for the year		â€“	â€“	â€“	(8,124)	4,962	(3,162)
Transaction with owners, recorded directly to equity:
Proceeds from shares issued	9 & 10	5	433	â€“	â€“	â€“	438
Share issue costs	10	â€“	(1)	â€“	â€“	â€“	(1)
Dividends paid*	7	â€“	â€“	â€“	â€“	(4,751)	(4,751)
		--------	--------	--------	--------	--------	--------
At 30 November 2017		1,188	46,827	71,223	(30,099)	2,218	91,357
		=====	=====	=====	=====	====	=====
For the year ended 30 November 2016
At 30 November 2015		1,156	44,837	71,223	(50,001)	2,215	69,430
Total comprehensive income:
Net profit for the year		â€“	â€“	â€“	28,026	6,237	34,263
Transaction with owners, recorded directly to equity:
Proceeds from shares issued		27	1,559	â€“	â€“	â€“	1,586

Share issue costs		â€“	(8)	â€“	â€“	â€“	(8)
Tender issue costs rebated		â€“	7	â€“	â€“	â€“	7
Dividends paid**	7	â€“	â€“	â€“	â€“	(6,445)	(6,445)
		--------	--------	--------	--------	--------	--------
At 30 November 2016		1,183	46,395	71,223	(21,975)	2,007	98,833
		--------	--------	--------	--------	--------	--------

* 4th interim dividend of 1.00p per share for the year ended 30 November 2016, declared on 16 December 2016 and paid on 20 January 2017; 1st interim dividend of 1.00p per share for the year ended 30 November 2017, declared on 14 March 2017 and paid on 21 April 2017, 2nd interim dividend of 1.00p per share for the year ending 30 November 2017, declared on 13 June 2017 and paid on 21 July 2017 and 3rd interim dividend of 1.00p per share for the year ended 30 November 2017, declared on 11 September 2017 and paid on 13 October 2017.

** 4th interim dividend of 1.50p per share for the year ended 30 November 2015, declared on 17 December 2015 and paid on 22 January 2016, 1st interim dividend of 1.50p per share for the year ended 30 November 2016, declared on 14 March 2016 and paid on 21 April 2016, 2nd interim dividend of 1.50p per share for the year ended 30 November 2016, declared on 14 June 2016 and paid on 22 July 2016 and 3rd interim dividend of 1.00p per share for the year ended 30 November 2016, declared on 12 September 2016 and paid on 21 October 2016.

CONSOLIDATED AND PARENT STATEMENTS OF FINANCIAL POSITION AS AT 30 NOVEMBER 2017

		30 November 2017		30 November 2016
	Notes	Group Â£â€™000	Company Â£â€™000	Group Â£â€™000	Company Â£â€™000
Non current assets
Investments held at fair value through profit or loss		94,603	96,718	103,127	104,449
		--------	--------	--------	--------
Current assets
Other receivables		2,057	2,057	916	916
Cash collateral held with brokers		949	â€“	2,990	â€“
Cash and cash equivalents		78	â€“	7,208	74
		--------	--------	--------	--------
		3,084	2,057	11,114	990
		--------	--------	--------	--------
Total assets		97,687	98,775	114,241	105,439
		--------	--------	--------	--------
Current liabilities
Other payables		(786)	(557)	(3,239)	(2,886)
Derivative financial liabilities held at fair value through profit or loss		(98)	(98)	(482)	(482)
Bank overdraft		(5,446)	(6,763)	(11,687)	(3,238)
		--------	--------	--------	--------
		(6,330)	(7,418)	(15,408)	(6,606)
		--------	--------	--------	--------
Net assets		91,357	91,357	98,833	98,833
		--------	--------	--------	--------
Equity attributable to equity holders
Called up share capital	9	1,188	1,188	1,183	1,183
Share premium account	10	46,827	46,827	46,395	46,395
Special reserve	10	71,223	71,223	71,223	71,223
Capital reserves	10	(31,394)	(30,099)	(22,479)	(21,975)
Revenue reserve	10	3,513	2,218	2,511	2,007
		--------	--------	--------	--------
Total equity		91,357	91,357	98,833	98,833
		--------	--------	--------	--------
Net asset value per ordinary share (pence)	8	76.92	76.92	83.57	83.57
		========	========	========	========

CONSOLIDATED AND PARENT CASH FLOW STATEMENTS FOR THE YEAR ENDED 30 NOVEMBER 2017

	30 November 2017		30 November 2016
	Group Â£â€™000	Company Â£â€™000	Group Â£â€™000	Company Â£â€™000
Operating activities
Net (loss)/profit on ordinary activities before taxation	(2,439)	(2,970)	35,198	34,416
Add back finance costs	159	120	100	48
Net loss/(profit) on investments and options held at fair value through profit or loss (including transaction costs)	8,066	7,273	(29,133)	(28,911)
Net loss/(profit) on foreign exchange	39	41	(723)	95
Sales of investments held at fair value through profit or loss	63,910	63,910	73,535	73,535
Purchases of investments held at fair value through profit or loss	(63,836)	(63,836)	(78,060)	(78,060)
Increase in other receivables	(21)	(21)	(13)	(13)
Increase/(decrease) in other payables	6	6	(203)	(203)
Increase in amounts due from brokers	(1,120)	(1,120)	(448)	(448)
(Decrease)/increase in amounts due to brokers	(2,335)	(2,335)	2,335	2,335
Net movement in cash collateral held with brokers	2,041	â€“	(1,678)	â€“
	--------	--------	--------	--------
Net cash inflow from operating activities before interest and taxation	4,470	1,068	910	2,794
	--------	--------	--------	--------
Interest paid	(159)	(120)	(100)	(48)
Taxaton paid	(655)	â€“	(845)	â€“
Taxation on investment income included within gross income	(192)	(192)	(153)	(153)
	--------	--------	--------	--------
Net cash inflow/(outflow) from operating activities	3,464	756	(188)	2,593
	--------	--------	--------	--------
Financing activities
Proceeds from shares issued	438	438	1,586	1,586
Share issue costs paid	(1)	(1)	(8)	(8)
Tender issue costs rebate received	â€“	â€“	7	7
Dividends paid	(4,751)	(4,751)	(6,445)	(6,445)
	--------	--------	--------	--------
Net cash outflow from financing activities	(4,314)	(4,314)	(4,860)	(4,860)
	--------	--------	--------	--------
Decrease in cash and cash equivalents	(850)	(3,558)	(5,048)	(2,267)
Effect of foreign exchange rate changes	(39)	(41)	723	(95)
	--------	--------	--------	--------
Change in cash and cash equivalents	(889)	(3,599)	(4,325)	(2,362)
Cash and cash equivalents at start of year	(4,479)	(3,164)	(154)	(802)
	--------	--------	--------	--------
Cash and cash equivalents at end of year	(5,368)	(6,763)	(4,479)	(3,164)
	--------	--------	--------	--------
Comprised of:
Cash and cash equivalents	78	â€“	7,208	74
Bank overdraft	(5,446)	(6,763)	(11,687)	(3,238)
	--------	--------	--------	--------
	(5,368)	(6,763)	(4,479)	(3,164)
	========	========	========	========

NOTES TO THE FINANCIAL STATEMENTS

1. PRINCIPAL ACTIVITY
The principal activity of the Company is that of an investment trust company within the meaning of section 1158 of the Corporation Tax Act 2010. The Company was incorporated on 4 November 2005 and this is the twelfth Annual Report.

2. ACCOUNTING POLICIES
The principal accounting policies adopted by the Group and Company are set out below.

(a) Basis of preparation
The Group and Parent Company financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union and as applied in accordance with the provisions of the Companies Act 2006. The Company has taken advantage of the exemption provided under section 408 of the Companies Act 2006 not to publish its individual Statement of Comprehensive Income and related notes. All of the Companyâ€™s operations are of a continuing nature.

Insofar as the Statement of Recommended Practice (SORP) for investment trust companies and venture capital trusts issued by the Association of Investment Companies (AIC), revised in November 2014, is compatible with IFRS, the financial statements have been prepared in accordance with guidance set out in the SORP.

Substantially, all of the assets of the Group consist of securities that are readily realisable and, accordingly, the Directors believe that the Company has adequate resources to continue in operational existence for the foreseeable future. Consequently, the Directors have determined that it is appropriate for the financial statements to be prepared on a going concern basis.

The Groupâ€™s financial statements are presented in sterling, which is the functional currency of the Group and of the primary economic environment in which the Group operates. All values are rounded to the nearest thousand pounds (Â£â€™000) except when otherwise indicated.

The Group has adopted IFRS10 â€“ Consolidated Financial Statements Investment Entities amendments (effective 1 January 2014) which establishes a single control model that applies to all entities including special purposes entities. The changes introduced by the Investment Entities amendments require management to exercise significant judgement to determine which entities are controlled and therefore are required to be consolidated by a parent. The Directors, having assessed the criteria, believe the parent company meets the criteria to be an investment entity under IFRS 10 and that this accounting treatment reflects the Companyâ€™s activities as an investment trust. Therefore any investments in subsidiaries may be carried at fair value through profit and loss in accordance with IAS 39. However, the principal activity of the subsidiary, BlackRock Commodities Securities Income Company Limited (which is controlled by the Company), is investment dealing activities and option writing and therefore this entity is considered to provide investment related services to the Company and is required to be consolidated under the Investment Entities amendment.

A number of new standards, amendments to standards and interpretations that became effective during the year had no significant impact on the amounts reported in these financial statements but may impact accounting for future transactions and arrangements.

At the date of authorising these financial statements the following standards and interpretations which had not been applied in these financial statements were in issue but not yet effective.

IFRS 9 â€“ Financial Instruments (2014) replaces IAS 39 and deals with a package of improvements including principally a revised model for classification and measurement of financial instruments, a forward looking expected loss impairment model and a revised framework for hedge accounting. In terms of classification and measurement the revised standard is principles based depending on the business model and nature of cash flows. Under this approach instruments are measured at either amortised cost or fair value . Under IFRS 9 equity and derivative investments will be held at fair value because they fail the â€˜solely payments of principal and interestâ€™ test and debt investments will be held at fair value because the business model is to manage them on a fair value basis. The scope of the fair value option is reduced within IFRS 9. The standard is effective from 1 January 2018 with earlier application permitted. The Company does not plan to early adopt this standard. The Standard is not expected to have any impact on the Company as all its investments are held at fair value through profit or loss.

Amendments to IAS 7 â€“ Disclosure initiative Statement of Cash Flows (effective 1 January 2017). The amendment is not expected to have a significant effect on the presentation of the Statement of Cash Flows within the financial statements of the Company.

Amendments to IAS 12 â€“ Recognition of deferred tax assets for unrealised losses (effective 1 January 2017). The amendment is not expected to have a significant effect on the measurement of amounts recognised in the financial statements of the Company.

IFRS 15 Revenue from Contracts with Customers (effective 1 January 2017) specifies how and when an entity should recognise revenue and enhances the nature of revenue disclosures. Given the nature of the Companyâ€™s revenue streams from financial instruments the provisions of this standard are not expected to have a material impact.

(b) Basis of consolidation
The Groupâ€™s financial statements are made up to 30 November each year and consolidate the financial statements of the Company and its wholly owned subsidiary, which is registered and operates in England and Wales, BlackRock Commodities Securities Income Company Limited.

Subsidiaries are consolidated from the date of their acquisition, being the date on which the Company obtains control, and continue to be consolidated until the date that such control ceases. The financial statements of subsidiaries used in the preparation of the consolidated financial statements are based on consistent accounting policies. All intra-group balances and transactions, including unrealised profits arising therefrom, are eliminated.

(c) Presentation of the Statement of Comprehensive Income
In order to reflect better the activities of an investment trust company and in accordance with guidance issued by the AIC, supplementary information which analyses the Consolidated Statement of Comprehensive Income between items of a revenue and a capital nature has been presented alongside the Consolidated Statement of Comprehensive Income.

(d) Segmental reporting
The Directors are of the opinion that the Group is engaged in a single segment of business being investment business.

(e) Income
Dividends receivable on equity shares are recognised as revenue for the year on an ex-dividend basis. Where no ex-dividend date is available dividends receivable on or before the year end are treated as revenue for the year. Provision is made for any dividends not expected to be received. Special dividends, if any, are treated as a capital or a revenue receipt depending on the facts or circumstances of each particular case. The return on a debt security is recognised on a time apportionment basis so as to reflect the effective yield on the debt security. Interest income and deposit interest is accounted for on an accruals basis.

Options may be purchased or written over securities held in the portfolio for generating or protecting capital returns, or for generating or maintaining revenue returns. Where the purpose of the option is the generation of income, the premium is treated as a revenue item. Where the purpose of the option is the maintenance of capital, the premium is treated as a capital item.

Option premium income is recognised as revenue evenly over the life of the option contract and included in the revenue column of the Consolidated Statement of Comprehensive Income unless the option has been written for the maintenance and enhancement of the Companyâ€™s investment portfolio and represents an incidental part of a larger capital transaction, in which case any premia arising are allocated to the capital column of the Consolidated Statement of Comprehensive Income.

Where the Company has elected to receive its dividends in the form of additional shares rather than in cash, the cash equivalent of the dividend is recognised as income. Any excess in the value of the shares received over the amount of the cash dividend is recognised in capital.

(f) Expenses
All expenses, including finance costs, are accounted for on an accruals basis. Expenses have been charged wholly to the revenue column of the Consolidated Statement of Comprehensive Income, except as follows:

expenses which are incidental to the acquisition or sale of an investment are charged to the capital column of the Consolidated Statement of Comprehensive Income. Details of transaction costs on the purchases and sales of investments are disclosed within note 10 to the financial statements on page â€¢;
expenses are treated as capital where a connection with the maintenance or enhancement of the value of the investments can be demonstrated;
the investment management fees and finance costs of borrowing borne by the Company have been allocated 75% to the capital column and 25% to the revenue column of the Consolidated Statement of Comprehensive Income in line with the Boardâ€™s expectations of the long term split of returns, in the form of capital gains and income, respectively, from the investment portfolio.

(g) Taxation
The Group accounts do not reflect any adjustment for group relief between the Company and the Subsidiary.

The tax expense represents the sum of the tax currently payable and deferred tax. The tax currently payable is based on the taxable profit for the year. Taxable profit differs from net profit as reported in the Consolidated Statement of Comprehensive Income because it excludes items of income or expenses that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Groupâ€™s liability for current tax is calculated using tax rates that were applicable at the balance sheet date.

Where expenses are allocated between capital and revenue any tax relief in respect of the expenses is allocated between capital and revenue returns on the marginal basis using the Companyâ€™s effective rate of corporation taxation for the accounting period.

Deferred taxation is recognised in respect of all temporary differences that have originated but not reversed at the financial reporting date, where transactions or events that result in an obligation to pay more tax in the future or right to pay less tax in the future have occurred at the financial reporting date. This is subject to deferred taxation assets only being recognised if it is considered more likely than not that there will be suitable profits from which the future reversal of the temporary differences can be deducted. Deferred taxation assets and liabilities are measured at the rates applicable to the legal jurisdictions in which they arise.

(h) Investments held at fair value through profit or loss
The Companyâ€™s investments are designated upon initial recognition as held at fair value through profit or loss in accordance with IAS 39 â€“ â€œFinancial Instruments: Recognition and Measurementâ€ and are managed and evaluated on a fair value basis in accordance with its investment strategy.

All investments are initially and subsequently measured at fair value through profit or loss. Purchases of investments are recognised on a trade date basis. The sale of investments are recognised at the trade date of the disposal. Proceeds are measured at fair value, which is regarded as the proceeds of sale less any transaction costs.

The fair value of the financial investments is based on their quoted bid price at the financial reporting date, without deduction for the estimated future selling costs. This policy applies to all current and non current asset investments held by the Group.

Changes in the value of investments held at fair value through profit or loss and gains and losses on disposal are recognised in the Consolidated Statement of Comprehensive Income as â€˜Profits or losses on investments held at fair value through profit or lossâ€™. Also included within the heading are transaction costs in relation to the purchase or sale of investments.

For all financial instruments not traded in an active market, the fair value is determined by using various valuation techniques. Valuation techniques include market approach (i.e., using recent armâ€™s length market transactions adjusted as necessary and reference to the current market value of another instrument that is substantially the same) and the income approach (i.e., discounted cash flow analysis and option pricing models making use of available and supportable market data as possible). Where no reliable fair value can be estimated for such instruments, they are carried at cost subject to any provision for impairment.

(i) Options
Options are held at fair value based on the bid/offer prices of the options written to which the Company is exposed. The value of the option is subsequently marked to market to reflect the fair value of the option based on traded prices. Where the premium is taken to revenue, an appropriate amount is shown as capital return such that the total return reflects the overall change in the fair value of the option. When an option is exercised the gain or loss is accounted for as a capital gain or loss. Any cost on closing out an option is transferred to revenue along with any remaining unamortised premium.

(j) Other receivables and other payables
Other receivables and other payables do not carry any interest and are short term in nature and are accordingly stated at their nominal value.

(k) Dividends payable
Under IFRS, final dividends should not be accrued in the financial statements unless they have been approved by shareholders before the financial reporting date. Interim dividends should not be accrued in the financial statements unless they have been paid.

Dividends payable to equity shareholders are recognised in the Statement of Changes in Equity.

(l) Foreign currency translation
Transactions involving foreign currencies are converted at the rate ruling at the date of the transaction. Foreign currency monetary assets and liabilities and non monetary assets held at fair value are translated into sterling at the rate ruling on the financial reporting date. Foreign exchange differences arising on translation are recognised in the Consolidated Statement of Comprehensive Income as a revenue or capital item depending on the income or expense to which they relate. For investment transactions and investments held at the year end, denominated in a foreign currency, the resulting gains or losses are included in the profit/(loss) on investments held at fair value through profit or loss in the Consolidated Statement of Comprehensive Income.

(m) Cash and cash equivalents
Cash comprises cash in hand and on demand deposits. Cash equivalents are short term, highly liquid investments that are readily convertible to known amounts of cash and that are subject to an insignificant risk of changes in value.

(n) Bank borrowings
Bank overdrafts are recorded as the proceeds received. Finance charges are accounted for on an accruals basis in the Consolidated Statement of Comprehensive Income using the effective interest rate method and are added to the carrying amount of the instruments to the extent that they are not settled in the period in which they arise.

3. INCOME

	2017 Â£â€™000	2016 Â£â€™000
Investment Income:
UK listed dividends	1,300	1,028
Overseas listed dividends	1,574	1,222
Fixed interest	582	586
	--------	--------
	3,456	2,836
	--------	--------
Other income:
Deposit interest	23	7
Option premium income	3,641	3,687
	--------	--------
	3,664	3,694
	--------	--------
Total income	7,120	6,530
	========	========

During the year, the Group received option premium income totalling Â£3,334,000 (2016: Â£4,103,000) for writing covered call options for the purposes of revenue generation. Option premiums of Â£3,641,000 (2016: Â£3,687,000) were amortised to income. At 30 November 2017, there were 6 (2016: 16) open positions with an associated liability of Â£98,000 (2016: Â£482,000).

Dividends and Interest received during the year amounted to Â£2,866,000 and Â£491,000 (2016: Â£2,226,000 and Â£525,000).

A special dividend of Â£91,000 has been recognised in capital (2016: nil).

4. INVESTMENT MANAGEMENT FEES

	2017			2016
	Revenue Â£â€™000	Capital Â£â€™000	Total Â£â€™000	Revenue Â£â€™000	Capital Â£â€™000	Total Â£â€™000
Investment management fee	239	717	956	201	602	803
	--------	--------	--------	--------	--------	--------
Total	239	717	956	201	602	803
	=====	=====	=====	=====	=====	=====

The investment management fee is levied at 0.95% of gross assets per annum on the first Â£250 million of the Companyâ€™s gross assets reducing to 0.90% thereafter. The fee is allocated 25% to the revenue column and 75% to the capital column of the Consolidated Statement of Comprehensive Income.

5. OTHER OPERATING EXPENSES

	2017 Â£â€™000	2016 Â£â€™000
Allocated to revenue:
Custody fees	5	3
Auditorsâ€™ remuneration:
â€“ audit services	25	25
Registrarâ€™s fee	23	26
Directorsâ€™ emoluments	107	82
Broker fees	25	40
Depositary fees	11	9
Marketing fees	25	69
Marketing fees prior year adjustment	â€“	(59)
Other administrative costs	115	84
	--------	--------
	336	279
	--------	--------
Allocated to capital:
Custody transaction charges	3	6
	--------	--------
	339	285
	--------	--------
The Companyâ€™s ongoing charges, calculated as a percentage of average net assets and using expenses, excluding any finance costs and taxation, were:	1.36%	1.39%
	=====	=====

For the year ended 30 November 2017, expenses of Â£3,000 (2016: Â£6,000) were charged to the capital column of the Statement of Comprehensive Income. These relate to transaction costs charged by the custodian on sale and purchase trades.

6. FINANCE COSTS

	2017			2016
	Revenue Â£â€™000	Capital Â£â€™000	Total Â£â€™000	Revenue Â£â€™000	Capital Â£â€™000	Total Â£â€™000
Interest on bank overdrafts	69	90	159	64	36	100
	--------	--------	--------	--------	--------	--------
	69	90	159	64	36	100
	=====	====	====	=====	=====	====

Finance costs for the Company are charged 25% to the revenue column and 75% to the capital column of the Consolidated Statement of Comprehensive Income. Subsidiary finance costs are charged 100% to the revenue column of the Consolidated Statement of Comprehensive Income.

7. DIVIDENDS

Dividends paid on equity shares:	Record date	Payment date	2017 Â£â€™000	2016 Â£â€™000
4th interim dividend of 1.00p per share for the year ended 30 November 2016 (2015: 1.50p)	30 December 2016	20 January 2017	1,188	1,734
1st interim dividend of 1.00p per share for the year ended 30 November 2017 (2016: 1.50p)	24 March 2017	21 April 2017	1,187	1,762
2nd interim dividend of 1.00p per share for the year ended 30 November 2017 (2016: 1.50p)	23 June 2017	21 July 2017	1,188	1,769
3rd interim dividend of 1.00p per share for the year ended 30 November 2017 (2016: 1.00p)	22 September 2017	13 October 2017	1,188	1,180
			--------	--------
Accounted for in the financial statements			4,751	6,445
			=====	=====

The total dividends payable in respect of the year ended 30 November 2017 which form the basis of section 1158 of the Corporation Tax Act 2010 and section 833 of the Companies Act 2006, and the amounts proposed, meet the relevant requirements as set out in this legislation.

Dividends paid, proposed or declared on equity shares:	2017 Â£â€™000	2016 Â£â€™000
1st interim dividend of 1.00p per share paid for the year ended 30 November 2017 (2016: 1.50p)	1,187	1,762
2nd interim dividend of 1.00p per share paid for the year ended 30 November 2017 (2016: 1.50p)	1,188	1,769
3rd interim dividend of 1.00p per share paid for the year ended 30 November 2017 (2016: 1.00p)	1,188	1,180
4th interim dividend of 1.00p per share payable on 19 January 2018 for the year ended 30 November 2017* (2016: 1.00p)	1,188	1,188
	--------	--------
	4,751	5,899
	--------	--------

* Based on 118,768,000 ordinary shares in issue on 22 December 2017.

8. CONSOLIDATED EARNINGS AND NET ASSET VALUE PER ORDINARY SHARE

	2017	2016
Net revenue profit attributable to ordinary shareholders (Â£â€™000)	5,753	5,197
Net capital (loss)/profit attributable to ordinary shareholders (Â£â€™000)	(8,915)	29,066
	--------	--------
Total (loss)/profit attributable to ordinary shareholders (Â£â€™000)	(3,162)	34,263
	--------	--------
Equity shareholdersâ€™ funds (Â£'000)	91,357	98,833
	----------------	----------------
The weighted average number of ordinary shares in issue during the year, on which the earnings per ordinary share was calculated, was:	118,751,562	117,437,126
	----------------	-----------------
The actual number of ordinary shares in issue at the year end, on which the net asset value per ordinary share was calculated, was:	118,768,000	118,268,000
	----------------	-----------------
Return per share
Revenue earnings per share â€“ (pence)	4.84	4.43
Capital (loss)/earnings per share â€“ (pence)	(7.50)	24.75
	--------	--------
Total earnings per share â€“ (pence)	(2.66)	29.18
	--------	--------
Net asset value per ordinary share â€“ (pence)	76.92	83.57
Ordinary share price (pence)	75.00	82.75
	=====	=====

There were no dilutive securities at the year end.

9. CALLED UP SHARE CAPITAL

	Ordinary shares number	Total shares number	Nominal value Â£â€™000
Allotted, called up and fully paid share capital comprised:
Ordinary shares of 1 pence each
Shares in issue at 30 November 2016	118,268,000	118,268,000	1,183
Shares issued	500,000	500,000	5
	----------------	----------------	--------
At 30 November 2017	118,768,000	118,768,000	1,188
	==========	==========	=====

During the year 500,000 (2016: 2,700,000) shares were issued for a total consideration of Â£438,000 (2016: Â£1,586,000) before deduction of issue costs. Since 30 November 2017, 52,000 shares have been bought back at an average price of 82.31 pence per share representing total consideration of Â£43,000.

10. RESERVES

Group	Share premium account Â£'000	Special reserve Â£'000	Capital reserve â€“ arising on investments sold Â£â€™000	Capital reserve â€“ arising on revaluation of investments held Â£â€™000	Revenue reserve Â£â€™000
At 1 December 2016	46,395	71,223	(34,627)	12,148	2,511
Movement during the year:
Total comprehensive income:
Net capital loss for the year	â€“	â€“	(365)	(8,550)	â€“
Net revenue profit for the year	â€“	â€“	â€“	â€“	5,753
Transactions with owners recorded directly to equity:
Proceeds from shares issued	433	â€“	â€“	â€“	â€“
Share issue costs	(1)	â€“	â€“	â€“	â€“
Dividends paid	â€“	â€“	â€“	â€“	(4,751)
	--------	--------	--------	--------	--------
At 30 November 2017	46,827	71,223	(34,992)	3,598	3,513
	======	=====	======	====	=====

Company	Share premium account Â£'000	Special reserve Â£â€™000	Capital reserve â€“ arising on investments sold Â£â€™000	Capital reserve â€“ arising on revaluation of investments held Â£â€™000	Revenue reserve Â£â€™000
At 1 December 2016	46,395	71,223	(35,445)	13,470	2,007
Movement during the year:
Total comprehensive income:
Net capital loss for the year	â€“	â€“	(365)	(7,759)	â€“
Net revenue profit for the year	â€“	â€“	â€“	â€“	4,962
Transactions with owners recorded directly to equity:
Proceeds from shares issued	433	â€“	â€“	â€“	â€“
Share issue costs	(1)
Dividends paid	â€“	â€“	â€“	â€“	(4,751)
	--------	--------	--------	--------	--------
At 30 November 2017	46,827	71,223	(35,810)	5,711	2,218
	======	=====	======	====	=====

The share premium account is not a distributable reserve under the Companies Act 2006. The special reserve may be used as distributable profits for all purposes and, in particular, for the repurchase by the Company of its ordinary shares and for payment as dividends. In accordance with the Companyâ€™s articles and its status as an investment company under the provisions of section 1158 of the Corporation Tax Act 2010, net capital returns may be distributed by way of dividend.

11. VALUATION OF FINANCIAL INSTRUMENTS

Financial assets and financial liabilities are either carried in the Statements of Financial Position at their fair value (investment and derivatives) or at an amount which is a reasonable approximation of fair value (due from brokers, dividends and interest receivable, due to brokers, accruals, cash at bank and bank overdrafts). IFRS 13 requires the Group to classify fair value measurements using a fair value hierarchy that reflects the significance of inputs used in making the measurements. The valuation techniques used by the Group are explained in the accounting policies note 2(h) above.

Categorisation within the hierarchy has been determined on the basis of the lowest level input that is significant to the fair value measurement of the relevant asset as follows.

The fair value hierarchy has the following levels:

Level 1 â€“ Quoted market price in an active market for an identical instrument. A financial instrument is regarded as quoted in an active market if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring market transactions on an armâ€™s length basis. The Group does not adjust the quoted price for these instruments.

Level 2 â€“ Valuation techniques used to price securities based on observable inputs. This category includes instruments valued using quoted market prices in active markets for similar instruments; quoted prices for similar instruments in markets that are considered less than active; or other valuation techniques where all significant inputs are directly or indirectly observable from market data. Valuation techniques used for non-standardised financial instruments such as options, currency swaps and other over-the-counter derivatives include the use of comparable recent armâ€™s length transactions, reference to other instruments that are substantially the same, discounted cash flow analysis, option pricing models and other valuation techniques commonly used by market participants making the maximum use of market inputs and relying as little as possible on entity specific inputs.

Level 3 â€“ Valuation techniques using significant unobservable inputs. This category includes all instruments where the valuation technique includes inputs not based on observable data and these inputs could have a significant impact on the instrumentâ€™s valuation. This category includes instruments that are valued based on quoted prices for similar instruments where significant entity determined adjustments or assumptions are required to reflect differences between the instruments and instruments for which there is no active market. The level in the fair value hierarchy within which the fair value measurement is categorised in its entirety is determined on the basis of the lowest level input that is significant to the fair value measurement in its entirety.

For this purpose, the significance of an input is assessed against the fair value measurement in its entirety. If a fair value measurement uses observable inputs that require significant adjustment based on unobservable inputs, that measurement is a Level 3 measurement. Assessing the significance of a particular input to the fair value measurement in its entirety requires judgement, considering factors specific to the asset or liability.

The determination of what constitutes â€œobservableâ€ requires significant judgement by the investment manager. The investment manager considers observable data to be that market data that is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided by independent sources that are actively involved in the relevant market.

Over-the-counter derivative option contracts have been classified as Level 2 investments as their valuation has been based on market observable inputs represented by the underlying quoted securities to which these contracts expose the Group.

The investment in the subsidiary is classified within Level 3 since the subsidiary is not an open ended entity. The fair value of the investment in subsidiary is calculated based on the fair value of the underlying balances within the subsidiary. Therefore, no sensitivity analysis has been presented.

The table below sets out fair value measurements using the IFRS 13 fair value hierarchy.

Financial assets at fair value through profit or loss at 30 November 2017 â€“ Group	Level 1 Â£â€™000	Level 2 Â£â€™000	Level 3 Â£â€™000	Total Â£â€™000
Assets:
Equity and debt investments	94,603	â€“	â€“	94,603
Liabilities:
Derivative financial instruments â€“ written options	â€“	(98)	â€“	(98)
	--------	--------	--------	--------
	94,603	(98)	â€“	94,505
	======	=====	=====	=====

Financial assets at fair value through profit or loss at 30 November 2017 â€“ Company	Level 1 Â£â€™000	Level 2 Â£â€™000	Level 3 Â£â€™000	Total Â£â€™000
Assets:
Equity and debt investments	94,603	â€“	2,115	96,718
Liabilities:
Derivative financial instruments â€“ written options	â€“	(98)	â€“	(98)
	--------	--------	--------	--------
	94,603	(98)	2,115	96,620
	======	=====	=====	=====

Financial assets at fair value through profit or loss at 30 November 2016 â€“ Group	Level 1 Â£â€™000	Level 2 Â£â€™000	Level 3 Â£â€™000	Total Â£â€™000
Assets:
Equity and debt investments	103,127	â€“	â€“	103,127
Liabilities:
Derivative financial instruments â€“ written options	â€“	(482)	â€“	(482)
	--------	--------	--------	--------
	103,127	(482)	â€“	102,645
	======	=====	=====	=====

Financial assets at fair value through profit or loss at 30 November 2016 â€“ Company	Level 1 Â£â€™000	Level 2 Â£â€™000	Level 3 Â£â€™000	Total Â£â€™000
Assets:
Equity and debt investments	103,127	â€“	1,322	104,449
Liabilities:
Derivative financial instruments â€“ written options	â€“	(482)	â€“	(482)
	--------	--------	--------	--------
	103,127	(482)	1,322	103,967
	======	=====	=====	=====

A reconciliation of fair value measurement in Level 3 is set out below.

Level 3 Financial assets at fair value through profit or loss as 30 November â€“ Company	2017 Â£â€™000	2016 Â£â€™000
Opening fair value	1,322	1,544
Total gains or losses included in profit/(loss) on investments in the Consolidated Statement of Comprehensive Income:
â€“ assets held at the end of the year	793	(222)
	--------	--------
Closing balance	2,115	1,322
	=====	=====

12. RELATED PARTY DISCLOSURE: DIRECTORSâ€™ EMOLUMENTS

The Board consists of four non-executive Directors, all of whom, with the exception of Mr Ruck Keene, who was previously (up until April 2017) an employee of the Manager, are considered to be independent of the Manager by the Board. None of the Directors has a service contract with the Company. For the year ended 30 November 2017, the Chairman received an annual fee of Â£36,000, the Chairman of the Audit and Management Engagement Committee received an annual fee of Â£30,000 and the other Directors received an annual fee of Â£25,000. Mr Ruck Keene waived his fee during the period from 1 October 2016 to 7 April 2017 when he retired as an employee of BlackRock. He has been paid as a Director from this date and for the year to 30 November 2017 received a total of Â£16,181, for his services as a Director.

13. CONTINGENT LIABILITIES
There were no contingent liabilities at 30 November 2017 (2016: nil).

14. PUBLICATION OF NON-STATUTORY ACCOUNTS

The financial information contained in this announcement does not constitute statutory accounts as defined in the Companies Act 2006. The 2017 Annual Report and Financial Statements will be filed with the Registrar of Companies shortly.

The report of the auditor for the year ended 30 November 2017 contains no qualification or statement under Section 498(2) or (3) of the Companies Act 2006.

This announcement was approved by the Board of Directors on 29 January 2018.

15. ANNUAL REPORT

Copies of the Annual Report will be sent to members shortly and will be available from the registered office c/o The Company Secretary, BlackRock Commodities Income Investment Trust plc, 12 Throgmorton Avenue, London EC2N 2DL.

16. ANNUAL GENERAL MEETING

The Annual General Meeting of the Company will be held at 12 Throgmorton Avenue, London EC2N 2DL on Tuesday, 13 March 2018 at [10.30 am].

ENDS

For further information, please contact:

Sarah Beynsberger, Director, Investment Companies, BlackRock Investment Management (UK) Limited
Tel: 020 7743 2639

Press enquires:

Lucy Horne, Lansons Communications - 020 7294 3689
E-mail:lucyh@lansons.com

BlackRock Investment Management (UK) Limited
12 Throgmorton Avenue
London
EC2N 2DL

29 January 2018