Final Results

BLACKROCK COMMODITIES INCOME INVESTMENT TRUST plc Annual Report 30 November 2011 Performance Record Financial Highlights As at As at 30 November 30 November Change 2011 2010 % Assets Net assets (£'000) 118,642 125,848 -5.7 Net asset value per ordinary share 131.08p 139.05p -5.7 - with income reinvested - - -2.0 Ordinary share price (mid-market) 127.75p 143.00p -10.7 - with income reinvested - - -7.1 Year ended Year ended 30 November 30 November Change 2011 2010 % Revenue Net revenue after taxation (£'000) 5,321 4,480 18.8 Revenue return per ordinary share 5.88p 5.85p 0.5 ------ ------- ----- Interim dividends 1st interim 1.400p 1.375p 1.8 2nd interim 1.400p 1.375p 1.8 3rd interim 1.400p 1.375p 1.8 4th interim 1.550p 1.475p 5.1 ------ ------ ----- 5.750p 5.600p 2.7 ====== ====== ===== Special dividends 1st special - 1.00p ------ ------ 2nd special - 0.52p ====== ====== Total dividends paid and payable 5.750p 7.12p ====== ====== Chairman's Statement The year under review has been challenging for investment. The Company's net asset value ("NAV") per share returned -2.0% and the share price returned -7.1%. Since the launch of the Company in December 2005 the NAV has returned 73.5% and the share price 65.8% (all percentages calculated in sterling terms with income reinvested). Since the year end, the Company's NAV has increased by a further 2.9% and the share price by 4.2%. Revenue return and dividends The Company's revenue return per share for the year amounted to 5.88 pence (2010: 5.85 pence). As set out in the Company's prospectus dated 22 November 2005, it is the Company's intention to pay four quarterly dividends, details of which are set out in note 8. It was the Company's aim to pay dividends amounting to at least 5.60 pence for the year ended 30 November 2011 and we are pleased to have exceeded this target by paying quarterly dividends amounting to 5.75 pence per share in total in respect of the year (2010: 5.60 pence). It is the Company's aim to pay dividends amounting to at least 5.75 pence per share for the year ending 30 November 2012. This is a target and should not be interpreted as a profit forecast. This represents a yield of 4.5% based on the share price as at the close of business on 30 November 2011. Tender Offer The Directors of the Company have the 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 21 June 2011 that it had decided not to proceed with the tender offer in August 2011. On 6 December 2011 the Board announced that the semi-annual tender offer in February 2012 would not be implemented as its ordinary shares had traded at an average discount to NAV of 0.3% during the six months to 30 November 2011. Given that this is better than a discount of 2% to NAV, the price at which any tender offer would be made, the Board concluded that it would not be in the interests of shareholders to implement the tender offer as at 28 February 2012. A resolution for the renewal of the Company's semi-annual tender authority will be put to shareholders at the forthcoming annual general meeting. Discount and share buy backs The Directors recognise the importance to investors of ensuring that the Company's share price is as close to its underlying NAV as possible. Accordingly, the Directors monitor the share rating closely and will consider share repurchases in the market if the discount to NAV widens significantly. The Directors have the authority from shareholders to buy back up to 14.99% of the Company's issued share capital. This authority, which has not so far been utilised, expires on the conclusion of the 2012 AGM, when a resolution will be put to shareholders to renew it. Gearing The Company operates a flexible gearing policy which depends on prevailing conditions. The maximum gearing used during the year was 3.8% and at 30 November 2011 gearing was 1.8%. Annual General Meeting The Company's Annual General Meeting will be held at 10.30 a.m. on Tuesday 13 March 2012 at the offices of BlackRock at 12 Throgmorton Avenue, London EC2N 2DL. The Investment Manager will make a presentation to shareholders on the Company's progress and the outlook for the year ahead. Outlook Against a backdrop of economic and market uncertainty driven by the Eurozone crisis and weak economic data out of China and the US, commodity equities are currently trading at relatively low valuations. Producers continue to generate strong cash flows and earnings which are reflected in progressive returns from our portfolio. Given its significant share of global consumption, the Chinese economy represents a key factor driving the performance of commodities markets. Barring an economic collapse in China, we remain cautiously optimistic about the long term prospects for commodities markets, although we anticipate a year of continuing high volatility ahead. Alan Hodson Chairman 20 January 2012 Principal risks The key risks faced by the Company are set out below. The Board regularly reviews and agrees policies for managing each risk, as summarised below. - Performance risk - The Board is responsible for deciding the investment strategy to fulfil the Company's objectives and monitoring the performance of the Investment Manager. An inappropriate strategy may lead to poor performance. To manage this risk the Investment Manager provides an explanation of significant stock selection decisions and the rationale for the composition of the investment portfolio. The Board monitors and maintains an adequate spread of investments in order to minimise the risks associated with particular countries (including the risk of government intervention and confiscation of assets) or factors specific to particular sectors, based on the diversification requirements inherent in the Company's investment policy. - Income/dividend risk - The amount of dividends and future dividend growth will depend on the Company's underlying portfolio. Any change in the tax treatment of the 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. - Regulatory risk - The Company operates as an investment trust in accordance with the requirements of 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. The Investment Manager monitors investment movements, the level and type of forecast income and expenditure and the amount of quarterly dividends to ensure that the provisions of Chapter 4 of Part 24 of the Corporation Tax Act 2010 are not breached and the results are reported to the Board at each meeting. The Company must also comply with the provisions of the Companies Act 2006 and, as its shares are admitted to the Official List, the UKLA Listing Rules, the Disclosure and Transparency Rules and the Prospectus Rules. A breach of the Companies Act 2006 could result in the Company and/or the Directors being fined or the subject of criminal proceedings. Breach of the UKLA Listing Rules could result in the Company’s shares being suspended from listing, which in turn would breach the requirements of Chapter 4 of Part 24 of the Corporation Tax Act 2010. The Board relies on the services of its professional advisers and its Company Secretary to ensure compliance with all relevant regulations. The Company Secretary has stringent compliance procedures in place and monitors regulatory developments and changes. - Operational risk - In common with most other investment trust companies, the Company has no employees. The Company therefore relies upon the services provided by third parties and is dependent on the control systems of the Investment Manager and the Company's other service providers. The security, for example, of the Company's assets, dealing procedures, accounting records and maintenance of regulatory and legal requirements, depend on the effective operation of these systems. These are regularly tested and monitored and an internal control report, which includes an assessment of risks together with procedures to mitigate such risks, is prepared by the Investment Manager and reviewed by the Audit and Management Engagement Committee at least twice a year. The custodian, Bank of New York Mellon (International) Limited ("BNYM") and the Investment Manager also produce internal controls reports on a quarterly and annual basis respectively, which are reviewed by their respective auditors and give assurance regarding the effective operation of controls. - Market risk - Market risk arises from volatility in the prices of the Company's investments. It represents the potential loss the Company might suffer through holding investments in the face of negative market movements. The Board considers asset allocation, stock selection, unquoted investments 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. - Liquidity risk - Investments in the Company's portfolio are subject to liquidity risk, particularly from any unquoted investments. The Company may also invest in smaller capitalisation companies or the securities markets of developing countries which are not as large as the more established securities markets and have substantially less trading volume, which may result in a lack of liquidity and higher price volatility. - Financial risk - The Company's investment activities expose it to a variety of financial risks that include market price risk, foreign currency risk and interest rate risk. These factors are taken into consideration by the Directors when determining the valuation of unquoted holdings. Further details are disclosed in note 18 of the annual report, together with a summary of the policies for managing these risks and liquidity and credit risks. Related party transactions The Investment Manager is regarded as a related party and details of the investment management fee payable is set out in note 4. The Board consists of five non-executive Directors, all of whom, with the exception of Mr Ruck Keene who is an employee of the Investment Manager, are considered to be independent by the Board. None of the Directors has a service contract with the Company. For the year ended 30 November 2011, the Chairman received an annual fee of £28,000, the Chairman of the Audit and Management Engagement Committee received an annual fee of £21,000 and each of the other Directors received an annual fee of £18,000. Mr Ruck Keene waived the entitlement to his fees. With effect from 1 December 2011 the annual remuneration of the Chairman was increased to £30,000, the Chairman of the Audit and Management Engagement Committee to £23,000 and the other Directors to £20,000. Four members of the Board hold shares in the Company. Alan Hodson holds 150,000 ordinary shares, David Gibbs holds 22,454 ordinary shares, Humphrey van der Klugt holds 35,000 ordinary shares and Jonathan Ruck Keene holds 14,000 ordinary shares. Michael Merton does not hold any shares in the Company at this time. Statement of Director's Responsibilities In accordance with Disclosure and Transparency Rule 4.1.12, the Directors also confirm to the best of their knowledge and belief that: • the financial statements, 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/(loss) of the Company and the Group; and • this Annual Report includes a fair review of the development and performance of the business and the position of the Company and the Group, together with a description of the principal risks and uncertainties that it faces. For and on behalf of the Board of Directors Alan Hodson Chairman 20 January 2012 Investment Manager's Report The Investment Manager reports that for the year to 30 November 2011, the Company's NAV returned -2.0% and the share price returned -7.1%. Over the same period, the HSBC Global Mining and MSCI World Energy indices returned -12.8% and 10.4% respectively, while the FTSE All Share Index returned 2.6%. (All data are in sterling with income reinvested). Commodity Market Overview Fortunes were mixed in commodity markets during the year under review, as shown in the following table. Base metals were weak, as were those precious metals with significant industrial exposure, gold behaved as expected, making gains in an environment of uncertainty. Coal prices finished the period higher and iron ore prices fell. In the energy sector, oil prices were strong. The year started positively and by the close of the interim period prices were stronger across the board, with the exception of uranium. Generally, demand had been strong not only in emerging economies, but also in the OECD where the recovery in commodity consumption had been better than expected. Meanwhile, supply growth remained constrained and capacity utilisation had been sub-par, by example due to weather related events. However, the market had turned markedly bearish by the second half as investors refocused their attention on the near-term headwinds facing capital markets. The inability of European politicians to solve the debt crisis, together with worsening economic data and the prospect of downgrades to Chinese growth saw several commodities close well below their highs of 2011. 30 November 30 November Commodity 2010 2011 % Change Base Metals (US$/tonne) Aluminium 2,255 2,103 -6.7 Copper 8,418 7,860 -6.6 Lead 2,214 2,091 -5.6 Nickel 22,998 17,492 -23.9 Tin 24,497 20,875 -14.8 Zinc 2,105 2,073 -1.5 Precious Metals (US$/oz) Gold 1,385.2 1,745.9 26.0 Silver (USc/oz) 2,713.0 3,135.0 15.6 Platinum 1,658.0 1,558.0 -6.0 Palladium 697.0 620.0 -11.0 Energy Oil (WTI) (US$/Bbl) 1 84.1 100.4 19.4 Oil (Brent) (US$/Bbl) 2 86.1 111.2 29.2 Natural Gas (US$/MMBTU) 3 4.15 3.54 -14.7 Uranium (US$/lb) 4 59.9 52.3 -12.7 Bulk Commodities (US$/tonne) Iron ore 5 167.8 147.0 -12.4 Coking coal 6 228.0 263.6 15.6 Thermal coal 7 108.5 112.0 3.2 Potash (US$/st) 8 473.0 533.0 12.7 Equity Indices HSBC Global Mining Index (US$) 682.5 590.9 -13.4 HSBC Global Mining Index (£) 438.2 375.7 -14.3 MSCI World Energy Index (US$) 222.6 242.0 8.7 MSCI World Energy Index (£) 142.9 153.9 7.7 1. West Texas Intermediate 2. Brent 3. Henry Hub 4. Nuexco Restricted, U3O8 5. CFR China (Bloomberg) 6. HCC, CFR China (Macquarie) 7. FOB Newcastle (Macquarie) 8. Standard Muriate, Saskatchewan Source: Datastream. Data are on a capital basis only. Base metal prices, having made some good gains early in the year, finished the period down 12.8% (in US Dollar terms, as measured by the MG Base Metal Price Index). The strength we saw had been driven by supply and demand imbalances. Copper demand, for example, expanded by 9% in 2010 to 18.7 million tonnes, a record level. However, as the market focussed on worsening economic data out of several major economies, prices started to drift lower. The market came under severe pressure in the third quarter amidst a broad collapse across many asset classes, including the base metals, which fell 17.8% in September alone. While global demand has disappointed in 2011, so has supply prices for some metals have held up remarkably well amidst the turmoil in financial markets. In the copper market, there has been deterioration in mine supply as the issues of declining, ageing mines become more persistent. Year-on-year, only three of the world's top ten copper mines have registered an increase in production. Nickel prices declined sharply this year due largely to the surge in Chinese Nickel-Pig-Iron production that has stolen market share from refined nickel. In the bulk commodity markets, heavy rains in Queensland resulted in some of the worst flooding for five decades and caused around 40 coal mines to close. As Australia is the world's largest supplier of coking coal prices moved up to US$370/tonne at one point, significantly higher than the end of December 2010 price of US$249/tonne. The iron ore market was well supported by the strength in Chinese demand and a tax imposed on Indian exports and prices held up well in September, when many other commodities slumped. In October, however, iron ore prices, which had traded around US$175/tonne, for much of the year fell back to US$117/tonne in response to production cuts by Chinese steel mills. In November, prices quickly bounced back to US$140/tonne. It would appear that Chinese buyers returned to the market to take advantage of seaborne iron ore prices that were below the costs of domestic iron ore production. The outlook for thermal coal has improved following the Japanese earthquake and tsunami, which saw an increase in thermal coal's share of electricity generating capacity. Meanwhile, China's imports have been strong due to the improvement in the competitive positive of imported coal versus Chinese domestic production. Both China and India are struggling to meet internal demand. Meanwhile, the supply side remains constrained. In the precious metals sector, gold prices made a new all time high of US$1,911 /oz in September. Strong demand for gold continued into the third quarter, as reported by the World Gold Council. The 6% year-on-year increase was predominantly driven by investment demand, with the yellow metal posting the third highest quarter for investment demand on record at 468 tonnes. Robust demand also came from the Official Sector (central banks) at 148 tonnes over the third quarter. For the first eleven months of 2011, demand from the central banks reached 356 tonnes, far exceeding expectations from industry consultants. Most recently Russia added 19.5 tonnes to their gold holdings, with further additions being made by Mexico, Kazakhstan and Columbia. Investment in the silver market saw prices retest the previous peal of US$50/oz set more than 30 years ago when the Hunt Brothers tried to corner the market. The white metal soon retreated from these levels as COMEX raised margin requirements. Elsewhere, platinum and palladium fell 6.0% and 11.0% respectively. The Platinum Group Metals are used mainly in auto catalysts and have fallen in line with declines in the automotive sector. The gold to platinum ratio rose to a new high, surpassing the previous peak reached at the height of the 2008 financial crisis. Oil prices rose back above the US$100/Bbl level during the period. Political issues in the MENA region had a significant impact on prices with the Libyan rebel uprising against Colonel Gaddafi at its epicentre. Prior to the conflict, Libya produced 1.6mb/d; at its trough production had fallen to 100kb/d. A portion of capacity could be delivered to the market comparatively quickly, but it is our view that it may take up to three years for production to return to pre-conflict levels. In response to the outage of Libyan supply and sustained high oil prices, the International Energy Agency ("IEA"), for only the third time in history, facilitated a release of 60 million barrels from the strategic petroleum reserves. Towards the end of the period oil production from Syria, Nigeria and the Yemen declined adding pressure to an already supply constrained market. Amidst the deteriorating economic environment, demand data points for oil have disappointed and downside risks have increased. The IEA moderated its oil demand forecasts by 200kb/d for 2011 and 400kb/d for 2012. It is also important to highlight a constructive demand side trend: Japan, post the Fukushima incident, only has 10 of 54 nuclear power stations in operation and is consuming an additional 230kb/d as their oil fired power stations increase fuel consumption in an attempt to fill the nuclear shortfall. In the third quarter, OECD inventories underwent a counter seasonal drawdown declining to below the 5-year average. It is important to pay due attention to both sides of the fundamental equation; supply as well as demand. The outlook for oil supply growth from non-OPEC remains muted as new sources struggle to offset declines from existing production and OPEC, the oil cartel that controls 43% of the world's production, has vested interests in keeping oil prices supported. The cartel has shown itself able and willing in the past to curb production should crude prices drop to levels which may jeopardise their own national fiscal budgets. Interestingly, the spread between Brent and West Texas Intermediate ("WTI") widened considerably during the period. Elevated stock levels and weak demand at Cushing, Oklahoma, the point of delivery for the WTI NYMEX crude oil contract, pushed the price lower. At its peak, the spread was US$27/Bbl in Brent's favour and by the end of the period it had closed to US$11/Bbl. The spread emerged due to landlocked excess inventories at the WTI delivery point in Cushing, Oklahoma. However, a series of projects have been undertaken to distribute oil from the landlocked delivery point, the most significant of which has been Enbridge's proposal, announced in November, to establish a reverse flow capability in the Seaway pipeline which would take crude from Cushing to refiners on the Gulf Coast. On 11 March 2011, the earthquake and tsunami that devastated the east coast of Japan caused significant damage to the Fukishima nuclear plant, one of the world's largest. This raised concerns about the long term build out of nuclear reactors globally and, by implication, the uranium industry. The price of uranium fell 22% on news that the reactor had been affected, while uranium equity valuations were slashed. Uranium prices recovered some of these losses, to close the period down 12.8%. The Company had no exposure to uranium equities during the period under review. A reduced build out should be positive for other forms of power generation including coal and oil. In commodity equity markets, one of the features of the period under review has been the dislocation between equity valuations and commodity prices. The situation has arisen, in our view, as a consequence of the heightened equity market volatility that has been so prevalent this year. This in turn has been caused by the ongoing Eurozone debt crisis as well as concerns about the global economic outlook. The so called "risk-on, risk-off" trading patterns have impacted all commodity equities, although it has been more pronounced in mining stocks. Mining equities have also underperformed the broader equity indices for only the third time in the past eleven years. Within the mining sector, gold stocks, as measured by the FTSE Gold Mines Index, have gained 2.9% this year, while gold prices have risen 26.0%. We believe this presents investment opportunities for the Company. BHP Billiton made a move into the North American shale gas industry with the purchase of Chesapeake Energy's Fayetteville assets in Arkansas. This US$4.75 billion acquisition was followed by the US$15 billion purchase of Petrohawk Energy. The company owns assets in three world class shale gas plays including the Eagle Ford and Haynesville shales and the Permian Basin, which cover around 1 million acres in Texas and Louisiana. In other equity news, the much anticipated London IPO of Glencore, the Swiss based commodities trader, received a lukewarm reception by investors. In the energy sector, renewed deep water drilling activity in the Gulf of Mexico was highlighted by Exxon announcing two large oil discoveries and a gas discovery in the region. The implications of and settlement of claims for the Macondo disaster are still yet to be fully resolved. During the period, Mitsui, Anadarko, Cameron International and Weatherford settled claims with BP. BP also reinstated its dividend payment during 2011. Another feature of energy companies this year has been the demerging of upstream and downstream businesses. Marathon Oil spun off its downstream unit, which is now known as Marathon Petroleum Company ("MPC"). We retained the Company's position in Marathon Oil and sold out of the position in MPC. Encouraged by the strong performance in Marathon's share price, ConocoPhillips announced details of a similar demerger that is expected to be completed in the first half of 2012. Portfolio review At 30 November 2011, the Company held 57 investments within the energy and mining sectors. The Company's exposure to energy increased over the period, driven partly by the outperformance relative to mining shares. The weighting also reflects the Investment Manager's view that energy shares are (marginally) better value and higher yielding than mining equities. A full breakdown of the Company's geographic and commodity allocation can be seen in the following tables. Asset Allocation - Geography Global 23.6% Canada 22.3% USA 20.8% Europe 8.7% Latin America 6.9% Australia 5.5% Asia 4.7% South Africa 4.1% Africa 1.8% China 1.6% Source: BlackRock. Asset Allocation - Commodity Energy 59.1% Mining 40.9% Mining Diversified 41.8% Gold 13.0% Copper 12.7% Iron ore 9.3% Aluminium 6.4% Fertilizers 5.1% Nickel 4.2% Tin 3.1% Zinc 2.2% Platinum 2.2% Energy Integrated oil 49.4% Exploration & production 21.3% Coal 11.4% Oil services 8.3% Oil sands 6.6% Distribution 3.0% Source: BlackRock. The Company generated £5.3 million of income during the year. Dividend and coupon payments from investee companies amounted to £4.6 million, or 72% of total income. It is worth noting the option premium income as a percentage of total income has fallen for the second consecutive year. The Investment Manager is pleased to report that the Group's net income for the year exceeded the Company's dividend target of 5.60 pence per share. Consequently, the fourth quarter dividend was raised bringing the total dividend for 2011 to 5.75 pence per share. Group revenue reserves increased to £3.1 million. A full analysis of income and expenses is contained in the notes to the financial statements on pages 36 to 53 of the annual report. Outlook We remain optimistic about the long term prospects for commodity markets, which should be driven by demand growth and weak supply growth. In this regard, China remains the single most important factor in commodity markets, given its dominant share of global consumption. Therefore, one of the key risks to the commodities sector would be a "hard landing" of China's economy, although we believe this is unlikely. With inflation now off its highs, it is important to note that the authorities have at their disposal a range of tools that can be used to support economic growth, including the ability to lower interest rates. Commodity equities are trading at attractive valuations, both in absolute terms and relative to their long term averages. Arguably, the market is therefore already discounting the prospect of slower global economic growth in 2012. Despite the recent pullback we have seen in commodity markets, prices remain at attractive levels for producers and they continue to generate strong cash flows and earnings, more of which is being returned to shareholders. Meanwhile, their balance sheets are stronger than they have been for many years, and we expect to see dividend increases in the portfolio in 2012. For as long as the Eurozone debt crisis remains unresolved, we would expect to see heightened volatility in the market as investor sentiment fluctuates between risk-on and risk-off trading. Richard Davis 20 January 2012 Ten Largest Investments 30 November 2011 ExxonMobil - 5.0% (2010: 3.9%, www.exxonmobil.com) is the world's largest publicly traded international oil and gas company and the largest refiner and marketer of petroleum products. Teck Resources - 4.2% (2010: 2.9%, www.teck.com) is Canada's largest diversified mining company focused on copper, metallurgical coal, zinc and energy. With assets in Canada, USA, Peru and Chile, Teck is the world's second largest exporter of seaborne coking coal in the world and the third largest zinc producer. In energy, Teck is also developing oil sands projects in Alberta's Athabasca oil sands region. RioTinto - 4.1% (2010: 3.4%, www.riotinto.com) is one of the world's leading mining companies. The company produces aluminium, copper, diamonds, gold, industrial minerals, iron ore and energy products. BHP Billiton - 4.0% (2010: 4.5%, www.bhpbilliton.com) is the world'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 and titanium minerals. The company also has significant interests in oil, gas, liquefied natural gas and diamonds. Coal & Allied - 3.8% (2010: 1.9%, www.coalandallied.com.au) based in the Hunter Valley, New South Wales, the company is one of Australia's major coal producers. In December 2011, Rio Tinto and Mitsubishi bought out the company's minority shareholders. Total - 3.8% (2010: 4.1%, www.total.com) based in France, Total is one of the world's largest international oil and gas companies with operations covering the entire energy chain, from oil exploration and production to trading, shipping and refining and marketing of petroleum products. Peyto Exploration & Development - 3.8% (2010: 2.5%, www.peyto.com) is an explorer and producer of unconventional natural gas. The company's wells, gas plants and pipelines are situated in the foothills of the Rockies in Alberta. Kinross - 3.3% (2010: 0.5%, www.kinross.com) based in Canada, Kinross is a gold mining company with assets in Canada, USA, Brazil, Chile, Ecuador, Russia, Ghana and Mauritania. In late 2010, the company bought Red Back Mining, owner of the world class Tasiast development project in Mauritania, an acquisition that has transformed Kinross into a high growth senior gold company. Chevron - 3.2% (2010: 2.3%, www.chevron.com) is one of the world's leading integrated energy companies engaged in every aspect of the oil, gas and power generation industries. Chevron is one of the world's "supermajor" oil companies, along with BP, Exxon, Shell and Total. KumbaIron Ore - 3.2% (2010: 3.8%, www.kumba.co.za) is the world's fourth largest supplier of seaborne iron ore. Based in South Africa, the company accounts for over 80% of the country's iron ore production, most of which is exported to Europe and Asia. Anglo American plc owns 65% of the outstanding shares in Kumba. 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. Investments as at 30 November 2011 Market Main geographic value % of exposure £'000 investments Integrated Oil ExxonMobil Global 6,072 5.0 Total Global 4,594 3.8 Chevron Global 3,914 3.2 Occidental Petroleum USA 3,770 3.1 Repsol Europe 3,161 2.6 ConocoPhillips USA 3,124 2.6 Statoil Europe 2,874 2.4 BP Global 2,635 2.2 Eni Europe 2,521 2.1 Hess USA 1,417 1.2 Marathon Oil USA 1,226 1.0 35,308 29.2 Diversified BHP Billiton Global 4,853 4.0 Rio Tinto Global 4,204 3.5 Vale Latin America 3,686 3.1 Teck Resources Canada 3,481 2.9 Teck Resources 10.75% 15/05/19 Canada 1,564 1.3 Xstrata Global 1,373 1.1 Rio Tinto Finance 8.95% 01/05/14 Global 744 0.6 Vedanta Resources Asia 489 0.4 Glencore Global 259 0.2 20,653 17.1 Exploration & Production Peyto Exploration & Development Canada 4,589 3.8 Anadarko Petroleum USA 3,615 3.0 Crescent Point Energy Trust Units Canada 2,498 2.1 Vermillion Energy Canada 2,057 1.7 Noble Energy USA 1,314 1.1 Ultra Petroleum USA 1,119 0.9 15,192 12.6 Coal Coal & Allied Australia 4,636 3.8 China Shenhua Energy China 1,909 1.6 Sakari Resources Asia 1,655 1.4 8,200 6.8 Gold Kinross Canada 3,956 3.3 Barrick Gold Canada 1,180 1.0 IAMGOLD Africa 898 0.7 High River Gold 8% Convertible Bonds 31/12/11* Africa 413 0.3 6,447 5.3 Copper Freeport McMoRan Copper & Gold Asia 2,265 1.9 Antofagasta Latin America 1,729 1.4 Southern Copper Latin America 1,289 1.1 Katanga Mining 14% S/Nts 30/11/13 Africa 679 0.5 Anvil Mining Africa 362 0.3 6,324 5.2 Oil Services Schlumberger USA 2,992 2.5 Baker Hughes USA 1,561 1.3 Transocean USA 1,362 1.1 Transocean call option 17/12/11 USA (4) 0.0 National Oilwell Varco put option 21/01/12 USA (31) 0.0 5,880 4.9 Oil Sands Suncor Energy Canada 2,291 1.9 Canadian Oil Sands Canada 1,201 1.0 Cenovus Energy Canada 1,190 1.0 4,682 3.9 Iron Ore Kumba Iron Ore Africa 3,814 3.2 Fortescue Metals Australia 784 0.6 4,598 3.8 Aluminium Alcoa USA 1,836 1.5 Alumina Australia 1,272 1.1 3,108 2.6 Fertilizers Agrium USA 1,869 1.5 Potash Corporation of Saskatchewan Canada 455 0.4 Mosaic USA 268 0.2 2,592 2.1 Distribution Enbridge Income Fund Trust Canada 2,196 1.8 2,196 1.8 Nickel International Nickel Indonesia Asia 1,267 1.0 Eramet Europe 782 0.7 2,049 1.7 Tin Minsur Latin America 1,626 1.3 1,626 1.3 Zinc Nyrstar Europe 1,140 0.9 1,140 0.9 Platinum Impala Platinum Africa 1,075 0.9 1,075 0.9 Uranium Cameco put option 17/03/12 Canada (109) (0.1) (109) (0.1) Total Investments 120,961 100.0 * Unquoted investment at Directors' valuation All investments are in equity shares unless otherwise stated. The total number of holdings as at 30 November 2011 was 57 (2010: 55) The total number of open options as at 30 November 2011 was 3 (2010: 9) The negative valuations of £144,000 in respect of options held represent the notional cost of repurchasing the contracts at market prices as at 30 November 2011. Consolidated Statement of Comprehensive Income for the year ended 30 November 2011 Revenue Revenue Capital Capital Total Total 2011 2010 2011 2010 2011 2010 Notes £'000 £'000 £'000 £'000 £'000 £'000 Income from investments held at fair value through profit or loss 3 4,625 3,610 - - 4,625 3,610 Other income 3 1,822 2,200 - - 1,822 2,200 ----- ----- ----- ----- ----- ----- Total revenue 6,447 5,810 - - 6,447 5,810 ----- ----- ----- ----- ----- ----- (Losses)/ gains on investments held at fair value through profit or loss - - (6,401) 16,773 (6,401) 16,773 ----- ----- ----- ------ ----- ------ 6,447 5,810 (6,401) 16,773 46 22,583 ----- ----- ----- ------ ----- ------ Expenses Investment management fee 4 (363) (282) (1,090) (848) (1,453) (1,130) Other expenses 5 (268) (260) - - (268) (260) ----- ----- ----- ------ ----- ------ Total operating expenses (631) (542) (1,090) (848) (1,721) (1,390) ----- ----- ----- ------ ----- ------ Profit/ (loss) before finance costs and taxation 5,816 5,268 (7,491) 15,925 (1,675) 21,193 ----- ----- ----- ------ ----- ------ Finance costs 6 (20) (9) (55) (27) (75) (36) ----- ----- ----- ------ ----- ------ Profit/ (loss) before taxation 5,796 5,259 (7,546) 15,898 (1,750) 21,157 ----- ----- ----- ------ ----- ------ Taxation 7 (475) (779) 125 (120) (350) (899) ----- ----- ----- ------ ----- ------ Net profit/ (loss) for the year after taxation 5,321 4,480 (7,421) 15,778 (2,100) 20,258 ----- ----- ----- ------ ----- ------ Earnings/ (loss) per ordinary share 9 5.88p 5.85p (8.20p) 20.61p (2.32p) 26.46p ===== ===== ===== ====== ===== ====== The total column of this statement represents the Group's Consolidated 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 BlackRock Commodities Income Investment Trust plc. There were no minority interests. The total net loss of the Company for the year was £2,100,000 (2010: profit of £20,258,000). The Group does not have any other recognised gains or losses. The net profit disclosed above represents the Group's total comprehensive income. Statements of Changes in Equity for the year ended 30 November 2011 Ordinary Share share premium Special Capital Revenue capital account reserve reserves reserve Total Group Notes £'000 £'000 £'000 £'000 £'000 £'000 For the year ended 30 November 2011 At 30 November 2010 905 20,748 71,223 30,059 2,913 125,848 Total comprehensive income: Net (loss)/ profit for the year - - - (7,421) 5,321 (2,100) Transactions with owners, recorded directly to equity: Write back of issue costs - 30 - - - 30 Dividends paid 8 - - - - (5,136) (5,136) --- ------ ------ ------ ----- ------- At 30 November 2011 905 20,778 71,223 22,638 3,098 118,642 === ====== ====== ====== ===== ======= For the year ended 30 November 2010 At 30 November 2009 756 1,223 70,219 14,281 3,781 90,260 Total comprehensive income: Net profit for the year - - - 15,778 4,480 20,258 Transactions with owners, recorded directly to equity: Issue and conversion of C shares into ordinary shares 149 19,501 - - - 19,650 Proceeds of sale of shares from treasury - 24 1,004 - - 1,028 Dividends paid 8 - - - - (5,348) (5,348) --- ------ ------ ------ ----- ------- At 30 November 2010 905 20,748 71,223 30,059 2,913 125,848 === ====== ====== ====== ===== ======= Ordinary Share share premium Special Capital Revenue capital account reserve reserves reserve Total Company Notes £'000 £'000 £'000 £'000 £'000 £'000 For the year ended 30 November 2011 At 30 November 2010 905 20,748 71,223 31,444 1,528 125,848 Total comprehensive income: Net (loss)/ profit for the year - - - (7,248) 5,148 (2,100) Transactions with owners, recorded directly to equity: Write back of issue costs - 30 - - - 30 Dividends paid 8 - - - - (5,136) (5,136) --- ------ ------ ------ ----- ------- At 30 November 2011 905 20,778 71,223 24,196 1,540 118,642 === ====== ====== ====== ===== ======= For the year ended 30 November 2010 At 30 November 2009 756 1,223 70,219 16,616 1,446 90,260 Total comprehensive income: Net profit for the year - - - 14,828 5,430 20,258 Transactions with owners, recorded directly to equity: Issue and conversion of C shares into ordinary shares 149 19,501 - - - 19,650 Proceeds of sale of shares from treasury - 24 1,004 - - 1,028 Dividends paid 8 - - - - (5,348) (5,348) --- ------ ------ ------ ----- ------- At 30 November 2010 905 20,748 71,223 31,444 1,528 125,848 === ====== ====== ====== ===== ======= Statements of Financial Position as at 30 November 2011 2011 2011 2010 2010 Group Company Group Company Notes £'000 £'000 £'000 £'000 Non current assets Investments held at fair value through profit or loss 120,961 122,519 126,285 127,670 ------- ------- ------- ------- Current assets Other receivables 354 1,577 1,619 1,619 Cash and cash equivalents - 46 374 60 ------- ------- ------- ------- 354 1,623 1,993 1,679 ------- ------- ------- ------- Total assets 121,315 124,142 128,278 129,349 ------- ------- ------- ------- Current liabilities Other payables (557) (431) (2,430) (1,964) Bank overdraft (2,116) (5,069) - (1,537) ------- ------- ------- ------- (2,673) (5,500) (2,430) (3,501) ------- ------- ------- ------- Net assets 118,642 118,642 125,848 125,848 ======= ======= ======= ======= Equity attributable to equity holders Ordinary share capital 10 905 905 905 905 Share premium account 20,778 20,778 20,748 20,748 Special reserve 71,223 71,223 71,223 71,223 Capital reserves 22,638 24,196 30,059 31,444 Revenue reserve 3,098 1,540 2,913 1,528 ------- ------- ------- ------- Total equity 118,642 118,642 125,848 125,848 ======= ======= ======= ======= Net asset value per ordinary share 9 131.08p 131.08p 139.05p 139.05p ======= ======= ======= ======= The financial statements were approved and authorised for issue by the Board of Directors on 20 January 2012 and signed on its behalf by Alan Hodson, Chairman. Cash Flow Statements for the year ended 30 November 2011 2011 2011 2010 2010 Group Company Group Company Note £'000 £'000 £'000 £'000 Operating activities (Loss)/profit before taxation (1,750) (1,848) 21,157 20,724 Add back interest paid 68 67 36 36 Losses/(gains) on investments held at fair value through profit or loss including transaction costs 6,401 6,228 (16,773) (15,823) Increase in other receivables 30 (1,193) (51) (51) (Decrease)/increase in other payables (520) (520) 959 959 Decrease/(increase) in amounts due from brokers 1,128 1,128 (684) (684) (Decrease)/increase in amounts due to brokers (533) (533) 533 533 Movements in investments held at fair value through profit or loss (1,102) (1,102) (23,647) (23,647) Movements in cash fund held at fair value through profit or loss - - 1,422 1,422 ------- ------- ------- ------- Net cash inflow/ (outflow) from operating activities before interest and taxation 3,722 2,227 (17,048) (16,531) ------- ------- ------- ------- Interest paid (68) (67) (36) (36) Taxation (paid)/ recovered (319) 119 (397) (72) Taxation on investment income included within gross income (394) (394) (324) (324) ------- ------- ------- ------- Net cash inflow/ (outflow) from operating activities 2,941 1,885 (17,805) (16,963) ------- ------- ------- ------- Financing activities Share issue costs paid (320) (320) - - Shares issued - - 20,678 20,678 Equity dividends paid 8 (5,136) (5,136) (5,348) (5,348) ------- ------- ------- ------- Net cash (outflow)/ inflow from financing activities (5,456) (5,456) 15,330 15,330 ------- ------- ------- ------- Decrease in cash and cash equivalents (2,515) (3,571) (2,475) (1,633) ------- ------- ------- ------- Cash and cash equivalents at start of the year 374 (1,477) 2,920 227 Effect of foreign exchange rate changes 25 25 (71) (71) ------- ------- ------- ------- Cash and cash equivalents at end of the year (2,116) (5,023) 374 (1,477) ------- ------- ------- ------- Comprised of: Cash and cash equivalents - 46 374 60 Bank overdraft (2,116) (5,069) - (1,537) ------- ------- ------- ------- (2,116) (5,023) 374 (1,477) ======= ======= ======= ======= Notes to the Financial Statements 1. Principal activities 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 principal activity of the subsidiary, BlackRock Commodities Securities Income Company Limited, is investment dealing and options writing. 2. Accounting policies The principal accounting policies adopted by the Group and the Company are set out below. (a) Basis of preparation The Group and Parent Company financial statements have been prepared in accordance with 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 Group's operations are of a continuing nature. The Group's financial statements are presented in Sterling, which is the currency of the primary economic environment in which the Group operates. All values are rounded to the nearest thousand pounds (£'000) except when otherwise stated. Insofar as the Statement of Recommended Practice ("SORP") for investment trust companies and venture capital trusts issued by the AIC, revised in January 2009 is compatible with IFRS, the financial statements have been prepared in accordance with guidance set out in the SORP. A number of new standards, amendments to standards and interpretations are effective for annual periods beginning after 1 January 2013, and have not been applied in preparing these financial statements. None of these are expected to have a significant effect on the measurement of the amounts recognised in the financial statements of the Company. However, IFRS 9 "Financial Instruments" issued in November 2009 will change the classification of financial assets, but is not expected to have an impact on the measurement basis of the financial assets since the majority of the Company's financial assets are measured at fair value through profit or loss. IFRS 9 (2009) deals with classification and measurement of financial assets and its requirements represent a significant change from the existing requirements in IAS 39 in respect of financial assets. The standard contains two primary measurement categories for financial assets: at amortised cost and fair value. A financial asset would be measured at amortised cost if it is held within a business model whose objective is to hold assets in order to collect contractual cash flows, and the asset's contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal outstanding. All other financial assets would be measured at fair value. The standard eliminates the existing IAS 39 categories of "held to maturity", "available for sale" and "loans" and "receivables". The standard is effective for annual periods beginning on or after 1 January 2013 but is not yet approved by the EU. Earlier application is permitted. The Company does not plan to adopt this standard early. (b) Basis of consolidation The Group's financial statements 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. (c) Presentation of the Consolidated 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. In accordance with the Company's status as a UK investment company under section 833 of the Companies Act 2006 and section 1158 of the Corporation Tax Act 2010, net capital returns may not be distributed by way of dividend. (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 treated 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 is accounted for on an accruals basis. Premia on written options are recognised as income. (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 of an investment are included within the cost of the investment. Details of transaction costs on the purchases and sales of investments are disclosed in note 10 in the annual report; - 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 Board's expectations of the long term split of return, in the form of capital gains and income respectively, from the investment portfolio. (g) Taxation 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 taxation in the future or right to pay less taxation 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 Company's investments are classified as held at fair value through profit or loss in accordance with IAS 39 "Financial Instruments: Recognition and Measurement" and are managed and evaluated on a fair value basis in accordance with its investment strategy. All investments are initially recognised as held at fair value through profit and loss. Purchases of investments are recognised on a trade date basis. The sales 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 financial instruments is based on their quoted bid price at the financial reporting date, without deduction for any estimated future selling costs. Unquoted investments are valued by the Directors at fair value using International Private Equity and Venture Capital Association Guidelines. 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 "Gains or losses on investments held at fair value through profit or loss". Also included within this heading are transaction costs in relation to the purchase or sale of investments. Under IFRS, the investment in the trading subsidiary is carried at fair value which is deemed to be the total equity of the subsidiary. (i) 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. (j) Dividends payable Under IFRS interim dividends are recognised when paid to shareholders. Final dividends, if any, are only recognised after they have been approved by shareholders. (k) 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 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. (l) 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. (m) 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 2011 2010 £'000 £'000 Investment Income: Overseas listed dividends 3,962 3,037 Fixed interest 321 307 UK listed dividends 342 266 ----- ----- 4,625 3,610 ----- ----- Other operating income: Deposit interest - 17 Option premium income 1,822 2,183 ----- ----- 1,822 2,200 ----- ----- Total 6,447 5,810 ===== ===== Option premium income is stated after deducting transaction costs incurred on the purchases and sales of investments. 4. Investment management fee 2011 2010 Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 Investment management fee 363 1,090 1,453 282 848 1,130 === ===== ===== === === ===== Details of the investment management contract are disclosed in the Directors' Report on page 17 of the annual report. The investment management fee is levied at a rate of 1.1% of gross assets per annum based on the gross assets on the last day of each quarter and is allocated 25% to the revenue column and 75% to the capital column of the Consolidated Statement of Comprehensive Income. The investment management fee is levied quarterly, based on the gross assets on the last day of each quarter, and is charged 25% to the revenue column and 75% to the capital column of the Consolidated Statement of Comprehensive Income. 5. Other expenses 2011 2010 £'000 £'000 Custody fee 24 24 Auditor's remuneration: - audit services 24 22 - other services 5 5 Directors' emoluments 85 69 Registrar's fee 33 25 Other administrative costs 97 115 --- --- 268 260 === === The Company's total expense ratio, calculated as a percentage of average net assets and using expenses, excluding any interest costs and excluding taxation, was: 1.3% 1.4% The Company's total expense ratio, calculated as a percentage of average net assets and using expenses, excluding any interest costs and including taxation, was: 1.7% 2.2% ==== ==== Fees paid to the Auditor for other services comprise £5,500 (2010: £5,000) relating to the review of the half yearly financial statements. 6. Finance costs 2011 2010 Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 Interest on bank overdrafts 20 55 75 9 27 36 == == == == == == Finance costs are charged 25% to the revenue column and 75% to the capital column of the Consolidated Statement of Comprehensive Income. 7. Taxation a) Analysis of charge in the year 2011 2010 Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 Current taxation: Corporation taxation 126 - 126 523 (8) 515 Double taxation relief - - - (82) - (82) --- --- --- --- --- --- 126 - 126 441 (8) 433 --- --- --- --- --- --- Overseas taxation 383 - 383 312 - 312 Prior year adjustment (29) - (29) 21 - 21 --- --- --- --- --- --- Total current taxation 480 - 480 774 (8) 766 === === === === === === Deferred taxation (5) (125) (130) 5 128 133 --- --- --- --- --- --- Total taxation (note 7b) 475 (125) 350 779 120 899 === === === === === === b) Factors affecting current taxation charge for the year The taxation assessed for the year is lower than the standard rate of corporation taxation in the UK for a large company of 26.66% (2010: 28.00%). The differences are explained below: 2011 2011 2011 Revenue Capital Total £'000 £'000 £'000 Total profit/(loss) on ordinary activities before taxation 5,796 (7,546) (1,750) ----- ----- ----- Profit/(loss) on ordinary activities multiplied by standard rate of corporation taxation 26.66% 1,545 (2,012) (467) Effects of: Non taxable capital gains - 1,707 1,707 Taxation effect of allowable expenses in capital (305) 305 - Prior year adjustment (29) - (29) UK dividends (91) - (91) Non taxable overseas dividends (1,021) - (1,021) Effect of income taxable in different periods 3 - 3 Expense relief for overseas taxation (6) - (6) Marginal relief (4) - (4) Provision for Peruvian capital gains taxation - 3 3 Reversal of deferred taxation provision - (128) (128) Overseas taxation charge 383 - 383 ----- ----- ----- (1,070) 1,887 817 ----- ----- ----- Total corporation taxation charge for the year (note 7a) 475 (125) 350 ==== ===== ===== 2010 2010 2010 Revenue Capital Total £'000 £'000 £'000 Total return on ordinary activities before taxation 5,259 15,898 21,157 ----- ----- ----- Return on ordinary activities multiplied by standard rate of corporation taxation 28% 1,473 4,451 5,924 Effects of: Non taxable capital gains - (4,696) (4,696) Taxation effect of allowable expenses in capital (178) 237 59 Prior year adjustment 25 - 25 UK dividends (75) - (75) Non taxable overseas dividends (695) - (695) Rate differential impact in deferred taxation - (3) (3) Unrealised offshore income gain - 131 131 Double taxation relief (82) - (82) Movement in double taxation relief in deferred taxation (1) - (1) Overseas taxation charge 312 - 312 ----- ----- ----- (694) (4,331) (5,025) ----- ----- ----- Total corporation taxation charge for the year (note 7a) 779 120 899 ===== ===== ===== Investment trusts are exempt from corporation taxation on capital gains provided the Company obtains agreement from HM Revenue & Customs that the tests outlined in Chapter 4 of Part 24 of the Corporation Tax Act 2010 have been met. Due to the Company's intention to meet the conditional requirement to obtain approval under section 1158 of the Corporation Tax Act 2010 it has not provided for taxation on any capital gains. 8. Dividends Under IFRS final dividends, if any, are not recognised until approved by shareholders, and special and interim dividends are not recognised until they are paid. They are also debited directly to reserves. The dividends disclosed in the table below have been considered in view of the requirements of section 1158 of the Corporation Tax Act 2010 and section 833 of the Companies Act 2006, and the amounts declared meet the relevant requirements. Amounts recognised as distributions to ordinary shareholders during the year to 30 November 2011 were as follows: 2011 2010 £'000 £'000 Fourth interim dividend for the year ended 30 November 2010 - 1.475p (2009: 1.45p) 1,335 1,085 First interim dividend for the year ended 30 November 2011 - 1.40p (2010: 1.375p) 1,267 1,036 Second interim dividend for the year ended 30 November 2011 - 1.40p (2010: 1.375p) 1,267 1,039 Third interim dividend for the year ended 30 November 2011 - 1.40p (2010: 1.375p) 1,267 1,039 First special dividend for the year ended 30 November 2011 - 0.00p (2010: 1.00p) - 756 Second special dividend for the year ended 30 November 2011 - 0.00p (2010: 0.52p) - 393 ----- ----- 5,136 5,348 ===== ===== For the year ended 30 November 2011, a fourth interim dividend of 1.55p (2010: 1.475p) per ordinary share has been declared and will be paid on 20 January 2012, to shareholders on the Company's register on 23 December 2011. The total dividends payable in respect of the year which form the basis of section 1158 of the Corporation Tax Act 2010 are set out below: 2011 2010 £'000 £'000 First interim dividend paid on 21 April 2011 of 1.40p (2010: 1.375p) 1,267 1,036 Second interim dividend paid on 22 July 2011 of 1.40p (2010: 1.375p) 1,267 1,039 Third interim dividend paid on 21 October 2011 of 1.40p (2010: 1.375p) 1,267 1,039 First special dividend paid on 21 October 2011 of 0.00p (2010: 1.00p) - 756 Second special dividend paid on 29 November 2011 of 0.00p (2010: 0.52p) - 393 Fourth interim dividend payable on 20 January 2012 of 1.55p (2011: 1.475p) 1,403 1,335 ----- ----- 5,204 5,598 ===== ===== 9. Consolidated earnings and net asset value per ordinary share Revenue and capital earnings per share are shown below and have been calculated using the following: 2011 2010 Net revenue profit attributable to ordinary shareholders (£'000) 5,321 4,480 Net capital (loss)/profit attributable to ordinary shareholders (£'000) (7,421) 15,778 ----- ------ Total (loss)/profit attributable to ordinary shareholders (£'000) (2,100) 20,258 ======= ======= Equity shareholders' funds (£'000) 118,642 125,848 ======= ======= The weighted average number of ordinary shares in issue during each period, on which the return per ordinary share was calculated was: 90,508,000 76,543,554 The actual number of ordinary shares in issue at the year end, on which the net asset value was calculated was: 90,508,000 90,508,000 The number of ordinary shares in issue including treasury shares at the year end was: 90,508,000 90,508,000 ---------- ---------- Revenue earnings per share 5.88p 5.85p Capital earnings per share (8.20p) 20.61p ---------- ---------- Total earnings per share (2.32p) 26.46p ---------- ---------- Net asset value per share 131.08p 139.05p Share price (mid-market) 127.75p 143.00p ========== ========= 10. Share capital Ordinary Treasury Total Nominal shares shares shares value number number number £'000 Allotted, called up and fully paid share capital comprised: Ordinary shares of 1p each Shares in issue at 30 November 2010 90,508,000 - 90,508,000 905 ---------- ------- ---------- ------- At 30 November 2011 90,508,000 - 90,508,000 905 ========== ======= ========== ======= The number of ordinary shares in issue at the year end was 90,508,000 of which none were held in treasury (2010: nil). The ordinary shares carry the right to receive any dividends and have one voting right per ordinary share. There are no restrictions on the voting rights of the ordinary shares or on the transfer of the ordinary shares. 11. 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 2011 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 2011 contains no qualification or statement under section 498(2) or (3) of the Companies Act 2006. The comparative figures are extracts from the audited financial statements of BlackRock Commodities Income Investment Trust plc and its subsidiary for the year ended 30 November 2010, which have been filed with the Registrar of Companies. The report of the Auditor on those accounts contained no qualification or statement under section 498 of the Companies Act. This announcement was approved by the Board of Directors on 20 January 2012. 12. Annual Report Members will be notified that the annual report is available shortly or if a hard copy has been requested this will be sent shortly. It will also be available from the registered office, c/o The Company Secretary, BlackRock Commodities Income Investment Trust plc, 12 Throgmorton Avenue, London EC2N 2DL. 13. Annual General Meeting The Annual General Meeting of the Company will be held at 12 Throgmorton Avenue, London EC2N 2DL on Tuesday, 13 March 2012 at 10:30 a.m. ENDS The Annual Report will also be available on the BlackRock Investment Management website at http://www.blackrock.co.uk/literature/annual-report/ blackrock-commodities-income-investment-trust-plc-annual-report.pdf. Neither the contents of the Manager's website nor the contents of any website accessible from hyperlinks on the Manager's website (or any other website) is incorporated into, or forms part of, this announcement. For further information, please contact: Jonathan Ruck Keene, Managing Director, Investment Companies, BlackRock Investment Management (UK) Limited Tel: 020 7743 2178 Richard Davis, Natural Resources Team, BlackRock Investment Management (UK) Limited Tel: 020 7743 2668 Emma Phillips, Media & Communication, BlackRock Investment Management (UK) Limited Tel: 020 7743 2922 12 Throgmorton Avenue London EC2N 2DL 20 January 2012

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