Final Results

BLACKROCK ENERGY AND RESOURCES INCOME TRUST PLC

(LEI: 54930040ALEAVPMMDC31)

Annual Results announcement for the year ended 30 November 2022

PERFORMANCE RECORD

	As at 30 November 2022	As at 30 November 2021	Change %
Net assets (£000)¹	194,708	120,828	61.1
Net asset value per ordinary share (pence)	144.92	103.97	39.4
Ordinary share price (mid-market) (pence)	135.00	96.70	39.6
Discount to net asset value²	6.8%	7.0%
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Performance (with dividends reinvested)
Net asset value per share²	44.5%	34.4%
Ordinary share price²	44.8%	41.7%
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	For the year ended 30 November 2022	For the year ended 30 November 2021	Change %
Revenue
Net profit on ordinary activities after taxation (£000)	6,394	5,704	12.1
Revenue earnings per ordinary share (pence)³	4.99	4.96	0.6
Dividends (pence)
1st interim	1.10	1.00	10.0
2nd interim	1.10	1.00	10.0
3rd interim	1.10	1.00	10.0
4th interim	1.10	1.10	0.0
Total dividends paid and payable	4.40	4.10	7.3
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¹ The change in net assets reflects portfolio movements, the issue of shares and dividends paid during the year.

² Alternative Performance Measures, see Glossary contained in the Annual Report for the year ended 30 November 2022.

³ Further details are given in the Glossary contained in the Annual Report for the year ended 30 November 2022.

Chairman’s statement

Market overview
As the Company’s financial year began on 1 December 2021, markets were buoyant with many major indices achieving either all-time highs or pre-COVID-19 levels. However, supply constraints coupled with increasing demand as post-COVID-19 economic activity restarted, caused inflation to rise sharply. An already challenging market environment was exacerbated by Russia’s invasion of Ukraine and the resulting humanitarian crisis. The energy supply shock that resulted drove energy prices ever higher, pushing inflation to a 40 year high of 10.7% in the UK in November 2022. In response, the Bank of England raised interest rates to 3.50% by December 2022 with further increases on the horizon which are likely to impact consumer confidence in the UK.

Against this backdrop, the Traditional Energy sector had the strongest start to the year in both relative and absolute terms (the MSCI World Energy Index was up by 68.7% over the year compared to an increase in the MSCI ACWI Metals and Mining Index of 14.8% - both in Sterling terms with dividends reinvested). In contrast the Energy Transition portion of the portfolio performed less well as margins were impacted by cost inflation, and a “growth” to “value” rotation drove a sell-off in share prices in high growth sectors. Your Company’s portfolio was well-positioned to weather these trends, as the portfolio managers had increased Traditional Energy exposure through 2021 and into 2022 to stand at 31.0% at the end of the year, and moved to lower weighting in the Energy Transition sector (21.9% at 30 November 2022).

Performance
I am pleased to report that your Company has delivered another year of exceptional performance, with the Net Asset Value per share up by an impressive 44.5% and the share price by 44.8%. When combined with the strong prior year performance to 30 November 2021, your Company’s share price has increased by 105.1% over the last two financial years (all percentages in Sterling terms with dividends reinvested). The Company’s objectives are to achieve both an annual dividend target and, over the long term, capital growth. Consequently, the Board does not formally benchmark performance against mining and energy sector indices as meeting a specific dividend target is not within the scope of these indices. However, to set the performance above in the context of the market backdrop, the MSCI All-Country World Index (“ACWI”) was up 18.6% over the year ended 30 November 2021 and the same index was down 3.5% over the year ended 30 November 2022 (all percentages in Sterling terms with dividends reinvested).

As noted above, the Board does not formally benchmark the Company’s performance against Mining and Energy sector indices; for internal monitoring purposes, however, the Board compares the performance of the portfolio against a bespoke internal Mining and Energy composite index. The neutral sector weightings of this bespoke index are 40% Mining, 30% Traditional Energy and 30% Energy Transition.

Further information on investment performance is given in the Investment Managers’ Report.

Cumulative performance as at 30 November 2022
Performance to 30 November 2022	1 Year change %	2 Years change %	3 Years change %	5 Years change %	Since inception² %
Net Asset Value (with dividends reinvested)¹	44.5	94.2	121.2	139.3	253.8
Share price (with dividends reinvested)¹	44.8	105.1	138.0	132.8	229.6
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¹ Alternative Performance Measures. Further details of the calculation of performance with dividends reinvested are given in the Glossary contained in the Annual Report for the year ended 30 November 2022.

² The Company was launched on 13 December 2005.

Revenue return and dividends
The Company’s revenue return per share for the year to 30 November 2022 was 4.99 pence per share, a 0.6% increase compared to the prior year earnings per share of 4.96 pence. The Board’s current target is to declare quarterly dividends of at least 1.10 pence per share in the year to 30 November 2022, making a total of at least 4.40 pence per share for the year as a whole. This target represents a yield of 3.3% based on the share price of 135.00 pence per share as at 30 November 2022, and 3.0% based on the share price at the close of business on 30 January 2023. The dividend target should not be interpreted as a profit forecast. The Board has decided to maintain the annual dividend target of at least 4.40 pence per share for the year to 30 November 2023. As a result the Board announced in December 2022 that it would pay a fourth quarterly dividend for the year to 30 November 2022 of 1.10 pence per share (making total dividend payment for the year of 4.40 pence per share).

The Company may also write options to generate revenue return, although the portfolio managers’ focus is on investing the portfolio to generate an optimal level of total return without striving to meet an annual income target and they will only undertake option transactions to the extent that the overall contribution is expected to be beneficial to total return.

Gearing
The Company operates a flexible gearing policy which depends on prevailing market conditions. The Company increased the overdraft facility to £35.0 million during the year and it is expected that gearing will not exceed 20% of the Group’s net assets. The maximum gearing used during the period was 12.3%, and the level of gearing at 30 November 2022 was 6.0%. Average gearing over the year to 30 November 2022 was 6.1%. For calculations, see the Glossary contained in the Annual Report for the year ended 30 November 2022.

Management of share rating
The Directors recognise the importance to shareholders that the Company’s share price should not trade at a significant premium or discount to NAV per share, and therefore, in normal market conditions, may use the Company’s share buyback, sale of shares from treasury and share issue powers to seek to address any imbalance in supply and demand for the Company’s shares in the market.

The Company’s shares traded at an average discount of 2.9% over the year. The shares started the year trading at a discount of 7.0%; this widened out to 9.2% in December 2021 but moved to trade consistently at a premium in January 2022, at which time (and with a premium established), the Company commenced selling its treasury shares and subsequently issuing new shares into market demand. During the year, the Company issued/sold 18,137,837 ordinary shares (of which 2,747,643 ordinary shares were sold from treasury) for net proceeds of £22,785,000. Since the year end and up to 30 January 2023, the Company issued 550,000 ordinary shares for net proceeds of £802,000. All shares were issued/sold at premiums to the prevailing NAV per share and were accretive to net assets. At the Company’s annual general meeting held on 15 March 2022, the Company was granted authority to allot up to 11,859,336 shares and/or sell the same amount of shares held in treasury on a non-pre-emptive basis (being equivalent to 10 per cent of share capital in issue at that time). However, given the ongoing volume of demand noted above, the Board sought shareholder approval for additional authority (approved by shareholders at a General Meeting on 26 May 2022) to allot and/or sell from treasury a further 12,844,039 ordinary shares on a non-pre-emptive basis over and above the 10% authority sought at the 2022 AGM. This action was taken to ensure that the Company could continue to be able to allot new shares to meet market demand and thereby help to manage the premium to NAV at which the shares were trading.

Subsequent to this, it was pleasing to note that in June 2022 the Company was promoted from the FTSE Fledgling Index into the FTSE Small Cap Index (and also therefore the FTSE All Share Index) which generated additional demand. Although macro events weighed on markets and the Company in the second half of the year, at the time of writing, the Company’s shares are trading at a premium again, with 550,000 shares having been issued over the last month. The Board notes that although the Company has in previous years sought authority from shareholders at the AGM to issue up to 10% of share capital with pre-emption rights disapplied, to the extent demand for the Company’s shares remains strong, there is a possibility that this will be insufficient to last until the AGM in 2024 and the Company will need to convene additional special General Meetings in order to request further authority. To minimise the cost to shareholders and to ensure the Company is positioned to issue into market demand on a timely basis, the Board is seeking additional shareholder authority at the forthcoming Annual General meeting to issue and allot new shares for an additional 10% over and above the 10% authority that is usually sought. These issuance and allotment authorities are structured as four separate resolutions; two seek to renew the Board’s power to sell shares from Treasury and/or to issue new shares, and to do so on a non pre-emptive basis up to 10% of the Company’s issued share capital, with two equivalent resolutions for an additional 10%. It should be noted that any shares issued will be a premium to the NAV per share. The Board believes these resolutions are in shareholders’ best interests and encourages shareholders to support them. There can be no certainty that issuance will continue at the same level; however by seeking this additional 10% authority concurrently with the usual 10% authority, your Board is seeking to ensure that the Company is position to allot new shares into market demand at minimal cost to shareholders. Such issuance will also increase the capital base over which the Company’s fixed costs are spread, reducing the Company’s ongoing charges ratio and further minimising costs for shareholders.

The Board is also mindful that there was significant volatility in markets over the second half of 2022, with markets correcting in late June 2022 as fears over the potential recessionary impact of central banks’ reaction to inflation pressures took hold; this created challenges for many investment companies with the average discount for the sector widened significantly. Your Board has monitored the market throughout this volatile period and, in conjunction with the Company’s broker, has given consideration to the possibility of buying back shares on a daily basis to the extent the Company’s shares were trading at a discount, although no shares were bought back during the period under review.

Placing Programme
As well as seeking authority to issue an additional 12,844,039 shares as described above, the Board also sought authority at the General Meeting on 26 May 2022 to allot on a non-pre-emptive basis up to 65 million ordinary shares pursuant to a Placing Programme (which would only proceed with the publication of a prospectus, if appropriate, in due course). This authority expires on the earlier of (i) the first anniversary of the date of the prospectus and (ii) the 2024 AGM. The Board took this step to ensure that the Company would not be as constrained in its ability to issue new shares to meet demand by the Prospectus Regulation. However, due to the turn in markets the Company ultimately did not utilise any of this authority during the year nor, therefore, did it need to publish a prospectus.

The Board does not currently anticipate exhausting the capacity under the aggregate 20% issuance authorities being sought at the AGM based on current issuance levels, but the Board keeps the situation under close review and take the necessary steps to ensure that a prospectus can be published on a timely basis if required such that the Company can continue to issue shares into market demand.

Board Composition
The Board supports the increasing focus on independence, tenure and succession planning set out in the updated Financial Reporting Council’s review of the UK Corporate Governance Code. With this in mind, the Board commenced a search in 2021 to identify a new Director to join the Board, assisted by a third-party recruitment firm, Odgers Berndtson. Following a detailed evaluation of each of the candidates, the Board selected Carole Ferguson who was subsequently appointed with effect from 22 December 2021. Mrs Ferguson was elected as a Director at the Annual General Meeting held on 15 March 2022.

Further information on all of the Directors can be found in their biographies contained in the Annual Report for the year ended 30 November 2022. Information on the recruitment and selection process undertaken and details of the Board’s policy on director tenure and succession planning can be found in the Directors’ Report contained in the Annual Report for the year ended 30 November 2022.

As previously advised in last year’s Annual Report, my predecessor, Ed Warner stood down from the Board at the AGM on 15 March 2022. Ed joined the Board in July 2013 and had acted as the Chair since March 2015. The Board wishes to thank Mr Warner for his many years of excellent service, and for leaving the Company with the solid base and clear direction, from which we can all continue to build the Company with confidence. We wish Ed the best for the future.

Annual general meeting arrangements
The AGM will be held in person at 12:00 noon on Monday, 13 March 2023 at the offices of BlackRock at 12 Throgmorton Avenue, London EC2N 2DL. Refreshments and a sandwich lunch will be provided.

At present UK Government restrictions on public gatherings are no longer in force in connection with COVID-19 and we therefore intend to hold the AGM in the normal way with physical attendance by shareholders. However, although unlikely, shareholders should be aware that it is possible that such restrictions could be reimposed if required prior to the date of the AGM and therefore we recommend that as well as physical attendance, shareholders also cast their votes by proxy to ensue that their votes are counted in the event that they are unable to attend.

Shareholders who intend to attend the AGM should ensure that they have read and understood the venue requirements for entry to the AGM. These requirements, along with further information on the business of this year’s AGM, can be found in the Directors Report contained in the Annual Report for the year ended 30 November 2022.

The Board very much looks forward to meeting shareholders and answering any question you may have on the day. We hope you can attend this year’s AGM; light refreshments will be made available to shareholders who have attended the AGM.

Market outlook and portfolio positioning
With the impact of the COVID-19 pandemic receding, the longer-term implications for the global economy are beginning to play out, compounded by increased geopolitical tensions. Commodity prices remain elevated, partly due to the war in Ukraine and the continued sanctions on Russia, while labour markets remain tight, underpinning higher inflation trends in the US and Europe. This has put increasing pressure on central banks to raise interest rates, increasing the risks to economic growth. However, either way, it is likely that inflation remains entrenched above central bank targets for some time to come. Against a weakening economic outlook, the company’s portfolio remains weighted towards well-capitalised companies in the mining and traditional energy sector with scope to reinvest in growth opportunities in the energy transition sector which has derated over the last year.

Against this volatile and uncertain market backdrop, the flexibility of the Company’s investment mandate, with the ability to shift exposure between Traditional Energy, Energy Transition and Mining sectors, means it is effectively positioned to serve investors well. Despite the current uncertainty, the longer-term drive by governments across the globe to decarbonise the energy supply chain and create a greener energy infrastructure is here to stay, and has been given increased focus by the events in Ukraine. Over the long term, capital investment in the relevant infrastructure and technological advances will create compelling investment opportunities both in the Energy Transition sector and for the companies that service the associated supply chains. The Board is confident that the Company remains well-placed to benefit from these key investment trends.

I look forward to seeing shareholders at the forthcoming Annual General Meeting.

Adrian Brown
1 February 2023

Investment Manager’s report

Market overview
The phrase “paradigm shift” is often over-used but it seems entirely appropriate when reflecting on the investment landscape in 2022. For much of the prior decade, markets have been characterised by low inflation, very low interest rates and relatively abundant, cheap energy with the many benefits this enabled. The last year has seen a major shift in these three factors with profound impacts on major financial asset classes and individual securities, as well on society more broadly. We now look set to enter a phase of the market cycle where inflation will be more of a factor, energy availability will be a critical question facing countries/industries and also capital will come with a higher cost.

This is going to require investors to find lessons further back in history than just the last ten years and have portfolios that are able, and willing, to adapt to changing circumstances. We would assert that the evolution of this Company’s strategy almost 3 years ago puts it in such a position to take advantage of the investment opportunities that invariably come with times of rapid change.

The geopolitical events of early 2022 accelerated and magnified trends already present in parts of the energy market where underinvestment had left little spare capacity and even less resilience to any external shock or supply disruption.

One of the consequences of the most recent energy crisis has been to raise the question of energy security in many countries. The short-term responses vary between countries, but one of the clear longer-term consequences is a hardened resolve to transition to a greater share of renewable energy and to accelerate the energy transition. Legislation such as the Inflation Reduction Act in the USA is a demonstration of how willing governments are to ensure the correct incentives are in place to incentivise private capital to be deployed on a large scale across multiple industries that need to transition to lower carbon footprints. Some of the growth stocks in the equity market, that are exposed to the energy transition, have come under short-term selling pressure with rising interest rates supressing the market’s appetite for growth stocks. However, the regulatory backdrop and the economics of transition technologies likely underpins longer-term earnings growth here, so for the Company, it is likely a matter of when, rather than if, we increase the exposure to these energy transition companies.

Commodity	30 November 2022	30 November 2021	% change	2022 on 2021 Average Price % Change¹
Base Metals (US$/tonne)
Aluminium	2,448	2,635	-7.1	13.1
Copper	8,227	9,516	-13.5	-2.5
Lead	2,182	2,318	-5.9	-0.7
Nickel	26,892	20,005	34.4	40.0
Tin	23,045	39,905	-42.3	6.4
Zinc	3,050	3,289	-7.3	19.0
	----------------	----------------	----------------	----------------
Precious Metals (US$/ounce)
Gold	1,751.9	1,780.1	-1.6	-0.2
Silver	21.7	22.8	-5.0	-14.3
Platinum	1,025.0	944.0	8.6	-12.8
Palladium	1,908.0	1,767.0	8.0	-13.8
	----------------	----------------	----------------	----------------
Energy
Oil (WTI) (US$/barrel)	80.5	66.2	21.6	43.3
Oil (Brent) (US$/barrel)	85.6	70.6	20.8	46.1
Natural Gas (US$/Metric Million British Thermal Unit)	7.0	4.6	54.9	65.7
	----------------	----------------	----------------	----------------
Bulk Commodities (US$/tonne)
Iron ore	103.0	100.0	3.0	-26.0
Coking coal	265.0	317.5	-16.5	62.0
Thermal coal	398.5	152.0	162.2	161.9
	----------------	----------------	----------------	----------------
Equity Indices
MSCI ACWI² Metals and Mining Index (US$)	369.8	357.7	3.4	n/a
MSCI ACWI² Metals and Mining Index (£)	516.6	449.9	14.8	n/a
MSCI³ World Energy Index (US$)	255.5	168.3	51.8	n/a
MSCI³ World Energy Index (£)	356.9	211.6	68.7	n/a
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Source: Datastream.

¹ Average of 01/12/20-30/11/21 to 01/12/21-30/11/22

² Morgan Stanley Capital International All Country Weighted Index

³ Morgan Stanley Capital International

Portfolio activity & investment performance
In contrast to the challenges faced by broader equity markets and the deluge of negative headlines through the year, the Company delivered another excellent year of returns, with shareholders experiencing a share price total return of 44.8% and NAV total return of 44.5% (all percentages are in British Pound Sterling with dividends reinvested).

In the second half of the year, oil markets steadily sold off from over US$110 per barrel at the end of May to US$80 per barrel by the Company’s year-end. However traditional energy equities held up remarkably well, with a wide performance differential versus the underlying commodity as shown in Figure 1 contained in the Annual Report for the year ended 30 November 2022.

Given this dislocation, we reduced the percentage of the Company’s assets invested in traditional energy companies in the latter part of the year and also rotated some of the holdings within the traditional energy holdings to reduce the oil price sensitivity (commodity beta) of the portfolio.

Also in terms of reducing positions in the second half of the year, we pared back some of our lithium mining exposure. As discussed in the Mining section later in this report, lithium prices had a terrific year and the lithium producing equities performed extremely well. With two of the three main Electric Vehicles (EV) subsidies in China set to finish at the end of 2022 and a gloomy outlook for US discretionary spending, we took profits but retained some modest positions.

On the other side of these sales, we added to holdings in some of our energy transition and other mining companies. Given the underperformance of growth companies versus value companies over the last year, a number of energy transition companies that we see as long-term winners had become meaningfully cheaper in terms of earnings multiples towards the end of the period. Whether we have timed the exact bottom here remains to be seen but we are confident that on a longer-term view, the recent entry points will prove to be attractive. Regarding mining, again it is tough to pick a precise turning point in China given the key driver there is government policy regarding COVID-19 restrictions. However, there was a clear pivot during the fourth quarter of 2022, which gave us the confidence to add to a number of mining positions where the underlying commodities will likely benefit from better real estate and infrastructure activity in China in 2023.

Income
This year was a strong year for the Company’s income. The strength of commodity prices, in particular energy commodities, combined with the financial discipline of the companies, resulted in a plethora of ordinary dividend increases and special dividends. The decision to be overweight in traditional energy companies for most of the period also helped boost the dividend income received, as this overweight was funded by an underweight to energy transition companies, which typically pay meagre dividends.

The income received by the Company was also helped during the year by a weaker British Pound Sterling. The average US Dollar – British Pound Sterling exchange rate for 2022 was $1.24, compared to $1.38 for 2021. With most of the Company’s portfolio companies paying dividends in US Dollars, this was a helpful tailwind for income.

As discussed elsewhere in this report, the balance sheets of the mining companies and traditional energy companies remain in great shape. However, given the recent pullback in oil prices and the incremental increases in capital expenditure guidance from mining companies for 2023, the probability of further dividend increases next year is quite low.

As in 2021, option activity was relatively modest in 2022 when compared to the late 2010s for the Company. The market volatility presented a number of attractive put writing opportunities during the year that we took advantage of. These trades were typically quite well-timed with only a minority of the options maturing in the money and being exercised against us.

Mining
If you had known at the start of 2022 that China, the world’s largest consumer of mined commodities, would remain in various states of lockdown through almost the entire year then it is highly likely you would have forecast a tough year for the mining sector. Whilst the sector did only deliver a modest positive return, it was still better than broader markets with the MSCI Metals and Mining Index total return of +10.0% compared to the S&P 500 Index total return of -9.2% and the FTSE 100 Index total return of -3.4% (all in US$, total return for the year ended 30 November 2022). Encouragingly, the Company’s mining holdings performed very well during the year too – so what drove the strong performance despite much of China’s real estate sector being weak throughout the year?

There were two key factors – supply challenges persisted across a number of commodities and demand for those commodities related to the energy transition surprised even the most optimistic of forecasts.

Looking more closely at the first driver – the supply challenges. We noted these in the interim report, specifically in relation to copper supply falling short of expectations from large producers such as Chile. These disappointments were not just isolated to Chile – as the chart in Figure 2 contained in the Annual Report for the year ended 30 November 2022 shows, copper companies with operations across the world downgraded production guidance relative to their aspirations at the start of the year.

We are not seeing this reverse – those companies that have guided for 2023 have so far tended to bring down numbers again compared to previous guidance as shown in the chart in Figure 3 contained in the Annual Report for the year ended 30 November 2022. This is likely to lead to a deficit of supply relative to demand again in 2023, which will tighten global inventories and be supportive of copper prices.

Looking out beyond 2023 does not offer much relief on the supply side for copper. The lack of significant discoveries in the last decade, the challenges to permit new mines and the discipline of companies have all combined to result in a ripple, rather than a wave, of new supply. This can be seen in the chart in Figure 4 contained in the Annual Report for the year ended 30 November 2022 it is worth noting that the copper market has grown a few percent a year over the last 20 years so as a proportion of supply/demand, the chart would be even more extreme.

Given the scarcity of good quality copper assets, we saw M&A in this space again during the second half of the year. BHP made an approach for Australian-focused copper miner OZ Minerals that was initially rebuffed but a higher offer, conditional on due diligence, was later accepted by their board. The Company was a holder of OZ Minerals having also generated income via put option selling after the first bid was deemed insufficient. With this scarcity of copper assets likely to get more acute over the next decade, the Company also took positions in two earlier stage copper companies, that have exploration and development potential, and crucially have proven management teams/boards, something often lacking at the smaller end of the market.

The second positive tailwind for the mining sector was the continued growth in demand for mined commodities from energy transition related applications. Battery related metals, in particular lithium, enjoyed huge price increases during the year as demand from electric car manufacturers drove prices to all-time highs (as shown in the chart in Figure 5 contained in the Annual Report for the year ended 30 November 2022). The price at the end of the year is well above the incentive price to encourage the development of new supply. However with all of the challenges of permitting new mines, financing them and then constructing them, we would expect the lithium price to remain well above the top end of the cost curve for years to come.

Energy Transition
Macro events once again played an important role in shaping price performance across the energy transition universe. On the one hand, persistently higher-than-expected inflation shown in the chart in Figure 6, contained in the Annual Report for the year ended 30 November 2022, has continued to cause margin headwinds for many of the renewables and autos manufacturers. On the other hand, the unprecedented rise in interest rates across the curve has placed downward pressure on valuation multiples for longer-duration growth stocks, many of which reside in the energy transition space.

Energy policy has also played a hand in 2022. The Biden Administration announced the Inflation Reduction Act (IRA) during the summer. The IRA will direct nearly $400 billion in federal funding towards clean energy and, according to a McKinsey¹ article, “represents the third piece of legislation passed since late 2021 that seeks to improve US economic competitiveness, innovation and industrial productivity”. Several tax credit modifications have been included in the IRA including production credits for nuclear ($15/megawatthours) and subsidies for hydrogen ($3/kilogram). Interestingly, many of the IRA incentives contain criteria which proactively reward investments which encourage extraction, processing and manufacturing in the United States. This provided a significant positive tailwind to stocks with exposure to solar, wind and hydrogen with the S&P Global Clean Energy Index jumping almost 20% following the initial announcement as shown in the chart in Figure 7 contained in the Annual Report for the year ended 30 November 2022.

Russia’s invasion of the Ukraine in February upended global energy and power markets. Prices for natural gas in the UK hit record highs in recent weeks as shown in the chart in Figure 8 contained in the Annual Report for the year ended 30 November 2022 as Europe struggles to fully replace Russian gas imports. Europe faces a tough few years ahead as it weans itself off Russian natural gas imports. Natural gas prices impact both power prices and industrial feedstock costs, and Europe’s ‘energy burden’ has increased far in excess of the United States; as shown in the chart in Figure 9 contained in the Annual Report for the year ended 30 November 2022, leaving the latter in a much stronger position both in terms of the energy transition and of industrial competitiveness. In order to combat soaring energy costs, European policy makers enacted several measures aimed at capping prices and providing subsidies to consumers ahead of peak demand in winter. Whilst gas demand has retrenched by almost 25% in recent months (relative to the prior five-year average), markets remain at the mercy of weather. We expect gas and power market tightness to keep prices high right the way through next winter.

Traditional Energy
Through November 2022, the traditional energy sector posted another strong positive total shareholder return, up +45.0% as shown in the chart in Figure 10 contained in the Annual Report for the year ended 30 November 2022, following +38.0% in the prior fiscal year. The MSCI All-Country World Index (ACWI) was down - 11.0% and up +20.0% over the same periods. With a strong tailwind from rising commodity prices, a continued focus on cost savings and material stock buybacks, the traditional energy sector posted some of the strongest positive cash flow per share revisions in its history, explaining a large proportion of its positive absolute performance, as shown in the chart in Figure 11 contained in the Annual Report for the year ended 30 November 2022.

As we outlined last year, a key pillar of our investment case for traditional energy was that of discipline. Following more than a decade of poor returns on and of capital, the energy sector was finally on a path to moderate spending, reduce leverage and return excess free cash flow to long-suffering investors. Management teams are increasingly incentivised to focus on per share metrics rather than topline growth. The result has been increasing cash flow and, in turn, improved stock price performance.

One other notable change in company strategy in the last 2 years has been the amount of capital now being allocated towards lower carbon business opportunities. The pace of investment into these areas should not be overlooked, as more oil and gas companies start to lean into the energy transition, seeking to meet customers’ needs to reduce their own carbon footprints. Capital investment into energy projects is also rising as shown in the chart in Figure 12 contained in the Annual Report for the year ended 30 November 2022, albeit not at the same pace as activity levels, as the North American energy industry faces its own inflation challenges. The US-focused upstream Exploration and Production sector as shown in the chart in Figure 13 contained in the Annual Report for the year ended 30 November 2022, are facing double digit service cost inflation which, in the absence of sharply higher commodity prices, is likely to see free cash flows under pressure in 2023.

From a regional perspective, the divergence in performance between European Energy companies and North American peers was stark. By way of example, ExxonMobil was up by +82% compared with Shell (up by +33% over the period). Part of this reflects the fact that the European Energy companies in aggregate cut dividends markedly during COVID-19, whilst large-cap North American peers did not suffer the same ignominy. Yield seeking investors were rightly chastened by this as European Energy companies had represented a bastion of income for a long time. We continue to believe that there is a material swathe of European investors that remain reluctant to own traditional energy companies based on their carbon footprint. Notwithstanding the challenges in negotiating these regulations, we continue to believe that many of these traditional energy companies can be a part of the solution rather than the sole root of the problem. Put simply, these companies can help investors navigate through the energy transition by providing secure, affordable energy today as well as profitably decarbonising for tomorrow.

Arguably the most important macro event in global energy markets was Russia’s invasion of Ukraine at the end of February. Europe’s reliance on Russian energy (and food) imports was laid bare sending natural gas and power prices to record levels. In stark contrast to natural gas and power prices, crude oil peaked in the summer of 2022, before retrenching back to pre-invasion levels. This partly reflects the fact that oil is more fungible and has largely found new markets as Europe instigated its ‘ban’ on Russian imports effective 5 December 2022. Substituting natural gas is far more challenging albeit not impossible. New sources are already making their way in from US Liquified Natural Gas as well as fresh investment stimulating higher imports from North Africa. But, all of this will take time, requiring demand to recalibrate lower in the next 1-2 years to help balance the market. Whilst governments have already pushed through price caps across gas and power markets and industrial users have ratcheted back consumption, residential consumers continue to respond to cold weather leaving higher prices the route to rebalancing markets as shown in the charts in Figure 8 and Figure 9 contained in the Annual Report for the year ended 30 November 2022.

Outlook
The year 2022 was marked by a flurry of unexpected events from the invasion of Ukraine to the replumbing of global energy markets, or the Federal Reserve’s pivot from quantitative easing to quantitative tightening. We continue to believe that inflation will be persistently higher than recent years as the world looks to replumb supply chains across multiple industries. All of this is set against a backdrop of continued geopolitical fragmentation. Yet, rapidly rising interest rates and the subsequent hit to equity values are gradually opening up some attractive opportunities across our investment universe, even as economic recession looms large across the globe.

Traditional commodities are in an unusual spot in the cycle. China is finally exiting COVID-19 induced lock downs. We doubt it will be a smooth restart across the Chinese economy but the underlying pull on demand for traditional commodities will cast a strong positive tailwind for oil prices as shown in Figure 14 contained in the Annual Report for the year ended 30 November 2022, with incremental oil demand in the coming months in the order of 0.5-1.0 million barrels per day as shown in Figure 15 contained in the Annual Report for the year ended 30 November 2022. This should be contrasted against recent downgrades to US shale oil production of almost 1.0 million barrels per day. Industrial mined commodities are also likely to be well supported as the Chinese economy regains its pre-COVID-19 levels and renewables demand for copper, nickel, lithium and aluminium continues apace. This comes at a time when investment in supply across the traditional commodities space remains at historic lows. Recent commentary from the US Administration stated an ambition to replenish the US Strategic Petroleum Reserve at oil prices between US$67-71 per barrel.

Policy will continue to be a strong driver of equity performance next year. Yet, the need to balance energy security with decarbonisation is set to drive diverging policy agendas in different regions. Indeed, we believe that in many instances policy ambitions around decarbonisation continue to run ahead of demand-side behaviour. This consumer inertia is causing severe bottlenecks across supply chains and a repricing of both traditional energy and electricity base load prices.

In Europe, for instance, energy security concerns have galvanised policy makers to strive for ever more ambitious renewables targets. Spurred by the invasion of the Ukraine, the 27 countries within the European Union will play a key role in driving an increase in global renewables capacity of almost 2,400GW through 2027 according to the IEA’s latest renewables report¹. This represents an 85% acceleration from the previous five years, and almost 30% higher than what was forecast in last year’s report. Whilst this ambitious growth outlook bodes well for many of our companies, we are acutely aware that permitting remains a key impediment to expediting this growth.

TOM HOLL AND MARK HUME
BlackRock Investment Management (UK) Limited
1 February 2023

¹ Source: IEA, Renewables 2022, IEA Paris

http://www.iea.org/reports/renewables-2022,

License: CC BY 4.0.

Distribution of investments as at 30 November 2022

ASSET ALLOCATION – GEOGRAPHY

Global	56.8%
United States of America	19.2%
Canada	10.3%
Brazil	4.4%
Germany	3.7%
Australia	3.0%
Latin America¹	1.7%
France	0.5%
Ireland	0.4%

Latin America represents Argentina.

ASSET ALLOCATION – COMMODITY

Mining	47.1%
Traditional Energy	31.0%
Energy Transition	21.9%

Energy Transition (21.9%)
Energy Efficiency	6.4%
Electrification	6.3%
Renewables	4.9%
Transport	4.3%

Traditional Energy (31.0%)
Exploration & Production	16.2%
Integrated	10.5%
Oil Services	2.1%
Refining & Marketing	1.2%
Distribution	1.0%

Mining (47.1%)
Diversified	22.2%
Copper	8.9%
Industrial Minerals	6.0%
Aluminium	3.6%
Steel	2.4%
Gold	1.1%
Diamonds	0.9%
Uranium	0.8%
Iron	0.6%
Nickel	0.6%

Source: BlackRock.

Ten largest investments

1 + Glencore (2021: 2nd)
Diversified mining group
Market value: £15,024,000
Share of investments: 7.3% (2021: 5.8%)

One of the world’s largest globally diversified natural resource groups. The group’s operations include approximately 150 mining and metallurgical sites and oil production assets. Glencore’s mined commodity exposure includes copper, cobalt, nickel, zinc, lead, ferroalloys, aluminium, iron ore, gold and silver.

2 - Vale (2021: 1st)
Diversified mining group
Market value: £9,000,000
Share of investments: 4.4%¹(2021: 5.9%)

One of the largest mining groups in the world, with operations in 30 countries. Vale is the world’s largest producer of iron ore and iron ore pellets, and the world’s largest producer of nickel. The group also produces manganese ore, ferroalloys, metallurgical and thermal coal, copper, platinum group metals, gold, silver, cobalt, potash, phosphates and other fertiliser nutrients.

3 + BHP (2021: 4th)
Diversified mining group
Market value: £8,667,000
Share of investments: 4.2% (2021: 3.8%)

The world’s largest diversified mining group by market capitalisation. The group is an important global player in a number of commodities including iron ore, copper, thermal and metallurgical coal, manganese, nickel, silver and diamonds. BHP also has significant interests in oil, gas and liquefied natural gas.

4 + Teck Resources (2021: 30th)
Diversified mining group
Market value: £7,516,000
Share of investments: 3.6% (2021: 1.4%)

A diversified mining group headquartered in Canada. Teck Resources is engaged in mining and mineral development with operations and projects in Canada, the US, Chile and Peru. The group has exposure to copper, zinc, steelmaking coal and energy.

5 + First Quantum Minerals (2021: 6th)
Copper producer
Market value: £7,128,000
Share of investments: 3.5%²(2021: 2.5%)

A Canadian-based mining and metals company whose principal activities include mineral exploration, development and mining. Its main product is copper.

6 + Shell (2021: n/a)
Integrated oil group
Market value: £6,698,000
Share of investments: 3.2% (2021: n/a)

A British publicly traded multinational oil and gas group headquartered in London. Shell is one of the world’s largest independent energy companies, operating in more than 70 countries. Shell explores and produces energy products - fuels, oil, natural gas, lubricants, LPG, chemicals; including 100% renewable electricity by Shell Energy.

7 + BP (2021: n/a)
Integrated oil group
Market value: £6,025,000
Share of investments: 2.9% (2021: n/a)

A British multinational oil and gas company headquartered in London. BP is one of the oil and gas “supermajors” and one of the world’s largest companies measured by revenues and profits. It is a vertically integrated company operating in all areas of the oil and gas industry, including exploration and extraction, refining, distribution and marketing, power generation, and trading; including low carbon businesses.

8 - ConocoPhillips (2021: 7th)
Exploration & Production
Market value: £5,570,000
Share of investments: 2.7% (2021: 2.7%)

An American multinational corporation engaged in hydrocarbon exploration. ConocoPhillips is one of the world’s largest independent Exploration & Production (E&P) companies based on production and proved reserves. It has operations in 15 countries and are committed to the efficient and effective exploration and production of oil and natural gas.

9 + NextEra Energy (2021: 53rd)
Electrification
Market value: £5,173,000
Share of investments: 2.5% (2021: 0.8%)

NextEra Energy is America’s premier clean energy leader and the world’s largest producer of wind and solar energy. The company has a dominant market share in a structurally growing renewables market.

10 + Canadian Natural Resources (2021: 12th)
Exploration & Production
Market value: £5,147,000
Share of investments: 2.5% (2021: 2.1%)

A senior Canadian oil and natural gas company. The company has a diversified portfolio of assets in North America, the UK North Sea and Offshore Africa.

¹ 1.1% relates to interest in Vale shareholder debentures.

² 1.5% relates to fixed interest holdings in First Quantum Minerals.

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 2021.

Together, the ten largest investments represent 36.8% of total investments (ten largest investments as at 30 November 2021: 36.4%).

Investments as at 30 November 2022

	Main geographic exposure	Market value £000		% of investments
Mining
Diversified
Glencore	Global	15,024		7.3
Vale	Brazil	6,735	}	4.4
Vale Debentures*	Brazil	2,265	}	4.4
BHP	Global	8,667		4.2
Teck Resources	Global	7,516		3.6
Anglo American	Global	2,839		1.4
Trident	Global	1,907		0.9
Rio Tinto	Global	822		0.4
		----------------		----------------
		45,775		22.2
		==========		==========
Copper
First Quantum Minerals	Global	4,153	}	3.5
First Quantum Minerals 6.875% 15/10/27	Global	1,674
First Quantum Minerals 6.875% 01/03/26	Global	919
First Quantum Minerals 7.5% 01/04/25	Global	382
Freeport-McMoRan	United States	5,024		2.4
Filo Mining	Latin America	3,579		1.7
OZ Minerals	Australia	2,005		1.0
Develop Global	Australia	516		0.3
		----------------		----------------
		18,252		8.9
		==========		==========
Industrial Minerals
Albemarle	Global	3,758		1.8
CF Industries	United States	3,542		1.7
Nutrien	United States	2,377	}	1.1
Nutrien Put Option 20/01/23	United States	(55)	}	1.1
Bunge	Global	1,650		0.8
Lynas Corporation	Australia	1,285		0.6
		----------------		----------------
		12,557		6.0
		==========		==========
Aluminium
Norsk Hydro	Global	4,509		2.2
Alcoa Corp	Global	2,818		1.4
		----------------		----------------
		7,327		3.6
		==========		==========
Steel
ArcelorMittal	Global	1,857	}	1.3
ArcelorMittal 5.5% 18/05/23	Global	856	}	1.3
Steel Dynamics	United States	2,253		1.1
		----------------		----------------
		4,966		2.4
		==========		==========
Gold
Wheaton Precious Metals	Global	2,373		1.1
		----------------		----------------
		2,373		1.1
		==========		==========
Diamonds
Mountain Province Diamonds 8% 15/12/22	Canada	1,798		0.9
		----------------		----------------
		1,798		0.9
		==========		==========
Uranium
Cameco	Canada	1,636		0.8
		----------------		----------------
		1,636		0.8
		==========		==========
Iron
Labrador Iron Ore	Canada	1,242		0.6
		----------------		----------------
		1,242		0.6
		==========		==========
Nickel
Nickel Mines	Australia	1,169		0.6
		----------------		----------------
		1,169		0.6
		==========		==========
Total Mining		97,095		47.1
		==========		==========
Traditional Energy
Exploration & Production
ConocoPhillips	Global	5,570		2.7
Canadian Natural Resources	Canada	5,147		2.5
Hess	Global	4,229		2.0
Tourmaline Oil	Canada	3,645		1.8
Arc Resources	Canada	3,256		1.6
EOG Resources	United States	3,076		1.5
Ovintiv	United States	2,570		1.2
Orron Energy	Global	2,455		1.2
Diamondback Energy	United States	1,634		0.8
Santos	Australia	978		0.5
Kosmos Energy	United States	745		0.4
		----------------		----------------
		33,305		16.2
		==========		==========
Integrated
Shell	Global	6,698		3.2
BP	Global	6,025		2.9
Cenovus Energy	Canada	4,315		2.1
TotalEnergies	Global	2,802		1.4
Chevron	Global	1,753		0.9
Gazprom**	Russian Federation	–		–
		----------------		----------------
		21,593		10.5
		==========		==========
Oil Services
Tenaris	Global	2,301		1.1
Patterson-UTI Energy	United States	2,088		1.0
		----------------		----------------
		4,389		2.1
		==========		==========
Refining & Marketing
Valero Energy	United States	2,476		1.2
		----------------		----------------
		2,476		1.2
		==========		==========
Distribution
Cheniere Energy	United States	2,157		1.0
		----------------		----------------
		2,157		1.0
		==========		==========
Total Traditional Energy		63,920		31.0
		==========		==========
Energy Transition
Energy Efficiency
Ingersoll-Rand	United States	2,988		1.5
Schneider Electric	Global	2,950		1.4
Analog Devices	Global	2,682		1.3
Trane Technologies	United States	1,729		0.8
Texas Instruments	Global	1,058		0.5
Soitec	France	1,017		0.5
Kingspan Group	Ireland	923		0.4
		----------------		----------------
		13,347		6.4
		==========		==========
Electrification
NextEra Energy	United States	5,173		2.5
EDP Renováveis	Global	3,935		1.9
RWE	Germany	3,817		1.9
		----------------		----------------
		12,925		6.3
		==========		==========
Renewables
Vestas Wind	Global	4,060		2.0
First Solar	Global	3,996		1.9
Sunnova Energy International	United States	2,065		1.0
		----------------		----------------
		10,121		4.9
		==========		==========
Transport
Samsung SDI	Global	5,099		2.5
Infineon Technologies	Germany	3,832		1.8
		----------------		----------------
		8,931		4.3
		==========		==========
Total Energy Transition		45,324		21.9
		==========		==========
Total Portfolio		206,339		100.0
		==========		==========
Comprising:

Equity and debt investments		206,394		100.0
Derivative financial instruments – written options		(55)		–
		----------------		----------------
		206,339		100.0
		==========		==========

* The investment in the Vale debenture is illiquid and has been valued using secondary market pricing information provided by the Brazilian Financial and Capital Markets Association (ANBIMA).

** The investment in Gazprom has been valued at a nominal value of £0.01 as secondary listings of the depositary receipts on Russian companies have been suspended from trading.

All investments are ordinary shares unless otherwise stated. The total number of holdings (including options) at 30 November 2022 was 68 (2021: 68). There was one open option as at 30 November 2022 (2021: none).

The equity and fixed income investment total of £206,394,000 (2021: £127,784,000) above before the deduction of the negative option valuation of £55,000 (2021: £nil) represents the Group’s total investments held at fair value as reflected in the Consolidated and Parent Company Statements of Financial Position. The table above excludes cash and gearing; the level of the Group’s gearing may be determined with reference to the bank overdraft of £14,345,000 (2021: £12,927,000) and cash and cash equivalents of £6,214,000 (2021: £6,552,000) that are also disclosed in the Consolidated and Parent Company Statements of Financial Position. Details of the AIC methodology for calculating gearing are given in the Glossary contained in the Annual Report for the year ended 30 November 2022.

As at 30 November 2022, the Company did not hold any equity interests comprising more than 3% of any company’s share capital.

Strategic report

The Directors present the Strategic Report of the Company for the year ended 30 November 2022. 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 for the collective benefit of shareholders.

The Chairman’s Statement together with the Investment Manager’s Report and the Section 172 Statement setting out how the Directors promote the success of the Company form part of the Strategic Report. The Strategic Report was approved by the Board at its meeting on 1 February 2023.

Business and management of the company
BlackRock Energy and Resources Income 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 and option writing. The Company’s wholly owned subsidiary is BlackRock Energy and Resources Securities Income Company Limited (together ‘the Group’). Its principal activity is investment dealing.

Investment trusts, like unit trusts and open-ended investment companies (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 Company’s Alternative Investment Fund Manager (AIFM). 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 the Manager, which in turn subdelegates these services to the Fund Accountant, The Bank of New York Mellon (International) Limited. The Company sub-delegates registration services to the Registrar, Computershare Investor Services PLC. Other service providers include the Depositary, also performed by The Bank of New York Mellon (International) Limited. Details of the contractual terms with these service providers are set out in the Directors’ Report contained in the Annual Report for the year ended 30 November 2022.

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. There is a clear division of responsibility between the Board and the Manager. Matters reserved for the Board include setting the Company’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 Company’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 Company’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 range, at 30 November 2022 the portfolio consisted of 68 investments (including one open option contract), and the detailed portfolio listing is provided above.

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 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 Company’s subsidiary. The Group may deal in derivatives, including options and futures, up to a maximum of 30% of the Group’s assets for the purposes of efficient portfolio management and to enhance portfolio returns. In addition, the Group is also permitted to enter into stock lending arrangements up to a maximum of 33.3% 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 Company’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 gross assets at the time of drawdown of the relevant borrowings.

The Group’s financial statements are maintained in British Pound Sterling. Although many investments are denominated and quoted in currencies other than British Pound 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.

Environmental, social and governance (ESG) impact
The Board’s ESG approach is set out in the Annual Report for the year ended 30 November 2022. The direct impact of the Company’s activities is minimal as it has no employees, premises, physical assets or operations either as a producer or a provider of goods or services. Neither does it have customers. Its indirect impact occurs through the investments that it makes, and this is managed through BlackRock’s approach to ESG integration.

Performance
Details of the Company’s performance for the year are given in the Chairman’s Statement. The Investment Manager’s Report includes a review of the main developments during the year, together with information on investment activity within the Company’s portfolio.

Results and dividends
The Company’s revenue earnings for the year amounted to 4.99p per share (2021: 4.96p). Details of dividends paid and declared in respect of the year, together with the Company’s dividend policy, are set out in the Chairman’s Statement.

Future prospects
The Board’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 Chairman’s Statement and in the Investment Manager’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 shareholders’ interests to consider environmental, social and governance factors and human rights issues when selecting and retaining investments. Details of the Company’s policy on socially responsible investment are set out in the Annual Report for the year ended 30 November 2022.

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 Company’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 and gender representation
The Directors of the Company are set out in the Governance structure and Directors’ biographies contained in the Annual Report for the year ended 30 November 2022. All the Directors held office throughout the year with the exception of Mrs Carole Ferguson (who was appointed to the Board on 22 December 2021). The Board consists of two male Directors and two female Directors.

Key performance indicators
A number of performance indicators (KPIs) are used to monitor and assess the Company’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 reviews performance in the context of the blended performance of the EMIX Global Mining (ex Gold) Index, MSCI World Energy Index and the S&P Global Clean Energy Index and a 40:30:30 composite of the three indices effective from 1 June 2020. The Board also monitors performance relative to a peer group of commodities and natural resources focused funds and also regularly reviews the Company’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. Information on the Company’s performance is given in the performance record and the Chairman’s Statement and Investment Manager’s Report.

SHARE RATING
The Board monitors the level of the Company’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 2022, the Company’s share price to NAV traded in the range of a discount of 12.1% to a premium of 9.2% on a cum income basis. The average discount for the year was 2.9%. A total of 15,390,194 new shares were issued and a total of 2,747,643 shares were issued from treasury during the year and further details are given in the Chairman’s Statement. No shares were bought back during the year. Details of shares issued or bought back since the year end date are given in note 14 contained in the Annual Report for the year ended 30 November 2022.

Further details setting out how the discount or premium at which the Company’s shares trade is calculated are included in the Glossary contained in the Annual Report for the year ended 30 November 2022.

ONGOING CHARGES
The ongoing charges represent the Company’s management fee and all other recurring operating expenses, excluding finance costs, direct transaction costs, custody transaction charges, VAT recovered, taxation, prior year expenses written back and certain non-recurring items, expressed as a percentage of average daily net assets. The ongoing charges are based on actual costs incurred in the year as being the best estimate of future costs. The Company’s Manager has also agreed to cap ongoing charges by rebating a portion of the management fee to the extent that the Company’s ongoing charges exceed 1.25% of average net assets. 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 ongoing charges ratio is calculated is included in the Glossary contained in the Annual Report for the year ended 30 November 2022. The Company’s ongoing charges was 1.13% for the year ended 30 November 2022 (there was no management fee rebate due for the year).

DIVIDEND TARGET AND INCOME GENERATION
The level of income is considered at each meeting and the Board receives detailed income forecasts. The Board also monitors the risks and returns from option writing, and regularly reviews the Company’s levels of distributable reserves.

The table below sets out the key KPIs for the Company. These KPIs fall within the definition of ‘Alternative Performance Measures’ (APMs) under guidance issued by the European Securities and Markets Authority (ESMA) and additional information explaining how these are calculated is set out in the Glossary contained in the Annual Report for the year ended 30 November 2022.

Key Performance Indicators	Year ended 30 November 2022	Year ended 30 November 2021
Net asset value total return^1,2	44.5%	34.4%
Share price total return^1,2	44.8%	41.7%
Discount to net asset value (at year end)^2,3	6.8%	7.0%
Revenue return per share	4.99p	4.96p
Dividends per share	4.40p	4.10p
Ongoing charges^{2, 4}	1.13%	1.21%
	=========	=========

¹ This measures the Company’s NAV and share price total returns, which assumes dividends paid by the Company have been reinvested.

² Alternative Performance Measures, see Glossary contained in the Annual Report for the year ended 30 November 2022.

³ This is the difference between the share price and the cum-income NAV per share.

⁴ Ongoing charges represent the management fee and all other recurring operating expenses excluding finance costs, direct transaction costs, custody transaction charges, VAT recovered, taxation, prior year expenses written back and certain non-recurring items, expressed as a percentage of average daily 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 Company’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 reassessed. 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 Manager’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 Manager’s and other third-party service providers’ risk management processes, and how these apply to the Company’s business, BlackRock’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 BlackRock’s internal control processes. The Audit and Management Engagement Committee also periodically receives presentations from BlackRock’s Risk & Quantitative Analysis teams, and reviews Service Organisation Control (SOC 1) reports from BlackRock and other key service providers. The Custodian is appointed by the Company’s Depositary and does not have a direct contractual relationship with the Company.

The Board has undertaken a robust assessment of both the principal and emerging risks facing the Company, including those that would threaten its business model, future performance, solvency or liquidity. The COVID-19 pandemic has given rise to unprecedented challenges for businesses across the globe. Additionally, the risk that unforeseen or unprecedented events including (but not limited to) heightened geo-political tensions such as the war in Ukraine, high inflation and the current cost of living crisis has had a significant impact on global markets. The Board has taken into consideration the risks posed to the Company by these events and incorporated them into the Company’s risk register. The risks identified by the Board have been described in the table that follows, together with an explanation of how they are managed and mitigated. Emerging risks are considered by the Board as they come into view and are incorporated into the existing review of the Company’s risk register. Additionally, the Manager considers emerging risks in numerous forums and the Risk and Quantitative Analysis team produces an annual risk survey. Any material risks of relevance to the Company identified through the annual risk survey will be communicated to the Board. The Board will continue to assess these risks on an ongoing basis. In relation to the UK Code, the Board is confident that the procedures that the Company has put in place are sufficient to ensure that the necessary monitoring of risks and controls has been carried out throughout the reporting period.

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 Company’s objective; and · monitoring the performance of the Investment Manager and the implementation of the investment strategy. An inappropriate investment strategy may lead to: · poor performance; · a reduction or permanent loss of capital; and · dissatisfied shareholders and reputational damage. The Board is also cognisant of the long-term risk to performance from inadequate attention to ESG issues, and in particular the impact of climate change. More detail in respect of these risks can be found in the AIFMD Fund Disclosures document available on the Company’s website at www.blackrock.com/uk/individual/literature/policies/itc-disclosure-blackrock-energy-and-resources-income-trust-plc.pdf	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 monitors 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 risks associated with factors specific to particular sectors, based on the diversification requirements inherent in the investment policy. ESG analysis is integrated in the Manager’s investment process. This is monitored by the Board.
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 has the ability to make dividend distributions out of special reserves and capital reserves as well as revenue reserves to support any dividend target. These reserves totalled £125.1 million at 30 November 2022. In setting the dividend target each year, the Board is mindful of the balance of shareholder returns between income and capital.
Gearing The Company’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 overdraft facility with The 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 Company’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 Company’s Articles of Association limit borrowings to an aggregate amount equal to 40% of the value of the gross assets of the Company. However, to further manage this risk the Board does not anticipate borrowings will exceed 20% of 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 Group’s assets. The Investment Manager will only use gearing when confident that market conditions and opportunities exist to enhance investment returns. The Investment Manager reports to the Board on a regular basis the levels of gearing in place as compared to limits set by the Board under the investment policy and by the Manager as Alternative Investment Fund Manager (AIFM) under the Alternative Investment Fund Managers’ Directive, as retained and onshored in the UK (AIFMD). The Board monitors gearing levels and will raise any queries or concerns in respect of changes in the gearing level with the Investment Manager.
Legal and regulatory compliance The Company has been approved 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 Company’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 Company’s shares which would in turn lead to a breach of the Corporation Tax Act 2010. Amongst other relevant laws and regulations, the Company is required to comply with the provisions of the Companies Act 2006, the Alternative Investment Fund Managers’ Directive, the Market Abuse Regulation, the UK Listing Rules, international sanctions and the FCA’s Disclosure Guidance and 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 Company’s professional advisers provide regular reports to the Board for their review in respect of compliance with all applicable rules and regulations. Following authorisation under the AIFMD, the Company and its appointed 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 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 The Bank of New York Mellon (International) Limited (who act as both Depositary, Custodian and Fund Accountant and who maintain the Company’s assets, settlement and accounting records). The Company’s share register is maintained by the Registrar, Computershare Investor Services PLC. The security of the Company’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 Company’s performance. Disruption to the accounting, payment systems or custody records could prevent the accurate reporting and monitoring of the Company’s financial position. Inadequate succession arrangements, particularly of the Manager, could disrupt the level of service provided.	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 Accountant’s and the Manager’s internal control processes are regularly tested and monitored throughout the year and are evidenced through their 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 Company’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 Company’s key service providers on an ongoing basis and reviews these as part of its review of the Company’s risk register. The Board considers the Manager's succession plans in so far as they affect the services provided to the Company.
Market Market risk arises from volatility in the prices of the Company’s investments. The price of shares of companies in the mining, traditional energy and energy transition sectors can be volatile and this may be reflected in the NAV and market price of the Company’s shares. The Company invests in the mining, traditional energy and energy transition 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. Market risk includes the potential impact of events which are outside the Company’s control, including (but not limited to) heightened geo-political tensions and military conflict, a global pandemic and high inflation. 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. Under the Company’s investment policy, the Investment Manager has the ability to invest in energy transition stocks and is mindful of the impact of any shift in energy consumption towards less carbon intensive energy supply. This is taken into account by the Investment Manager in building a well diversified portfolio. The Board also recognises the benefits of a closed-end fund structure in extremely volatile markets such as those experienced with the COVID-19 pandemic, and more recently the Russia-Ukraine conflict. Unlike open-ended counterparts, closed-end funds are not obliged to sell-down portfolio holdings at low valuations to meet liquidity requirements for redemptions. During times of elevated volatility, restrictions and impacts on securities and markets following the Russian invasion of the Ukraine and market stress, the ability of a closed-end fund structure to remain invested for the long term enables the Portfolio Managers to adhere to disciplined fundamental analysis from a bottom-up perspective and be ready to respond to dislocations in the market as opportunities present themselves.
Financial The Company’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 British Pound Sterling and non-British Pound Sterling denominated securities. Consequently, the value of investments in the portfolio made in non-British Pound Sterling currencies will be affected by currency movements.	Details of these risks are disclosed in note 16 to the Financial Statements contained in the Annual Report for the year ended 30 November 2022, together with a summary of the policies for managing these risks.

Viability statement
In accordance with provision 31 of the 2018 UK Corporate Governance Code, the Directors have assessed the prospects of the Company over a longer period than the twelve months referred to by the ‘Going Concern’ guidelines. The Board is cognisant of the uncertainty surrounding the potential duration of the Russia-Ukraine conflict, its impact on the global economy and the prospects for many of the Company’s portfolio holdings. Notwithstanding this crisis, and given the factors stated below, the Board expects the Company to continue for the foreseeable future and has therefore conducted this review for a period of five years. This is generally the investment holding period investors consider while investing in the sector. The Board conducted this review for the period up to the AGM in 2028.

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 gearing facilities in place and no concerns around facilities, headroom or covenants;

· the Company’s forecasts for revenues, expenses and liabilities are relatively stable, it has largely fixed overheads which comprise a small percentage of net assets and ongoing charges are capped at 1.25% of average net asset value; and

· the business model should remain attractive for longer than five years unless there is significant economic or regulatory change.

The Directors have also reviewed:

· the impact of a significant fall in global commodity equity markets on the value of the Company’s investment portfolio;

· the ability of portfolio companies to pay dividends, and the Company’s portfolio yield and ability to meet its dividend target over the longer term;

· the ongoing relevance of the Company’s investment objective, business model and investment policy in the current environment; and

· the level of demand for the Company’s shares.

The Board has also considered a number of other factors in its assessment, including:

· portfolio liquidity;

· setting the investment strategy to fulfill the Company’s objective; and monitoring the performance of the Investment Manager and the implementation of the investment strategy. The Board regularly reviews the Company’s investment mandate and long-term strategy; it has set investment restrictions and guidelines which the Investment Manager monitors and regularly reports to the Board;

· the Company’s revenue and expense forecasts. The Board is confident that the Company’s business model remains viable and that there are sufficient resources to meet all liabilities as they fall due for the period under review;

· the Company’s borrowing facility and the fact that the Company continues to meet its financial covenants in respect of this facility;

· the long-term risk to performance from inadequate attention to ESG issues, and in particular the impact of climate change. ESG analysis is integrated in the Manager’s investment process. This is monitored by the Board;

· the principal risks and uncertainties as set out above and the fact that the Company has appropriate controls and processes in place to manage these and to maintain its operating model;

· the operational resilience of the Company and its key service providers and their ability to continue to provide a good level of service for the foreseeable future;

· the effectiveness of business continuity plans in place for the Company and key service providers; and

· the level of income generated by the Company and future income forecasts.

Based on the results of their analysis, the Directors have concluded that there is 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.

Section 172 Statement: promoting the success of BlackRock Energy and Resources Income Trust plc
The Companies (Miscellaneous Reporting) Regulations 2018 require Directors to explain in detail how they have discharged their duties under Section 172(1) of the Companies Act 2006 in promoting the success of their companies for the benefit of members as a whole. This enhanced disclosure covers how the Board has engaged with and understands the views of stakeholders and how stakeholders’ needs have been taken into account, the outcome of this engagement and the impact that it has had on the Board’s decisions.

As the Company is an externally managed investment company and does not have any employees or customers, the Board considers the main stakeholders in the Company to be the shareholders, key service providers (being the Manager and Investment Manager, the Custodian, Depositary, Registrar and Broker) and investee companies. The reasons for this determination, and the Board’s overarching approach to engagement, are set out in the table below.

Stakeholders
Shareholders	Manager and Investment Manager	Other key service providers	Investee companies
Continued shareholder support and engagement are critical to the continued existence of the Company and the successful delivery of its long-term strategy. The Board is focused on fostering good working relationships with shareholders and on understanding the views of shareholders in order to incorporate them into the Board’s strategy and objectives in delivering long-term growth and income.	The Board’s main working relationship is with the Manager, who is responsible for the Company’s portfolio management (including asset allocation, stock and sector selection) and risk management, as well as ancillary functions such as administration, secretarial, accounting and marketing services. The Manager has sub-delegated portfolio management to the Investment Manager. Successful management of shareholders’ assets by the Investment Manager is critical for the Company to successfully deliver its investment strategy and meet its objective. The Company is also reliant on the Manager as AIFM to provide support in meeting relevant regulatory obligations under the AIFMD and other relevant legislation.	In order for the Company to function as an investment trust with a listing on the premium segment of the official list of the Financial Conduct Authority (FCA) and trade on the London Stock Exchange’s (LSE) main market for listed securities, the Board relies on a diverse range of advisors for support in meeting relevant obligations and safeguarding the Company’s assets. For this reason, the Board considers the Company’s Custodian, Depositary, Registrar and Broker to be stakeholders. The Board maintains regular contact with its key external service providers and receives regular reporting from them through the Board and committee meetings, as well as outside of the regular meeting cycle.	Portfolio holdings are ultimately shareholders’ assets, and the Board recognises the importance of good stewardship and communication with investee companies in meeting the Company’s investment objective and strategy. The Board monitors the Manager’s stewardship arrangements and receives regular feedback from the Manager in respect of meetings with the management of portfolio companies.

A summary of the key areas of engagement undertaken by the Board with its key stakeholders in the year under review and how Directors have acted upon this to promote the long-term success of the Company are set out in the table below.

Area of Engagement	Issue	Engagement	Impact
Investment Mandate and Objective	The Board is committed to promoting the role and success of the Company in delivering on its investment mandate to shareholders over the long term. However, the Board recognises that the sectors in which the Company invests are undergoing structural changes, with a shift in the energy sector away from carbon-based energy supplies towards alternative and renewable energy sources. The extractive industries in which the companies in the Company’s investment universe operate are facing ethical and sustainability issues that cannot be ignored by asset managers and investment companies alike. More than ever, consideration of material ESG information and sustainability risks is an important element of the investment process. The Board also has responsibility to shareholders to ensure that the Company’s portfolio of assets is invested in line with the stated investment objective and in a way that ensures an appropriate balance between spread of risk and portfolio returns.	The Board believes that responsible investment and sustainability are integral to the longer-term delivery of growth in capital and income and has worked very closely with the Manager throughout the year to regularly review the Company’s performance, investment strategy and underlying policies to ensure that the Company’s investment objective continues to be met in an effective, responsible way that is transparent to current and future investors. In addition to six scheduled Board meetings a year, the Board holds a Strategy Day which is dedicated to an in depth review of the Company’s strategy in conjunction with key advisors including the Company’s broker, public relations and marketing teams and members of BlackRock’s portfolio management and risk analytics teams. The Manager’s approach to the consideration of ESG factors in respect of the Company’s portfolio, as well as its engagement with investee companies to encourage the adoption of sustainable business practices which support long-term value creation, are kept under review by the Board. The Manager reports to the Board in respect of its consideration of ESG factors and how these are integrated into the investment process; a summary of BlackRock’s approach to ESG integration is set out in the Annual Report for the year ended 30 November 2022.	The portfolio activities undertaken by the Investment Manager can be found in the Investment Manager’s Report on above. The Board does not formally benchmark the Company’s performance against mining and energy sector indices because meeting a specific dividend target is not within the scope of these indices and also because no index appropriately reflects the Company’s blended exposure to the Energy (including the energy transition) and mining sectors. For internal monitoring purposes, however, the Board compares the performance of the portfolio against a bespoke internal mining and energy composite index. Details regarding the Company’s Key Performance Indicators can be found in this Strategic Report.
Management of Share Rating	The Board recognises the importance to shareholders that the market price of the Company’s shares should not trade at either a significant discount or premium to the NAV. One of the Board’s long-term strategic aspirations is that the Company’s shares should trade consistently at a price close to the NAV per share.	The Board monitors the Company’s discount on an ongoing basis and meets with the Manager and the Company’s Broker on a regular basis to discuss methods to manage the discount. A range of discount control mechanisms have been considered and the benefits and disadvantages of these have been discussed at length. The Board is also prepared to issue shares into the market to meet demand as required and avoid shares moving to trade at an excessive premium. The Company’s shares moved to trade at a sustained premium in the first half of 2022, and the Company sold all of its treasury shares and issued new shares into market demand to manage this following consultation with the manager and the broker. Where necessary, the Board sought shareholder approval to both buy-backs and issuance. Resolutions were proposed, and passed, at the Annual General Meeting on 15 March 2022 and a General Meeting on 26 May 2022. The Board notes that all share issues have been and will continue to be made at premiums to the prevailing NAV per share, such that all such transactions are accretive to the NAV and NAV per share so that existing shareholders are protected from any value/economic dilution. In addition, the Board has worked closely with the Manager to develop the Company’s marketing strategy, with the aim of ensuring effective communication with existing shareholders and to attract new shareholders to the Company in order to improve liquidity in the Company’s shares and to sustain the share rating of the Company	The Company’s average discount for the year to 30 November 2022 was 2.9% (year to 30 November 2021: 5.6%) and as at 30 January 2023 the premium stood at 3.6%. This compares to an average discount for the AIC Commodities and Natural resources sector of 11.3% at 30 November 2022 and 12.2% at 31 December 2022. All share issues and re-issues from treasury undertaken in the year were made at a premium to NAV, and resulted in an overall accretion to the NAV per share of 0.39p per share. The share issuance transactions in the year under review results in an increase of £22.6 million in the Company's assets under management and this contributed to a decrease in the Company's operating charges ratio, as a large proportion of the Company's operating costs are fixed and they are now being spread over a larger capital base. The Company contributed during the year 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 2022, the Group’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 (£122.3million) as at 31 December 2021, and this contribution was matched by BIM (UK). This marketing activity was one factor contributing to increased demand for the Company’s shares, enabling it to grow in size and resulting in a lower operating charges ratio and greater liquidity. Combined with the strong NAV performance seen over the course of the year, this was also a factor in the Company being promoted from the FTSE Fledgling Index into the FTSE Small Cap Index (and also therefore the FTSE All Share Index) in June 2022 which generated additional demand for the Company’s shares.
Dividend target	A key element of the Company’s investment objective is to achieve an annual dividend target. The Board is cognisant that portfolio investments with a high yield may have lower capital growth, and that seeking to ensure that any dividend target is covered by current year dividend revenue may result in a lower total return. Conversely, a move to invest a higher proportion of the portfolio in higher growth investments (including certain energy transition stocks) may result in a lower yielding portfolio.	The Board reviews income forecasts and option writing activity in conjunction with the Manager to determine the most effective approach for meeting the dividend target whilst generating the optimal level of total return for shareholders. The Board aims to meet the annual target dividend primarily from a mix of dividend income from the portfolio and revenue reserves, although this will be supported by the distribution of the Company’s other substantial distributable reserves (£121.3 million at 30 November 2022) if required.	Since the year-end, the Board has announced that the annual dividend target will be remain at 4.40 pence per share for the year to 30 November 2023.
Service levels of third party providers	The Board acknowledges the importance of ensuring that the Company’s principal suppliers are providing a suitable level of service: this includes the Manager in respect of investment performance and delivering on the Company’s investment mandate; the Custodian and Depositary in respect of their duties towards safeguarding the Company’s assets; the Registrar in its maintenance of the Company’s share register and dealing with investor queries and the Company’s Broker in respect of the provision of advice and acting as a market maker for the Company’s shares.	The Manager reports to the Board on the Company’s performance on a regular basis. The Board carries out a robust annual evaluation of the Manager’s performance, its commitment and available resources. The Board performs an annual review of the service levels of all third-party service providers and concludes on their suitability to continue in their role. The Board receives regular updates from the AIFM, Depositary, Registrar and Broker on an ongoing basis.	All performance evaluations were performed on a timely basis and the Board concluded that all key third-party service providers, including the Manager were operating effectively and providing a good level of service.
Board composition	The Board is committed to ensuring that its own composition brings an appropriate balance of knowledge, experience and skills, and that it is compliant with best corporate governance practice under the UK Code, including guidance on tenure and the composition of the Board’s committees.	The Board reviews succession planning on an ongoing basis. A new Director, Carole Ferguson, was appointed in the year under review as part of a recruitment drive that was initiated in 2021. As part of this process, the Nomination Committee agreed the selection criteria and the method of selection, recruitment and appointment. Board diversity, including gender, was taken into account when establishing the criteria. The services of an external search consultant, Odgers Berndtson, was used to identify potential candidates. The Board remain focused on best Corporate Governance Practice, and in particular the recommendation under the UK Code that Directors’ tenure is limited to nine years. While the Board does not have a formal limit on tenure, Mr Warner retired as Chairman and a Director of the Company in March 2022, noting that his tenure would exceed nine years with effect from July 2022.	The Board appointed Mrs Carole Ferguson as a Director of the Company with effect from 22 December 2021. Mrs Ferguson’s biography is set in the Annual Report for the year ended 30 November 2022. Details of each Director’s contribution to the success and promotion of the Company are set out in the Directors’ Report contained in the Annual Report for the year ended 30 November 2022. All Directors currently serving on the Board have tenure below the nine years maximum limit recommended under the UK Code. The Board's composition currently meets all targets recommended under the Parker Review and enshrined in recent changes to the FCA's Listing Rules (which set new diversity targets and associated disclosure requirements for UK companies listed on the London Stock Exchange).

Environmental, Social And Governance Approach

The Board’s approach
Environmental, social and governance (ESG) issues can present both opportunities and risks to long-term investment performance. The Company’s investment universe comprises sectors that are undergoing significant structural change and are likely to be highly impacted by increasing regulation as a result of climate change and other social and governance factors. Your Board is committed to ensuring that we have appointed a manager that integrates ESG considerations into its investment process and has the skill and vision to navigate the structural transition that the Company’s investment universe is undergoing.

The Board believes multi-year engagement with management is, in most cases, the most constructive way of building our understanding of a company’s approach to addressing material business risks and opportunities. Engagement can lead to stronger relationships with companies and more constructive outcomes for shareholders and businesses alike.

This is particularly true for the Company’s Manager given the extent of BlackRock’s shareholder engagement (BlackRock held 3,693 engagements with companies based in 55 markets for the year to 30 June 2022, and voted on more than 173,000 management and shareholder proposals at 18,100 meetings¹). The Board believes that BlackRock is well-placed as Manager to fulfil these requirements due to the integration of ESG into its investment processes, its constructive approach in its investment stewardship activities and its position in the industry as one of the largest suppliers of sustainable investment products in the global market.

More information on BlackRock’s global approach to ESG integration, as well as activity specific to the BlackRock Energy and Resources Income Trust plc portfolio is set out below. BlackRock has defined ESG integration as the practice of incorporating material ESG information and consideration of sustainability risks into investment decisions in order to enhance risk-adjusted returns. ESG integration does not change the Company’s investment objective or constrain the Investment Manager’s investable universe, and does not mean that an ESG or impact focused investment strategy or any exclusionary screens have been or will be adopted by the Company (apart from the exclusion of companies that generate more than 25% of their revenues from thermal coal production in active and advisory portfolios). Similarly, ESG integration does not determine the extent to which the Company may be impacted by sustainability risks.

More information on sustainability risks may be found in the AIFMD Fund Disclosures document of the Company available on the Company’s website at www.blackrock.com/uk/individual/literature/policies/itc-disclosure-blackrock-energy-and-resources-income-trust-plc.pdf

The Company does not meet the criteria for Article 8 or 9 products under the EU Sustainable Finance Disclosure Regulation (“SFDR”) and the investments underlying this financial product do not take into account the EU criteria for environmentally sustainable economic activities.

¹ Source: BlackRock 2022 Voting Spotlight report and BlackRock Investment Stewardship website www.blackrock.com/corporate/about-us/investment-stewardship#engagement-and-voting-history

BlackRock Investment Stewardship Engagement with portfolio companies in the year ended 30 November 2022
Given the Board’s belief in the importance of engagement and communication with portfolio companies, they receive regular updates from the Manager in respect of activity undertaken for the year under review. The Board notes that over the year to 30 November 2022, 94 total company engagements were held with the management teams of 40 portfolio companies representing 66% of the portfolio by value at 30 November 2022. To put this into context, there were 61 companies in the BlackRock Energy and Resources Income Trust plc portfolio at 30 November 2022. Additional information is set out in the table and charts contained in the Annual Report for the year ended 30 November 2022 as well as the key engagement themes for the meetings held in respect of the Company’s portfolio holdings.

	BlackRock Energy and Resources Income Trust plc - year ended 30 November 2022
Number of engagements held	94
Number of companies met	40
% of equity investments covered	66%
Shareholder meetings voted at	67
Number of proposals voted on	897
Number of votes against management	22
% of total votes represented by votes against management	2.23%
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The importance and challenges of considering ESG when engaging with investee companies in the Natural Resources Sector and BlackRock’s global approach to ESG integration

Environmental	Social	Corporate Governance
As well as the longer-term contribution to carbon emissions and the impact on the environment, the activities undertaken by many companies in the portfolio such as digging mines or drilling for oil will inevitably have an impact on local surroundings. It is important how companies manage this process and ensure that an appropriate risk oversight framework is in place, with consideration given to all stakeholders. The value wiped off the market capitalisation of companies like BP, after the Macondo oil spill, and Vale, after the Brumadinho dam collapse, highlights the key role that ESG has on share price performance. BlackRock’s approach to climate risk and opportunities and the global energy transition is based on our role as a fiduciary to our clients. As the world works toward a transition to a low-carbon economy, BlackRock are interested in hearing from companies about their strategies and plans for responding to the challenges and capturing the opportunities that this transition creates. When companies consider climate-related risks, it is likely that they will also assess their impact and dependence on natural capital.	BlackRock’s Global Principles underscore the belief that companies are best placed to deliver value for long-term shareholders like BlackRock’s clients when they also consider the interests of their other key stakeholders, which generally will include workers, business partners (such as suppliers and distributors), clients and consumers, government, and the communities in which they operate. In BlackRock’s experience, companies that build strong relationships with their stakeholders are more likely to meet their own strategic objectives, while poor relationships may create adverse impacts that expose a company to legal, regulatory, operational, and reputational risks and jeopardize their ability to deliver sustainable, long-term financial performance.	As with all companies, good corporate governance is especially critical for natural resources companies. In our experience, the sound governance, in terms of both process and practice, is critical to the success of a company, the protection of shareholders’ interests, and long-term shareholder value creation. Governance issues, including the management of material sustainability issues that have a significant impact for natural resource companies, all require effective leadership and oversight from a company’s board. BlackRock believes that companies with experienced, engaged and diverse directors, who are effective in actively advising and overseeing management as a board, are well-positioned to deliver long-term value creation.

Blackrock’s approach to ESG integration
BlackRock believes that sustainability risk – and climate risk in particular – now equates to investment risk, and this will drive a profound reassessment of risk and asset values as investors seek to react to the impact of climate policy changes. This in turn (in BlackRock’s view) is likely to drive a significant reallocation of capital away from traditional carbon intensive industries over the next decade. BlackRock believes that carbon-intensive companies will play an integral role in unlocking the full potential of the energy transition, and to do this, they must be prepared to adapt, innovate and pivot their strategies towards a low carbon economy.

As part of BlackRock’s structured investment process, ESG risks and opportunities (including sustainability/climate risk) are considered within the portfolio management team’s fundamental analysis of companies and industries. ESG factors have been a key consideration of the BlackRock Natural Resources Team’s investment process since inception and the Company’s portfolio managers work closely with BIS to assess the governance quality of companies and understand any potential issues, risks or opportunities.

As part of their approach to ESG integration, the portfolio managers use ESG information when conducting research and due diligence on new investments and again when monitoring investments in the portfolio. In particular, portfolio managers now have access to 1,200 key ESG performance indicators in Aladdin (BlackRock’s proprietary trading system) from third-party data providers. BlackRock’s internal sustainability research framework scoring is also available alongside third-party ESG scores in core portfolio management tools. BlackRock’s analyst’s sector expertise and local market knowledge allows it to engage with companies through direct interaction with management teams and conducting site visits. In conjunction with the portfolio management team, BlackRock Investment Stewardship’s (BIS) meets with boards of companies frequently to evaluate how they are strategically managing their longer-term issues, including those surrounding ESG and the potential impact these may have on company financials. BIS’s and the portfolio management team’s understanding of ESG issues is further supported by BlackRock’s Sustainable and Transition Solutions (STS). STS look to advance ESG research and integration, active engagement and the development of sustainable investment solutions across the firm.

Investment Stewardship
Consistent with BlackRock’s fiduciary duty as an asset manager, BIS seeks to support investee companies in their efforts to deliver long-term durable financial performance on behalf of our clients. These clients include public and private pension plans, governments, insurance companies, endowments, universities, charities and, ultimately, individual investors, among others. BIS serves as an important link between BlackRock’s clients and the companies they invest in. Clients depend on BlackRock to help them meet their investment goals; the business and governance decisions that companies make will have a direct impact on BlackRock’s clients’ long-term investment outcomes and financial well-being.

Global Principles
BlackRock’s approach to corporate governance and stewardship is comprised in BIS’ Global Principles and market-specific voting guidelines. BIS’ policies set out the core elements of corporate governance that guide its investment stewardship activities globally and within each regional market, including when voting at shareholder meetings for those clients who have authorized BIS to vote on their behalf. Each year, BIS reviews its policies and updates them as necessary to reflect changes in market standards and regulations, insights gained over the year through third-party and its own research, and feedback from clients and companies. BIS’ Global Principles are available on its website at www.blackrock.com/corporate/literature/fact-sheet/blk-responsible-investment-engprinciples-global.pdf.

Market-specific proxy voting guidelines
BIS’ voting guidelines are intended to help clients and companies understand its thinking on key governance matters. They are the benchmark against which it assesses a company’s approach to corporate governance and the items on the agenda to be voted on at shareholder meeting. BIS applies its guidelines pragmatically, taking into account a company’s unique circumstances where relevant. BlackRock informs voting decisions through research and engages as necessary. BIS reviews its voting guidelines annually and updates them as necessary to reflect changes in market standards, evolving governance practice and insights gained from engagement over the prior year.

BIS’ market-specific voting guidelines are available on its website at www.blackrock.com/corporate/about-us/investment-stewardship#stewardship-policies.

BlackRock is committed to transparency in terms of disclosure on its stewardship activities on behalf of clients. BIS publishes its stewardship policies – such as the Global Principles, engagement priorities, and voting guidelines – to help BlackRock’s clients understand its work to advance their interests as long-term investors in public companies. Additionally, BIS publishes both annual and quarterly reports detailing its stewardship activities, as well as vote bulletins that describe its rationale for certain votes at high profile shareholder meetings. More detail in respect of BIS reporting can be found at www.blackrock.com/corporate/about-us/investment-stewardship.

BlackRock’s reporting and disclosures
In terms of its own reporting, BlackRock believes that the SASB provides a clear set of standards for reporting sustainability information across a wide range of issues, from labour practices to data privacy to business ethics.

For evaluating and reporting climate-related risks, as well as the related governance issues that are essential to managing them, the TCFD provides a valuable framework.

BlackRock recognises that reporting to these standards requires significant time, analysis, and effort. BlackRock’s 2021 TCFD report can be found at www.blackrock. com/corporate/literature/continuous-disclosure-and-importantinformation/tcfd-report-2021-blkinc.pdf.

The Investment Manager has access to a range of data sources, including principal adverse indicator (“PAI”) data, when making decisions on the selection of investments. However, whilst BlackRock considers ESG risks for all portfolios and these risks may coincide with environmental or social themes associated with the PAIs, unless stated otherwise in the AIFMD Fund Disclosure Document, the Company does not commit to considering PAIs in driving the selection of its investments.

The above forms part of the Strategic Report.

By order of the Board

GRAHAM VENABLES
FOR AND ON BEHALF OF
BLACKROCK INVESTMENT MANAGEMENT (UK) LIMITED
Company Secretary
1 February 2023

Statement of Directors’ 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 Group and Parent Company financial statements in accordance with UK-adopted International Accounting Standards (IFRSs). 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 and the Company and of the profit or loss of the Group and the Company for that period.

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

· 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;

· in respect of the Group financial statements, state whether UK-adopted International Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;

· provide additional disclosures when compliance with the specific requirements in IFRSs is insufficient to enable users to understand the impact of particular transactions, other events and conditions on the Group and Company financial position and financial performance;

· in respect of the Parent Company financial statements, state whether UK-adopted International Accounting Standards, have been followed, subject to any material departures disclosed and explained in the financial statements; and

· prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group and/or the Company will continue in business.

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

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

Under applicable law and regulations, the Directors are also responsible for preparing a Strategic Report, Directors’ Report, Directors’ Remuneration Report, Corporate Governance Statement and the Report of the Audit and Management Engagement Committee that comply with that law and those regulations. The Directors have delegated responsibility to the Manager for the maintenance and integrity of the Group’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.

The Directors confirm, to the best of their knowledge:

· that the consolidated financial statements prepared in accordance with UK-adopted International Accounting Standards, give a true and fair view of the assets, liabilities, financial position and profit of the Parent Company and undertakings included in the consolidation taken as a whole;

· that the annual report, including the strategic report, includes a fair review of the development and performance of the business and the position of the Company and undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face; and

· that they consider the annual report, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the company’s position, performance, business model and strategy.

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 Committee’s Report. As a result, the Board has concluded that the Annual Report for the year ended 30 November 2022, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Group’s and the Company’s position, performance, business model and strategy.

FOR AND ON BEHALF OF THE BOARD
ADRIAN BROWN
Chairman
1 February 2023

Consolidated statement of comprehensive income for the year ended 30 November 2022

	Notes	2022			2021
	Notes	Revenue £000	Capital £000	Total £000	Revenue £000	Capital £000	Total £000
Income from investments held at fair value through profit or loss	3	6,969	–	6,969	6,061	–	6,061
Other income	3	1,343	–	1,343	742	–	742
		---------------	---------------	---------------	---------------	---------------	---------------
Total revenue		8,312	–	8,312	6,803	–	6,803
		=========	=========	=========	=========	=========	=========
Net profit on investments and options held at fair value through profit or loss		–	51,394	51,394	–	25,954	25,954
Net profit/(loss) on foreign exchange		–	4	4	–	(1)	(1)
		---------------	---------------	---------------	---------------	---------------	---------------
Total		8,312	51,398	59,710	6,803	25,953	32,756
		=========	=========	=========	=========	=========	=========
Expenses
Investment management fee	4	(339)	(1,019)	(1,358)	(234)	(706)	(940)
Other operating expenses	5	(886)	(11)	(897)	(419)	(7)	(426)
		---------------	---------------	---------------	---------------	---------------	---------------
Total operating expenses		(1,225)	(1,030)	(2,255)	(653)	(713)	(1,366)
		=========	=========	=========	=========	=========	=========
Net profit on ordinary activities before finance costs and taxation		7,087	50,368	57,455	6,150	25,240	31,390
Finance costs	6	(49)	(147)	(196)	(5)	(15)	(20)
		---------------	---------------	---------------	---------------	---------------	---------------
Net profit on ordinary activities before taxation		7,038	50,221	57,259	6,145	25,225	31,370
Taxation (expense)/credit		(644)	162	(482)	(441)	24	(417)
		---------------	---------------	---------------	---------------	---------------	---------------
Net profit on ordinary activities after taxation		6,394	50,383	56,777	5,704	25,249	30,953
		=========	=========	=========	=========	=========	=========
Earnings per ordinary share (pence)	8	4.99	39.28	44.27	4.96	21.96	26.92
		=========	=========	=========	=========	=========	=========

The total column of this statement represents the Group’s Statement of Comprehensive Income, prepared in accordance with UK-adopted International Accounting Standards (IASs). The supplementary revenue and capital accounts 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 (2021: £nil). The net profit for the year disclosed above represents the Group’s total comprehensive income.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 NOVEMBER 2022

Group For the year ended 30 November 2022	Notes	Called up share capital £000	Share premium account £000	Special reserve £000	Capital reserves £000	Revenue reserve £000	Total £000
At 30 November 2021		1,190	47,727	68,852	(2,548)	5,607	120,828
Total comprehensive income:
Net profit for the year		–	–	–	50,383	6,394	56,777
Transactions with owners, recorded directly to equity:
Ordinary share issues	9, 10	154	19,563	–	–	–	19,717
Share issue costs	9, 10	–	(110)	–	–	–	(110)
Ordinary shares reissued from treasury	10	–	1,023	2,091	–	–	3,114
Share reissue costs		–	–	(6)	(32)	–	(38)
Dividends paid¹	7	–	–	–	–	(5,580)	(5,580)
		---------------	---------------	---------------	---------------	---------------	---------------
At 30 November 2022		1,344	68,203	70,937	47,803	6,421	194,708
		=========	=========	=========	=========	=========	=========
For the year ended 30 November 2021
At 30 November 2020		1,190	46,977	66,775	(27,797)	4,497	91,642
Total comprehensive income:
Net profit for the year		–	–	–	25,249	5,704	30,953
Transactions with owners, recorded directly to equity:
Ordinary shares reissued from treasury		–	750	2,131	–	–	2,881
Share issue costs		–	–	(6)	–	–	(6)
Ordinary shares purchased into treasury		–	–	(48)	–	–	(48)
Dividends paid²	7	–	–	–	–	(4,594)	(4,594)
		---------------	---------------	---------------	---------------	---------------	---------------
At 30 November 2021		1,190	47,727	68,852	(2,548)	5,607	120,828
		=========	=========	=========	=========	=========	=========

¹ 4th interim dividend of 1.10p per share for the year ended 30 November 2021, declared on 8 December 2021 and paid on 14 January 2022; 1st interim dividend of 1.10p per share for the year ended 30 November 2022, declared on 15 March 2022 and paid on 21 April 2022; 2nd interim dividend of 1.10p per share for the year ended 30 November 2022, declared on 7 June 2022 and paid on 15 July 2022 and 3rd interim dividend of 1.10p per share for the year ended 30 November 2022, declared on 12 September 2022 and paid on 20 October 2022.

² 4th interim dividend of 1.00p per share for the year ended 30 November 2020, declared on 8 December 2020 and paid on 15 January 2021; 1st interim dividend of 1.00p per share for the year ended 30 November 2021, declared on 16 March 2021 and paid on 22 April 2021; 2nd interim dividend of 1.00p per share for the year ended 30 November 2021, declared on 8 June 2021 and paid on 16 July 2021 and 3rd interim dividend of 1.00p per share for the year ended 30 November 2021, declared on 14 September 2021 and paid on 19 October 2021.

PARENT COMPANY STATEMENT OF CHANGES IN EQUITY

Company	Notes	Called up share capital £000	Share premium account £000	Special reserve £000	Capital reserves £000	Revenue reserve £000	Total £000
For the year ended 30 November 2022
At 30 November 2021		1,190	47,727	68,852	436	2,623	120,828
Total comprehensive income:
Net profit for the year		–	–	–	50,033	6,744	56,777
Transactions with owners, recorded directly to equity:
Ordinary share issues	9, 10	154	19,563	–	–	–	19,717
Share issue costs	10	–	(110)	–	–	–	(110)
Ordinary shares reissued from treasury	9, 10	–	1,023	2,091	–	–	3,114
Share reissue costs	10	–	–	(6)	(32)	–	(38)
Dividends paid¹	7	–	–	–	–	(5,580)	(5,580)
		---------------	---------------	---------------	---------------	---------------	---------------
At 30 November 2022		1,344	68,203	70,937	50,437	3,787	194,708
		=========	=========	=========	=========	=========	=========
For the year ended 30 November 2021
At 30 November 2020		1,190	46,977	66,775	(24,822)	1,522	91,642
Total comprehensive income:
Net profit for the year		–	–	–	25,258	5,695	30,953
Transactions with owners, recorded directly to equity:
Ordinary shares reissued from treasury		–	750	2,131	–	–	2,881
Share issue costs		–	–	(6)	–	–	(6)
Ordinary shares purchased into treasury		–	–	(48)	–	–	(48)
Dividends paid²	7	–	–	–	–	(4,594)	(4,594)
		---------------	---------------	---------------	---------------	---------------	---------------
At 30 November 2021		1,190	47,727	68,852	436	2,623	120,828
		=========	=========	=========	=========	=========	=========

For information on the Company’s distributable reserves please refer to note 15 contained in the Annual Report for the year ended 30 November 2022.

CONSOLIDATED AND PARENT COMPANY STATEMENTS OF FINANCIAL POSITION AS AT 30 NOVEMBER 2022

	Notes	30 November 2022		30 November 2021
	Notes	Group £000	Company £000	Group £000	Company £000
Non current assets
Investments held at fair value through profit or loss		206,394	209,849	127,784	131,588
		---------------	---------------	---------------	---------------
Current assets
Other receivables		1,980	4,721	4,878	7,619
Current tax asset		103	103	57	57
Cash collateral held with brokers		285	285	–	–
Cash and cash equivalents		6,214	18	6,552	7
		---------------	---------------	---------------	---------------
Total current assets		8,582	5,127	11,487	7,683
		---------------	---------------	---------------	---------------
Total assets		214,976	214,976	139,271	139,271
		=========	=========	=========	=========
Current liabilities
Other payables		(5,868)	(5,868)	(5,516)	(5,516)
Derivative financial liabilities held at fair value through profit or loss		(55)	(55)	–	–
Bank overdraft		(14,345)	(14,345)	(12,927)	(12,927)
		---------------	---------------	---------------	---------------
Total current liabilities		(20,268)	(20,268)	(18,443)	(18,443)
		=========	=========	=========	=========
Net assets		194,708	194,708	120,828	120,828
		=========	=========	=========	=========
Equity attributable to equity holders
Called up share capital	9	1,344	1,344	1,190	1,190
Share premium account	10	68,203	68,203	47,727	47,727
Special reserve	10	70,937	70,937	68,852	68,852
Capital reserves
At 1 December	10	(2,548)	436	(27,797)	(24,822)
Net profit for the year		50,383	50,033	25,249	25,258
Transactions with owners recorded directly to equity		(32)	(32)	–	–
At 30 November		47,803	50,437	(2,548)	436
		=========	=========	=========	=========
Revenue reserve
At 1 December	10	5,607	2,623	4,497	1,522
Net profit for the year		6,394	6,744	5,704	5,695
Dividends paid		(5,580)	(5,580)	(4,594)	(4,594)
At 30 November		6,421	3,787	5,607	2,623
		---------------	---------------	---------------	---------------
Total equity		194,708	194,708	120,828	120,828
		=========	=========	=========	=========
Net asset value per ordinary share (pence)	8	144.92	144.92	103.97	103.97
		=========	=========	=========	=========

CONSOLIDATED AND PARENT COMPANY CASH FLOW STATEMENTS FOR THE YEAR ENDED 30 NOVEMBER 2022

	30 November 2022		30 November 2021
	Group £000	Company £000	Group £000	Company £000
Operating activities
Net profit on ordinary activities before taxation	57,259	57,259	31,370	31,370
Add back finance costs	196	196	20	20
Net profit on investments and options held at fair value through profit or loss (including transaction costs)	(51,394)	(51,045)	(25,954)	(25,963)
Net (profit)/loss on foreign exchange	(4)	–	1	(31)
Sales of investments held at fair value through profit or loss	126,788	126,788	82,907	82,907
Purchases of investments held at fair value through profit or loss	(153,949)	(153,949)	(87,168)	(87,168)
Increase in other receivables	(18)	(18)	(128)	(350)
Increase in other payables	230	230	231	231
Decrease/(increase) in amounts due from brokers	2,916	2,916	(4,412)	(4,412)
Increase in amounts due to brokers	40	40	4,798	4,798
Net movement in cash collateral held with brokers	(285)	(285)	163	–
	---------------	---------------	---------------	---------------
Net cash (outflow)/inflow from operating activities before taxation	(18,221)	(17,868)	1,828	1,402
	=========	=========	=========	=========
Taxation paid	–	–	(221)	–
Taxation on investment income included within gross income	(528)	(528)	(457)	(457)
	---------------	---------------	---------------	---------------
Net cash (outflow)/inflow from operating activities	(18,749)	(18,396)	1,150	945
	=========	=========	=========	=========
Financing activities
Interest paid	(196)	(196)	(20)	(20)
Receipts from share issues	19,717	19,717	2,881	2,881
Share issue costs paid	(60)	(60)	(6)	(6)
Payments for share purchases	–	–	(48)	(48)
Proceeds from shares reissued from treasury	3,108	3,108	–	–
Dividends paid	(5,580)	(5,580)	(4,594)	(4,594)
	---------------	---------------	---------------	---------------
Net cash inflow/(outflow) from financing activities	16,989	16,989	(1,787)	(1,787)
	=========	=========	=========	=========
Decrease in cash and cash equivalents	(1,760)	(1,407)	(637)	(842)
Effect of foreign exchange rate changes	4	–	(1)	31
	---------------	---------------	---------------	---------------
Change in cash and cash equivalents	(1,756)	(1,407)	(638)	(811)
	=========	=========	=========	=========
Cash and cash equivalents at start of year	(6,375)	(12,920)	(5,737)	(12,109)
	---------------	---------------	---------------	---------------
Cash and cash equivalents at end of year	(8,131)	(14,327)	(6,375)	(12,920)
	=========	=========	=========	=========
Comprised of:
Cash at bank	6,214	18	6,552	7
Bank overdraft	(14,345)	(14,345)	(12,927)	(12,927)
	---------------	---------------	---------------	---------------
	(8,131)	(14,327)	(6,375)	(12,920)
	=========	=========	=========	=========

Notes to the financial statements for the year ended 30 November 2022

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 seventeenth Annual Report.

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

(a) Basis of preparation
On 31 December 2020, International Financial Reporting Standards as adopted by the European Union at that date was brought into UK law and became UK-adopted International Accounting Standards (IASs), with future changes being subject to endorsement by the UK Endorsement Board. The Group and Company transitioned to IASs in its financial statements with effect from 1 December 2021. There was no impact or changes in accounting policies from the transition.

The Group and Company financial statements have been prepared under the historic cost convention modified by the revaluation of certain financial assets and financial liabilities held at fair value through profit or loss and in accordance with IASs. All of the Group’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) in October 2019, and updated in July 2022, is compatible with IASs, 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 are satisfied that the Group has adequate resources to continue in operational existence for the foreseeable future for the period to 30 November 2024, being a period of at least twelve months from the date of approval of the financial statements and therefore consider the going concern assumption to be appropriate. The Directors have reviewed compliance with the covenants associated with the bank overdraft facility, income and expense projections and the liquidity of the investment portfolio in making their assessment.

The Directors have considered the impact of climate change on the value of the investments included in the Financial Statements and have concluded that:

· there was no further impact of climate change to be considered as the investments are valued based on market pricing as required by IFRS 13; and

· the risk is adequately captured in the assumptions and inputs used in measurement of Level 3 assets, if any, as noted in note 16 of the Financial Statements contained in the Annual Report for the year ended 30 November 2022.

None of the Company’s other assets and liabilities were considered to be potentially impacted by climate change.

The Group’s financial statements are presented in British Pound Sterling, which is the functional currency of the Group and 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 indicated.

Relevant International Accounting Standards that have yet to be adopted:
IFRS 17 – Insurance contracts (effective 1 January 2023). This standard replaces IFRS 4, which currently permits a wide range of accounting practices in accounting for insurance contracts. IFRS 17 will fundamentally change the accounting by all entities that issue insurance contracts and investment contracts with discretionary participation features.

This standard is unlikely to have any impact on the Group as it has no insurance contracts.

IAS 12 - Deferred tax related to assets and liabilities arising from a single transaction (effective 1 January 2023). The International Accounting Standards Board (IASB) has amended IAS 12 Income Taxes to require companies to recognise deferred tax on particular transactions that, on initial recognition, give rise to equal amounts of taxable and deductible temporary differences. According to the amended guidance, a temporary difference that arises on initial recognition of an asset or liability is not subject to the initial recognition exemption if that transaction gave rise to equal amounts of taxable and deductible temporary differences. These amendments might have a significant impact on the preparation of financial statements by companies that have substantial balances of right-of-use assets, lease liabilities, decommissioning, restoration and similar liabilities. The impact for those affected would be the recognition of additional deferred tax assets and liabilities.

The amendment of this standard is unlikely to have any significant impact on the Group.

None of the standards that have been issued but are not yet effective are expected to have a material impact on the Group.

(b) Basis of consolidation
The Group’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 Energy and Resources Securities Income Company Limited (together ‘the Group’).

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. The subsidiary is not considered to be an investment entity.

(c) Presentation of the Consolidated Statement of Comprehensive Income
In order to better reflect 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.

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 account of the Consolidated Statement of Comprehensive Income unless the option has been written for the maintenance and enhancement of the Group’s investment portfolio and represents an incidental part of a larger capital transaction, in which case any premia arising are allocated to the capital account of the Consolidated Statement of Comprehensive Income.

Deposit interest receivable is accounted for on an accruals basis.

Where the Group 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 revenue. 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 account 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 account 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 contained in the Annual Report for the year ended 30 November 2022;

· expenses are treated as capital where a connection with the maintenance or enhancement of the value of the investments can be demonstrated; and

· the investment management fee and finance costs have been allocated 75% to the capital account and 25% to the revenue account of the Consolidated Statement of Comprehensive Income in line with the Board’s expectations of the long term split of returns, in the form of capital gains and income, respectively, from the investment portfolio. The investment management fee rebate accrued as a result of the application of the cap on ongoing charges of 1.25% per annum of average daily net assets is offset against management fees and is allocated between revenue and capital in the ratio of total ongoing charges allocated between revenue and capital during the year.

Finance costs incurred by the Subsidiary are charged 100% to revenue.

(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 Group’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 accounts, any tax relief in respect of expenses is allocated between capital and revenue returns on the marginal basis using the Company’s effective rate of corporation tax 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 taxation 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
In accordance with IFRS 9, the Group classifies its investments at initial recognition as held at fair value through profit or loss and are managed and evaluated on a fair value basis in accordance with its investment strategy and business model.

All investments are measured initially and subsequently at fair value through profit or loss. Purchases of investments are recognised on a trade date basis. Sales of investments are recognised at the trade date of the disposal.

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

The fair value of the investment in the subsidiary is calculated based on the net asset value of the underlying balances within the subsidiary.

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 ‘Net profit/(loss) on investments and options held at fair value through profit of loss’. 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 arm’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). See note 2(p) below.

(i) Options
Options are held at fair value through profit or loss based on the bid/offer prices of the options written to which the Group is exposed. The value of the option is subsequently marked-to-market to reflect the fair value through profit or loss 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 on an amortised cost basis.

(k) Dividends payable
Under IASs, 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 recognised in the financial statements unless they have been paid.

Dividends payable to equity shareholders are recognised in the Consolidated 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 British Pound 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 net profit/(loss) on investments and options 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, bank overdrafts 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.

(o) Share repurchases and share reissues
Shares repurchased and subsequently cancelled – share capital is reduced by the nominal value of the shares repurchased, and the capital redemption reserve is correspondingly increased in accordance with Section 733 of the Companies Act 2006. The full cost of the repurchase is charged to the special reserve.

Shares repurchased and held in treasury – the full cost of the repurchase is charged to the special reserve.

Where treasury shares are subsequently reissued:

· amounts received to the extent of the repurchase price are credited to the special reserve and capital reserves based on a weighted average basis of amounts utilised from these reserves on repurchases; and

· any surplus received in excess of the repurchase price is taken to the share premium account.

Where new shares are issued, amounts received to the extent of any surplus received in excess of the par value are taken to the share premium account.

Share issue costs are charged to the share premium account. Costs on share reissues are charged to the special reserve and capital reserves.

(p) Critical accounting estimates and judgements
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates and assumptions will, by definition, seldom equal the related actual results. Estimates and judgements are regularly evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The Directors do not believe that any accounting judgements or estimates have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities within the next financial year.

3. INCOME

	2022 £000	2021 £000
Investment income:
UK dividends	613	1,204
UK special dividends	67	205
Overseas dividends	4,604	3,745
Overseas special dividends	1,060	282
Fixed income	625	625
	---------------	---------------
Total investment income	6,969	6,061
	=========	=========
Other income:
Option premium income	1,342	742
Bank interest	1	–
	---------------	---------------
	1,343	742
	=========	=========
Total income	8,312	6,803
	=========	=========

During the year, the Group received option premium income in cash totalling £1,342,000 (2021: £711,000) for writing covered call and put options for the purposes of revenue generation.

Option premium income is amortised evenly over the life of the option contract and accordingly, during the period, option premiums of £1,342,000 (2021: £742,000) were amortised to revenue.

At 30 November 2022, there was one open position (2021: nil) with an associated liability of £55,000 (2021: £nil).

Dividends and interest received in cash during the year amounted to £5,609,000 and £437,000 (2021: £4,951,000 and £411,000).

No special dividends have been recognised in capital during the year (2021: £nil).

4. INVESTMENT MANAGEMENT FEE

	2022			2021
	Revenue £000	Capital £000	Total £000	Revenue £000	Capital £000	Total £000
Investment management fee	339	1,019	1,358	234	706	940
	---------------	---------------	---------------	---------------	---------------	---------------
Total	339	1,019	1,358	234	706	940
	=========	=========	=========	=========	=========	=========

The investment management fee is levied at 0.80% of gross assets per annum. Gross assets for the purposes of calculating the management fee equate to the value of the portfolio’s gross assets held on the relevant date as valued on the basis of applicable accounting policies, less the value of any investments in in-house funds.

The fee is allocated 25% to the revenue account and 75% to the capital account of the Consolidated Statement of Comprehensive Income. There is no additional fee for company secretarial and administration services.

The Company is entitled to a rebate from the investment management fee charged by the Manager in the event the Company’s ongoing charges exceed the cap of 1.25% per annum of average daily net assets. The amount of rebate accrued for the year ended 30 November 2022 amounted to £nil (2021: £nil). The rebate, if any, is offset against management fees and is allocated between revenue and capital in the ratio of total ongoing charges allocated between revenue and capital during the year.

5. OTHER OPERATING EXPENSES

	2022 £000	2021 £000
Allocated to revenue:
Custody fee	8	5
Auditors’ remuneration - audit services¹	46	45
Registrar’s fee	31	30
Directors’ emoluments²	139	131
Broker fees	25	25
Depositary fees	15	10
Marketing fees	45	34
Printing and postage fees	42	33
Legal and professional fees	20	18
Directors search fees	18	21
Bank charges	12	7
Stock exchange listings fees³	53	8
Other administrative costs	52	52
Provision for doubtful debts⁴	380	–
	---------------	---------------
	886	419
	=========	=========
Allocated to capital:
Custody transaction charges⁵	11	7
	897	426
	=========	=========
The Company’s ongoing charges⁶, calculated as a percentage of average daily net assets and using the management fee and all other operating expenses excluding finance costs, direct transaction costs, custody transaction charges, VAT recovered, taxation, prior year expenses written back and certain non-recurring items were:	1.13%	1.21%
	=========	=========

¹ No non-audit services are provided by the Company’s auditors (2021: none).

² Further information on Directors’ emoluments can be found in the Directors’ Remuneration Report contained in the Annual Report for the year ended 30 November 2022. The Company has no employees.

³ For the year ended 30 November 2022, this included one-off block listing fees of £49,000.

⁴ Provision for doubtful debts relate to dividend income from Gazprom ADR which has has not been received due to measures imposed by the Russian authorities in response to the sanctions that have been imposed on Russia as a result of the invasion of Ukraine.

⁵ For the year ended 30 November 2022, expenses of £11,000 (2021: £7,000) were charged to the capital account of the Statement of Comprehensive Income. These relate to transaction costs charged by the custodian on sale and purchase trades.

⁶ Alternative Performance Measure, see Glossary contained in the Annual Report for the year ended 30 November 2022.

The Company’s ongoing charges, as defined on pages 134 and 135 contained in the Annual Report for the year ended 30 November 2022 (including the investment management fee), are capped at 1.25% per annum of average daily net assets. The Company is entitled to a rebate from the investment management fee charged by the Manager in the event the Company’s ongoing charges exceed the cap.

The overall cap on ongoing charges and any applicable rebate is calculated and accrued on a daily basis and will be adjusted in the investment management fees charged up to 30 November every year. See note 4 above.

6. FINANCE COSTS

	2022			2021
	Revenue £000	Capital £000	Total £000	Revenue £000	Capital £000	Total £000
Interest payable – bank overdraft	49	147	196	5	15	20
	---------------	---------------	---------------	---------------	---------------	---------------
Total	49	147	196	5	15	20
	=========	=========	=========	=========	=========	=========

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

7. DIVIDENDS

Dividends paid on equity shares	Record date	Payment date	2022 £000	2021 £000
4th interim dividend of 1.10p per share for the year ended 30 November 2021 (2020: 1.00p)	17 December 2021	14 January 2022	1,278	1,135
1st interim dividend of 1.10p per share for the year ended 30 November 2022 (2021: 1.00p)	25 March 2022	21 April 2022	1,376	1,135
2nd interim dividend of 1.10p per share for the year ended 30 November 2022 (2021: 1.00p)	17 June 2022	15 July 2022	1,448	1,162
3rd interim dividend of 1.10p per share for the year ended 30 November 2022 (2021: 1.00p)	23 September 2022	20 October 2022	1,478	1,162
			---------------	---------------
Accounted for in the financial statements			5,580	4,594
			=========	=========

The total dividends payable in respect of the year ended 30 November 2022 which form the basis 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 as set out in this legislation.

Dividends paid/payable on equity shares for the year ended 30 November 2022:	2022 £000	2021 £000
1st interim dividend of 1.10p per share for the year ended 30 November 2022 (2021: 1.00p)	1,376	1,135
2nd interim dividend of 1.10p per share for the year ended 30 November 2022 (2021: 1.00p)	1,448	1,162
3rd interim dividend of 1.10p per share for the year ended 30 November 2022 (2021: 1.00p)	1,478	1,162
4th interim dividend of 1.10p per share for the year ended 30 November 2022 (2021: 1.10p)	1,478	1,278
	---------------	---------------
	5,780	4,737
	=========	=========

8. EARNINGS AND NET ASSET VALUE PER ORDINARY SHARE
Total revenue, capital earnings and net asset value per ordinary share are shown below and have been calculated using the following:

	2022	2021
Net revenue profit attributable to ordinary shareholders (£000)	6,394	5,704
Net capital profit attributable to ordinary shareholders (£000)	50,383	25,249
	---------------	---------------
Total profit attributable to ordinary shareholders (£000)	56,777	30,953
	=========	=========
Total shareholders’ funds (£000)	194,708	120,828
	=========	=========
The weighted average number of ordinary shares in issue during the year on which the earnings per ordinary share was calculated was:	128,248,137	114,982,762
The actual number of ordinary shares in issue at the year end on which the net asset value per ordinary share was calculated was:	134,356,194	116,218,357
Earnings per share:
Revenue earnings per share (pence) - basic and diluted	4.99	4.96
Capital earnings per share (pence) - basic and diluted	39.28	21.96
	---------------	---------------
Total earnings per share (pence) - basic and diluted	44.27	26.92
	=========	=========

	As at 30 November 2022	As at 30 November 2021
Net asset value per ordinary share (pence)	144.92	103.97
Ordinary share price (pence)	135.00	96.70
	=========	=========

There were no securities in issue at the year end that have any dilutive effect on earnings per share.

9. CALLED UP SHARE CAPITAL

	Number of shares in issue	Treasury shares	Total shares	Nominal value £000
Allotted, called up and fully paid share capital comprised:
Ordinary shares of 1 pence each
At 30 November 2021	116,218,357	2,747,643	118,966,000	1,190
Ordinary shares issued	15,390,194	–	15,390,194	154
Ordinary shares reissued from treasury	2,747,643	(2,747,643)	–	–
	---------------	---------------	---------------	---------------
At 30 November 2022	134,356,194	–	134,356,194	1,344
	=========	=========	=========	=========

During the year ended 30 November 2022, no shares were bought back into treasury (2021: 51,992 shares for a net consideration after costs of £48,000).

During the year ended 30 November 2022, the Company issued 15,390,194 shares (2021: none) for a net consideration after costs of £19,677,000 (2021: £nil).

During the year ended 30 November 2022, the Company also reissued 2,747,643 (2021: 2,800,000) shares from treasury for a net consideration after costs of £3,108,000 (2021: £2,875,000).

Since the year end, and as at 30 January 2023 a further 550,000 ordinary shares have been issued for a net consideration of £802,000.

10. RESERVES

Group	Share premium account £000	Special reserve £000	Capital reserve arising on investments sold £000	Capital reserve arising on revaluation of investments held £000	Revenue reserve £000
At 30 November 2021	47,727	68,852	(26,149)	23,601	5,607
Movement during the year:
Total comprehensive income:
Net profit for the year	–	–	24,831	25,552	6,394
Transactions with owners recorded directly to equity:
Ordinary shares issued	19,563	–	–	–	–
Share issue costs	(110)	–	–	–	–
Ordinary shares reissued from treasury	1,023	2,091	–	–	–
Share reissue costs	–	(6)	(32)	–	–
Dividends paid	–	–	–	–	(5,580)

At 30 November 2022	68,203	70,937	(1,350)	49,153	6,421
	=========	=========	=========	=========	=========

Company		Distributable reserves
Company	Share premium account £000	Special reserve £000	Capital reserve arising on investments sold £000	Capital reserve arising on revaluation of investments held £000	Revenue reserve £000
At 30 November 2021	47,727	68,852	(26,967)	27,403	2,623
Movement during the year:
Total comprehensive income:
Net profit for the year	–	–	24,831	25,202	6,744
Transactions with owners recorded directly to equity:
Ordinary shares issued	19,563	–	–	–	–
Share issue costs	(110)	–	–	–	–
Ordinary shares reissued from treasury	1,023	2,091	–	–	–
Share reissue costs	–	(6)	(32)	–	–
Dividends paid	–	–	–	–	(5,580)

At 30 November 2022	68,203	70,937	(2,168)	52,605	3,787
	=========	=========	=========	=========	=========

Group	Share premium account £000	Special reserve £000	Capital reserve arising on investments sold £000	Capital reserve arising on revaluation of investments held £000	Revenue reserve £000
At 30 November 2020	46,977	66,775	(41,446)	13,649	4,497
Movement during the year:
Total comprehensive income:
Net profit for the year	–	–	15,297	9,952	5,704
Transactions with owners recorded directly to equity:
Ordinary shares reissued from treasury	750	2,131	–	–	–
Share issue costs	–	(6)	–	–	–
Ordinary shares purchased into treasury	–	(48)	–	–	–
Dividends paid	–	–	–	–	(4,594)

At 30 November 2021	47,727	68,852	(26,149)	23,601	5,607
	=========	=========	=========	=========	=========

		Distributable reserves
Company	Share premium account £000	Special reserve £000	Capital reserve arising on investments sold £000	Capital reserve arising on revaluation of investments held £000	Revenue reserve £000
At 30 November 2020	46,977	66,775	(42,264)	17,442	1,522
Movement during the year:
Total comprehensive income:
Net profit for the year	–	–	15,297	9,961	5,695
Transactions with owners recorded directly to equity:
Ordinary shares purchased into treasury	750	2,131	–	–	–
Share issue costs	–	(6)	–	–	–
Ordinary shares purchased into treasury	–	(48)	–	–	–
Dividends paid	–	–	–	–	(4,594)

At 30 November 2021	47,727	68,852	(26,967)	27,403	2,623
	=========	=========	=========	=========	=========

The share premium account and capital redemption reserve are not distributable reserves under the Companies Act 2006. In accordance with ICAEW Technical Release 02/17BL on Guidance on Realised and Distributable Profits under the Companies Act 2006, the special reserve and capital reserves of the Parent Company may be used as distributable reserves for all purposes and, in particular, the repurchase by the Parent Company of its ordinary shares and for payments as dividends. In accordance with the Company’s Articles of Association, the special reserve, capital reserves and the revenue reserve may be distributed by way of dividend. The Parent Company’s capital gains of £50,437,000 (2021: capital gain of £436,000) comprise a loss on capital reserve arising on investments sold of £2,168,000 (2021: loss of £26,967,000), a gain on capital reserve arising on revaluation of listed investments of £49,150,000 (2021: gain of £23,599,000) and a revaluation gain on the investment in the subsidiary of £3,455,000 (2021: gain of £3,804,000). The gain on capital reserve arising on the revaluation of investments of £49,150,000 (2021: £23,599,000) is subject to fair value movements and may not be readily realisable at short notice, as such it may not be entirely distributable. The investments are subject to financial risks, as such capital reserves (arising on investments sold) and the revenue reserve may not be entirely distributable if a loss occurred during the realisation of these investments. The reserves of the subsidiary company are not distributable until distributed as a dividend to the Parent Company.

11) VALUATION OF FINANCIAL INSTRUMENTS
Financial assets and financial liabilities are either carried in the Consolidated and Parent Company Statements of Financial Position at their fair value (investments 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) to the Financial Statements.

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.

The fair value hierarchy has the following levels:

Level 1 – Quoted market price for identical instruments in active markets
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 arm’s length basis. The Group does not adjust the quoted price for these instruments.

Level 2 – Valuation techniques using observable inputs
This category includes instruments valued using 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 arm’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.

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.

Level 3 – Valuation techniques using significant unobservable inputs
This category includes all instruments where the valuation technique includes inputs not based on market data and these inputs could have a significant impact on the instrument’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 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.

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. 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 ‘observable’ inputs requires significant judgement by the Investment Manager.

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

Fair values of financial assets and financial liabilities
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 2022 – Group	Level 1 £000	Level 2 £000	Level 3 £000	Total £000
Assets:
Equity investments	198,500	–	–	198,500
Fixed income investments	5,629	2,265	–	7,894
Liabilities:
Derivative financial instruments – written options	(55)	–	–	(55)
	---------------	---------------	---------------	---------------
	204,074	2,265	–	206,339
	=========	=========	=========	=========

Financial assets at fair value through profit or loss at 30 November 2022 – Company	Level 1 £000	Level 2 £000	Level 3 £000	Total £000
Assets:
Equity investments	198,500	–	3,455	201,955
Fixed income investments	5,629	2,265	–	7,894
Liabilities:
Derivative financial instruments – written options	(55)	–	–	(55)
	---------------	---------------	---------------	---------------
	204,074	2,265	3,455	209,794
	=========	=========	=========	=========

Financial assets at fair value through profit or loss at 30 November 2021 – Group	Level 1 £000	Level 2 £000	Level 3 £000	Total £000
Assets:
Equity investments	121,179	–	–	121,179
Fixed income investments	3,898	2,707	–	6,605
	---------------	---------------	---------------	---------------
	125,077	2,707	–	127,784
	=========	=========	=========	=========

Financial assets at fair value through profit or loss at 30 November 2021 – Company	Level 1 £000	Level 2 £000	Level 3 £000	Total £000
Assets:
Equity investments	121,179	–	3,804	124,983
Fixed income investments	3,898	2,707	–	6,605
	---------------	---------------	---------------	---------------
	125,077	2,707	3,804	131,588
	=========	=========	=========	=========

In addition to the investment in the subsidiary, the Company held one other Level 3 security as at 30 November 2022 (2021: nil).

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

Level 3 Financial assets fair value through profit or loss at 30 November – Company	2022 £000	2021 £000
Opening fair value	3,804	3,795
Transfers from Level 1	1	–
Total gains or losses included in profit/(loss) on investments in the Consolidated Statement of Comprehensive Income:
– assets held at the end of the year	(350)	9
	---------------	---------------
Closing balance	3,455	3,804
	=========	=========

As at 30 November 2022, the investment in Gazprom has been valued at a nominal value of RUB0.01 due to lack of access to the Moscow Stock Exchange as a result of sanctions against Russia following the invasion of Ukraine. Following the suspension of the secondary listings of depositary receipts of Russian companies, the investment in Gazprom ADRs was transferred from Level 1 to Level 3. Towards the year end, the ADRs in Gazprom were converted into equity shares of Gazprom. As at the year-end, this investment is considered a Level 3 financial asset.

For exchange listed equity investments, the quoted price is the bid price. Substantially, all investments are valued based on unadjusted quoted market prices. Where such quoted prices are readily available in an active market, such prices are not required to be assessed or adjusted for any business risks, including climate change risk, in accordance with the fair value related requirements of the Company’s financial reporting framework.

12. RELATED PARTY DISCLOSURE
Directors’ emoluments
At the date of this report, the Board consists of four non-executive Directors, all of whom are considered to be independent of the Manager by the Board.

Disclosures of the Directors’ interests in the ordinary shares of the Company and fees and expenses payable to the Directors are set out in the Directors’ Remuneration Report contained in the Annual Report for the year ended 30 November 2022. At 30 November 2022, £11,000 (2021: £10,000) was outstanding in respect of Directors’ fees.

Significant holdings
The following investors are:

a. funds managed by the BlackRock Group or are affiliates of BlackRock Inc. (“Related BlackRock Funds”); or

b. investors (other than those listed in (a) above) who held more than 20% of the voting shares in issue in the Company and are as a result, considered to be related parties to the Company (“Significant Investors”).

As at 30 November 2022

Total % of shares held by Related BlackRock Funds	Total % of shares held by Significant Investors who are not affiliates of BlackRock Group or BlackRock, Inc.	Number of Significant Investors who are not affiliates of BlackRock Group or BlackRock, Inc.
1.3	n/a	n/a

As at 30 November 2021

Total % of shares held by Related BlackRock Funds	Total % of shares held by Significant Investors who are not affiliates of BlackRock Group or BlackRock, Inc.	Number of Significant Investors who are not affiliates of BlackRock Group or BlackRock, Inc.
nil	n/a	n/a

13. TRANSACTIONS WITH THE INVESTMENT MANAGER AND AIFM
BlackRock Fund Managers Limited (BFM) provides management and administrative services to the Group under a contract which is terminable on six months’ notice. BFM has (with the Group’s consent) delegated certain portfolio and risk services, and other ancillary services to BlackRock Investment Management (UK) Limited (BIM (UK)). Further details of the investment management contract are disclosed in the Directors’ Report contained in the Annual Report for the year ended 30 November 2022.

The investment management fee due for the year ended 30 November 2022 amounted to £1,358,000 (2021: £940,000). At the year end, £728,000 was outstanding in respect of the management fee (2021: £498,000).

The Company is entitled to a rebate from the investment management fee charged by the Manager in the event the Company’s ongoing charges exceeds the cap of 1.25% per annum of average daily net assets. The amount of rebate accrued to 30 November 2022 amounted to £nil (2021: £nil).

Further details in respect of the management fee and rebate are given in note 4 above.

In addition to the above services, BIM (UK) has provided the Group with marketing services. The total fees paid or payable for these services for the year ended 30 November 2022 amounted to £45,000 excluding VAT (2021: £34,000). Marketing fees of £22,000 excluding VAT (2021: £22,000) were outstanding as at the year end.

The ultimate holding company of the Manager and the Investment Manager is BlackRock, Inc., a company incorporated in Delaware USA.

14. CONTINGENT LIABILITIES
There were no contingent liabilities at 30 November 2022 (2021: nil).

15. 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 2022 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 2022 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 1 February 2023.

16. 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 Energy and Resources Income Trust plc, 12 Throgmorton Avenue, London EC2N 2DL.

17. ANNUAL GENERAL MEETING

The Annual General Meeting of the Company will be held at 12 Throgmorton Avenue, London EC2N 2DL on Monday, 13 March 2023 at 12.00 noon.

ENDS

For further information, please contact:

Sarah Beynsberger, Director, Investment Companies, BlackRock Investment Management (UK) Limited
Tel: 020 7743 3000

Press enquiries:

Lansons Communications

Email: BlackRockInvestmentTrusts@lansons.com

Tel: 020 7490 8828

1 February 2023

12 Throgmorton Avenue
London EC2N 2DL

END

Companies

BlackRock Energy and Resources Income Trust (BERI)

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