Portfolio Update

BLACKROCK SMALLER COMPANIES TRUST plc

All information is at 31 January 2009 and unaudited.

Performance at month end is calculated on a capital only basis

                              One     Three        One      Three      Five      
                            Month    Months       Year      Years     Years     
                                                                              
Net asset value             -1.0%     -6.7%     -39.3%     -33.8%      1.7%      
Share price                 -0.3%     -3.2%     -41.5%     -39.4%      4.2%      
HGSC ex Inv Trust + AIM*    -0.5%     -5.2%     -45.5%     -49.5%    -35.8%  

Sources: BlackRock and Datastream

*With effect from 1 September 2007 the Hoare Govett Smaller Companies plus AIM
(ex Investment Companies) Index replaced the FTSE SmallCap Index (ex Investment
Companies) as the Company's benchmark. For three year and five year periods the
above index has been blended to reflect this.

At month end                                                                  
                                                                              
Net asset value Capital only (debt at par value):           230.29p           
Net asset value Capital only (debt at fair value):          224.79p           
Net asset value incl Income (debt at par value):            235.02p**         
Net asset value incl Income (debt at fair value):           229.52p**         
Share price:                                                181.00p           
Discount to Capital only NAV (debt at par value):           21.4%             
Discount to Capital only NAV (debt at fair value):          19.5%             
Net yield:                                                  3.43%             
Total assets:                                               £128.8m^          
Gearing incl. income:                                       13.6%             
Ordinary shares in issue:                                   48,494,792^^      

**includes net revenue of 4.73p.
^includes current year revenue.
^^excludes 1,498,731 shares held in treasury.

Ten Largest Sector Weightings                                       % of Total Assets
                                                                               
Support Services                                                           15.6
Software & Computer Services                                               10.9
Financial Services                                                         10.7
Aerospace & Defence                                                         9.2
Industrial Engineering                                                      6.5
Oil & Gas Producers                                                         5.8
Health Care Equipment & Services                                            5.1
Pharmaceuticals & Biotechnology                                             4.8
Electronic & Electrical Equipment                                           3.7
Nonlife Insurance                                                           3.3
                                                                           ----
Total                                                                      75.9
                                                                           ====

Ten Largest Equity Investments (in alphabetical order)                         
                                                                               
Company                                                                        
                                                                               
Aveva Group                                                                    
Brewin Dolphin Holdings                                                        
Chemring Group                                                                 
Connaught                                                                      
Dechra Pharmaceuticals                                                         
Fidessa Group                                                                  
London Capital Group Holding                                                   
Mouchel Group                                                                  
Rathbone Brothers                                                              
Ultra Electronics Holdings                                                     

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

January was a calmer month with the NAV (on a capital only basis) falling by
1.0%; the benchmark declined by 0.5%. The FTSE 100 Index fell by 6.4% during
the month.

The main contributors to relative outperformance during the month were holdings
in Dechra Pharmaceuticals, Chemring, Fidessa and Emerald Energy. Dechra
released a confident pre-close update; on a like for like basis its sales in
the six months to 31 December 2008 were up 9.5% on the prior comparable period.
High margin pharmaceutical sales are increasing strongly. Chemring, which
supplies military decoys and explosives, produced excellent full year results
with earnings up 43%; the order book gives good visibility of 2009 revenues.
Fidessa is due to report its full year results in mid February. We believe the
shares are excellent value at 1 times EV/sales for a world leading software
company with 75% of its revenues recurring and a cash rich balance sheet,
albeit selling to a challenged customer base. Emerald Energy continued to have
drilling success in Syria. Its oil production has grown strongly and the group
is cash rich.

On the negative side, the holdings which detracted most from relative
performance were BATM Advanced Communications and Rathbone Brothers. BATM
shares were weak because the market fears the telecom capex will fall and this
will curb BATM's growth. BATM's products are advanced and sell into higher
growth areas of the telecoms market. Despite this, some destocking is
inevitable followed by lower growth. Much of this should be allowed for in
recently downgraded current year forecasts. Stripping out BATM's considerable
cash resources, it trades on only 3 times current year downgraded earnings.
Rathbones shares had been amongst our strongest performers in prior months.

New holdings in the month were Burberry, Charter, Lancashire and Eaga. We sold
the holding in Hiscox. The purchases of shares in international fashion brand
Burberry and steel related Charter reflect our desire to increase our exposure
to good quality, well funded, more cyclical companies. Both have performed well
since purchase. We switched our holding in insurer Hiscox, which had performed
well, into cheaper Lancashire. Eaga provides efficient energy solutions to the
less well off; it has good long term revenue predictability.

We remain defensively positioned with overweight positions in defence,
software, healthcare and engineering companies. We are favouring well
differentiated companies with good revenue visibility, strong balance sheets
and capable management teams. We are underweight stocks dependent on
discretionary UK consumer spending.

Latest information is available by typing www.blackrock.co.uk/its on the
internet, "BLRKINDEX" on Reuters, "BLRK" on Bloomberg or "8800" on Topic 3 (ICV
terminal).

23 February 2009