Portfolio Update

BLACKROCK SMALLER COMPANIES TRUST plc

All information is at 31 December 2010 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             10.6%     20.0%      61.2%      42.8%     84.0%     
Share price                 10.3%     24.2%      76.2%      58.3%     83.0%     
HGSC ex Inv Trust + AIM*     9.2%     12.6%      28.6%       2.5%      8.5%      

Sources: BlackRock and Datastream

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

At month end                                                                  
                                                                              
Net asset value Capital only (debt at par value):           593.05p           
Net asset value Capital only (debt at fair value):          588.81p           
Net asset value incl. Income (debt at par value):           598.18p**         
Net asset value incl. Income (debt at fair value):          593.94p**         
Share price:                                                499.50p           
Discount to Capital only NAV (debt at par value):           15.8%             
Discount to Capital only NAV (debt at fair value):          15.2%             
Net yield:                                                  1.2%              
Total assets:                                               £310.4m^          
Gearing incl. Income:                                       8.4%              
Ordinary shares in issue:                                   47,879,792^^      

**includes net revenue of 5.13p.
^includes current year revenue.
^^excludes 2,113,731 shares held in treasury.
 
Ten Largest Sector                                                         
Weightings                                      % of Total Assets
                                                                           
Software & Computer Services                                  9.6
Industrial Metals & Mining                                    9.5
Oil & Gas Producers                                           9.4
Electronic & Electrical Equipment                             8.9
Support Services                                              8.3
Financial Services                                            8.1
Industrial Engineering                                        6.6
Media                                                         5.8
Pharmaceuticals & Biotechnology                               4.7
Technology Hardware & Equipment                               4.0
                                                             ----
Total                                                        74.9
                                                             ====

Ten Largest Equity Investments (in alphabetical order)

Company

Abcam Group
Aveva Group
Avocet Mining
Bellway
City of London Investment Group
Cove Energy
Domino Printing Sciences
Eastern Platinum
Fidessa group
Gooch & Housego

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

December was a strong month for equities generally and also for the Company.
The Company's NAV per share rose by 10.6% on a capital only basis, whilst the
benchmark index increased by 9.2%. The FTSE 100 Index rose by 6.7%.

The main positive contributor to our outperformance in the month, relative to
the Company's benchmark, was our holding in ITE Group which organises
exhibitions. ITE announced final results and gave a positive outlook on its key
markets. Russia is ITE's key geographical market and has been impacted by
severe recession over the last few years. Management talked of strengthening
recovery in Russia, and also stable or improving conditions in their other
markets of Turkey, India and the UK.

There was no significant negative contributor to relative performance during
the month, in that no one holding detracted from relative performance by more
than 0.25%.

We sold the balance of our holding in Western Coal, following the bid. We added
new holdings in Howden Joinery and Vectura, each 0.5% of net assets. Howden
manufacture and sell fitted kitchens in the UK; its customers are local
builders who fit the kitchens. We regard the management highly and see this as
a key provider in the UK, good exposure to the consumer where we are
underweight, and at an attractive valuation. Vectura develops inhaled therapies
for respiratory diseases. It has an interesting portfolio of late stage
development products and we see 2011 as the year when the Company could make
significant progress. As with Howden, we regard management highly.

18 January 2011

ENDS

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). Neither the contents of the Manager's website nor the contents of
any website accessible from hyperlinks on the Manager's website (or any other
website) is incorporated into, or forms part of, this announcement.