BlackRock Sustainable American Income Trust Plc - Final Results

BlackRock Sustainable American Income Trust Plc - Final Results

PR Newswire

LONDON, United Kingdom, February 02

BlackRock Sustainable American Income Trust plc

Annual Report and Financial Statements 31 October 2023

LEI:549300WWOCXSC241W468

Performance record

	As at 31 October 2023	As at 31 October 2022
Net assets (£'000)1	154,789	171,086
Net asset value per ordinary share (pence)	193.51	213.25
Ordinary share price (mid-market) (pence)	174.00	197.50
Discount to cum income net asset value2	10.1%	7.4%
Russell 1000 Value Index	1733.58	1824.64
	=========	=========

	For the year ended 31 October 2023	For the year ended 31 October 2022
Performance (with dividends reinvested)
Net asset value per share2	-5.6%	7.4%
Ordinary share price2	-8.1%	3.6%
Russell 1000 Value Index	-5.0%	10.7%
	---------------	---------------
Performance since inception (with dividends reinvested)
Net asset value per share2	198.7%	216.3%
Ordinary share price2	167.8%	191.4%
Russell 1000 Value Index	250.7%	269.2%
	=========	=========

	For the year ended 31 October 2023	For the year ended 31 October 2022	Change %
Revenue
Net profit on ordinary activities after taxation (£'000)	2,945	3,081	-4.4
Revenue earnings per ordinary share (pence)3	3.67	3.84	-4.4
	---------------	---------------	---------------
Interim dividends (pence)
1st interim	2.00	2.00	-
2nd interim	2.00	2.00	-
3rd interim	2.00	2.00	-
4th interim	2.00	2.00	-
	---------------	---------------	---------------
Total dividends payable/paid	8.00	8.00	-
	=========	=========	=========

1 The change in net assets reflects portfolio movements, share repurchases and dividends paid during the year.

2 Alternative Performance Measures, see Glossary in the Company's Annual Report for the year ended 31 October 2023.

3 Further details are given in the Glossary in the Company's Annual Report for the year ended 31 October 2023.

Sources: BlackRock and Datastream.
Performance figures have been calculated in Sterling terms with dividends reinvested.

Chair's Statement

Market overview
During the year markets have faced a number of headwinds including higher inflation and interest rates, as well as geo-political tensions with the ongoing war in Ukraine and, more recently, the conflict in the Middle East. The US Federal Reserve (the Fed) has undertaken aggressive interest rate hikes and made progress in a bid to bring inflation back down to its target level. Despite these rate hikes, together with a steady unwinding of previously plentiful liquidity in the form or quantitative tightening, there was no recession in the US and growth remained surprisingly robust.

Performance
Against this background and over the year to 31 October 2023, the Company's net asset value per share (NAV) returned -5.6%1 and the share price returned -8.1%1. This compares with a fall of 5.0%1 in the Russell 1000 Value Index, the Company's reference index. In the same period, the S&P 500 Index was up by 4.5%1, as a handful of mega-capitalisation technology stocks (most of which do not pay a dividend) enjoyed a boom from new artificial intelligence technologies and exceptionally strong performance.

The Company has faced headwinds as market turbulence and heightened scrutiny from US states has led to a challenging environment for ESG funds, resulting in a negative return and underperformance of the reference index over this period. A key driver for the underperformance was not owning Meta Platforms (Meta) which briefly entered the reference index. We did not hold a position in Meta because historically it did not meet our portfolio managers' criteria of paying a dividend and also scores poorly from an ESG perspective. There were also headwinds for value stocks, our Investment Manager's favoured style of investing, and at the end of September the Russell 1000 Value Index had one of the largest price-to-earnings discounts in the last ten years.

Alongside our investment objective of maximising long-term capital growth and income, we are investing across the breadth of the market in companies that capture sustainable shifts and are responsible businesses within their industry.

I am pleased to report that the Company has delivered a superior ESG score versus its reference index, as measured by MSCI, with an overall rating of AA. The Company has also delivered on its commitment to achieve a lower carbon emissions intensity than the reference index; further details are provided on pages 27 to 29 in the Company's Annual Report for the year ended 31 October 2023.

Since the financial year end and up to close of business on 31 January 2024, the Company's NAV had increased by 9.2% compared with a rise of 8.3% in the reference index (both with dividends reinvested).

Revenue earnings and dividends
The Company's revenue earnings per share, based on the weighted average number of shares in issue for the year, amounted to 3.67p (2022: 3.84p), a decrease of 4.4%. Four quarterly interim dividends of 2.00p per share were paid on 28 April 2023, 3 July 2023, 2 October 2023 and 2 January 2024. This is in line with the payments made in the previous financial year. The dividend paid represents a yield of 4.6% on the share price at the year end.

Your Board considers that it remains appropriate to continue with the current dividend policy for the new financial year, which will be supported through accumulated distributable reserves. The Board continues to believe that this dividend policy provides an attractive option for current and prospective shareholders who wish to achieve exposure to the US equity market, whilst at the same time receiving a competitive dividend.

Management of share rating
The Directors recognise the importance to investors that the market price of the Company's shares should not trade at a significant premium or discount to the underlying NAV. Accordingly, the Board monitors the share price closely, receiving regular updates from the Manager and our corporate broker, Cavendish Securities, and in normal market conditions may use the Company's share buy back and share issue powers to ensure that the share price does not go to an excessive discount or premium.

Investor sentiment and discounts have been influenced by various external factors and uncertainties, including rising interest rates, and discounts have widened generally across the investment trust sector. At market close on 31 October 2023, the average investment company was trading at the widest discount for a month-end since December 2008 when the world was in the depths of the global financial crisis.

Over the Company's financial year to the end of October, the Company's shares have traded at an average discount of 6.0%. During the year, the Company purchased 240,000 shares at an average price of 175.83p per share at an average discount of 9.1% for a total cost of £423,000. Since the year end and up to 2 February 2024, a further 780,803 shares have been bought back at an average price of 185.35p per share for a total cost of £1,452,000. All shares have been placed in treasury. No shares were issued during the year under review and up to the date of this report.

Resolutions to renew the authorities to issue and buy back shares will be put to shareholders at the forthcoming Annual General Meeting.

Board composition
As stated in the 2023 Half Yearly Financial Report, the Board was pleased to announce the appointment of Solomon Soquar as a new non-executive Director with effect from 21 March 2023. He brings a wealth of investment knowledge and has already made a significant contribution to the Board.

As part of the Board's ongoing succession plans I agreed to serve as Chair of the Board to provide some continuity following the retirements of Simon Miller and Andrew Irvine in 2022 and Christopher Casey in 2023. Having now served for a tenure in excess of ten years, it is my intention to retire from the Board at the Company's Annual General Meeting to be held in March 2025. I am delighted that David Barron has agreed to succeed me as Chair upon my retirement, at which time Solomon Soquar will become Senior Independent Director. The Board is currently undertaking a process to identify a new Director who will have the knowledge and skills to become Chair of the Audit Committee and a further announcement will be made in due course.

I am pleased to report that the Board is compliant with the recommendations of the Parker Review and FTSE Women Leaders Review and, at the date of this report, we have a 50:50 gender ratio. For the first time this year and in accordance with the Listing Rules, we have also disclosed the ethnicity of the Board and our policy on matters of diversity in the Corporate Governance Statement in the Company's Annual Report for the year ended 31 October 2023.

SDR considerations
The Sustainable Disclosure Requirements (SDR) regime introduced by the Financial Conduct Authority is a package of measures aimed at tackling greenwashing. This includes sustainable investment labels, disclosure requirements and restrictions on the use of sustainability-related terms in product naming and marketing. These differ from the European Union's Sustainable Finance Disclosure Regulation. The Board is carefully considering the implications of the regulation for the Company. The Directors expect that the Company will be subject to the regulation and is working closely with BlackRock to assess the implications for the Company and to determine any changes that may be necessary or appropriate whilst acting in the best interests of investors. BlackRock has formed a cross functional working group to assess the requirements of the regulation and the implications for the strategies it manages. The Company will need to comply with the requirements by 2 December 2024.

Outlook
Looking ahead, it is only natural to ask what is in store for the US market for the rest of 2024. On the geopolitical front, the war in the Middle East, ongoing conflict between Russia and Ukraine and structural competition between the US and China will continue to be a key driver of uncertainty for markets and global supply chains. Interest rates also remain elevated, which has squeezed the housing market, business investment and consumer spending. The Fed has signalled that interest rates will remain high until inflation approaches 2% and, even if policy rates have peaked, central banks may not cut rates to levels that stimulate growth any time soon. Despite these headwinds, the US economy has been more resilient than anticipated in 2023 with baseline economic data in the US encouraging due to one of the longest stretches of low unemployment in history and gross domestic product (GDP) growing in the third quarter.

Against a background of macroeconomic uncertainty and market volatility, our portfolio managers are of the view that an active approach to investing is likely to carry greater rewards. Additionally, our portfolio managers believe quality stocks with higher profitability, stronger balance sheets and stable earnings growth should outperform in an environment of persistent investor concerns over a mild recession in the US and other major developed economies. These are the fundamentals that our portfolio managers continue to favour within your Company's portfolio.

Annual General Meeting
The Annual General Meeting of the Company will be held at the offices of BlackRock at 12 Throgmorton Avenue, London EC2N 2DL on Thursday, 14 March 2024 at 12.00 noon. Details of the business of the meeting are set out in the Notice of Annual General Meeting in the Company's Annual Report for the year ended 31 October 2023. The Board very much looks forward to meeting shareholders on the day and hope you will be able to attend.

ALICE RYDER
Chair
2 February 2024

1 All percentages calculated in Sterling terms with dividends reinvested.

Investment Manager's Report

Market overview
Over the year to 31 October 2023, the Company's NAV returned -5.6% and the share price returned -8.1%. This compares with a return of -5.0% in the Russell 1000 Value Index (all percentages calculated in Sterling terms with dividends reinvested). For the one-year period ended 31 October 2023, US large cap stocks, as represented by the S&P 500® Index, advanced by 10.1% in US Dollar terms. In Sterling, the S&P 500® Index returned 4.5% for the performance period. The following discussion highlights some of the key market events during the financial year.

US equities saw a strong rally early in the fourth quarter of 2022 as inflation pressures continued to ease. However, 2022 remains one of the worst years for the reference index since 2008. On the macro front, annual inflation slowed for a fifth straight month and the Fed's final rate hike of the year of 50 basis points (bps) marked a step down after four consecutive larger increases of 75bps. Despite central bank policy efforts, weakening housing data and disappointing economic data, inflation remained firmly embedded in the US economy during the final quarter of 2022. This backdrop, combined with anticipation of further rate hikes in 2023, stoked recessionary fears and weighed on market sentiment.

Early in the first quarter of 2023, equities rallied broadly as the market began to digest stronger-than-expected economic data and weakening headline inflation, which fell to 6.0% in February. By March 2023, we saw the first real economic ramifications from the Fed's tightening cycle as regulators announced the government rescue of depositors at Silicon Valley Bank (SVB). Signature Bank, another regional bank based out of New York, also collapsed in the wake of SVB's failure. While this initially sent shockwaves through the market, US equities eventually stabilised and rallied back to end the quarter as risk of contagion abated.

US equities posted strong gains in the second quarter of the year led by the "magnificent seven"1. The majority of the gains were made in June as inflation prints continued to fall, showing signs of a resilient US economy and excitement around artificial intelligence intensified. The Fed raised rates by 25bps in May only to leave rates unchanged in June's Federal Open Market Committee meeting, indicating a hawkish pause. Part of their reasoning related to headline US inflation which fell by 0.1% in May, bringing the annual inflation rate to 4.0%, below expectations of 4.1% but well ahead of the Fed's stated target of 2%2. The US unemployment rate, another key economic indicator, increased in May to 3.7% from 3.4%, confirming the labour market remained historically tight3.

By the third quarter, the magnificent seven continued their lead, albeit with some dispersion forming. While the group collectively outperformed, Apple, Microsoft, and Tesla underperformed. Despite the lacklustre third quarter, the US continued to see mostly positive economic signs such as a healthy job market, cooling inflation and rising GDP, significantly lowering the odds of a recession in 2023. By late August, investors' enthusiasm began to fade as the theme of "higher for longer" sank in and the much-anticipated rate cuts for 2024 continue to look more and more unlikely. Although overall market sentiment dipped in the third quarter due to elevated rates and consumer pressures, the labour market has shown signs of softening without a large surge in the unemployment rate and core inflation continues to slow. In terms of style, growth stocks outperformed value stocks as the Russell 1000 Growth Index returned 12.9% and the Russell 1000 Value Index returned -5.0% during the one-year period.

Portfolio overview
The largest detractor from relative performance was due to investment decisions in communication services. Our lack of exposure to the interactive media and services industry, in particular, Meta Platforms (Meta), detracted from performance. Meta is broadly ineligible for our portfolio given it has not been a quality dividend payer and scores poorly on ESG metrics. While Meta's data security framework includes strong measures such as board-level oversight, it continues to face multiple controversies tied to its data collection and processing practices. As a result, Meta remains ineligible for our portfolio. Nonetheless, the company had a strong year and continues to benefit from operating strength. It is also worth noting that the company was reconstituted from the Russell 1000 Value Index to the Russell 1000 Growth Index at the end of the second quarter. In consumer staples, stock selection within the consumer staples distribution and retail industry proved costly. Other detractors from relative results included selection decisions within materials.

The largest contributor to relative performance was stock selection in health care. Within the sector, our investment decisions within the pharmaceuticals industry accounted for the majority of strong performance helped in particular by the holding in Novo Nordisk whose shares soared on the back of the success of its diabetes drug, Wegovy. In utilities, stock selection within the multi-utilities industry boosted relative returns. Furthermore, selection decisions in energy proved beneficial, mainly due to investment decisions within the oil, gas, and consumable fuels industry.

Top 10 stock contributions and detractors
Below are the top 10 stock contributors and detractors during the year.

Company name	Sector	Portfolio average weight	Reference index average weight	Portfolio active weight	Contribution to relative return
Top 10 contributors
Microsoft	Information Technology	+2.3	+0.0	+2.3	+0.9
Shell	Energy	+2.7	+0.0	+2.7	+0.5
Novo Nordisk	Health Care	+0.9	+0.0	+0.9	+0.5
Komatsu	Industrials	+1.7	+0.0	+1.7	+0.4
Pfizer	Health Care	+0.0	+1.2	-1.2	+0.4
Panasonic	Consumer Discretionary	+2.0	+0.0	+2.0	+0.4
Cardinal Health	Health Care	+2.2	+0.1	+2.1	+0.4
Ralph Lauren	Consumer Discretionary	+0.9	+0.0	+0.9	+0.4
PPG Industries	Materials	+1.3	+0.1	+1.2	+0.4
Bank of America	Financials	+0.0	+1.2	-1.2	+0.3
		=========	=========	=========	=========

Company name	Sector	Portfolio average weight	Reference index average weight	Portfolio active weight	Contribution to relative return
Top 10 detractors
Newell Brands	Industrials	+0.8	+0.0	+0.7	-0.4
Berkshire Hathaway	Financials	+0.0	+3.2	-3.2	-0.4
Comerica	Financials	+0.5	+0.0	+0.5	-0.5
General Motors	Consumer Discretionary	+2.0	+0.3	+1.7	-0.5
Dollar Tree	Consumer Discretionary	+1.9	+0.1	+1.8	-0.6
Sealed Air Corp	Materials	+1.7	+0.0	+1.7	-0.7
Citizens Financial Group	Financials	+1.5	+0.1	+1.4	-0.7
Fidelity National Information Services	Information Technology	+2.0	+0.2	+1.8	-0.9
Baxter International	Health Care	+2.3	+0.1	+2.2	-1.0
Meta Platforms	Information Technology	+0.0	+1.1	-1.1	-1.7
		=========	=========	=========	=========

Below is a comprehensive overview of our allocations (in Sterling) at the end of the period.

Health Care: 3.3% overweight (18.4% of the portfolio)
Secular growth opportunities in health care are a byproduct of demographic trends. Older populations spend more on health care than younger populations. In the United States, a combination of greater demand for health care services and rising costs facilitates a need for increased efficiency within the health care ecosystem. We believe innovation and strong cost control can work together to address this need and companies that can contribute to this outcome may be poised to benefit. On the innovation front, we are finding opportunities in pharmaceuticals and among companies in the health care equipment and supplies industry. We prefer to invest in pharma companies with a proven ability to generate high research and development productivity versus those that focus on one or two key drugs and rely upon raising their prices to drive growth. Outside of pharma, our search for attractively priced innovators is more stock specific; we recently initiated a position in CardinalHealth, (2.4% of the portfolio) a healthcare company that specialises in the distribution of pharmaceuticals and medicalproducts. From a cost perspective, health maintenance organisations (HMOs) have an economic incentive to drive down costs as they provide health insurance coverage to constituents. These efforts ultimately help to make health care insurance affordable to more people and the HMOs also play a substantial role in improving the access to and quality of health care its members receive. Fundamentally, we believe our holdings in the space can benefit from downward pressure on cost-trend, new membership growth and further industry consolidation over time. Furthermore, they trade at meaningfully discounted valuations versus peers, offering us an attractive risk versus reward opportunity.

Consumer Discretionary: 4.8% overweight (9.6% of the portfolio)
Within the sector, our preferred areas of investment include household durables, textiles and apparel, and firms with auto-related exposure. Disruption risks persist in the sector and we believe these risks are best mitigated through identifying stock-specific investment opportunities that either trade at discounted valuations or have business models that are somewhat insulated from disruptive pressures. For example, we believe companies such as General Motors (1.7% of the portfolio) and Gildan Activewear (1.4% of the portfolio) offer investors exposure to underappreciated franchises at discounted valuations. From a sustainability standpoint, our selection of companies includes a mix of ESG leaders such as Panasonic (1.6% of the portfolio) as well as ESG Improvers with clear roadmaps for better ESG adherence and disclosures (i.e., General Motors' commitment to electric vehicles).

Financials: 1.2% underweight (19.6% of the portfolio)
Financials represent our portfolio's largest absolute sector allocation and we prefer companies in the banks, insurance and wealth management industries. We believe the US banks offer investors a combination of strong balance sheets (their capital levels are meaningfully higher post financial crisis) attractive valuations and the potential for relative upside versus the broader market from inflation and higher interest rates. Secondly, we continue to like insurers and insurance brokers as these companies operate relatively stable businesses and trade at attractive valuations. We categorise most of our holdings in this space as ESG Improvers, with opportunities for company managements to enact stronger corporate governance and human capital development policies. Lastly, we have also identified stock specific investments in wealth management as companies such as Raymond James (1.5% of the portfolio) stand out from peers due to its differentiated investment platforms, proximity to end customers and runways for long-term growth.

Information Technology (IT): 4.5% overweight (13.5% of the portfolio)
An increasing number of companies in the technology sector are what we refer to as "industrial tech". These firms are competitively insulated from disruptors, well-positioned to take advantage of long-term secular tailwinds and exhibit growth in earnings and free cash flow (FCF). Strong earnings growth and FCF generation is also translating to an increasing number of companies paying growing dividends to shareholders. This is in stark contrast to the dot.com era where growth was often prioritised over shareholder return. We believe this trend is poised to continue. Our preferred exposures in the sector include IT services and communications equipment companies with sticky revenue streams such as Cognizant Technology Solutions (2.2% of the portfolio) and Cisco Systems (2.9% of the portfolio). We also continue to invest in software companies with capital-light business models such as Microsoft (2.4% of the portfolio). IT broadly scores well on ESG metrics given the generally lower environmental impact than other sectors, with our selection of companies including a mix of ESG Leaders and ESG Improvers.

Energy: 0.3% overweight (9.3% of the portfolio)
The portfolio currently invests in four energy stocks and we have a neutral weight in the sector relative to the reference index. Our focus on sustainability places a high hurdle for energy companies to be included in the portfolio, but we believe the sector remains investable, as more traditional oil and gas operators are critical in the energy transition towards less carbon intensive sources. For example, natural gas is 40-60% less carbon-intensive to produce and combust versus coal and oil. We view natural gas as a key "bridge fuel" and like companies such as Shell (3.3% of the portfolio) and Cheniere Energy (2.5% of the portfolio). Fundamentally, we generally seek to invest in attractively priced operators with good resource assets that have the opportunity to improve upon environmental issues or demonstrate clear leadership in sustainability (i.e., through their exposure to renewables or commitments to net zero/carbon neutral outcomes). We also prefer to target companies with experienced management teams, low financial leverage and disciplined capital expenditure spending plans as these elements can contribute to positive free cash flow generation over time.

Consumer Staples: 1.4% underweight (7.2% of the portfolio)
The consumer staples sector is a common destination for the conservative equity income investor. Historically, many of these companies have offered investors recognisable brands, diverse revenue streams, exposure to growing end markets and the ability to garner pricing power. These characteristics, in turn, have translated into strong and often stable FCF and growing dividends for shareholders. Notable portfolio holdings include Kraft Heinz (2.6% of the portfolio) and Mondelez International (2.1% of the portfolio). We view each of these businesses as ESG Leaders and Improvers respectively: Mondelez International stands out for securing GFSI-benchmarked certification for its manufacturing sites which provide audits of suppliers and routine tests for final products limiting product and reputational risks. Kraft Heinz is an ESG Improver as it has committed to a 50% reduction in greenhouse gas emissions across all 3 scopes by 2030 and net zero by 2050.

Communication Services: 0.3% underweight (4.5% of the portfolio)
The portfolio has an underweight to communication services. Our underweight is driven by expensive valuations and a lack of dividend payers in the entertainment and interactive media and services industries. Meanwhile, the portfolio is overweight to the diversified telecom services and media industries. Notable portfolio holdings include Verizon Communications (2.7% of the portfolio) and Comcast (1.7% of the portfolio). Verizon Communications trades at a reasonable price relative to the quality and stability of its business and acts as a key enabler for smart cities, with potential to reduce energy consumption, increase safety and provide other social benefits. Comcast also trades at a very reasonable valuation due to competition in broadband and in media. As the leading broadband provider in the United States, Comcast is a key enabler of digital interactions and provides some of the key infra-structure that enables remote work (which reduces commuting related emissions).

Utilities: 1.1% underweight (4.0% of the portfolio)
The portfolio currently invests in only three utility stocks and we have a slight underweight in the sector relative to the reference index. Portfolio exposures are stock specific as we are finding pockets of investment opportunity among US regulated utilities, which add a level of stability and defensiveness to the portfolio through their durable earnings and dividend profiles. Our investments in the sector primarily focus on ESG Leaders that have specific targets for reduction in carbon emissions and maintain significant exposure to renewables or generate power through cleaner means such as natural gas.

Materials: 1.3% underweight (3.6% of the portfolio)
Our exposure to the materials sector is stock specific as we are only invested in the chemicals and containers and packaging industries. Within the containers and packaging industry, our position in Sealed Air (1.7% of the portfolio) offers a relatively stable growth outlook. Sealed Air operates a high return business and has good pricing power. From a sustainability standpoint, plastic packagers generally score poorly on waste and water stress. The key issue for plastic is how to improve circularity and management has pledged to have 100% recyclable/reusable solutions and 50% average recycled/renewable content by 2025, which is well ahead of peers.

Real Estate: 3.3% underweight (1.3% of the portfolio)
The portfolio has an underweight allocation to real estate, as we are finding few companies in the sector with both attractive valuations and strong or improving fundamentals. For example, retail REITs are facing challenges due to e-commerce and its negative impact on traditional brick and mortar retailers. Meanwhile, data center and logistics companies have strong fundamentals, but we view their valuations as unattractive. Our lone recent holding is a specialised REIT company, CrownCastle (1.3% of the portfolio). The company owns cell towers, fiber and collects rent from carriers who collocate its equipmenton the infrastructure. Crown Castle is trading at a wide discount relative to peers and is a leader in labour management and corporate governance practices.

Industrials: 4.3% underweight (9.0% of the portfolio)
The portfolio is meaningfully underweight to the industrials sector. Our selectivity is driven by relative valuations, which we view as expensive, in many cases, versus other cyclical value segments of the US equity market. Notable positions include L3Harris Technologies (2.7% of the portfolio) and Allegion (1.9% of the portfolio). We view both companies as ESG Leadersin their respective domains. L3Harris Technologies does not have exposure to controversial weapons or nuclear weapons unlike all seven other US defence primes and its MSCI ESG score was recently upgraded from A to AA. Allegion's products enhance public safety and increase building efficiency. Additionally, Allegion's MSCI ESG score is top decile, both relative to the investment universe and Allegion's peer group.

Market outlook
The stock market saw solid gains in the first half of 2023, only to fade in the second half. While many analysts remain optimistic for 2024 as inflation cools and economic growth persists, we believe investors need to proceed with caution as warning signs continue to flash. These warning signs lead us to believe that the US economy is "late cycle", meaning economic activity has reached its peak and the next phase would feature a slowing US economy with an elevated risk of recession. Some indicators in our view include low unemployment4, rapid Fed tightening, negative monetary supply growth, an inverted yield curve and consumers spending more and saving less.

Despite the strong economic data the US has seen year-to-date, it is imperative we keep an eye on both the aforementioned economic indicators and company valuations. Valuation gaps have grown substantially year-to-date and absolute valuations are beginning to look expensive yet again - the FY1 P/E ratio for the S&P 500 Index is 19.3x5 versus the 20-year average at 16.4x. With higher valuations, increased volatility and a less accommodative Fed, we view the current market environment ripe for talented stock pickers. As a result, our team is prioritising high quality company fundamentals (i.e. consistent earnings, strong balance sheets, etc.) while being mindful of price as market dispersion increases and economic conditions worsen.

TONY DESPIRITO, DAVID ZHAO AND LISA YANG
BLACKROCK INVESTMENT MANAGEMENT LLC
2 February 2024

1 Source: BlackRock; "magnificent seven" are the largest US based companies by market cap and have performed well in 2023 due to the latest artificial intelligence boom.

2 Source: New York Fed as of 30 June 2023.

3 US Bureau of Labor Statistics as of 30 June 2023.

4 As of September 2023.

5 As of 30 September 2023.

Ten largest investments

Together, the ten largest investments represent 28.0% of the Company's portfolio as at 31 October 2023 (2022: 27.4%).

1 ? Shell (2022: 11th)
Sector: Energy
Market value: £5,070,000
Share of investments: 3.3% (2022: 2.5%)

Shell is one of the largest integrated energy companies globally with five main operating segments: Integrated Gas, Upstream, Marketing, Chemicals and Products, and Renewables and Energy Solutions. The company has a high-quality, gas/liquified natural gas (LNG)-weighted portfolio. Shell is an ESG Leader, having adopted an internal net-zero strategy by 2050 to be Paris-aligned, which is not adopted by most US-based oil major peers. Shell owns the largest portfolio of global LNG supplies, which is a critical long-term bridge to help the world abate from highly polluting coal power generation. Under its 'Powering Progress' strategy, Shell is committing a third or more of its capital expenditure into renewables and energy solutions. These include electrical charging platforms, wind power generation and nature-based carbon offsetting. The company believes it was the first energy major in Europe to sign up to the Science-Based Targets Initiative for reaching net zero. Whilst Shell is a UK listed company, it is global in nature and we believe it is more attractively priced versus its US peers. Its strong performance through the reporting period propelled it to become the portfolio's largest holding.

2 ? Cigna (2022: 8th)
Sector: Health Care
Market value: £4,481,000
Share of investments: 2.9% (2022: 2.6%)

Cigna is a health services company that offers integrated health plans and services. The company operates two main segments. The first segment is a traditional managed care business which operates a primarily fee-based commercial insurance business. The second segment is a pharmacy benefit managers/healthcare services segment that provides pharmacy benefits and broader healthcare services to a wide variety of customers.

3 ? Cisco Systems (2022: 5th)
Sector: Information Technology
Market value: £4,448,000
Share of investments: 2.9% (2022: 2.8%)

Cisco Systems (Cisco) is the world's largest networking equipment vendor, with leading positions in most of its core end markets. As one of the largest suppliers of network security solutions, Cisco's products help customers to enhance data security and privacy.

4 ?Willis Towers Watson (2022: 3rd)
Sector: Financials
Market value: £4,446,000
Share of investments: 2.9% (2022: 2.9%)

Willis Towers Watson (WTW) is a British-American multinational insurance advisor company. WTW's revenue breakdown is approximately 55% consulting related and 45% insurance brokerage related.

5 ? American International (2022: 10th)
Sector: Financials
Market value: £4,322,000
Share of investments: 2.8% (2022: 2.5%)

American International (AIG) is a diversified insurance company with half the book value allocated to P&C (property and casualty) and the other half to life insurance. AIG's business model revolves around pooling and diversifying risk which includes key issues such as climate change and impacted risks like hurricanes.

6 ? Verizon Communications (2022: 4th)
Sector: Communication Services
Market value: £4,213,000
Share of investments: 2.7% (2022: 2.8%)

Verizon Communications (Verizon) is the leading wireless company in the United States. Verizon has some optionality on new types of revenue enabled by 5th generation networks with telecommunication networks being key enablers for smart cities, with the potential to reduce energy consumption, increase safety and provide other social benefits.

7 ? L3Harris Technologies (2022: 47th)
Sector: Industrials
Market value: £4,208,000
Share of investments: 2.7% (2022: 1.0%)

L3Harris Technologies (L3Harris) is an American technology company, defence contractor and information technology services provider that produces command and control systems and products, wireless equipment and more. L3Harris does not have exposure to controversial weapons or nuclear weapons unlike all seven other US defence primes.

8 ? Citigroup (2022: 13th)
Sector: Financials
Market value: £4,117,000
Share of investments: 2.7% (2022: 2.4%)

Citigroup (Citi) is a multinational investment bank and financial services corporation with a larger international footprint and smaller US retail footprint compared to its large US bank peers. Citi scores similarly to its large US bank peers with a strong score in Financing Environmental Impact, which will be increasingly important.

9 ? Kraft Heinz (2022: 44th)
Sector: Consumer Staples
Market value: £3,942,000
Share of investments: 2.6% (2022: 1.2%)

Kraft Heinz is a leading US packaged food manufacturer with brands including Oscar Mayer, Kraft, Lunchables, Philadelphia and more. Kraft Heinz has also committed to a 50% reduction in its GHG emissions across all three scopes by 2030 and net zero by 2050.

10 ? Cheniere Energy (2022: 24th)
Sector: Energy
Market value: £3,812,000
Share of investments: 2.5% (2022: 1.9%)

Cheniere Energy (Cheniere) is a full-service LNG provider with capabilities such as gas procurement and transportation, liquefaction, vessel chartering and LNG delivery. Cheniere is a recession-resilient name with quality management and strong dividend growth potential.

All percentages reflect the value of the holding as a percentage of total investments.

Percentages in brackets represent the value of the holding as at 31 October 2022.

Arrows indicate the change in relative ranking of the position in the portfolio compared to its ranking as at 31 October 2022.

Portfolio analysis as at 31 October 2023

Sector Exposure

	20231 portfolio	20222 portfolio	2023 reference index1,3
Communication Services	4.5%	4.4%	4.8%
Consumer Discretionary	9.6%	10.0%	4.8%
Consumer Staples	7.2%	5.4%	8.6%
Energy	9.3%	8.7%	9.0%
Financials	19.6%	21.9%	20.8%
Health Care	18.4%	20.4%	15.1%
Industrials	9.0%	5.5%	13.3%
Information Technology	13.5%	13.9%	9.0%
Materials	3.6%	4.3%	4.9%
Real Estate	1.3%	1.3%	4.6%
Utilities	4.0%	4.2%	5.1%

1 Represents exposure at 31 October 2023.

2 Represents exposure at 31 October 2022.

3 Russell 1000 Value Index at 31 October 2023.

Geographic Exposure1

	As at 31 October 2023	As at 31 October 2022
United States	86.8%	81.2%
United Kingdom	4.8%	7.7%
Other2	3.7%	4.6%
Japan	2.8%	3.6%
France	1.9%	2.9%

1 Based on the principal place of operation of each investment.

2 Consists of Australia, Canada and Denmark.

Investments as at 31 October 2023

Company	Country	Sector	Securities	Market value £'000	% of total portfolio
Shell	United Kingdom	Energy	Ordinary shares	5,070	3.3
Cigna	United States	Health Care	Ordinary shares	4,481	2.9
Cisco Systems	United States	Information Technology (IT)	Ordinary shares	4,448	2.9
Willis Towers Watson	United States	Financials	Ordinary shares	4,446	2.9
American International	United States	Financials	Ordinary shares	4,322	2.8
Verizon Communications	United States	Communication Services	Ordinary shares	4,213	2.7
L3Harris Technologies	United States	Industrials	Ordinary shares	4,208	2.7
Citigroup	United States	Financials	Ordinary shares	4,117	2.7
Kraft Heinz	United States	Consumer Staples	Ordinary shares	3,942	2.6
Cheniere Energy	United States	Energy	Ordinary shares	3,812	2.5
Microsoft	United States	IT	Ordinary shares	3,734	2.4
Cardinal Health	United States	Health Care	Ordinary shares	3,723	2.4
Anthem	United States	Health Care	Ordinary shares	3,570	2.3
Sony	United States	Consumer Discretionary	Ordinary shares	3,541	2.3
Cognizant Technology Solutions	United States	IT	Ordinary shares	3,438	2.2
Baxter International	United States	Health Care	Ordinary shares	3,381	2.2
Mondelez International	United States	Consumer Staples	Ordinary shares	3,213	2.1
Western Digital	United States	IT	Ordinary shares	2,954	1.9
Sanofi	France	Health Care	Ordinary shares	2,937	1.9
Exelon	United States	Utilities	Ordinary shares	2,911	1.9
Allegion	United States	Industrials	Ordinary shares	2,874	1.9
Fidelity National Information Services	United States	IT	Ordinary shares	2,840	1.8
Laboratory Corporation of America	United States	Health Care	Ordinary shares	2,809	1.8
Kosmos Energy	United States	Energy	Ordinary shares	2,753	1.8
Comcast	United States	Communication Services	Ordinary shares	2,699	1.8
General Motors	United States	Consumer Discretionary	Ordinary shares	2,675	1.7
Woodside Energy Group	Australia	Energy	Ordinary shares	2,647	1.7
Dollar Tree	United States	Consumer Discretionary	Ordinary shares	2,631	1.7
Sealed Air	United States	Materials	Ordinary shares	2,539	1.6
First Citizens BancShares	United States	Financials	Ordinary shares	2,521	1.6
Panasonic	Japan	Consumer Discretionary	Ordinary shares	2,511	1.6
Fortrea Holdings	United States	Health Care	Ordinary shares	2,380	1.5
Prudential	United Kingdom	Financials	Ordinary shares	2,345	1.5
Raymond James	United States	Financials	Ordinary shares	2,309	1.5
Wells Fargo	United States	Financials	Ordinary shares	2,275	1.5
Union Pacific	United States	Industrials	Ordinary shares	2,252	1.5
JPMorgan Chase	United States	Financials	Ordinary shares	2,208	1.4
Unilever	United States	Consumer Staples	Ordinary shares	2,164	1.4
Public Service Enterprise Group	United States	Utilities	Ordinary shares	2,132	1.4
Gildan Activewear	Canada	Consumer Discretionary	Ordinary shares	2,128	1.4
Crown Castle	United States	Real Estate	Ordinary shares	1,996	1.3
Visa	United States	IT	Ordinary shares	1,812	1.2
Komatsu	Japan	Industrials	Ordinary shares	1,803	1.2
Zimmer Biomet	United States	Health Care	Ordinary shares	1,717	1.1
Avantor	United States	Health Care	Ordinary shares	1,714	1.1
Zebra Technologies	United States	IT	Ordinary shares	1,697	1.1
Dollar General	United States	Consumer Staples	Ordinary shares	1,620	1.1
International Flavors & Fragrances	United States	Materials	Ordinary shares	1,611	1.0
Crown Holdings	United States	Materials	Ordinary shares	1,495	1.0
Goldman Sachs	United States	Financials	Ordinary shares	1,465	1.0
Lear	United States	Consumer Discretionary	Ordinary shares	1,394	0.9
Fidelity National	United States	Financials	Ordinary shares	1,387	0.9
Citizens Financial Group	United States	Financials	Ordinary shares	1,370	0.9
First American	United States	Financials	Ordinary shares	1,331	0.9
NextEra Energy	United States	Utilities	Ordinary shares	1,093	0.7
Eli Lilly	United States	Health Care	Ordinary shares	962	0.6
CNH Industrial	United States	Industrials	Ordinary shares	954	0.6
Pentair	United States	Industrials	Ordinary shares	942	0.6
Novo Nordisk	Denmark	Health Care	Ordinary shares	922	0.6
Transunion	United States	Industrials	Ordinary shares	774	0.5
				---------------	---------------
Portfolio				154,212	100.0
				=========	=========

All investments are in ordinary shares unless otherwise stated. The number of holdings as at 31 October 2023 was 60 (31 October 2022: 57).

At 31 October 2023, 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 31 October 2023. The aim of the Strategic Report is to provide shareholders with the information to assess how the Directors have performed their duty to promote the success of the Company for the collective benefit of shareholders.

The Chair's Statement together with the Investment Manager's Report form part of this Strategic Report. The Strategic Report was approved by the Board at its meeting on 2 February 2024.

Principal activity
The Company carries on business as an investment trust and has a premium listing on the London Stock Exchange. Its principal activity is portfolio investment. Investment trusts are pooled investment vehicles which allow exposure to a diversified range of assets through a single investment, thus spreading investment risk.

Investment objective
The Company's objective is to provide an attractive level of income return together with capital appreciation over the long term in a manner consistent with the principles of sustainable investing adopted by the Company.

Strategy, business model and investment policy
Strategy
The Company invests in accordance with the objective given above. The Board is collectively responsible to shareholders for the long-term success of the Company and is its governing body. There is a clear division of responsibility between the Board and BlackRock Fund Managers Limited (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 performance of service providers, including the Manager.

Business model
The Company's business model follows that of an externally managed investment trust. Therefore, the Company does not have any employees and outsources its activities to third-party service providers including the Manager who is the principal service provider. In accordance with the Alternative Investment Fund Managers' Directive (AIFMD) the Company is an Alternative Investment Fund (AIF). BlackRock Fund Managers Limited is the Company's Alternative Investment Fund Manager.

The management of the investment portfolio and the administration of the Company have been contractually delegated to the Manager who in turn (with the permission of the Company) has delegated certain investment management and other ancillary services to BlackRock Investment Management (UK) Limited (the Investment Manager or BIM (UK)). The Manager, operating under guidelines determined by the Board, has direct responsibility for the decisions relating to the day-to-day 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 sub-delegates these services to The Bank of New York Mellon (International) Limited (BNYM). Other service providers include the Depositary (also BNYM) and the Registrar, Computershare Investor Services PLC. Details of the contractual terms with the Manager and the Depositary and more details of arrangements in place governing custody services are set out in the Directors' Report.

Investment policy
The Company invests primarily in a diversified portfolio of North American* equity securities, with a focus on large-cap and medium-cap companies that pay and grow their dividends. 'North America', in accordance with the United Nations publication 'Standard Country or Area Codes for Statistical Use', means Bermuda, Canada, Greenland, Saint Pierre and Miquelon and United States of America and 'North American' shall be construed accordingly. The Company may also invest in the equity securities of companies outside North America, subject to the restrictions set out below, and may invest in securities denominated in currencies other than the official currencies of the relevant countries or areas within North America. The Company may also hold other securities from time-to-time including, inter alia, options, futures contracts, convertible securities, fixed interest securities, preference shares, non-convertible preferred stock and depositary receipts (such securities other than equity securities, together 'Other Securities'). The Company may also write covered call options in respect of its portfolio.

To achieve the Company's investment objective, the Investment Manager adopts a stock specific approach in managing the Company's portfolio, selecting investments that it believes will both increase in value over the long term and provide income. The Company does not invest in companies which are not listed, quoted or traded on an exchange at the time of investment, although it may have exposure to such companies where, following investment, the relevant securities cease to be listed, quoted or traded on an exchange. Typically, it is expected that the investment portfolio will comprise between 30 and 60 equity securities. As at 31 October 2023, there were 60 holdings in the Company's portfolio.

The Company may invest in derivatives for efficient portfolio management and in options for investment purposes and may, for investment purposes, write covered call options in respect of its portfolio. Any use of derivatives for efficient portfolio management and/or options for investment purposes is made based on the same principles of risk spreading and diversification that apply to the Company's direct investments. For the avoidance of doubt, the Company does not enter into physical or synthetic short positions or write any uncovered options.

Portfolio risk is mitigated by investing in a diversified spread of investments. In particular, the Company observes the following investment restrictions: no single investment (including for the avoidance of doubt, any single derivative instrument) at the time of investment, shall account for more than 10% of the gross asset value of the Company; no more than 25% of the gross asset value of the Company, at the time of investment, shall be invested in securities which are not deemed to be North American* securities; no more than 35% of the gross asset value of the Company, at the time of investment, shall be exposed to any one sector; no more than 20% of the gross asset value of the Company, at the time of investment, shall be invested in Other Securities; and no more than 20% of the Company's portfolio will be under option at any given time.

* Securities may be deemed to be North American securities if: (i) the company's principal operations are conducted from North America; or (ii) the company's equity securities are listed, quoted or traded on a North American stock exchange; or (iii) the company does a substantial amount of business in North America; or (iv) the issuer of securities is included in the Company's reference index.

In managing the Company's portfolio, the Investment Manager, in addition to other investment criteria, takes into account the environmental, social and governance (ESG) characteristics of the relevant issuers of securities and seeks to deliver a superior ESG outcome versus the reference index by aiming for the Company's portfolio to achieve: (i) a better ESG score than the reference index; and (ii) a lower carbon emissions intensity score than the reference index. The reference index is the Russell 1000 Value Index, or such other index as may be agreed by the Company and the Investment Manager to be appropriate from time to time. However, there can be no guarantee that these aims will be achieved and the ESG rating of the Company's portfolio and its carbon emission intensity score may vary.

The Investment Manager also applies a screening policy (currently the BlackRock EMEA Baseline Screens policy1) at the time of investment through which it seeks to limit and/or exclude direct investment (as applicable) in companies which, in the opinion of the Investment Manager, have exposure to, or ties with, certain sectors (in some cases subject to specific revenue thresholds) including but not limited to: (i) the production of certain types of controversial weapons; (ii) the distribution or production of firearms or small arms ammunition intended for retail civilians; (iii) the extraction of certain types of fossil fuel and/or the generation of power from them; (iv) the production of tobacco products or certain activities in relation to tobacco-related products; and (v) issuers which have been deemed to have failed to comply with United Nations Global Compact Principles.

1 https://www.blackrock.com/corporate/literature/publication/blackrock-baseline-screens-in-europe-middleeast-and-africa.pdf.

Following application of the screening policy outlined above, those companies which have not yet been excluded from investment are then evaluated by the Investment Manager based on their ability to manage the risks and opportunities associated with ESG-consistent business practices and their ESG risk and opportunity credentials, such as their leadership and governance framework, which is considered essential for sustainable growth, their ability to strategically manage longer-term issues surrounding ESG and the potential impact this may have on a company's financials. To undertake the required analyses, the Investment Manager may use data provided by external ESG data providers, proprietary models and local intelligence and may undertake site visits.

Should holdings which are compliant with the screening policy applied by the Investment Manager outlined above at the time of investment subsequently become ineligible, they will be divested within a reasonable period of time. The Company may gain limited exposure (including, but not limited to, through investment in other listed closed-ended investment funds and derivatives) to issuers with exposures that do not meet the sustainable investment principles described above. Circumstances in which such exposure may arise include, but are not limited to, where a counterparty to a derivative in which the Company invests posts collateral which is inconsistent with the Company's sustainable investment principles or where a fund in which the Company invests does not apply any or the same sustainable investment principles as the Company and so provides exposure to securities which are inconsistent with the Company's sustainable investment principles. The Investment Manager may take corrective action in such circumstances.

The Company may borrow up to 20 per cent of its net asset value (calculated at the time of draw down), although typically borrowings are not expected to exceed 10 per cent of its net asset value at the time of draw down. Borrowings may be used for investment purposes. The Company has entered into an overdraft facility for this purpose. The Company may enter into interest rate hedging arrangements.

The Company's foreign currency investments are not hedged to Sterling as a matter of general policy. However, the investment team may employ currency hedging, either back to Sterling or between currencies (i.e. cross-hedging of portfolio investments).

In order to comply with the current Listing Rules, the Company also complies with the following investment restrictions (which do not form part of the Company's investment policy): the Company will not conduct any trading activity which is significant in the context of its group as a whole; and the Company will not invest more than 10% of its gross asset value in other listed closed-ended investment funds, whether managed by the Investment Manager or not, except that this restriction shall not apply to investments in listed closed-ended investment funds which themselves have stated investment policies to invest no more than 15% of their gross assets in other listed closed-ended investment funds.

Information regarding the Company's investment exposures is contained within the schedule of investments above. Further information regarding investment risk and activity throughout the year can be found in the Investment Manager's Report.

No material change will be made to the investment policy without the approval of shareholders by ordinary resolution.

Environmental impact
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 mitigated through BlackRock's environmental, social and governance policies.

Performance
Over the year ended 31 October 2023, the Company's net asset value returned -5.6% compared with a return of -5.0% in the Russell 1000 Value Index. The ordinary share price returned -8.1% (all percentages are calculated in Sterling terms with dividends reinvested). 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 results for the Company are set out in the Statement of Comprehensive Income. The total return for the year, after taxation, was a loss of £9,456,000 (2022: profit of £12,170,000) of which the revenue return amounted to a profit of £2,945,000 (2022: profit of £3,081,000) and the capital return amounted to a loss of £12,401,000 (2022: profit of £9,089,000).

The Company pays dividends quarterly. Four quarterly interim dividends of 2.00p per share were paid on 28 April 2023, 3 July 2023, 2 October 2023 and 2 January 2024. Total dividends of 8.00p per share were paid or declared in the year ended 31 October 2023 (2022: 8.00p).

Future prospects
The Board's main focus is to provide an attractive level of income together with capital appreciation over the long term, in a manner consistent with the principles of sustainable investing. The future of the Company is dependent upon the success of the investment strategy. The outlook for the Company in the next twelve months is discussed in both the Chair's Statement and in the Investment Manager's Report.

Social, community and human rights issues
As an investment trust, the Company has no direct social or community responsibilities or impact on the environment. However, the Directors believe that it is important and in shareholders' interests to consider human rights issues and environmental, social and governance factors when selecting and retaining investments. Details of the Company's approach on socially responsible investment are set out on page 70 in the Company's Annual Report for the year ended 31 October 2023.

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. The Investment Manager considers modern slavery as part of supply chains and labour management within the investment process. Accordingly, the Directors consider that the Company is not required to make any slavery or human trafficking statement under the Modern Slavery Act 2015. In any event, the Board considers the Company's supply chains, dealing predominantly with professional advisers and service providers in the financial services industry, to be low risk in relation to this matter.

Directors, gender representation and employees
The Directors of the Company on 31 October 2023 are set out in the Directors' Biographies in the Company's Annual Report for the year ended 31 October 2023. The Board consists of two male Directors and two female Directors. The Company does not have any executive employees.

Key performance indicators
At each Board meeting, the Directors consider a number of performance measures to assess the Company's success in achieving its objectives. The key performance indicators (KPIs) used to measure the progress and performance of the Company over time, and which are comparable to other investment trusts, are set out in the following table. As indicated in the footnote to the table, some of these KPIs fall within the definition of 'Alternative Performance Measures' 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 in the Company's Annual Report for the year ended 31 October 2023.

Additionally, the Board regularly reviews the performance of the portfolio, as well as the net asset value and share price of the Company and compares this against various companies and indices. The Board also reviews the performance of the portfolio against a reference index, the Russell 1000 Value Index. Information on the Company's performance is given in the Chair's Statement.

	Year ended 31 October 2023	Year ended 31 October 2022
Net asset value per ordinary share	193.51p	213.25p
Ordinary share price (mid-market)	174.00p	197.50p
Net asset value total return1	-5.6%	+7.4%
Reference index2	-5.0%	+10.7%
Share price total return1	-8.1%	+3.6%
Dividends per share	8.00p	8.00p
Discount to cum income net asset value3	10.1%	7.4%
Revenue return per share	3.67p	3.84p
Ongoing charges4	1.03%	1.01%
	=========	=========

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

2 Russell 1000 Value Index, total return basis.

3 This is the difference between the share price and the NAV per share with debt at par. It is an indicator of the need for shares to be bought back or, in the event of a premium to NAV per share, issued.

4 Ongoing charges represent 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 as a % of average daily net assets.

Principal risks
The Company is exposed to a variety of risks and uncertainties. As required by the 2018 UK Corporate Governance Code (the UK Code), the Board has put in place a robust ongoing process to identify, assess and monitor the principal and emerging risks facing the Company, including those that would threaten its business model. 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 quality of controls operating to mitigate it. A residual risk rating is then calculated for each risk based on the outcome of the assessment.

The risk register, its method of preparation and the operation of key controls in BlackRock's and third-party service providers' systems of internal control, are reviewed on a regular basis by the Audit Committee. In order to gain a more comprehensive understanding of BlackRock'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 Committee chairs of the BlackRock investment trusts setting out the results of testing performed in relation to BlackRock's internal control processes. The Audit Committee also periodically receives and reviews internal control reports from BlackRock and the Company's service providers.

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 gave 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 and the conflict in the Middle East, 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 these into the Company's risk register. The threat of climate change has also reinforced the importance of more sustainable practices and environmental responsibility.

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 below.

Market

Principal risk
Market risk arises from volatility in the prices of the Company's investments. It represents the potential loss the Company might suffer through realising investments in the face of negative market movements.

Changes in general economic and market conditions, such as currency exchange rates, interest rates, rates of inflation, industry conditions, tax laws, political events and trends can also substantially and adversely affect the securities and, as a consequence, the Company's prospects 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.

Companies operating in 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.

Mitigation/Control
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.

The Board also recognises the benefits of a closed-end fund structure in extremely volatile markets such as those experienced as a consequence of the COVID-19 pandemic and the conflicts in Ukraine and the Middle East. 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 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.

The portfolio managers spend a considerable amount of time understanding the ESG risks and opportunities facing investee companies and conduct research and due diligence on new investments and when monitoring investments in the portfolio.

Investment performance

Principal risk
Returns achieved are reliant primarily upon the performance of the portfolio.

The Board is responsible for:

- deciding 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:

- underperformance compared to the reference index;

- a reduction or permanent loss of capital; and

- dissatisfied shareholders and reputational damage.

Mitigation/Control
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;

- monitors and maintains an adequate spread of investments in order to minimise the risks associated with particular countries or factors specific to particular sectors, based on the diversification requirements inherent in the investment policy; and

- receives and reviews regular reports showing an analysis of the Company's performance against the Russell 1000 Value Index and other similar indices.

Operational

Principal risk
In common with most other investment trust companies, the Company has no employees. The Company therefore relies on the services provided by third parties and is dependent on the control systems of the Manager, the Depositary and Fund Accountant, which maintain the Company's assets, dealing procedures and accounting records.

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 these other third-party service providers. There is a risk that a major disaster, such as floods, fire, a global pandemic, or terrorist activity, renders the Company's service providers unable to conduct business at normal operating effectiveness.

Failure by any service provider to carry out its obligations could have a material adverse effect on the Company's performance. Disruption to the accounting, payment systems or custody records (including cyber security risk) could prevent the accurate reporting and monitoring of the Company's financial position.

Mitigation/Control
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 Board reviews on a regular basis an assessment of the fraud risks that the Company could potentially be exposed to and also a summary of the controls put in place by the Manager, Depositary, Custodian, Fund Accountant and Registrar specifically to mitigate these risks.

Most third-party service providers produce Service Organisation Control (SOC 1) reports to provide assurance regarding the effective operation of internal controls as reported on by their reporting accountants. These reports are provided to the Audit Committee for review. The Committee would seek further representations from service providers if not satisfied with the effectiveness of their control environment.

The Company's financial instruments held in custody are subject to a strict liability regime and, in the event of a loss of such financial instruments held in custody, the Depositary must return financial instruments 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 and compliance with the Investment Management Agreement annually.

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.

Legal & Regulatory Compliance

Principal risk
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 corporation tax on capital gains 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. In such event, the investment returns of the Company may be adversely affected.

A serious regulatory 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, the Company is required to comply with the provisions of the Companies Act 2006, the Alternative Investment Fund Managers' Directive, the UK Listing Rules, Disclosure Guidance and Transparency Rules, the Sanctions and Anti-Money Laundering Act 2018 and the Market Abuse Regulation.

Mitigation/Control
The Investment Manager monitors investment movements, the level of forecast income and expenditure and the amount of proposed dividends 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 also carefully and regularly monitored.

The Company Secretary, Manager and the Company's professional advisers provide regular reports to the Board in respect of compliance with all applicable rules and regulations. The Board and Manager also monitor changes in government policy and legislation which may have an impact on the Company.

Counterparty

Principal risk
The potential loss that the Company could incur if a counterparty is unable (or unwilling) to perform on its commitments.

Mitigation/Control
Due diligence is undertaken before contracts are entered into and exposures are diversified across a number of counterparties.

The Depositary is liable for restitution for the loss of financial instruments held in custody unless able to demonstrate the loss was a result of an event beyond its reasonable control.

Financial

Principal risk
The Company's investment activities expose it to a variety of financial risks which include market risk, counterparty credit risk, liquidity risk and the valuation of financial instruments.

Mitigation/Control
Details of these risks are disclosed in note 15 to the Financial Statements in the Company's Annual Report for the year ended 31 October 2023, together with a summary of the policies for managing these risks.

Marketing

Principal risk
Marketing efforts are inadequate or do not comply with relevant regulatory requirements. There is a failure to communicate adequately with shareholders or reach out to potential new shareholders resulting in reduced demand for the Company's shares and a widening of the discount.

Mitigation/Control
The Board reviews marketing strategy and initiatives and the Manager is required to provide regular updates on progress. BlackRock has a dedicated investment trust sales team visiting both existing and potential clients on a regular basis. The Manager also devotes considerable resources marketing to self-directed private investors. Data on client meetings and issues raised are provided to the Board on a regular basis.

All investment trust marketing documents are subject to appropriate review and authorisation.

Section 172 statement: Promoting the success of the Company
The Companies (Miscellaneous Reporting) Regulations 2018 require directors to explain in greater 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 includes the likely consequences of their decisions in the longer term and how they have taken wider stakeholders' needs into account.

The disclosure that follows 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. The Board considers the main stakeholders in the Company to be the Manager, Investment Manager and the shareholders. In addition to this, the Board considers investee companies and key service providers of the Company to be stakeholders; the latter comprise the Company's Custodian, Depositary, Registrar and Broker.

Stakeholders

Shareholders
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 an attractive level of income return together with capital appreciation over the long term in a manner consistent with the principles of sustainable investing adopted by the Company.

Manager and Investment Manager
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 deliver successfully 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.

Other key service providers
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 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.

Investee companies
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 activities and receives regular feedback from the Manager in respect of meetings with the management.

Area of Engagement

Investment mandate and objective

Issue
The Board 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.

Engagement
The Board worked closely with the Investment Manager throughout the year in further developing investment strategy and underlying policies in the interests of shareholders and future investors.

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, is to encourage the adoption of sustainable business practices which support long-term value creation.

Impact
The Company's investment objective is to provide an attractive level of income together with capital appreciation over the long term in a manner consistent with the principles of sustainable investing adopted by the Company.

The Board believes that it offers an attractive investment strategy with the additional potential the ESG integration provides to exceed the reference index over time.

Shareholders

Issue
Continued shareholder support and engagement are critical to the continued existence of the Company and the successful delivery of its long-term strategy.

Engagement
The Board is committed to maintaining open channels of communication and engaging with shareholders. The Company welcomes and encourages attendance and participation from shareholders at its Annual General Meetings. Shareholders will have the opportunity to meet the Directors and Investment Manager and to address questions to them directly. The Investment Manager will also provide a presentation on the Company's performance and outlook.

The Annual Report and Half Yearly Financial Report are available on the BlackRock website and are also circulated to shareholders. In addition, regular updates on performance, monthly factsheets, the daily NAV and other information are also published on the Manager's website at www.blackrock.com/uk/brsa. The Company's website and marketing initiatives are geared to providing a breadth and depth of informative and engaging content.

The Board also works closely with the Manager to develop the Company's marketing strategy. Unlike trading companies, one-to-one shareholder meetings normally take the form of a meeting with the Investment Manager as opposed to members of the Board. The Company's willingness to enter into discussions with institutional shareholders is also demonstrated by the programmes of institutional presentations by the portfolio managers. Additionally, the Investment Manager regularly presents at professional and private investor events to help explain and promote the Company's strategy.

If shareholders wish to raise issues or concerns with the Board, they are welcome to do so at any time. The Chair is available to meet directly with shareholders periodically to understand their views on governance and the Company's performance where they wish to do so. She may be contacted via the Company Secretary whose details are given in the Company's Annual Report for the year ended 31 October 2023.

Impact
The Board values any feedback and questions from shareholders ahead of and during Annual General Meetings in order to gain an understanding of their views and will take action when and as appropriate. Feedback and questions will also help the Company evolve its reporting, aiming to make reports more transparent and understandable.

Feedback from all substantive meetings between the Investment Manager and shareholders will be shared with the Board. The Directors will also receive updates from the Company's Broker on any feedback from shareholders, as well as share trading activity, share price performance and an update from the Investment Manager.

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 activities and receives regular feedback from the Investment Manager in respect of meetings with the management of portfolio companies.

Responsible investing

Issue
More than ever, the importance of good governance and consideration of sustainable investment are key factors in making investment decisions. Climate change is becoming a defining factor in companies' long-term prospects across the investment spectrum, with significant and lasting implications for economic growth and prosperity.

Engagement
The Board believes that responsible investment and sustainability are important to the longer-term delivery of the Company's success. The Board works closely with the Investment Manager to review regularly and challenge the Company's performance, investment strategy and underlying policies to ensure that the Company's investment objective continues to be met in an effective and responsible way in the interests of shareholders and future investors.

The Investment Manager's approach to the consideration of ESG factors in respect of the Company's portfolio, as well as the Investment Manager's 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 Board also expects to be informed by the Manager of any sensitive voting issues involving the Company's investments.

The Investment Manager reports to the Board in respect of its ESG policies and how these are integrated into the investment process; a summary of BlackRock's approach to ESG and sustainability is set out in the Company's Annual Report for the year ended 31 October 2023. The Investment Manager's engagement and voting policy is detailed pages 30 and 31 and on page 54 in the Company's Annual Report for the year ended 31 October 2023 and on the BlackRock website.

Impact
The Board and Investment Manager believe there is likely to be a positive correlation between strong ESG practices and investment performance over time.

Management of share rating

Issue
The Board recognises that it is in the long-term interests of shareholders that the Company's shares do not trade at a significant discount (or premium) to their prevailing NAV. The Board believes this may be achieved by the use of share buy back powers and the issue of shares.

Engagement
The Board monitors the Company's share rating on an ongoing basis and receives regular updates from the Manager and the Company's Broker, Cavendish Securities, regarding the level of discount/premium.

The Board believes that the best way of maintaining the share rating at an optimal level over the long term is to create demand for the shares in the secondary market. To this end, the Investment Manager is devoting considerable effort to broadening the awareness of the Company, particularly to wealth managers and to the wider retail market.

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.

Impact
The Board continues to monitor the Company's premium/discount to NAV and will look to buy back or issue shares if it is deemed to be in the interests of shareholders as a whole. During the financial year and up to the date of this report the Company did not reissue any shares. The Company bought back 1,020,803 shares both during the financial year and since the year end.

The Company's average discount for the year to 31 October 2023 was 6.0% and the discount at 31 January 2024 stood at 10.8%.

Service levels of third-party providers

Issue
The Board acknowledges the importance of ensuring that the Company's principal suppliers are providing a suitable level of service, including 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.

Engagement
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, their commitment and available resources. The Board met with the Investment Manager for a comprehensive two day agenda at their place of work in New York - meeting, engaging and understanding the significant level of input from multiple different teams and experts feeding in to the Company's strategy.

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. For example, our brokers Cavendish Securities, report to the Board at each board meeting and provide direct unfiltered feedback on the views of the shareholders, wider market considerations and offer Company specific advice. They also arrange meetings for major shareholders to meet the Chair, or other Directors, outside the normal general meeting cycle. The AIFM and Depositary also attend the Audit Committee meetings and provide a report on their monitoring activities, whilst the Registrar produces a quarterly report to monitor their level of service and ensure it is acceptable.

The Board works closely with the Manager to gain comfort that relevant business continuity plans are operating effectively for all of the Company's key service providers.

Impact
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.

The Board has received updates in respect of business continuity planning from the Company's Manager, Custodian, Depositary, Fund Accountant, Registrar and Printer and is confident that arrangements are in place to ensure a good level of service will continue to be provided.

Board composition

Issue
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.

Engagement
During the year, the Board engaged the services of an external search consultant to identify potential candidates to replace Mr Casey who retired as a Director following the Annual General Meeting held on 21 March 2023. The Nomination Committee agreed the selection criteria and the method of selection, recruitment and appointment.

All Directors are subject to a formal evaluation process on an annual basis (more details and the conclusions of the 2023 evaluation process are given below). All Directors stand for re-election by shareholders annually.

Shareholders may attend the Annual General Meeting and raise any queries in respect of Board composition or individual Directors in person or may contact the Company Secretary or the Chair using the details provided in the Company's Annual Report for the year ended 31 October 2023.

Impact
As a result of the recruitment process, Mr Solomon Soquar was appointed as a Director of the Company following the Annual General Meeting held on 21 March 2023.

As at the date of this report, the Board was comprised of two men and two women. One Board Director, Ms Ryder, has a tenure in excess of nine years and it is her intention to retire at the Annual General Meeting to be held in 2025. The Board considers that the tenure of the Chair and Directors should be determined principally by how the Board's purpose in providing strategic leadership, governance and bringing challenge and support to the Manager can best be maintained, whilst also recognising the importance of independence, refreshment, diversity and retention of accumulated knowledge. It firmly believes that an appropriate balance of these factors is essential for an effective functioning board and, at times, will naturally result in some longer serving Directors. Furthermore, the Board wishes to retain the flexibility to recruit outstanding candidates when they become available rather than simply adding new Directors based upon a predetermined timetable.

Details of each Directors' contribution to the success and promotion of the Company are set out in the Directors' Report and details of Directors' biographies can be found in the Company's Annual Report for the year ended 31 October 2023.

The Directors are not aware of any issues that have been raised directly by shareholders in respect of Board composition in the year under review. Details of the proxy voting results in favour and against individual Directors' re-election at the 2023 Annual General Meeting are given on the Manager's website at www.blackrock.com/uk/brsa.

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 Company is an investment trust with the objective of providing an attractive level of income return together with capital appreciation over the long term.

The Directors expect the Company to continue for the foreseeable future and have therefore conducted this review for a period up to the Annual General Meeting in 2027. The Directors assess viability over a rolling three-year period as they believe it best balances the Company's long-term objective, its financial flexibility and scope with the difficulty in forecasting economic conditions which could affect both the Company and its shareholders. The Company also undertakes a continuation vote every three years with the next one taking place at the Annual General Meeting in 2025.

In making an assessment on the viability of the Company, the Board has considered the following:

- the impact of a significant fall in US equity markets on the value of the Company's investment portfolio;

- the ongoing relevance of the Company's investment objective, business model and investment policy in the prevailing market;

- the principal and emerging risks and uncertainties, as set out above, and their potential impact;

- the level of ongoing demand for the Company's shares;

- the Company's share price discount/premium to NAV;

- the liquidity of the Company's portfolio; and

- the level of income generated by the Company and future income and expenditure forecasts.

The Directors have concluded that there is a reasonable expectation that the Company will continue in operation and meet its liabilities as they fall due over the period of their assessment based on the following considerations:

- the Investment Manager's compliance with the investment objective and policy, its investment strategy and asset allocation;

- the portfolio mainly comprises readily realisable assets which continue to offer a broad range of investment opportunities for shareholders as part of a balanced investment portfolio;

- 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 its key service providers;

- the ongoing processes for monitoring operating costs and income which are considered to be reasonable in comparison to the Company's total assets;

- the Board's discount management policy; and

- the Company is a closed-end investment company and therefore does not suffer from the liquidity issues arising from unexpected redemptions.

In addition, the Board's assessment of the Company's ability to operate in the foreseeable future is included in the Going Concern Statement which can be found in the Directors' Report.

BY ORDER OF THE BOARD
CAROLINE DRISCOLL
FOR AND ON BEHALF OF
BLACKROCK INVESTMENT MANAGEMENT (UK) LIMITED
Company Secretary
2 February 2024

Related Party and Transactions with the Investment Manager and AIFM

BlackRock Fund Managers Limited (BFM) provides management and administration services to the Company under a contract which is terminable on six months' notice. BFM has (with the Company's consent) delegated certain portfolio and risk management 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 in the Company's Annual Report for the year ended 31 October 2023.

The investment management fee due for the year ended 31 October 2023 amounted to £1,144,000 (2022: £1,197,000). At the year end, £837,000 was outstanding in respect of the management fee (2022: £899,000).

In addition to the above services, BIM (UK) has provided the Company with marketing services. The total fees paid or payable for these services for the year ended 31 October 2023 amounted to £94,000 excluding VAT (2022: £49,000). Marketing fees of £123,000 excluding VAT (2022: £29,000) were outstanding as at the year end.

The Company has an investment in the BlackRock Institutional Cash Series plc - US Dollar Liquid Environmentally Aware Fund of £879,000 (2022: £nil) at the year end, which is a fund managed by a company within the BlackRock Group.

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

As at 31 October 2023, the Board consisted of four non-executive Directors, all of whom were considered to be independent by the Board. None of the Directors has a service contract with the Company. For the year ended 31 October 2023, the Chair received an annual fee of £43,000, the Chairman of the Audit Committee received an annual fee of £36,000 and each other Director received an annual fee of £30,000. With effect from 1 November 2023, the Chair receives an annual fee of £44,000, the Chairman of the Audit Committee receives an annual fee of £38,000 and each other Director receives an annual fee of £31,500.

As at 31 October 2023, three members of the Board held shares in the Company. Alice Ryder held 9,047 ordinary shares, David Barron held 5,000 ordinary shares and Melanie Roberts held 10,000 ordinary shares.

All of the holdings of the Directors are beneficial. Since the year end there have been no further changes to the Directors' share interests.

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 financial statements under UK-adopted International Accounting Standards (IASs) in conformity with the requirements of the Companies Act 2006. 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 Company as at the end of each financial year and of the profit or loss of the Company for that period.

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

- present fairly the financial position, financial performance and cash flows of the Company;

- select suitable accounting policies in accordance with IAS 8, 'Accounting Policies, Changes in Accounting Estimates and Errors,' and then apply them consistently;

- present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;

- make judgements and estimates that are reasonable and prudent;

- state whether the financial statements have been prepared in accordance with IASs in conformity with the requirements of the Companies Act 2006, subject to any material departures disclosed and explained in the financial statements;

- provide additional disclosures when compliance with the specific requirements in IASs in conformity with the requirements of the Companies Act 2006 is insufficient to enable users to understand the impact of particular transactions, other events and conditions on the Company's financial position and financial performance; and

- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

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

Each of the Directors, whose names are listed in the Company's Annual Report for the year ended 31 October 2023, confirm to the best of their knowledge that:

- the financial statements, which have been prepared in accordance with IASs in conformity with the requirements of the Companies Act 2006, give a true and fair view of the assets, liabilities, financial position and net profit of the Company; and

- the Strategic Report contained in the Annual Report and Financial Statements includes a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that it faces.

The 2018 UK Corporate Governance Code also requires Directors to ensure that the Annual Report and Financial Statements are fair, balanced and understandable. In order to reach a conclusion on this matter, the Board has requested that the Audit Committee advise on whether it considers that the Annual Report and Financial Statements fulfil these requirements. The process by which the Committee has reached these conclusions is set out in the Audit Committee's report on pages 72 to 77 in the Company's Annual Report for the year ended 31 October 2023. As a result, the Board has concluded that the Annual Report and Financial Statements for the year ended 31 October 2023, taken as a whole, are fair, balanced and understandable and provide the information necessary for shareholders to assess the Company's position, performance, business model and strategy.

FOR AND ON BEHALF OF THE BOARD
ALICE RYDER
Chair
2 February 2024

Statement of Comprehensive Income for the year ended 31 October 2023

		2023			2022
	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	4,252	-	4,252	4,255	55	4,310
Other income	3	11	-	11	3	-	3
		---------------	---------------	---------------	---------------	---------------	---------------
Total income		4,263	-	4,263	4,258	55	4,313
		=========	=========	=========	=========	=========	=========
Net (loss)/profit on investments and options held at fair value through profit or loss		-	(11,550)	(11,550)	-	10,423	10,423
Net gain/(loss) on foreign exchange		-	50	50	-	(433)	(433)
		---------------	---------------	---------------	---------------	---------------	---------------
Total		4,263	(11,500)	(7,237)	4,258	10,045	14,303
		=========	=========	=========	=========	=========	=========
Expenses
Investment management fee	4	(286)	(858)	(1,144)	(299)	(898)	(1,197)
Other operating expenses	5	(521)	(4)	(525)	(412)	2	(410)
		---------------	---------------	---------------	---------------	---------------	---------------
Total operating expenses		(807)	(862)	(1,669)	(711)	(896)	(1,607)
		=========	=========	=========	=========	=========	=========
Net profit/(loss) on ordinary activities before finance costs and taxation		3,456	(12,362)	(8,906)	3,547	9,149	12,696
Finance costs		(13)	(39)	(52)	(17)	(52)	(69)
		---------------	---------------	---------------	---------------	---------------	---------------
Net profit/(loss) on ordinary activities before taxation		3,443	(12,401)	(8,958)	3,530	9,097	12,627
Taxation		(498)	-	(498)	(449)	(8)	(457)
		---------------	---------------	---------------	---------------	---------------	---------------
Profit/(loss) for the year		2,945	(12,401)	(9,456)	3,081	9,089	12,170
		=========	=========	=========	=========	=========	=========
Earnings/(loss) per ordinary share (pence)	7	3.67	(15.46)	(11.79)	3.84	11.33	15.17
		=========	=========	=========	=========	=========	=========

The total columns of this statement represent the Company's Statement of Comprehensive Income, prepared in accordance with UK-adopted International Accounting Standards (IAS). 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.

The Company does not have any other comprehensive income (31 October 2022: £nil). The net profit for the year disclosed above represents the Company's total comprehensive income.

Statement of Changes in Equity for the year ended 31 October 2023

	Notes	Called up share capital £'000	Share premium account £'000	Capital redemption reserve £'000	Special reserve £'000	Capital reserves £'000	Revenue reserve £'000	Total £'000
For the year ended 31 October 2023
At 31 October 2022		1,004	-	1,460	82,963	84,940	719	171,086
Total comprehensive (loss)/income:
Net (loss)/profit for the year		-	-	-	-	(12,401)	2,945	(9,456)
Transactions with owners, recorded directly to equity:
Ordinary shares bought back into treasury	8, 9	-	-	-	(421)	-	-	(421)
Share buyback costs	8, 9	-	-	-	(2)	-	-	(2)
Dividends paid	6	-	-	-	-	(3,338)	(3,080)	(6,418)
		---------------	---------------	---------------	---------------	---------------	---------------	---------------
At 31 October 2023		1,004	-	1,460	82,540	69,201	584	154,789
		=========	=========	=========	=========	=========	=========	=========
For the year ended 31 October 2022
At 31 October 2021		1,004	44,873	1,460	38,090	79,369	538	165,334
Total comprehensive income:
Net profit for the year		-	-	-	-	9,089	3,081	12,170
Transactions with owners, recorded directly to equity:
Transfer of share premium to special reserve	9	-	(44,873)	-	44,873	-	-	-
Dividends paid	6	-	-	-	-	(3,518)	(2,900)	(6,418)
		---------------	---------------	---------------	---------------	---------------	---------------	---------------
At 31 October 2022		1,004	-	1,460	82,963	84,940	719	171,086
		=========	=========	=========	=========	=========	=========	=========

For information on the Company's distributable reserves please refer to note 9 below.

Statement of Financial Position as at 31 October 2023

	Notes	2023 £'000	2022 £'000
Non current assets
Investments held at fair value through profit or loss		154,212	175,425
Current assets
Current tax asset		130	145
Other receivables		2,614	3,287
Cash and cash equivalents		1,092	58
		---------------	---------------
Total current assets		3,836	3,490
		---------------	---------------
Total assets		158,048	178,915
		=========	=========
Current liabilities
Current tax liability		(6)	(6)
Other payables		(3,253)	(3,969)
Bank overdraft		-	(3,854)
		---------------	---------------
Total current liabilities		(3,259)	(7,829)
		---------------	---------------
Net assets		154,789	171,086
		=========	=========
Equity attributable to equity holders
Called up share capital	8	1,004	1,004
Share premium account	9	-	-
Capital redemption reserve	9	1,460	1,460
Special reserve	9	82,540	82,963
Capital reserves	9	69,201	84,940
Revenue reserve	9	584	719
		---------------	---------------
Total equity		154,789	171,086
		=========	=========
Net asset value per ordinary share (pence)	7	193.51	213.25
		=========	=========

Cash Flow Statement for the year ended 31 October 2023

	2023 £'000	2022 £'000
Operating activities
Net (loss)/profit on ordinary activities before taxation	(8,958)	12,619
Add back finance costs	52	69
Net loss/(profit) on investments and options held at fair value through profit or loss (including transaction costs)	11,550	(10,423)
Net (gain)/loss on foreign exchange	(50)	433
Sales of investments held at fair value through profit or loss	98,933	107,169
Purchases of investments held at fair value through profit or loss	(89,270)	(107,200)
Decrease/(increase) in other receivables	61	(23)
Increase/(decrease) in other payables	195	(76)
Decrease/(increase) in amounts due from brokers	612	(1,021)
(Decrease)/increase in amounts due to brokers	(911)	829
	---------------	---------------
Net cash inflow from operating activities before taxation	12,214	2,376
Taxation paid	(483)	(492)
	---------------	---------------
Net cash inflow from operating activities	11,731	1,884
	=========	=========
Financing activities
Interest paid	(52)	(69)
Payments for ordinary shares bought back into treasury	(423)	-
Dividends paid	(6,418)	(6,418)
	---------------	---------------
Net cash outflow from financing activities	(6,893)	(6,487)
	=========	=========
Increase/(decrease) in cash and cash equivalents	4,838	(4,603)
Effect of foreign exchange rate changes	50	(433)
	---------------	---------------
Change in cash and cash equivalents	4,888	(5,036)
Cash and cash equivalents at start of year	(3,796)	1,240
	---------------	---------------
Cash and cash equivalents at end of year	1,092	(3,796)
	=========	=========
Comprised of:
Cash at bank	213	58
Bank overdraft	-	(3,854)
Cash Fund1	879	-
	---------------	---------------
	1,092	(3,796)
	=========	=========

1 Cash Fund represents funds held on deposit with the BlackRock Institutional Cash Series plc - US Dollar Liquid Environmentally Aware Fund.

Notes to the Financial Statements for the year ended 31 October 2023

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 in England and Wales on 30 August 2012 and this is the eleventh Annual Report.

2. Accounting policies
The principal accounting policies adopted by the Company have been applied consistently, other than where new policies have been adopted and are set out below.

(a) Basis of preparation
On 31 December 2020, International Financial Reporting Standards (IFRS) as adopted by the European Union at that date were brought into UK law and became UK-adopted International Accounting Standards (IAS), with future changes being subject to endorsement by the UK Endorsement Board and with the requirements of the Companies Act 2006 as applicable to companies reporting under those standards.

The 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 UK-adopted IAS. All of the Company'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 UK-adopted IAS, the financial statements have been prepared in accordance with the guidance set out in the SORP.

Substantially, all of the assets of the Company consist of securities that are readily realisable and, accordingly, the Directors are satisfied that the Company has adequate resources to continue in operational existence for the foreseeable future for the period to 28 February 2025, 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 the 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 the measurement of Level 3 assets, if any, as noted in note 15 of the Financial Statements.

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

The Company's financial statements are presented in Sterling, which is the functional currency of the Company and the currency of the primary economic environment in which the Company operates. All values are rounded to the nearest thousand pounds (£'000) except where otherwise indicated.

Adoption of new and amended International Accounting Standards and interpretations:
IFRS 9 - Fees in the '10 per cent' Test for Derecognition of Financial Liabilities (effective 1 January 2022). The InternationalAccounting Standards Board (IASB) has amended IFRS 9 Financial Instruments to clarify the fees that a company includes when assessing whether the terms of a new or modified financial liability are substantially different from the terms of the original financial liability.

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 widerange 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 Company 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 IASBhas 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.

IAS 8 - Definition of accounting estimates (effective 1 January 2023). The IASB has amended IAS 8 Accounting Policies,Changes in Accounting Estimates and Errors to help distinguish between accounting policies and accounting estimates, replacing the definition of accounting estimates.

IAS 1 and IFRS Practice Statement 2 - Disclosure of accounting policies (effective 1 January 2023). The IASB has amendedIAS 1 Presentation of Financial Statements to help preparers in deciding which accounting policies to disclose in their financial statements by stating that an entity is now required to disclose material accounting policies instead of significant accounting policies.

IAS 12 - International Tax Reform Pillar Two Model Rules (effective 1 January 2023). The IASB has published amendmentsto IAS 12 Income Taxes to respond to stakeholders' concerns about the potential implications of the imminent implementation of the OECD pillar two rules on the accounting for income taxes. The amendment is an exception to the requirements in IAS 12 that an entity does not recognise and does not disclose information about deferred tax assets as liabilities related to the OECD pillar two income taxes and a requirement that current tax expenses must be disclosed separately to pillar two income taxes.

IAS 1 - Classification of liabilities as current or non-current (effective 1 January 2024). The IASB has amended IAS 1Presentation of Financial Statements to clarify its requirement for the presentation of liabilities depending on the rights that exist at the end of the reporting period. The amendment requires liabilities to be classified as non-current if the entity has a substantive right to defer settlement for at least 12 months at the end of the reporting period. The amendment no longer refers to unconditional rights.

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

(b) Presentation of the 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 Statement of Comprehensive Income between items of a revenue and a capital nature has been presented alongside the Statement of Comprehensive Income.

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

(d) 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 Statement of Comprehensive Income unless the option has been written for the maintenance and enhancement of the Company'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 Statement of Comprehensive Income.

Deposit interest receivable is accounted for on an accruals basis. Interest income from the Cash Fund is accounted for on an accruals basis.

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

(e) Expenses
All expenses, including finance costs, are accounted for on an accruals basis. Expenses have been charged wholly to the revenue account of the 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 Statement of Comprehensive Income. Details of transaction costs on the purchases and sales of investments are disclosed within note 10 in the Company's Annual Report for the year ended 31 October 2023 to the financial statements in the Company's Annual Report for the year ended 31 October 2023;

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

- the investment management fee and finance costs have been allocated 25% to the revenue account and 75% to the capital account of the Statement of Comprehensive Income in line with the Board's expected long-term split of returns, in the form of capital gains and income, respectively, from the investment portfolio.

(f) Taxation
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 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 Company'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 taxation in the future have occurred at the financial reporting date. This is subject to deferred taxation assets only being recognised if it is considered more likely than not that there will be suitable profits from which the future reversal of the temporary differences can be deducted. Deferred taxation assets and liabilities are measured at the rates applicable to the legal jurisdictions in which they arise.

(g) Investments held at fair value through profit or loss
In accordance with IFRS 9, the Company 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 Company.

Changes in the value of investments held at fair value through profit or loss and gains and losses on disposal are recognised in the Statement of Comprehensive Income as "Net profit/(loss) on investments and options held at fair value through profit or 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 as much use of available and supportable market data where possible). See note 2(o).

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

(i) Other receivables and other payables
Other receivables and other payables do not carry any interest and are short term in nature and are accordingly stated on an amortised cost basis.

(j) 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 Statement of Changes in Equity.

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

(l) 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.

The Company can invest in a Cash Fund which is managed as part of the Company's investment policy and, accordingly, the investment is managed as part of the Company's cash and cash equivalents as defined under IAS 7 and is presented as a cash equivalent in the Financial Statements.

(m) Bank borrowings
Bank overdrafts and loans are recorded as the proceeds received. Finance charges, including any premium payable on settlement or redemption and direct issue costs, are accounted for on an accruals basis in the Statement of Comprehensive Income using the effective interest rate method and are added to the carrying amount of the instrument to the extent that they are not settled in the period in which they arise.

(n) Share repurchases and 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 re-issued:

- 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, the par value is taken to called up share capital and 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.

(o) Critical accounting estimates and judgements
The Company 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

	2023 £'000	2022 £'000
Investment income:
UK dividends	334	234
Overseas dividends	3,839	3,926
Overseas special dividends	-	27
Overseas REIT1 dividends	34	68
Interest from Cash Fund	45	-
	---------------	---------------
Total investment income	4,252	4,255
Deposit interest	11	3
	---------------	---------------
Total income	4,263	4,258
	=========	=========

1 Real Estate Investment Trust.

Dividends and interest received in cash during the year amounted to £3,724,000 and £51,000 (31 October 2022: £3,662,000 and £3,000).

Special dividends of £nil have been recognised in capital (2022: £55,000).

4. Investment management fee

	2023			2022
	Revenue £'000	Capital £'000	Total £'000	Revenue £'000	Capital £'000	Total £'000
Investment management fee	286	858	1,144	299	898	1,197
	---------------	---------------	---------------	---------------	---------------	---------------
Total	286	858	1,144	299	898	1,197
	=========	=========	=========	=========	=========	=========

The investment management fee is payable in quarterly arrears, calculated at the rate of 0.70% of the Company's net assets.

The investment management fee is allocated 25% to the revenue account and 75% to the capital account.

There is no additional fee for company secretarial and administration services.

5. Other operating expenses

	2023 £'000	2022 £'000
Allocated to revenue:
Custody fee	2	3
Auditors' remuneration - audit services1	36	38
Registrar's fee	28	32
Directors' emoluments2	142	165
Broker fees	40	40
Depositary fees	16	16
Printing fees	31	32
Legal and professional fees	14	35
Marketing fees	94	49
AIC fees	13	11
FCA fees	11	9
Write back of prior year expenses3	(11)	(101)
Other administrative costs	105	83
	---------------	---------------
	521	412
	=========	=========
Allocated to capital:
Custody transaction charges	4	5
Write back of prior year expenses	-	(7)
	---------------	---------------
	525	410
	=========	=========
The Company's ongoing charges4, 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:	1.03%	1.01%
	=========	=========

1 No non-audit services were provided by the Company's auditor (2022: none).

2 Further information on Directors' emoluments can be found in the Directors' Remuneration Report in the Company's Annual Report for the year ended 31 October 2023. The Company has no employees.

3 Relates to Directors' expenses written back during the year (2022: printing fees, legal fees, Directors' emoluments, Employers' national insurance and Directors' expenses).

4 Alternative Performance Measure, see Glossary in the Company's Annual Report for the year ended 31 October 2023.

6. Dividends

Dividends paid on equity shares	Record date	Payment date	2023 £'000	2022 £'000
4th interim dividend of 2.00p per share paid for the year ended 31 October 2022 (2021: 2.00p)	25 November 2022	3 January 2023	1,604	1,605
1st interim dividend of 2.00p per share paid for the year ended 31 October 2023 (2022: 2.00p)	31 March 2023	28 April 2023	1,605	1,605
2nd interim dividend of 2.00p per share paid for the year ended 31 October 2023 (2022: 2.00p)	19 May 2023	3 July 2023	1,605	1,604
3rd interim dividend of 2.00p per share paid for the year ended 31 October 2023 (2022: 2.00p)	18 August 2023	2 October 2023	1,604	1,604
			---------------	---------------
Accounted for in the financial statements			6,418	6,418
			=========	=========

The total dividends payable in respect of the year ended 31 October 2023 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 or declared on equity shares	2023 £'000	2022 £'000
1st interim dividend of 2.00p per share paid for the year ended 31 October 2023 (2022: 2.00p)	1,605	1,605
2nd interim dividend of 2.00p per share paid for the year ended 31 October 2023 (2022: 2.00p)	1,605	1,604
3rd interim dividend of 2.00p per share paid for the year ended 31 October 2023 (2022: 2.00p)	1,604	1,604
4th interim dividend of 2.00p per share payable on 2nd January 2024 for the year ended 31 October 20231 (2022: 2.00p)	1,597	1,604
	---------------	---------------
	6,411	6,417
	=========	=========

1 Based on 79,827,506 ordinary shares in issue on 23 November 2023 (the ex-dividend date).

7. (Loss)/earnings and net asset value per ordinary share
Revenue, capital (loss)/earnings and net asset value per ordinary share are shown below and have been calculated using the following:

	Year ended 31 October 2023	Year ended 31 October 2022
Net revenue profit attributable to ordinary shareholders (£'000)	2,945	3,081
Net capital (loss)/profit attributable to ordinary shareholders (£'000)	(12,401)	9,089
	---------------	---------------
Total (loss)/profit attributable to ordinary shareholders (£'000)	(9,456)	12,170
	---------------	---------------
Equity shareholders' funds (£'000)	154,789	171,086
	=========	=========
The weighted average number of ordinary shares in issue during the year on which the earnings per ordinary share was calculated was:	80,225,591	80,229,044
The actual number of ordinary shares in issue at the year end on which the net asset value per ordinary share was calculated was:	79,989,044	80,229,044
(Loss)/earnings per ordinary share
Revenue earnings per share (pence) - basic and diluted	3.67	3.84
Capital (loss)/earnings per share (pence) - basic and diluted	(15.46)	11.33
	---------------	---------------
Total (loss)/earnings per share (pence) - basic and diluted	(11.79)	15.17
	=========	=========

	As at 31 October 2023	As at 31 October 2022
Net asset value per ordinary share (pence)	193.51	213.25
Ordinary share price (pence)	174.00	197.50
	=========	=========

There were no dilutive securities at the year end.

8. Called up share capital

	Ordinary shares in issue number	Treasury shares number	Total shares number	Nominal value £'000
Allotted, called up and fully paid share capital comprised:
Ordinary shares of 1 pence each:
At 31 October 2022	80,229,044	20,132,261	100,361,305	1,004
Ordinary shares bought back into treasury	(240,000)	240,000	-	-
	-----------------	-----------------	-----------------	-----------------
At 31 October 2023	79,989,044	20,372,261	100,361,305	1,004
	==========	==========	==========	==========

During the year ended 31 October 2023, the Company bought back and transferred 240,000 (2022: none) shares into treasury for a total consideration including costs of £423,000 (2022: £nil).

Since 31 October 2023 and up to the date of this report, 780,803 shares have been bought back into treasury for a total consideration including costs of £1,452,000.

9. Reserves

			Distributable reserves
	Share premium account £'000	Capital redemption reserve £'000	Special reserve £'000	Capital reserve arising on investments sold £'000	Capital reserve arising on revaluation of investments held £'000	Revenue reserve £'000
At 31 October 2022	-	1,460	82,963	73,260	11,680	719
Movement during the year:
Total comprehensive income/(loss):
Net profit/(loss) for the year	-	-	-	5,918	(18,319)	2,945
Transactions with owners, recorded directly to equity:
Ordinary shares bought back into treasury	-	-	(421)	-	-	-
Share buyback costs	-	-	(2)	-	-	-
Dividends paid	-	-	-	(3,338)	-	(3,080)
	---------------	---------------	---------------	---------------	---------------	---------------
At 31 October 2023	-	1,460	82,540	75,840	(6,639)	584
	=========	=========	=========	=========	=========	=========

			Distributable reserves
	Share premium account £'000	Capital redemption reserve £'000	Special reserve £'000	Capital reserve arising on investments sold £'000	Capital reserve arising on revaluation of investments held £'000	Revenue reserve £'000
At 31 October 2021	44,873	1,460	38,090	62,624	16,745	538
Movement during the year:
Total comprehensive income/(loss):
Net profit/(loss) for the year	-	-	-	14,154	(5,065)	3,081
Transactions with owners, recorded directly to equity:
Transfer of share premium to special reserve1	(44,873)	-	44,873	-	-	-
Dividends paid	-	-	-	(3,518)	-	(2,900)
	---------------	---------------	---------------	---------------	---------------	---------------
At 31 October 2022	-	1,460	82,963	73,260	11,680	719
	=========	=========	=========	=========	=========	=========

1 The Company's share premium account was cancelled pursuant to shareholders' approval of a special resolution at the Company's Annual General Meeting on 22 March 2022 and Court approval on 19 July 2022. The share premium account which totalled £44,873,000 was transferred to a special reserve. This action was taken, in part, to ensure that the Company had sufficient distributable reserves.

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 may be used as distributable reserves for all purposes and, in particular, the repurchase by the Company of its ordinary shares and for payments such 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. At 31 October 2023 there were no gains on the capital reserve arising on the revaluation of investments (2022: gain of £11,680,000). The gains on revaluation of investments are subject to fair value movements and may not be readily realisable at short notice; as such any gains 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.

10. Valuation of financial instruments
Financial assets and financial liabilities are either carried in the Statement of Financial Position at their fair value (investments) 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 Company 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 Company are explained in the accounting policies note 2(g) to the Financial Statements in the Company's Annual Report for the year ended 31 October 2023.

Categorisation within the hierarchy has been determined on the basis of the lowest level of 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 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 Company 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 active, or other valuation techniques where all significant inputs are directly or indirectly observable from market data.

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.

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 31 October 2023	Level 1 £'000	Level 2 £'000	Level 3 £'000	Total £'000
Assets:
Equity investments	154,212	-	-	154,212
	---------------	---------------	---------------	---------------
	154,212	-	-	154,212
	=========	=========	=========	=========

Financial assets at fair value through profit or loss at 31 October 2022	Level 1 £'000	Level 2 £'000	Level 3 £'000	Total £'000
Assets:
Equity investments	175,425	-	-	175,425
	---------------	---------------	---------------	---------------
	175,425	-	-	175,425
	=========	=========	=========	=========

There were no transfers between levels of financial assets and financial liabilities during the year recorded at fair value as at 31 October 2023 and 31 October 2022. The Company did not hold any Level 3 securities throughout the financial year or as at 31 October 2023 (2022: nil).

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 price related risks, including climate risk, in accordance with the fair value related requirements of the Company's financial reporting framework.

11. 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 in the Company's Annual Report for the year ended 31 October 2023. At 31 October 2023, £12,000 (2022: £14,000) 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 31 October 2023

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.
0.8	n/a	n/a

As at 31 October 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.
1.8	n/a	n/a

12. Transactions with the Investment Manager and AIFM
BlackRock Fund Managers Limited (BFM) provides management and administration services to the Company under a contract which is terminable on six months' notice. BFM has (with the Company's consent) delegated certain portfolio and risk management 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 in the Company's Annual Report for the year ended 31 October 2023.

The investment management fee due for the year ended 31 October 2023 amounted to £1,144,000 (2022: £1,197,000). At the year end, £837,000 was outstanding in respect of the management fee (2022: £899,000).

In addition to the above services, BIM (UK) has provided the Company with marketing services. The total fees paid or payable for these services for the year ended 31 October 2023 amounted to £94,000 excluding VAT (2022: £49,000). Marketing fees of £123,000 excluding VAT (2022: £29,000) were outstanding as at the year end.

The Company has an investment in the BlackRock Institutional Cash Series plc - US Dollar Liquid Environmentally Aware Fund of £879,000 (2022: £nil) at the year end, which is a fund managed by a company within the BlackRock Group.

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

13. Contingent liabilities
There were no contingent liabilities at 31 October 2023 (2022: nil).

14. Publication of non-statutory accounts

The financial information contained in this announcement does not constitute statutory accounts as defined in the Companies Act 2006. The Annual Report and Financial Statements for the year ended 31 October 2023 will be filed with the Registrar of Companies after the Annual General Meeting.

The figures set out above have been reported upon by the auditors, whose report for the year ended 31 October 2023 contains no qualification or statement under section 498(2) or (3) of the Companies Act 2006.

The comparative figures are extracts from the audited financial statements of BlackRock Sustainable American Income Trust plc for the year ended 31 October 2022, which have been filed with the Registrar of Companies. The report of the auditor on those financial statements contained no qualification or statement under section 498 of the Companies Act.

15. Annual Report

Copies of the Annual Report and Financial Statements will be published shortly and will be available from the registered office, c/o The Company Secretary, BlackRock Sustainable American Income Trust plc, 12 Throgmorton Avenue, London EC2N 2DL.

16. Annual General Meeting

The Annual General Meeting of the Company will be held at the offices of BlackRock, 12 Throgmorton Avenue, London EC2N 2DL on Thursday, 14 March 2024 at 12.00 noon.

ENDS

The Annual Report will also be available on the BlackRock website at blackrock.com/uk/brsa. Neither the contents of the Manager's website nor the contents of any website accessible from hyperlinks on the Manager's website (or any other website) is incorporated into, or forms part of, this announcement.

For further information please contact:

Charles Kilner, Director, Investment Trusts, BlackRock Investment Management (UK) Limited

Tel: [phone]

Press enquiries:

Ed Hooper, Lansons Communications

Tel: [phone]

E-mail: [e-mail] or [e-mail]

12 Throgmorton Avenue

London

EC2N 2DL

2 February 2024

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Release

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