|
Investment Company Act file number: 811-05992
|
|
Fair
|
||||||||
Shares
|
Value
|
|||||||
JAPANESE EQUITY SECURITIES
|
||||||||
Banks
|
||||||||
Fukuoka Financial Group, Inc.
|
58,200
|
$ |
996,735
|
|||||
General banking services
|
||||||||
The Akita Bank, Ltd.
|
163,100
|
3,169,992
|
||||||
General banking services
|
||||||||
The Bank of Okinawa, Ltd.
|
61,400
|
1,943,735
|
||||||
General banking services
|
||||||||
The Keiyo Bank, Ltd.
|
330,900
|
1,903,212
|
||||||
General banking services
|
||||||||
The Musashino Bank, Ltd.
|
89,100
|
1,667,781
|
||||||
General banking services
|
||||||||
The Taiko Bank, Ltd.
|
113,400
|
1,643,630
|
||||||
General banking services
|
||||||||
The Yamanashi Chuo Bank, Ltd.
|
122,400
|
1,361,815
|
||||||
General banking services
|
||||||||
Total Banks (4.6%)
|
12,686,900
|
|||||||
Chemicals
|
||||||||
Adeka Corporation
|
258,800
|
3,617,698
|
||||||
Manufactures chemical and food products
|
||||||||
C. Uyemura & Co., Ltd.
|
49,500
|
2,915,382
|
||||||
Plating chemicals
|
||||||||
Fujikura Kasei Co., Ltd.
|
1,029,600
|
5,296,521
|
||||||
Specialty coating materials and fine chemicals
|
||||||||
Koatsu Gas Kogyo Co., Ltd.
|
565,600
|
4,205,630
|
||||||
High-pressured gases and chemicals
|
||||||||
Sakata Inx Corporation
|
854,300
|
7,500,135
|
||||||
Manufactures printing ink
|
||||||||
Sekisui Jushi Corporation
|
271,700
|
5,098,204
|
||||||
Manufactures plastics and other resin materials
|
||||||||
Shikoku Chemicals Corporation
|
129,100
|
1,197,559
|
||||||
Manufactures chemical products
|
||||||||
Shin-Etsu Polymer Co., Ltd.
|
98,700
|
673,047
|
||||||
Manufactures electronic devices, precision moldings, dwelling environment and living materials
|
||||||||
Tenma Corporation
|
204,300
|
3,355,961
|
||||||
Manufactures synthetic resin products
|
||||||||
T&K Toka Co., Ltd.
|
278,900
|
2,366,409
|
||||||
Manufactures specialized inks for printing applications
|
||||||||
Yushiro Chemical Industry Co., Ltd.
|
252,500
|
2,974,279
|
||||||
Manufactures metalworking fluids
|
||||||||
Total Chemicals (14.3%)
|
39,200,825
|
|||||||
Construction
|
||||||||
Toenec Corporation
|
243,900
|
6,693,138
|
||||||
Construction of comprehensive building facilities
|
||||||||
Totetsu Kogyo Co., Ltd.
|
148,200
|
4,075,108
|
||||||
Operates construction-related businesses
|
||||||||
Yondenko Corporation
|
65,500
|
1,581,066
|
||||||
Construction of electrical distribution systems
|
||||||||
Yurtec Corporation
|
225,600
|
1,494,796
|
||||||
Engineering company
|
||||||||
Total Construction (5.0%)
|
13,844,108
|
|||||||
Electric Appliances
|
||||||||
Aoi Electronics Co., Ltd.
|
10,100
|
177,713
|
||||||
Manufactures electronic components
|
||||||||
Enplas Corporation
|
2,900
|
80,863
|
||||||
Manufactures engineering plastics and composite materials
|
||||||||
Koito Manufacturing Co., Ltd.
|
32,100
|
1,488,833
|
||||||
Manufactures lighting equipment
|
||||||||
Mabuchi Motor Co., Ltd.
|
95,200
|
3,180,196
|
||||||
Manufactures small motors
|
||||||||
Maxell Holdings, Ltd.
|
67,700
|
1,127,035
|
||||||
Manufactures media devices, batteries and electrical appliances
|
||||||||
Nichicon Corporation
|
192,800
|
1,415,860
|
||||||
Manufactures capacitors and transformers
|
||||||||
Shindengen Electric Manufacturing Co., Ltd.
|
4,500
|
142,870
|
||||||
Manufactures semiconductor products, electrical components, and power supplies
|
||||||||
Shinko Electric Industries Co., Ltd.
|
37,300
|
299,320
|
||||||
Manufactures semiconductor packages
|
||||||||
Total Electric Appliances (2.9%)
|
7,912,690
|
Financing Business
|
||||||||
Hitachi Capital Corporation
|
152,500
|
3,226,407
|
||||||
General financial services
|
||||||||
Ricoh Leasing Company, Ltd.
|
117,500
|
3,616,965
|
||||||
Leasing and financial services
|
||||||||
Tokai Tokyo Financial Holdings, Inc.
|
179,800
|
552,645
|
||||||
Investment and financial services
|
||||||||
Total Financing Business (2.7%)
|
7,396,017
|
|||||||
Food
|
||||||||
Nichirei Corporation
|
95,500
|
2,332,462
|
||||||
Produces frozen foods and provides cold storage warehousing
|
||||||||
Total Food (0.8%)
|
2,332,462
|
|||||||
Information and Communication
|
||||||||
NS Solutions Corporation
|
31,600
|
|
984,365
|
|||||
System consulting services and software development
|
||||||||
OBIC Co., Ltd.
|
9,700
|
1,172,052
|
||||||
Computer system integration
|
||||||||
Okinawa Cellular Telephone Company
|
246,100
|
7,700,179
|
||||||
Telecommunications
|
||||||||
Otsuka Corporation
|
22,500
|
872,751
|
||||||
Computer information system developer
|
||||||||
Total Information and Communication (3.9%)
|
10,729,347
|
|||||||
Iron and Steel
|
||||||||
Chubu Steel Plate Co., Ltd.
|
229,100
|
1,294,505
|
||||||
Manufactures steel-related products
|
||||||||
Mory Industries Inc.
|
42,500
|
707,910
|
||||||
Manufactures steel tubing products
|
||||||||
Nichia Steel Works, Ltd.
|
1,833,600
|
5,365,893
|
||||||
Manufactures steel-related products
|
||||||||
Osaka Steel Co., Ltd.
|
487,400
|
7,638,542
|
||||||
Manufactures steel-related products
|
||||||||
Total Iron and Steel (5.5%)
|
15,006,850
|
|||||||
Machinery
|
||||||||
Hisaka Works, Ltd.
|
122,100
|
1,013,520
|
||||||
Manufactures heat exchangers and other machinery
|
||||||||
Miura Co., Ltd.
|
36,600
|
1,136,751
|
||||||
Manufactures boilers and related products
|
||||||||
Nippon Pillar Packing Co., Ltd.
|
127,900
|
1,264,111
|
||||||
Manufactures mechanical seals
|
||||||||
Nitto Kohki Co., Ltd.
|
177,500
|
3,399,232
|
||||||
Manufactures machine tools and motor pumps
|
||||||||
Oiles Corporation
|
313,880
|
4,234,556
|
||||||
Manufactures bearing equipment
|
||||||||
Shibuya Corporation
|
10,700
|
284,178
|
||||||
Packing plant business
|
||||||||
Star Micronics Co., Ltd.
|
13,400
|
163,269
|
||||||
Manufactures machinery, electronic components, and precision parts
|
||||||||
Toshiba Machine Co., Ltd.
|
45,200
|
949,631
|
||||||
Manufactures industrial machinery and equipment
|
||||||||
Yamashin-Filter Corporation
|
58,200
|
283,863
|
||||||
Manufactures filters
|
||||||||
Total Machinery (4.6%)
|
12,729,111
|
|||||||
Metal Products
|
||||||||
Dainichi Co., Ltd.
|
215,100
|
1,233,215
|
||||||
Manufactures oil heating equipment
|
||||||||
Neturen Co., Ltd.
|
498,500
|
3,757,157
|
||||||
Manufactures steel bars and induction heating equipment
|
||||||||
Piolax, Inc.
|
149,600
|
2,460,178
|
||||||
Manufactures automobile-related products
|
||||||||
Rinnai Corporation
|
58,900
|
3,859,274
|
||||||
Manufactures heating appliances and components
|
||||||||
Shinpo Co., Ltd.
|
1,900
|
20,352
|
||||||
Manufactures smokeless roasters
|
||||||||
Total Metal Products (4.1%)
|
11,330,176
|
Other Products
|
||||||||
Fuji Seal International, Inc.
|
9,100
|
316,132
|
||||||
Packaging-related materials and machinery
|
||||||||
Komatsu Wall Industry Co., Ltd.
|
24,600
|
410,660
|
||||||
Manufactures various partitions
|
||||||||
Nishikawa Rubber Co., Ltd.
|
164,200
|
2,657,965
|
||||||
Manufactures rubber automobile parts
|
||||||||
Pigeon Corporation
|
8,600
|
327,253
|
||||||
Manufactures baby care products
|
||||||||
The Pack Corporation
|
233,100
|
6,682,064
|
||||||
Manufactures paper and chemical products
|
||||||||
Total Other Products (3.8%)
|
10,394,074
|
|||||||
Precision Instruments
|
||||||||
Nakanishi Inc.
|
88,700
|
1,642,336
|
||||||
Manufactures dental instruments
|
||||||||
Total Precision Instruments (0.6%)
|
1,642,336
|
|||||||
Real Estate
|
||||||||
Daibiru Corporation
|
194,900
|
1,694,939
|
||||||
Real estate leasing and building management
|
||||||||
Sanyo Housing Nagoya Co., Ltd.
|
325,000
|
2,599,043
|
||||||
Designs and constructs housing
|
||||||||
Starts Corporation Inc.
|
86,400
|
2,031,491
|
||||||
Construction, leasing and management of real estate
|
||||||||
Total Real Estate (2.3%)
|
6,325,473
|
|||||||
Retail Trade
|
||||||||
ABC-Mart, Inc.
|
33,700
|
|
2,102,664
|
|||||
Retail sales of shoes
|
||||||||
AIN Holdings Inc.
|
1,200
|
91,658
|
||||||
Operates pharmacies and drug store chains
|
||||||||
Amiyaki Tei Co., Ltd.
|
254,700
|
7,781,751
|
||||||
Operates barbecue restaurant chains
|
||||||||
Cosmos Pharmaceutical Corporation
|
8,300
|
1,310,707
|
||||||
Operates drug store chains
|
||||||||
Create SD Holdings Co., Ltd.
|
64,400
|
1,393,313
|
||||||
Operates pharmacies and drug store chains
|
||||||||
Daikokutenbussan Co., Ltd.
|
171,000
|
5,429,071
|
||||||
Operates supermarkets
|
||||||||
Hiday Hidaka Corp.
|
216,226
|
4,019,477
|
||||||
Operates restaurant chains
|
||||||||
Izumi Co., Ltd.
|
67,100
|
2,865,173
|
||||||
Operates shopping centers, real estate, and credit card services
|
||||||||
Japan Meat Co., Ltd.
|
119,500
|
1,858,510
|
||||||
Supermarket business and operation of eating-out stores
|
||||||||
JINS Inc.
|
14,400
|
856,062
|
||||||
Retail sales of eyewear and fashion accessories
|
||||||||
Kusuri No Aoki Holdings Co., Ltd.
|
11,800
|
751,447
|
||||||
Operates drug stores
|
||||||||
NAFCO Co., Ltd.
|
50,500
|
673,860
|
||||||
Operates a chain of home and furniture retail outlets
|
||||||||
Pan Pacific International Holdings Corporation | 55,600 | 3,438,384 | ||||||
Operates discount stores
|
||||||||
Saizeriya Co., Ltd.
|
321,900
|
7,186,577
|
||||||
Operates restaurants
|
||||||||
San-A Co., Ltd.
|
172,800
|
6,694,778
|
||||||
Retail sales of home goods
|
||||||||
Seria Co., Ltd.
|
141,100
|
3,505,913
|
||||||
Discount retail sales
|
||||||||
Sundrug Co., Ltd.
|
21,300
|
533,554
|
||||||
Operates pharmacies and drug store chains
|
||||||||
Yossix Co., Ltd.
|
13,100
|
290,053
|
||||||
Operates restaurant chains
|
||||||||
Total Retail Trade (18.5%)
|
50,782,952
|
Services
|
||||||||
EPS Holdings, Inc.
|
98,600
|
1,614,222
|
||||||
Performs contract medical research services
|
||||||||
H.I.S. Co., Ltd.
|
82,300
|
2,408,448
|
||||||
Travel business
|
||||||||
Nihon M&A Center Inc.
|
33,900
|
843,249
|
||||||
Provides merger and acquisition brokerage services
|
||||||||
Nippon Air Conditioning Services Co., Ltd.
|
408,900
|
2,513,645
|
||||||
Provides maintenance and management of building facilities
|
||||||||
Step Co., Ltd.
|
161,100
|
2,097,791
|
||||||
Operates preparatory schools
|
||||||||
Tear Corporation
|
66,800
|
391,585
|
||||||
Funeral business
|
||||||||
Total Services (3.6%)
|
9,868,940
|
|||||||
Textiles and Apparel
|
||||||||
Seiren Co., Ltd.
|
329,400
|
4,171,117
|
||||||
Manufactures synthetic fibers and textile products
|
||||||||
Total Textiles and Apparel (1.5%)
|
4,171,117
|
|||||||
Transportation and Warehousing
|
||||||||
Alps Logistics Co., Ltd.
|
235,100
|
1,579,377
|
||||||
General logistics services
|
||||||||
Japan Transcity Corporation
|
307,400
|
1,253,193
|
||||||
General logistics services
|
||||||||
Meiko Trans Co., Ltd.
|
370,800
|
3,951,469
|
||||||
Marine logistics services
|
||||||||
Trancom Co., Ltd.
|
37,400
|
2,257,802
|
||||||
General logistics services
|
||||||||
Total Transportation and Warehousing (3.3%)
|
9,041,841
|
|||||||
Transportation Equipment
|
||||||||
Hi-Lex Corporation
|
170,700
|
2,931,268
|
||||||
Manufactures control cables
|
||||||||
Morita Holdings Corporation
|
49,100
|
858,058
|
||||||
Operates five business transportation segments
|
||||||||
Nippon Seiki Co., Ltd.
|
4,500
|
73,009
|
||||||
Manufactures transportation equipment parts
|
||||||||
Nissin Kogyo Co., Ltd.
|
63,800
|
797,904
|
||||||
Manufactures automobile brake systems
|
||||||||
Total Transportation Equipment (1.7%)
|
4,660,239
|
|||||||
Utilities
|
||||||||
Keiyo Gas Co., Ltd.
|
77,300
|
|
2,169,650
|
|||||
Produces gas and energy products
|
||||||||
The Okinawa Electric Power Company, Incorporated
|
262,477
|
3,983,109
|
||||||
Produces thermal energy products
|
||||||||
Total Utilities (2.3%)
|
6,152,759
|
Wholesale Trade
|
||||||||
Ai Holdings Corporation
|
34,400
|
536,901
|
||||||
Information and security equipment
|
||||||||
Elematec Corporation
|
17,000
|
152,533
|
||||||
Electric materials, components and mechanical parts
|
||||||||
Kanaden Corporation
|
307,300
|
3,645,237
|
||||||
Factory automation business
|
||||||||
Kohsoku Corporation
|
363,700
|
3,741,928
|
||||||
Food and industrial packaging materials
|
||||||||
Matsuda Sangyo Co., Ltd.
|
291,800
|
3,893,710
|
||||||
Precious metals, electronic materials, and food
|
||||||||
Paltac Corporation
|
18,500
|
953,389
|
||||||
Cosmetics and daily necessities
|
||||||||
Ryoden Corporation
|
802,500
|
11,321,332
|
||||||
Purchases electronic and electrical devices
|
||||||||
SIIX Corporation
|
774,000
|
8,476,142
|
||||||
Parts procurement, logistics, and manufacturing of electronics
|
||||||||
Sugimoto & Co., Ltd.
|
85,300
|
1,625,696
|
||||||
Machine tools and measuring instruments
|
||||||||
Techno Associe Co., Ltd.
|
11,600
|
133,438
|
||||||
Screws and nonferrous metal products
|
||||||||
Total Wholesale Trade (12.6%)
|
34,480,306
|
|||||||
TOTAL INVESTMENTS IN JAPANESE EQUITY SECURITIES (98.6%)
|
$
|
270,688,523
|
||||||
FOREIGN CURRENCY
|
||||||||
Japanese Yen
|
||||||||
Interest bearing account
|
$
|
929,514
|
||||||
TOTAL FOREIGN CURRENCY (0.4%)
|
929,514
|
|||||||
TOTAL INVESTMENTS IN JAPANESE EQUITY SECURITIES AND FOREIGN CURRENCY (99.0%)
|
$
|
271,618,037
|
||||||
OTHER ASSETS LESS LIABILITIES, NET (1.0%)
|
2,792,813
|
|||||||
NET ASSETS (100%)
|
$
|
274,410,850
|
||||||
Portfolio securities and foreign currency holdings were translated
at the following exchange rate as of May 31, 2019.
|
||||||||
Japanese Yen JPY ¥ 108.665 = USD $1.00
|
Notes to Schedule of Investments (Unaudited)
|
||||||||
Costs for Federal Income Tax Purposes
|
||||||||
As of May 31, 2019, for federal income tax purposes, subject to change, the aggregate cost of securities was $300,694,604 and net
unrealized depreciation was $30,006,081, comprised of gross unrealized appreciation of $5,529,588 and gross unrealized depreciation of $35,535,669. The aggregate cost of investments for tax purposes will depend upon Japan Smaller
Capitalization Fund, Inc.’s (the “Fund”) investment experience during the entirety of its fiscal year and may be subject to changes based on tax regulations. Certain tax related calculations are completed and reviewed annually by the
Fund.
|
||||||||
Fair Value Measurements
|
||||||||
In accordance with United States generally accepted accounting principles (“U.S. GAAP”), fair value is defined as the price that
the Fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. U.S. GAAP also establishes a framework for measuring fair value, and a three-level
hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability. Inputs may be observable or unobservable and refer broadly to the assumptions that market participants would use in
pricing the asset or liability. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Fund. Unobservable inputs reflect the
Fund’s own assumptions about the assumptions that market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. Each investment is assigned a level based upon the
observability of the inputs which are significant to the overall valuation.
|
||||||||
The three-tier hierarchy of inputs is summarized below.
|
||||||||
Level 1 - quoted prices in active markets for identical investments
|
||||||||
Level 2 - other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)
|
||||||||
Level 3 - significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)
|
||||||||
At May 31, 2019, all of the Fund’s investments were determined to be Level 1 securities.
|
||||||||
During the quarter ended May 31, 2019, the Fund did not hold any instruments which used significant unobservable inputs (Level 3) in determining fair value.
|
||||||||
1.
|
I have reviewed this report on Form N-Q of Japan Smaller Capitalization Fund, Inc. (the “Registrant”);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in
light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the schedules of investments included in this report, fairly present in all material respects the investments of the Registrant as of the end of
the fiscal quarter for which the report is filed;
|
4.
|
The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under
the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940 for the Registrant and have;
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material
information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure
controls and procedures, as of a date within 90 days prior to the filing date of this report, based on such evaluation; and
|
d.
|
Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter that
has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and
|
5.
|
The Registrant’s other certifying officer and I have disclosed to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons
performing equivalent functions);
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely
affect the Registrant’s ability to record, process, summarize, and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.
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Date: 7/26/2019
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/s/ Yuichi Nomoto |
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Yuichi Nomoto
President, Principal Executive Officer
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1.
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I have reviewed this report on Form N-Q of Japan Smaller Capitalization Fund, Inc. (the “Registrant”);
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in
light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the schedules of investments included in this report, fairly present in all material respects the investments of the Registrant as of the end of
the fiscal quarter for which the report is filed;
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4.
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The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under
the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940 for the Registrant and have;
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a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material
information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b.
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c.
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Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure
controls and procedures, as of a date within 90 days prior to the filing date of this report, based on such evaluation; and
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d.
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Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter that
has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and
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5.
|
The Registrant’s other certifying officer and I have disclosed to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons
performing equivalent functions);
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely
affect the Registrant’s ability to record, process, summarize, and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.
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Date: 7/26/2019
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/s/ Amy J. Robles |
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Amy J. Robles
Treasurer, Principal Financial Officer
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