efc14-551_nq.htm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED
MANAGEMENT INVESTMENT COMPANY

Investment Company Act file number:  811-05992                                

JAPAN SMALLER CAPITALIZATION FUND, INC.
(Exact name of registrant as specified in charter)

Worldwide Plaza
309 West 49th Street
New York, New York 10019
(Address of principal executive offices)

Yutaka Itabashi
Worldwide Plaza
309 West 49th Street
New York, New York 10019
(Name and address of agent for service)

Registrant’s telephone number, including area code: (800) 833-0018

Date of fiscal year end:  February 28, 2015                              

Date of reporting period:  March 1, 2014 - May 31, 2014
 
 
 
 
 
 
JAPAN SMALLER CAPITALIZATION FUND, INC.
SCHEDULE OF INVESTMENTS
May 31, 2014
 

 
                               
                               
                               
                           
% of
  
               
Market
    
Unrealized
    
Net
  
   
Shares
    
Cost
    
Value
    
Gain or Loss
    
Assets
  
JAPANESE EQUITY SECURITIES
                              
Banks
                              
Akita Bank, Ltd.
   $ 1,267,000     $ 3,418,365     $ 3,361,074       (57,291 )     1.2  
 General banking services
                                        
The Kagoshima Bank, Ltd.
     721,000       4,897,424       4,533,700       (363,724 )     1.6  
 General banking services
                                        
The Tochigi Bank, Ltd.
     759,000       2,820,038       3,132,050       312,012       1.1  
 Commercial banking services
                                        
The Yamanashi Chuo Bank, Ltd.
     1,214,000       5,328,607       5,355,532       26,925       1.9  
 Commercial banking services
                                        
Total Banks
       16,464,434       16,382,356       (82,078 )     5.8  
                                         
Chemicals
                                        
C. Uyemura &  Co., Ltd.
     56,100       2,412,511       2,714,606       302,095       1.0  
 Plating chemicals
                                        
Sakai Chemical Industry Co., Ltd.
     2,830,000       8,745,638       8,035,665       (709,973 )     2.8  
 Titanium oxide, polyvinyl chloride stabilizers, and pharmaceuticals
                                  
Tenma Corporation
     315,400       4,047,200       4,369,365       322,165       1.5  
 Molded resin products
                                        
Total Chemicals
       15,205,349       15,119,636       (85,713 )     5.3  
                                         
Construction
                                        
MIRAIT Holdings Corporation
     677,600       5,823,055       6,357,909       534,854       2.2  
 Telecommunication engineering
                                        
Toenec Corporation
     1,214,000       6,698,384       6,452,879       (245,505 )     2.3  
 Constructs comprehensive building facilities
                                        
Total Construction
       12,521,439       12,810,788       289,349       4.5  
                                         
Electric Appliances
                                        
Espec Corp
     552,700       4,186,751       4,295,400       108,649       1.5  
 Meteorological testing devices
                                        
Koito Manufacturing Co., Ltd.
     153,000       2,953,092       3,631,833       678,741       1.3  
 Lighting equipment
                                        
Zojirushi Corporation
     848,000       3,063,173       3,074,396       11,223       1.1  
 Household appliances
                                        
Total Electric Appliances
       10,203,016       11,001,629       798,613       3.9  
                                         
Financing Business
                                        
Ricoh Leasing Company, Ltd.
     120,800       3,146,266       3,242,539       96,273       1.1  
 Office automation equipment leasing
                                        
Total Financing Business
       3,146,266       3,242,539       96,273       1.1  
                                         
Food
                                        
Fuji Oil Co., Ltd.
     259,200       4,480,280       3,241,910       (1,238,370 )     1.1  
 Palm oil and coconut oil
                                        
Total Foods
       4,480,280       3,241,910       (1,238,370 )     1.1  
                                         
Information and Communication
                                        
NS Solutions Corporation
     115,900       2,265,323       2,873,017       607,694       1.0  
 System consulting services and software development
                                        
Okinawa Cellular Telephone Company
     118,800       2,972,394       3,033,614       61,220       1.1  
 Cellular and car phone services
                                        
Total Information and Communication
       5,237,717       5,906,631       668,914       2.1  
 

 
 
 
 
 
                           
% of
  
               
Market
    
Unrealized
    
Net
  
   
Shares
    
Cost
    
Value
    
Gain or Loss
    
Assets
  
Iron and Steel
                              
Chubu Steel Plate Co., Ltd.
     728,900       2,975,320       3,086,617       111,297       1.1  
 Manufactures electric furnace steel plates
                                        
Nichia Steel Works, Ltd.
     1,239,000       3,987,650       3,542,435       (445,215 )     1.2  
 Produces and sells steel products
                                        
Osaka Steel Co., Ltd.
     214,600       3,923,376       3,542,228       (381,148 )     1.3  
 Electric furnace steelmaker
                                        
Total Iron and Steel
       10,886,346       10,171,280       (715,066 )     3.6  
                                         
                                         
                                         
                                         
                                         
                                         
Machinery
                                        
Hisaka Works, Ltd.
     473,000       4,524,847       4,275,496       (249,351 )     1.5  
 Heat exchangers and evaporators
                                        
Oiles Corporation
     127,000       2,824,109       2,848,703       24,594       1.0  
 Manufactures oilless bearings
                                        
Sintokogio, Ltd.
     515,400       3,957,547       3,580,151       (377,396 )     1.3  
 Engineering equipment
                                        
Total Machinery
       11,306,503       10,704,350       (602,153 )     3.8  
                                         
Metal Products
                                        
Neturen Co., Ltd.
     422,500       2,776,065       2,710,675       (65,390 )     1.0  
 Induction hardening equipment
                                        
Total Metal Products
       2,776,065       2,710,675       (65,390 )     1.0  
                                         
Other Products
                                        
Nishikawa Rubber Company Ltd.
     197,800       3,271,767       3,047,263       (224,504 )     1.1  
 Rubber products
                                        
Total Other Products
       3,271,767       3,047,263       (224,504 )     1.1  
                                         
Real Estate
                                        
Keihanshin Building Co., Ltd.
     695,500       3,924,534       3,594,351       (330,183 )     1.3  
 Real estate leasing and building management
                                        
Sundrug Co., Ltd.
     69,200       2,791,390       3,103,734       312,344       1.1  
 Drug store chain
                                        
Total Real Estate
       6,715,924       6,698,085       (17,839 )     2.4  
                                         
Retail Trade
                                        
Arc Land Sakamoto Co., Ltd.
     206,300       3,382,879       4,199,780       816,901       1.5  
 Operates home centers
                                        
Create S D Co., Ltd.
     127,400       4,400,779       4,255,846       (144,933 )     1.5  
 Drug store chain
                                        
Daikokutenbussan Co., Ltd.
     108,500       2,986,895       2,758,872       (228,023 )     1.0  
 Operates discount stores for food products and sundry goods
                                  
Heiwado Co., Ltd.
     199,600       2,506,913       2,914,184       407,271       1.0  
 Supermarkets
                                        
Jin Co., Ltd.
     97,400       3,159,714       2,747,449       (412,265 )     1.0  
 Eyeglasses and fashion merchandise
                                        
Total Retail Trade
       16,437,180       16,876,131       438,951       6.0  
                                         
Textiles and Apparel
                                        
Hogy Medical Co., Ltd.
     68,600       3,110,860       3,680,055       569,195       1.3  
 Medical supply products
                                        
Komatsu Seiren Co., Ltd.
     727,000       3,732,747       3,842,857       110,110       1.3  
 Synthetic fibers, textiles products, and composite thin-membrane
                                  
Total Textiles and Apparel
       6,843,607       7,522,912       679,305       2.6  
                                         
Transportation and Warehousing
                                        
Alps Logistics Co., Ltd.
     259,700       2,685,357       2,717,435       32,078       1.0  
 Delivery, storage, and forwarding of electronic components
                                  
Japan Transcity Corporation
     1,238,000       4,217,485       3,965,298       (252,187 )     1.4  
 Warehousing and transportation services
                                        
Total Transportation and Warehousing
       6,902,842       6,682,733       (220,109 )     2.4  
                                         
Transportation Equipment
                                        
Sanoh Industrial Co., Ltd.
     427,400       3,131,514       2,746,312       (385,202 )     1.0  
 Tubes, wires and electrical products
                                        
Tachi-S Co., Ltd.
     395,200       6,705,798       6,282,507       (423,291 )     2.2  
 Child transformation seats, seat components, and rotating units
                                  
Total Transportation Equipment
       9,837,312       9,028,819       (808,493 )     3.2  
                                         
Utilities
                                        
The Okinawa Electric Power Company, Incorporated
     95,900       3,436,145       3,104,642       (331,503 )     1.1  
 Thermal power
                                        
Total Utilities
       3,436,145       3,104,642       (331,503 )     1.1  
                                         
Wholesale Trade
                                        
Siix Corporation
     300,400       3,969,867       4,725,294       755,427       1.7  
 Video, audio, and office equipment
                                        
 
 
 
 
 
 
                           
% of
  
               
Market
    
Unrealized
    
Net
  
   
Shares
    
Cost
    
Value
    
Gain or Loss
    
Assets
  
Ryoden Trading Company, Ltd.
     809,000       5,492,187       5,492,425       238       1.9  
 Electronic components
                                        
Total Wholesale Trade
       9,462,054       10,217,719       755,665       3.6  
                                         
TOTAL INVESTMENTS IN JAPANESE EQUITY SECURITIES
     $ 155,134,246     $ 154,470,098     $ (664,148 )     54.6  
                                         
INVESTMENTS IN FOREIGN CURRENCY
                                        
Japanese Yen
                                        
 Non-interest bearing account
       7,129,155       7,122,158       (6,997 )     2.5  
TOTAL INVESTMENTS IN FOREIGN CURRENCY
     $ 7,129,155     $ 7,122,158     $ (6,997 )     2.5  
                                         
TOTAL INVESTMENTS
     $ 162,263,401     $ 161,592,256     $ (671,145 )     57.1  
                                         
OTHER ASSETS LESS LIABILITIES, NET
       123,993,969               42.9  
                                         
NET ASSETS
       285,586,225               100.0  
                                         
                                         
                                         
                                         
Aggregate gross unrealized appreciation for all securities in which there is an excess of value over tax cost was $6,201,306.
          
Aggregate gross unrealized depreciation for all securities in which there is an excess of tax cost over value was $6,865,454.
          
                                         
                                         
Portfolio securities and foreign currency holdings were translated at the
                                  
following exchange rate as of May 31, 2014
                                        
                                         
Japanese Yen
             101.780    
=$1.00
                  
                                         
                                         
                                         
                                         
The following table summarizes the valuation of the Fund’s investments by fair value hierarchy levels as of May 31, 2014.
          
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 – (including the Fund’s own assumptions in determining the fair value of investments).
                          
                                         
Level
  
Investments in Securities
                                  
                               
Level 1
                                        
      Equity Securities
   $ 154,470,098                                  
      Foreign Currency
     7,122,158                                  
Level 2
                                        
Level 3
                                        
Total
   $ 161,592,256                                  
                                         
During the quarter ended May 31, 2014, there were no transfers between Level 1 and 2 and the Fund did not hold any instruments which used
  
significant observable inputs (Level 3) in determining fair value.
                                  
                                         
                                         
 
 
 
 
 
 
Item 2. Controls and Procedures.

(a) The Registrant’s Principal Executive Officer and Principal Financial Officer evaluated the Registrant’s disclosure controls and procedures within 90 days of the filing of this report and concluded that they were effective in providing reasonable assurance that the information required to be disclosed by the Registrant in its reports or statements filed under the 1934 Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission.
 
(b) There were no changes in the Registrant’s internal control over financial reporting that occurred during the Registrant’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Registrant’s internal control over financial reporting.

Item 3. Exhibits.

(a) Certifications of Principal Executive Officer and Principal Financial Officer pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 are attached hereto as an exhibit.
 
 
 
 
 
 
 
SIGNATURES
 
 
 
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


JAPAN SMALLER CAPITALIZATION FUND, INC.



By:   /s/ Yutaka Itabashi
        Yutaka Itabashi, President
        (Principal Executive Officer)

Date:  July 21, 2014

 

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.


By:  /s/ Yutaka Itabashi
        Yutaka Itabashi, President
        (Principal Executive Officer)

Date: July 21, 2014

 

By:   /s/ Amy J. Marose
        Amy J. Marose, Treasurer
        (Principal Financial Officer)

Date: July 21, 2014