efc12-216_fmnq.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)

Two World Financial Center
Building B, 18th Floor
New York, New York 10281-1712
(Address of principal executive offices)

Shigeru Shinohara
Japan Smaller Capitalization Fund, Inc.
Two World Financial Center
Building B, 18th Floor
New York, New York 10281-1712
(Name and address of agent for service)

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

Date of fiscal year end:  February 29, 2012                                

Date of reporting period:  September 1, 2011  –  November 30, 2011

 
 
 
 
 
Item 1.  Schedule of Investments.
 

JAPAN SMALLER CAPITALIZATION FUND, INC.
  
SCHEDULE OF INVESTMENTS
  
IN SECURITIES OF UNAFFILIATED ISSUERS
  
November 30, 2011
  
 
 
                           
% of
  
               
Market
    
Unrealized
    
Net
  
   
Shares
    
Cost
    
Value
    
Gain or Loss
    
Assets
  
                               
COMMON STOCKS
                              
Automotive Equipment and Parts
                              
Musashi Seimitsu Industries Co., Ltd.
     255,800     $ 5,649,598     $ 5,561,729     $ (87,869 )     2.3  
 Ball joints, camshafts, and gears
                                        
Total Automotive Equipment and Parts
             5,649,598       5,561,729       (87,869 )     2.3  
                                         
Chemicals and Pharmaceuticals
                                        
Adeka Corporation
     382,900       3,718,799       3,602,487       (116,312 )     1.5  
 Resin products
                                        
Rohto Pharmaceutical Co., Ltd.
     330,000       3,686,286       4,134,038       447,752       1.7  
 Pharmaceuticals manufacturer
                                        
Total Chemicals and Pharmaceuticals
       7,405,085       7,736,525       331,440       3.2  
                                         
Electronics
                                        
Alpine Electronics, Inc.
     394,800       5,095,907       4,482,779       (613,128 )     1.9  
 Car audio and navigation systems
                                        
Funai Electric Co., Ltd.
     222,900       5,617,768       4,711,380       (906,388 )     2.0  
 Audio-visual equipment
                                        
Fuji Machine Mfg. Co., Ltd.
     261,700       4,369,268       4,711,882       342,614       2.0  
 Automated assembly machines
                                        
MegaChips Corporation
     362,400       5,826,797       6,053,234       226,437       2.6  
 Large-Scale-Integration circuits
                                        
Nippon Chemi-Con Corporation
     1,376,000       7,946,481       4,947,854       (2,998,627 )     2.1  
 Electronic components and circuit products
                                        
The Okinawa Electric Power Company, Incorporated
     88,600       4,015,397       3,728,303       (287,094 )     1.6  
 Thermal power
                                        
Shinko Electric Industries Co., Ltd.
     882,400       7,401,455       6,482,382       (919,073 )     2.7  
 Semiconductor packages
                                        
Siix Corporation
     253,100       3,433,289       3,248,970       (184,319 )     1.4  
 Video, audio, and office equipment
                                        
Toshiba Tec Corporation
     771,000       3,287,998       2,841,938       (446,060 )     1.2  
 Point of Sale systems
                                        
Total Electronics
       46,994,360       41,208,722       (5,785,638 )     17.5  
                                         
Information and Software
                                        
Cookpad Inc.
     151,300       3,575,522       3,402,739       (172,783 )     1.4  
Operates cooking recipes websites
                                        
Itochu Techno-Solutions Corporation
     116,800       4,077,920       5,005,284       927,364       2.1  
 Computer network systems developer
                                        
Kakaku.com, Inc.
     107,900     $ 4,019,651     $ 4,055,115     $ 35,464       1.7  
 Price comparison and product information
                                        
Otsuka Corporation
     88,500       5,699,155       5,976,801       277,646       3.0  
Computer information system developer
                                        
Sato Corporation
     284,800       3,334,454       3,413,636       79,182       1.4  
 Automation recognition systems
                                        
Square Enix Holdings Co., Ltd.
     267,400       5,091,616       5,362,475       270,859       2.3  
 Entertainment software
                                        
Total Information and Software
       25,798,318       27,216,050       1,417,732       11.9  
 
 
 
2
 
 

JAPAN SMALLER CAPITALIZATION FUND, INC.
  
SCHEDULE OF INVESTMENTS
  
IN SECURITIES OF UNAFFILIATED ISSUERS
  
November 30, 2011
  
 
                           
% of
  
               
Market
    
Unrealized
    
Net
  
   
Shares
    
Cost
    
Value
    
Gain or Loss
    
Assets
  
                               
Iron and Steel
                              
Hanwa Co., Ltd.
     1,112,000       4,565,349       4,700,812       135,463       2.0  
 Steel imports/exports
                                        
Neturen Co., Ltd.
     447,100       3,882,722       3,319,108       (563,614 )     1.4  
 Induction hardening equipment
                                        
Total Iron and Steel
       8,448,071       8,019,920       (428,151 )     3.4  
                                         
Machinery and Machine Tools
                                        
Ashi Diamond Industrial Co
     240,700       3,731,787       3,220,088       (511,699 )     1.4  
HandMachine Tools
                                        
Disco Corporation
     141,500       8,312,942       7,312,991       (999,951 )     3.1  
 Industrial machinery
                                        
THK Co., Ltd.
     271,500       6,461,106       5,273,238       (1,187,868 )     2.2  
 Linear motion systems
                                        
Total Machinery and Machine Tools
       18,505,835       15,806,317       (2,699,518 )     6.7  
                                         
Miscellaneous Manufacturing
                                        
Central Glass Co., Ltd.
     635,000       3,000,572       3,019,912       19,340       1.3  
Glass and Chemicals
                                        
Hogy Medical Co., Ltd.
     112,400       5,034,669       4,555,974       (478,695 )     1.9  
 Medical supply products
                                        
Nihon Kohden Corporation
     198,500       4,010,530       4,515,434       504,904       1.9  
 Medical equipment
                                        
Toyo Tanso Co., Ltd.
     102,800       4,735,322       4,922,052       186,730       2.1  
 Carbon and graphite
                                        
Total Miscellaneous Manufacturing
       16,781,093       17,013,372       232,279       7.2  
                                         
Real Estate and Warehouse
                                        
Daibiru Corporation
     376,400       3,532,575       2,474,082       (1,058,493 )     1.0  
 Leases office buildings, apartments and hotels
                                        
Resorttrust, Inc.
     216,900       3,098,516       3,094,578       (3,938 )     1.3  
 Timeshare resort hotels
                                        
Total Real Estate and Warehouse
       6,631,091       5,568,660       (1,062,431 )     2.3  
                                         
Retail
                                        
Arcs Company, Limited
     230,800     $ 4,020,854     $ 4,348,880     $ 328,026       1.8  
 Supermarkets and discount stores
                                        
Heiwado Co., Ltd.
     212,000       2,662,853       2,696,791       33,938       1.1  
 Supermarkets
                                        
Mitsui Matsushima Co., Ltd.
     2,544,000       5,065,089       4,491,919       (573,170 )     1.9  
 Coal
                                        
Saint Marc Holdings Co., Ltd.
     69,000       2,659,319       2,658,977       (342 )     1.1  
 Drug store chain
                                        
Xebio Co., Ltd.
     167,900       3,625,165       3,823,680       198,515       1.6  
 Sporting goods
                                        
Total Retail
       18,033,280       18,020,247       (13,033 )     7.5  
 
 
 
 
3
 
 
 

JAPAN SMALLER CAPITALIZATION FUND, INC.
  
SCHEDULE OF INVESTMENTS
  
IN SECURITIES OF UNAFFILIATED ISSUERS
  
November 30, 2011
  
 

 
                           
% of
  
               
Market
    
Unrealized
    
Net
  
   
Shares
    
Cost
    
Value
    
Gain or Loss
    
Assets
  
                               
                               
Services
                              
Aeon Credit Service Co., Ltd.
     421,400       5,874,848       6,316,384       441,536       2.7  
 Credit cards
                                        
Daiseki Co., Ltd.
     252,900       5,023,184       4,419,802       (603,382 )     1.9  
 Waste disposal
                                        
Fuyo General Lease Co., Ltd.
     134,800       3,769,496       4,515,340       745,844       1.9  
 Machinery Leasing
                                        
Message Co., Ltd.
     1,668       5,180,170       5,161,578       (18,592 )     2.2  
 Nursing facilities
                                        
NEC Networks & System Integration Corporation
     181,100       2,211,447       2,726,186       514,739       1.2  
 Communication systems
                                        
Park24 Co., Ltd
     454,700       4,955,706       5,467,652       511,946       2.3  
 Parking garages
                                        
Rakuten Inc.
     6,255       5,879,746       6,699,194       819,448       2.8  
 Manages consumer websites
                                        
Sky Perfect JSAT Holdings, Inc.
     8,050       3,545,397       4,051,456       506,059       1.7  
 Broadcasting and data transmission
                                        
Total Services
       36,439,994       39,357,592       2,917,598       16.7  
                                         
Transportation
                                        
Kintetsu World Express Inc.
     122,100       3,434,091       3,561,184       127,093       1.5  
 Distribution services
                                        
Total Transportation
       3,434,091       3,561,184       127,093       1.5  
                                         
TOTAL INVESTMENTS IN COMMON STOCKS
       194,120,816       189,070,318       (5,050,498 )     80.2  
                                         
INVESTMENTS IN FOREIGN CURRENCY
                                        
Mizuho Corporate Bank, Ltd.
                                        
Non- interest bearing account
       1,269,837       1,273,564       3,727       0.5  
TOTAL INVESTMENTS IN FOREIGN CURRENCY
       1,269,837       1,273,564       3,727       0.5  
                                         
TOTAL INVESTMENTS
     $ 195,390,653     $ 190,343,882     $ (5,046,771 )     80.7  
                                         
OTHER ASSETS LESS LIABILITIES, NET
       46,639,337               19.3  
                                         
NET ASSETS
     $ 236,983,219               100.0  
                                         
 

 
* Aggregate gross unrealized appreciation for all securities in which there is an excess of value over tax cost was $7,680,889.
   Aggregate gross unrealized depreciation for all securities in which there is an excess of tax cost over value was $ 12,731,397.
 
 
 
Portfolio securities and foreign currency holdings were translated at the
following exchange rate as of November 30, 2011.
 
 
 
 
 
Japanese Yen 77.59 =$1.00
 
 
 
 
 
4
 

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.
 
 
 
 
 
5
 
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/ Shigeru Shinohara        
        Shigeru Shinohara, President
        (Principal Executive Officer)

Date:  February 27, 2012

 

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 person on behalf of the registrant and in the capacities and on the dates indicated.



By:     /s/ Robert Kleinman             
        Robert Kleinman, Treasurer
        (Principal Financial Officer)

Date:  February 27, 2012
 
 
 
 
6