Nomura Agribusiness Index

Global Markets Research
25 December 2023

EQUITY: INDEX SERVICES DEPARTMENT

Index rulebook

Research Analysts
Japan index products
Index Services Department - NFRC
idx_mgr@nfrc.co.jp

The Nomura Agribusiness Index comprises stocks of Japanese companies engaged inagriculture, forestry, and fishery businesses (collectively, "agribusiness"). The index
comprises stocks based on predetermined rules that take into account investibility.
• The index consists of Japanese stocks where agribusiness sales account for 5% ormore of total sales.
• The agribusiness sales of individual companies are calculated by Nomura Fiduciary
Research & Consulting Co., Ltd. ("NFRC") based on quantitative rules, using
companies' securities filings, Securities Identification Code Committee industrial
classification, and Japan Standard Industrial Classification data published by the
Ministry of Internal Affairs and Communications, among other materials.
• As a rule, the index is reconstructed annually.
• While the index is weighted by market capitalization, individual stock weights arecapped at 5% to prevent the index from being excessively weighted toward large
market caps.
• To make the index more investible, individual stocks with low free float weightadjusted market caps and low average daily turnover are screened out.

Production Complete: 2023-12-25 07:23 UTC

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Table of contents
1 Introduction
2 Periodic reconstitutions
2.1 Periodic reconstitution date
2.2 Periodic reconstitution base date
2.3 Announcement of periodic reconstitutions
3 The Selection and Construction Method for Index Constituent Stocks
3.1 Universe
3.2 Terminology
3.3 Stock selection
3.4 Number of shares included in index
4 Unscheduled reconstitutions
4.1 Addition of stocks
4.2 Treatment of stock swaps, stock transfers, mergers, etc
4.3 Removal of stocks
4.4 Announcement of unscheduled reconstitutions
5 Index calculation
5.1 Index base date, index base values, Publication start date
5.2 Index market cap
5.3 Calculation of index values
5.4 Index maintenance
6 Data services
For further information on the indicesDisclaimer
Policies with regard to the indices

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1 Introduction
The Nomura Agribusiness Index is a Japanese equities index consisting of the stocks of Japanese companies involvedin agribusiness. The index is aiming to provide a benchmark for passive investment funds to create portfolios that track
the share price performance of Japanese agribusiness stocks.
The definition of the term agribusiness in this document is used in its broadest sense to encompass not only the primaryindustries of agriculture, forestry, and fisheries, but also secondary and tertiary industries, such as agribusiness-related
manufacturing, retailing, and wholesaling industries. The agribusiness sales of individual companies are calculated by
NFRC based on predetermined quantitative rules, using securities filings, Securities Identification Code Committee
industrial classification, and Japan Standard Industrial Classification data published by the Ministry of Internal Affairs
and Communications, among other materials. Stocks belonging to the Securities Identification Code Committee's
fishery, agriculture & forestry category are all included in the universe.
The index consists of common stocks listed on Japanese stock exchanges, for which the company gains at least 5% of
their total sales from agribusiness. Under the annual reconstitution of the index, stocks with low liquidity are screenedout to ensure investibility. While the portfolio is weighted by market cap, weights of individual stocks are capped toprevent the index from being excessively weighted toward large caps.

Fig. 1: Examples of agribusiness eligible to the Nomura Agribusiness Index

Primary industries• Agriculture• Forestry• Fisheries

Secondaryindustries

Tertiary industries• Food product manufacturing• Tobacco and beverage
manufacturing• Fertilizer, feedstuff, andagrochemical manufacturing• Agricultural machinery
manufacturing• Beverage and food retailing• Agricultural, forestry, andfishery product wholesaling• Fertilizer and feedstuff
wholesaling• Farm machinery wholesaling

Source: NFRC

1.

NFRC took over the index business of Nomura Securities Co., Ltd., effective 1 February 2023.

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2 Periodic reconstitutions
2.1 Periodic reconstitution date
The periodic reconstitution date is the first business day of December every year, and reconstitution is carried out after
the close of trading on the business day preceding the periodic reconstitution date.

2.2 Periodic reconstitution base date
Constituents and the number of shares in each component stock to be included in the index following the periodic
reconstitution are determined on the basis of calculations using information as of the periodic reconstitution base date.
The periodic reconstitution base date is the 15th of the month that is two months prior to the periodic reconstitution date(ie, 15 October of each year, or the preceding business day if the 15th is a non-business day).

2.3 Announcement of periodic reconstitutions
As a general rule, an announcement will appear on the NFRC website at around 16:00 (JST) 10 business days before
the periodic reconstitution date, except in the case of unforeseen circumstances or when information cannot be
confirmed.
Website: http://qr.nomuraholdings.com/en/frcnri/index.html

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3 The Selection and Construction Method forIndex Constituent Stocks
3.1 Universe
The universe includes all stocks listed on Japanese stock exchanges[2] as of the periodic reconstitution base date.
However, stocks that meet the following criteria as of the periodic reconstitution base date are excluded.
• Equities other than common stock
As a general rule, only common stock is included in the universe. However, exceptions to this rule will be made if
necessary.
• Stocks assigned for delisting
Stocks assigned for delisting are not included in the universe.
• Stocks under supervision
Stocks designated as securities under supervision are not included in the universe.
• Target companies of a tender offer
Stocks that are the targets of tender offers (ie, TOBs) may be excluded from the universe of stock selection only if
all of the following requirements are met:
(1) the offer close date falls between the periodic reconstitution base date and the periodic reconstitution date(2) the company conducting the tender offer plans to acquire all the outstanding shares in the target company; and(3) the company conducting the tender offer is planning to acquire all of the stock of the target company inexchange either for money or its own stock and the target company agrees to the offer.
• Exchange Traded Funds• Foreign stocks
Stocks listed on foreign sections of Japanese exchanges or stocks regarded as overseas companies are excluded
from the universe even if they are traded in the Japanese market.
• Other exceptions
Latent stocks, warrants, and rights on them are excluded. The Bank of Japan is also excluded.

2.

Tokyo Stock Exchange (Prime Market, Standard Market, Growth Market, TOKYO PRO Market), Nagoya Stock
Exchange, Sapporo Securities Exchange, and Fukuoka Stock Exchange.

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3.2 Terminology• Free float-adjusted market cap
We use the following method to calculate free float-adjusted market capitalization in order to reflect the number ofshares that are actually available for investment.
Nomura composite price × (number of shares outstanding for index calculation purposes - stable shareholding)• Nomura composite price
The Nomura composite price refers to the stock price of the exchange selected based on the number of traded daysand volume of contracts in the last 60 trading days. As a general rule, the exchange is selected on a daily basis.
The share price is selected according to the following order of precedence:Contract price on selected exchange (see note) > standard price on selected exchange > Nomura composite priceon previous business day
Note: Priority is given to the special quotation price or continuous confirmed quotation price on the selectedexchange if these are available.

• Number of shares outstanding for index calculation purposes
The number of shares outstanding for index calculation purposes is the number of shares outstanding afterreflecting changes in the number of shares, in accordance with 5.4.2 Adjustments resulting from changes in capital
structure.

• Stable shareholdings
The stable shareholding is the number of shares deemed to be held stably. It is estimated based on major
shareholders data, a list of securities held in an annual securities report, and information published by an exchange
or company (such as a bulletin or prospectuses, etc.).

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3.3 Stock selection[3]Stocks are selected for the Nomura Agribusiness Index from the universe after screening out stocks with low market
capitalization or low liquidity to avoid their inclusion in the index (Figure 2).
Stock selection process• Select a group of stocks from the universe that are in the top 98% in terms of free float–adjusted market.
• Stocks ranked in the bottom 5% of the group in terms of average trading value over the past 60 days[4] areineligible.
• Stocks for which agribusiness sales account for 5% or more of the subject company's most recent total sales areincluded in the Nomura Agribusiness Index[5] .
Fig. 2: Overview of Nomura Agribusiness Index stock selection process(1) Determination of universe
All stocks listed in Japan(Top 98% in terms of free float–adjusted market cap)

(2) Liquidity screening
Bottom 5% of stocks in terms of average trading value over the past 60 days are screened out(3) Selection of agribusiness stocks
Stocks with an agribusiness sales ratio of 5% or more are included in the index(4) Adjusted to cap weighting of individual stocks in the index
Adjusted to ensure individual stock weightings are capped at 5%(5) Determination of individual stock weights for index constituents
Source: NFRC

3.

4.
5.

The stock selection criteria may be revised at Nomura's discretion in response to changes in the economic
situation, etc. In this case, a revised rulebook will be published at least two weeks before the periodic
reconstitution date.
Average trading value over the past 60 days is calculated as the average of [Nomura composite price × trading
volume] over the past 60 days, including the reconstitution base date.
The agribusiness sales of individual companies are calculated by NFRC based on pre-determined quantitative
rules, using securities filings, Securities Identification Code Committee sector categories, and Japan Standard
Industrial Classification data published by the Ministry of Internal Affairs and Communications, among othermaterials. Stocks belonging to the category of fishery, agriculture & forestry among the Securities Identification
Code Committee sector categories, that meet criteria (1) and (2) in the stock selection process are included in theindex.

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3.4 Number of shares included in index
Weights for each constituent in the index are calculated using the free float–adjusted market cap as of the reconstitution
base date. First, the free float–adjusted market cap weight for each component stock is calculated, with individual stock
weight capped at 5%. The sum of weights of stocks whose free float-adjusted market cap weights exceed 5% is
subtracted from 1, and this figure is proportionately allocated among other constituents based on free float–adjusted
market cap size to determine index weights for individual stocks.
Each constituent's number of shares included in the index is calculated by first calculating its adjustment coefficient.
The adjustment coefficient is determined using the formula below to ensure that the weight of each stock as of thereconstitution base date is equal to the weight determined in line with the above adjustment (see 3.2 Glossary regarding
the Nomura composite price).
Number of shares of the stocki within the index= no. of shares outstanding for index calculation purposesi × adjustment coefficienti
Adjustment coefficient for stocki= (index market cap × i ′s weight)/ (no. of shares outstanding for index calculation purposesi × Nomura composite pricei )8Nomura | Nomura Agribusiness Index

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4 Unscheduled reconstitutions
Each time an event such as corporate realignment occurs, the reconstitution shall be carried out based on the following
rules as a rule, taking into consideration the actual situation after the event. However, a material event other than thosebelow may lead to an unscheduled index reconstitution. Any such change would be announced in advance.

4.1 Addition of stocks• Treatment of newly listed stocks
Stocks newly listed in the period following the periodic reconstitution base date will be considered for inclusion in
the index at the time of the next periodic reconstitution[6] .

4.2 Treatment of stock swaps, stock transfers, mergers, etc
Unscheduled reconstitutions are carried out in response to various forms of corporate reorganization, based on thefollowing rules. Changes are made on a case-by-case basis taking the situation following the restructuring into account.
The objective of this is to avoid temporary exclusions of companies that have conducted a stock swap, stock transfer orsimilar action, and thus maintain the consistency of the stocks included in the index.
• Stock swaps and absorption-type mergers
When a stock is delisted because it is about to become a wholly owned subsidiary or be merged into anothercompany, it may be included in the index after its delisting but must be removed from the index on the day of thelisting change. Following its delisting, and until the business day prior to the listing change, the merged company's
valuation is based on the market value of the company that will become the parent company or the surviving
company multiplied by the exchange or merger ratio. Also, the number of shares of the stock within the index of thesurviving company is changed on the listing change date based on the exchange or merger ratio.

• Stock transfers and consolidation-type mergers
When an unlisted surviving company takes over the operations of another company and becomes listed after ashort period of time, the merged company is removed from the index on the new listing date of the surviving
company. The price used for the delisted merged company through to the business day prior to the surviving
company's listing is the price on the day before its delisting. The price used for the surviving company is the priceon its new listing date. However, if it is apparent the surviving company will not be eligible for the index periodic
reconstitution, the merged company is removed from the index on the delisting date.

4.3 Removal of stocks• Assignment to securities to be delisted
Stocks assigned as securities to be delisted will be removed from the index four business days after theassignment. However, stocks that are listed on more than one stock exchange and not assigned to be delisted on
all stock exchanges will not be removed.
6.

Except for stocks newly listed due to stock transfer or consolidation-type merger. For the treatment of these stocks
see 4.2 Treatment of stock swaps, stock transfers, mergers, etc.

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• Delisting
Stocks delisted for reasons other than those cited in 4.2 Treatment of stock swaps, stock transfers, mergers, etc,
are removed from the index on the delisting date.

• Marked loss of eligibility for inclusion in the universe
In the case of an event that is considered to seriously damage a component stock's eligibility for inclusion in theuniverse, the stock may be removed from the index following an official announcement by the company in question,
the stock exchange, or a government/regulatory agency.

4.4 Announcement of unscheduled reconstitutions
As a rule, unscheduled reconstitutions are announced on the NFRC website no later than five business days before thedate of reconstitution, except in the case of unforeseen circumstances or when information cannot be confirmed.
Website: http://qr.nomuraholdings.com/en/frcnri/index.html

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5 Index calculation
5.1 Index base date, index base values, Publication start dateIndex base date

： 29 December 2000

Index base values： 10,000

Publication start date

： 31 July 2013

Index values before the publication start date were calculated based on the rules as of the publication start date
for reference purposes.

5.2 Index market cap
5.2.1 Index market capitalization
Stock market cap for the indexi= Nomura composite pricei × number of shares of the stock within the indexi
Index market cap = Σi (stocki ’s market cap of the index)

i indicates each index constituent. Σi indicates the sum for all index constituents.
5.2.2 Base market capitalization
Base market capitalization is used in index calculations to avoid index values being affected by changes in market
capitalization that are caused by non-market factors, such as changes in capital structure or in the constituents of theindex.

• Base market capitalization (excluding dividends)
Base market capitalizationt = index market capitalizationt -1 + adjusted market capt

t is the day in question. t -1 is the preceding business day.
• Base market capitalization (including dividends)
Base market capitalizationt= index market capitalizationt -1 + adjusted market capitalizationt - adjusted total dividendt

t is the day in question. t -1 is the preceding business day.
Adjusted market capitalization refers to the movement of market capitalization due to the change in the capital
structure or the change in constituents. Adjusted total dividends is calculated as the difference between forecast
dividends and actual dividends.

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5.3 Calculation of index values
The index value and return are calculated using the values described above as follows;
5.3.1 JPY–denominated index value• Index excluding dividends
Returnt = index market capitalizationt / base market capitalizationt -1
Index valuet = index valuet -1 × (1 + returnt )t is the day in question. t -1 is the preceding business day.
• Index including dividends
Returnt = (index market capitalizationt + total dividendst ) / base market capitalizationt – 1
Index valuet = index valuet -1 × (1 + returnt )t is the day in question. t-1 is the preceding business day.

• Method for reflecting dividends
For the index including dividends, dividend data are reflected on the ex-dividend date. However, as the value of thedividend has not yet been determined on the ex-dividend date, the stock issuer's dividend forecast is used (if this isunavailable, the Toyo Keizai dividend forecast is used)[7] . In the event of a difference between the dividend forecast
and the actual dividend, the base market capitalization is adjusted on the last business day of the month of theearnings announcement (if the earnings announcement is made on the last business day of the month, the basemarket capitalization is adjusted on the last business day of the following month). In addition, if dividend adjustment isrequired, the base market capitalization is adjusted on the last business day of the month in which NFRC comes toknow (if the day in which NFRC comes to know is the last business day of the month, the base market capitalization isadjusted on the last business day of the following month). For details of base market capitalization see 5.4.2
Adjustments resulting from changes in capital structure.

5.4 Index maintenance5.4.1 Reconstitutions
Constituents are replaced in periodic and unscheduled reconstitutions and also when necessary for other reasons. Thebase market capitalization is calculated on the reconstitution date using share prices from day prior to the reconstitution
date.
7.

This rule is effective from fiscal years ended end-December 2011 onward. For fiscal years before this, the actual
dividend on the ex-dividend date is used retroactively for reference purposes.

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5.4.2 Adjustments resulting from changes in capital structure
Adjusting the base market capitalization
The base market capitalization is adjusted in the following way if market cap moved due to a change of capital
structure regardless of market movement. However, no adjustment is made to base market capitalization to reflectchanges in capital structure that do not involve payment, such as stock splits, reverse stock splits, and changes in facevalue, as these do not affect market capitalization.

Fig. 3: Timing of adjustments of base market capitalization and share price used

Change in capital structure
Stock transfer, stock swap, merger
Corporate
Corporate divestiture
reorganization(company/division spinoff)
Shareholder allocation
Allotment of acquisition rights toshares without contribution
Allotment of treasury stock without
contribution

Adjustment date
Date of listing change

Share price used
Previous day's priceEx-rights date

Not used[8]Ex-rights dateIssue priceEx-rights date

Exercise priceEx-rights datePrevious day's priceBusiness day following payment date
(listing date of new shares in case of when- Previous day's priceissued transaction)
Five business days after date of listing
Third-party allocation of shares
Previous day's pricechangeLast business day of month in which
Conversion of preferred stocknumber of converted shares becomes
Previous day's priceknown
Conversion of CBs
Last business day of month in which
number of new shares for which rights were Previous day's price
Exercise of stock acquisition rights
exercised becomes known
Corporate divestiture (new shares
Date of listing change
Previous day's priceof successor company)
Last business day of month following month
Retirement of treasury stock
Previous day's priceof treasury stock retirement
Last business day of month in which
forfeiture of stock acquisition rights is
Forfeiture of stock acquisition rights announced (or last business day ofPrevious day's pricefollowing month if announcement is within
five business days of month-end)
Capital reduction with
Effective datePrevious day's pricecompensation
Other adjustments to base market
capitalization, if required, are made on thelast business day of the month of the
Other adjustments
disclosure of the relevant information (or the Previous day's pricelast business day of the following month if
the disclosure is made within five businessdays of the month-end)
Public offering

Capitalincrease

Capitalreduction

Other

Source: NFRC

8.

In the case of a corporate divestiture (company/division spinoff), the base market capitalization is adjusted by the
reduction in capital. The reduction in capital is defined as follows:(1) when the divesting entity does not announce the value of the divested division or of the shares of the divested(spun-off) company, capital is reduced by the amount by which the divesting entity’s shareholders' equity is
expected to be reduced and(2) when the divesting entity does announce the value of the divested division or of the shares of the divested(spun-off) company, capital is reduced by the value of the division or the value of the divested company's shares
multiplied by the total number of shares

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Adjustments to index weightings
When the following changes in capital structure result in a change in the number of shares outstanding for index
calculation purposes, the number of shares of the stock within the index is adjusted so that the number of shares in thestock that are included in the index does not change.
• Stock transfer, stock swap, merger[9]• Shareholder allocation• Allotment of acquisition rights to shares without contribution• Public offering• Third-party allocation of shares• Conversion of preferred stock• Conversion of CBs, exercise of stock acquisition rights• Corporate divestiture (new shares of successor company)• Retirement of treasury stock• Forfeiture of stock acquisition rights• Capital reduction with compensation• Other adjustments
9.

When an index constituent becomes a wholly owned subsidiary (or merged company), the number of shares ofthe stock within the index of the parent (or surviving company) is adjusted so that the total number of shares in
the index remains the same as it was before, taking the exchange ratio (or merger ratio) into account.

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6 Data services
Data for the indices can be obtained via the following channels[10]Index values are published in the following media:
Bloomberg：

JPY-denominated (excluding dividends): NMRIJOAG <Index>
JPY-denominated (including dividends): NMRIJIAG <Index>

10.

QUICK

：

JPY-denominated (excluding dividends): SRNAB/NRIJ

Website：http://qr.nomuraholdings.com/jp/agri/index.html (Japanese only)

Published data are all for reference only.

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For further information on the indices
Nomura Fiduciary Research & Consulting Co., Ltd.
Index Services Departmente-mail：idx_mgr@nfrc.co.jp

Website：http://qr.nomuraholdings.com/en/frcnri/index_contacts.html

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Disclaimer
The intellectual property rights and any other rights in Nomura Agribusiness Index belong to Nomura Fiduciary
Research & Consulting Co., Ltd. ("NFRC").
NFRC do not guarantee accuracy, completeness, reliability, usefulness, marketability, merchantability and fitness of theIndex, and do not account for business activities or services that any index user and/or its affiliates undertakes with theuse of the Index.
Publication of the index could be delayed or canceled if a computer malfunction, natural disaster, or other unavoidable
event affects the index calculation process.
Please read “About The Index License” before using the indexes, regardless of the channel through which indexes/data
is acquired (NFRC website, services via information vendors, etc).
"About The Index License" http://qr.nomuraholdings.com/en/indexlicense.html■ This material has been prepared by Nomura Fiduciary Research & Consulting Co., Ltd. (NFRC) for information
purposes only.
■ All opinions and/or predictions contained in this material are based on the determination of NFRC at the time thismaterial was prepared and are subject to change without notice. We do not provide any guarantee or assurance
that opinions contained in this material relating to future predictions will actually take place. Some part of thecontent of this material is based on various information available to NFRC which NFRC determined to be reliable.
However, NFRC does not guarantee the accuracy of such information, and there is a possibility that suchinformation was summarized and imperfect. The past investment performance is not indicative of the future results.
■ This material is not intended as an investment solicitation or an investment advice in connection with any particular
security transaction.
■ If a customer invests in an investment product that uses a market benchmark developed and provided by NFRC, aportion of the fees for the use of such benchmark may be directly or indirectly attributed to NFRC. For details,
please visit the following website.
Securities Market Benchmarks http://qr.nomuraholdings.com/en/■ This material may only be used by the customer to whom it was distributed. This material is the copyrighted work of
NFRC and you may not copy, transmit or redistribute this material, in whole or in part, without the prior writtenconsent of NFRC.

Nomura Fiduciary Research & Consulting Co., Ltd.
Registration Number: Director-General of the Kanto Local Financial Bureau (Finance & Commerce) Registration
No.451
Membership: Japan Investment Advisers Association No. 011-00961

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Policies with regard to the indices
The below index-related policies are published on our website. See the following link for details:
http://qr.nomuraholdings.com/en/guides/index.html• Index Governance Framework• Conflicts of Interest Policy• Index Calculation Policy• Complaints Handling Policy

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