# EDGAR Filing Document

**Accession Number:** 0000859796
**File Stem:** 0001133228-26-007999
**Filing Date:** 2026-5
**Character Count:** 319765
**Document Hash:** 41642a6ef6a7343a3e3d036c107f85fd
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001133228-26-007999.hdr.sgml**: 20260505

**ACCESSION NUMBER**: 0001133228-26-007999

**CONFORMED SUBMISSION TYPE**: N-CSR

**PUBLIC DOCUMENT COUNT**: 23

**CONFORMED PERIOD OF REPORT**: 20260228

**FILED AS OF DATE**: 20260505

**DATE AS OF CHANGE**: 20260505

**EFFECTIVENESS DATE**: 20260505

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** JAPAN SMALLER CAPITALIZATION FUND INC
- **CENTRAL INDEX KEY:** 0000859796

**ORGANIZATION NAME:**
- **EIN:** 133553469
- **STATE OF INCORPORATION:** MD
- **FISCAL YEAR END:** 0228

**FILING VALUES:**
- **FORM TYPE:** N-CSR
- **SEC ACT:** 1940 Act
- **SEC FILE NUMBER:** 811-05992
- **FILM NUMBER:** 26942485

**BUSINESS ADDRESS:**
- **STREET 1:** WORLDWIDE PLAZA
- **STREET 2:** 309 WEST 49TH STREET
- **CITY:** NEW YORK
- **STATE:** NY
- **ZIP:** 10019
- **BUSINESS PHONE:** 8008330018

**MAIL ADDRESS:**
- **STREET 1:** WORLDWIDE PLAZA
- **STREET 2:** 309 WEST 49TH STREET
- **CITY:** NEW YORK
- **STATE:** NY
- **ZIP:** 10019

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** JAPAN OTC EQUITY FUND INC
- **DATE OF NAME CHANGE:** 19920703

?xml version='1.0' encoding='ASCII'?

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

**FORM N-CSR**

**CERTIFIED SHAREHOLDER REPORT OF REGISTERED**

**MANAGEMENT INVESTMENT COMPANIES**

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, NY 10019**

(Address of principal executive offices)

**Nomura Asset Management U.S.A. Inc.**

**Worldwide Plaza 309 West 49th Street New York, NY 10019**

(Name and address of agent for service)

Registrant's telephone number, including area code: 1-800-833-0018

Date of fiscal year end: February 28, 2026

Date of reporting period: February 28, 2026

Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.

A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 100 F Street, NE, Washington, DC 20549-1090. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.

**Item 1. Reports to Stockholders.**

(a) ![](norumacover_efp-24220.jpg)

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#### JAPAN SMALLER CAPITALIZATION FUND, INC.
April 28, 2026

To Our Shareholders:

We present the Annual Report of Japan Smaller Capitalization Fund, Inc. (the "Fund") for the fiscal year ended February 28, 2026.

The net asset value ("NAV") per share of the Fund increased by 55.8% and the closing market price of the Fund (on the New York Stock Exchange (the "Exchange")) increased by 66.9% after giving effect to the reinvestment of income dividends and ordinary income distributions for the fiscal year ended February 28, 2026. The closing market price of the Fund on February 28, 2026 was $12.37, representing a discount of 10.4% to the NAV of $13.81. The net assets of the Fund totalled $391,326,471 on February 28, 2026.

The Russell/Nomura Small Cap™ Index, the Fund's benchmark ("Benchmark"), increased by 48.0% in United States ("U.S.") dollar terms. During the fiscal year ended February 28, 2026, the Fund outperformed the Benchmark by 7.8% on a NAV basis. The Tokyo Price Index (the "TOPIX"), a free-float adjusted market capitalization-weighted index covering an extensive proportion of the Japanese stock market, increased by 41.8% and the Nikkei Stock Average Index ("Nikkei"), a price-weighted index of the 225 leading stocks on the TSE, increased by 52.9% in U.S. dollar terms for the fiscal year ended February 28, 2026. The Benchmark increased by 51.6% and outperformed the TOPIX index, which increased by 45.4% in local currency terms, for the fiscal year ended February 28, 2026. The Japanese yen ("Yen") depreciated by 3.6% against the U.S. dollar during the fiscal year ended February 28, 2026.

For the quarter ended February 28, 2026, the Benchmark increased by 17.2%, the TOPIX increased by 16.7%, and the Nikkei increased by 17.2% in U.S. dollar terms. The total return based on NAV of the Fund increased by 18.5% and outperformed the Benchmark by 1.2%. The total return based on the closing market price of the Fund increased by 17.6% and the Yen appreciated by 0.1% against the U.S. dollar during the quarter ended February 28, 2026.

#### Investment Strategy
The Fund aims to invest in undervalued stocks that offer fundamental strength and potential for improvement. The Fund performs extensive fundamental research to identify companies that have not received much attention from the market despite their excellent business strategies, companies where management has shown signs of change due to internal reforms, and companies where capital efficiency is projected to improve due to changes in their attitude toward shareholder returns. The Fund focuses on companies that are leaders in certain niche markets, companies with large or expanding market shares, and stocks that offer idiosyncratic business growth prospects.

#### Performance
In terms of the sector allocation strategy during the fiscal year ended February 28, 2026,

the underweight position in the Retail Trade sector and the overweight position in the

Glass & Ceramics Products sector generated the largest positive contributions. Sector returns were negatively affected by the underweight position in the Electric Appliances sector and the overweight position in the Wholesale Trade sector.

Positions that added value to the Fund's relative performance included Tryt Inc. in the Services sector, Daishi Hokuetsu Financial Group, Inc. in the Banks sector, and Nippon Seiki Co., Ltd. in the Transportation Equipment sector. Conversely, positions that detracted from relative performance included Quants Research Institute Holdings, Inc. in the Services sector, Askul Corporation in the Retail Trade sector, and Tsumura & Co. in the Pharmaceutical sector.

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#### Market Review
The Benchmark index rose 53.3%, outperforming the TOPIX index, which appreciated by 50.5% in local currency terms on a total return basis over the one-year review period ended February 28, 2026. During the past 12 months, the Japanese equity market delivered strong and resilient performance results, supported by improving domestic political clarity, solid corporate fundamentals, renewed global risk appetite, and growing optimism around technology and AI-related investment. Despite periods of elevated volatility driven by tariffs, geopolitics, and policy uncertainty, the Japanese equity market finished the period on a notably strong footing, with broad-based optimism supported by both cyclical and structural factors.

The Japanese equity market fell sharply in late March, losing nearly 5% in the last two sessions and ending the month up only 0.22%, as measured by the TOPIX Total Return Index. After trading in a narrow range while investors eyed U.S. tariff developments, stocks rose about 5% when the Trump administration postponed implementing its planned 25% tariffs on Canada and Mexico. That optimism vanished when President Trump later imposed a 25% tariff on all cars and parts imported into the U.S., effective April 2. Investors realized the administration was unlikely to yield, and weakening consumer confidence raised fears of a U.S. slowdown or stagflation.

The TOPIX rose 0.33% in April. Though modest, few expected gains at the month's start. A late-March announcement of 25% tariffs on cars and auto parts jolted markets, and the shock deepened after President Trump unveiled a menu of "reciprocal tariffs" on April 2, applying to all countries. Nations with large U.S. trade surpluses faced steep 20–40% rates, while others paid at least 10%; tariffs on China were raised to 145%. Together, these steps would raise effective tariffs on all U.S. imports to about 25%, a level last seen in the early 20th century, threatening U.S.-led postwar free-trade frameworks.

Global equities extended their mid-April rally, returning to pre–"Liberation Day" tariff levels. The TOPIX rose 5.10% in May. A U.S.–U.K. draft trade deal signed in early May, the first since the Trump administration declared a sweeping overhaul of free trade, kept 10% tariffs but raised hopes for negotiations with other countries. Reports of progress with China and the EU reduced trade war risks. Japan's economic policy minister led talks with the U.S. before the June G7, while the Trump administration approved Nippon Steel's investment in U.S. Steel. Despite the progress, uncertainty persists.

The TOPIX traded in a narrow range for most of June, but a late rally lifted it 1.96%. Stalled U.S. trade talks and rising geopolitical tensions capped the gains. Hopes tied to a G7 meeting between Prime Minister Ishiba and President Trump faded when Trump cut his visit short, and the summit ended without a joint communiqué. Despite seven U.S. trips by lead negotiator Ryosei Akazawa, no agreement was reached. Israel's escalation of its simmering conflict with Iran and surprise U.S. strikes on Iran's nuclear sites heightened geopolitical risks. Oil prices spiked on fears of disruption to the Strait of Hormuz shipping channel. Currency markets were nervous, yet equities proved resilient, with net inflows for 13 straight weeks.

The TOPIX posted a 3.17% gain in July, briefly hitting a record. Trading was range-bound in early July amid stalled U.S.–Japan talks, and a threat to lift reciprocal tariffs from 24% to 25% effective August 1, as well as uncertainty over the July 20 House of Councillors (upper house) election, with fears of a hung parliament and a dual bond–currency selloff. Outcomes proved better than feared: talks ended with Japan settling for 15% tariffs across industries, including autos, with exceptions such as semiconductors and pharmaceuticals to be handled under the U.S. Trade Expansion Act. Although higher than WTO-era levels, the tariff deal was seen as a success and sparked a broad rally. The ruling coalition avoided a meltdown, remaining just short of a simple majority; the prime minister stayed in office, and fears of undisciplined fiscal spending receded.

The TOPIX extended its recent gains with a strong 4.52% rally in August, with the TOPIX cementing its position in record-high territory. Matters of significant uncertainty are

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now behind us, especially regarding negotiations over U.S. trade tariffs and the House of Councillors election results. In the end, both outcomes turned out better than feared. Investor optimism therefore seems to have returned. Meanwhile, U.S. labor statistics released at the beginning of August showed weaker-than-expected job growth in July, along with significant downward revisions to the May and June figures. Soft U.S. labor market data fueled investor optimism for an early or even imminent interest rate cut by the Federal Reserve, further encouraging risk-on sentiment.

The TOPIX extended its rally in September, gaining 2.98% and pushing the index to fresh record highs. Despite the absence of a clear catalyst, positive sentiment (or at least a lack of negative news) helped to drive the market higher. Increased expectations of a rate cut by the Federal Reserve (the "Fed") following Chair Jerome Powell's speech at the Jackson Hole symposium for central bankers in late August supported optimism, and the Fed subsequently delivered the expected 25 basis point rate cut on 17 September. Somewhat ironically, Prime Minister Ishiba's resignation announcement earlier in the month also triggered a strong market rally. The race for the leadership of the ruling Liberal Democratic Party appeared to bring a renewed sense of optimism to Japanese politics.

The TOPIX extended its positive run to eight consecutive months and recorded the year's largest monthly gain in October, as the TOPIX advanced 6.20%. While the AI theme has continued to dominate the recent rally, the market's response to domestic political developments has proved more sanguine than previously expected. Sanae Takaichi became Japan's first female prime minister, and the market welcomed the new political landscape. Equities reacted positively to her economic policies, which leaned toward fiscal expansion and accommodative monetary conditions. Meanwhile, the Japanese yen weakened against both the U.S. dollar and the euro. After adjusting for the weaker yen, the Japanese equity market marginally outperformed its global peers in October.

The TOPIX rose 1.42% in November, despite an absence of new catalysts and signs of investor fatigue in parts of the market. A series of debt financing rounds by AI developers and cloud-service providers reminded investors that profits must ultimately justify the scale of substantial AI infrastructure spending. Cooling enthusiasm for the AI theme triggered a sharp sell-off in what had seemed like invincible AI-related stocks. Nevertheless, the broader rally meant the market as a whole still finished the month in positive territory. It was not just a matter of sector rotation, solid fundamentals also underpinned the market's resilience. Corporate earnings growth forecasts have been revised up consistently, and the latest consensus estimates now indicate flat to slightly positive growth. This represented a meaningful improvement from the decline of six to eight percentage points expected just a few months earlier.

Although positive momentum eased somewhat, the TOPIX still recorded another monthly gain in December, advancing by 1.03% in December. Earlier concerns that massive debt financing by technology companies for AI infrastructure investment could trigger broader market fallout had weighed on investor sentiment. However, shares of leading AI-related stocks have since rebounded or at least stabilized, helping to calm the market. Optimism also returned after the Fed cut its policy rate by 25 basis points.

The TOPIX advanced an additional 4.62% in January. Positive momentum appeared to have accelerated once again, although January also contained a number of surprises and sharp reversals. AI-themed investment once again drove the rally early in the month, led by memory-related semiconductor stocks. Geopolitical developments then took centre stage. Markets were stunned by reports of the capture of Venezuelan President Nicolás Maduro by U.S. forces. Nationwide protests in Iran escalated into a serious government crackdown, prompting a reaction from the U.S. administration and hints of possible military intervention. Oil prices rallied in response to rising geopolitical tension in those regions, while prices of precious metals such as gold and silver also surged.

The TOPIX extended its strong run in February 2026, posting a substantial gain of 10.47%. Japanese equities outpaced other markets by a wide margin, accelerating after the

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Liberal Democratic Party (LDP) secured a landslide victory in the February 8 snap election. The LDP alone won more than two-thirds of the lower house seats, marking a striking recovery from the minority coalition it had formed with its new partner the Japan Innovation Party. Control of the lower house gives the ruling coalition the power to override the upper house, where it still lacks an overall majority. The election result sparked a powerful market reaction, as Prime Minister Takaichi's strengthened political position was seen as giving the administration greater scope to pursue a pro-growth economic policy agenda.

#### Outlook and Future Strategy
The outbreak of conflict in Iran and across the Middle East has cast a shadow over the global economic outlook. Primarily, the risk of a blockade of the Strait of Hormuz together with Iran's retaliatory strikes on energy infrastructure in neighboring countries have been driving crude oil and liquefied natural gas (LNG) prices higher. Japan remains particularly vulnerable given its heavy dependence on energy resources from the region. The magnitude of the economic impact will hinge on the severity and duration of this spike in crude oil and gas prices.

Beyond geopolitics, a more structural theme with the potential to reshape the economy is the displacement of labor tasks by artificial intelligence. The technological evolution of so-called AI agents, which are capable of performing tasks autonomously, has been striking. Equity markets have already started to price in shifting competitive dynamics in the software industry, where development and operations workflows face the prospect of disruption amid increasing automation.

Having rallied significantly over the first two months of this year, the TOPIX appears vulnerable to profit-taking in the wake of escalating geopolitical risk. Even after the correction in early March, the TOPIX trades at a forward price-to-earnings multiple in excess of 17 times consensus earnings per share (EPS), which is still above the 15 times level that has historically represented the upper end of the valuation range. Nevertheless, we still have a constructive view of the Japan equity market's underlying fundamentals. A more stable domestic political environment has emerged following the Liberal Democratic Party's (LDP) decisive victory in the Lower House election, while there are persistent corporate efforts to enhance capital efficiency. This healthy fundamental backdrop suggests the market could be well-positioned to resume its upward trajectory once the external pressures have lifted.

Following the House of Representatives election held on February 8, the LDP secured 316 seats, surpassing the two-thirds supermajority required to override the House of Councilors and pass legislation. This outcome was welcomed by the equity market, as it is expected to underpin the steady progress of the Takaichi administration's policy of "responsible and proactive fiscal management." The landslide victory also alleviated concerns regarding a surge in fiscal spending, which had previously been demanded by some opposition parties. As a result, the yen and Japanese long-term interest rates remained stable following the snap election. Under these conditions, small-cap stocks have outperformed slightly against large-caps in February. During the second half of the month, large-cap stocks stalled as their rapid post-election rally triggered investor caution. However, small-cap stocks remained robust, supported by the view that their valuations were lagging behind those of large-caps.

Corporate earnings for small-cap companies in the October-December 2025 quarter were generally solid, with upward revisions outnumbering downward revisions. The projected corporate earnings for the following quarter remain promising as well. For the fiscal year ending March 2027, the profit growth outlook for large-caps has improved to +8% (based on NAM internal projections). Nevertheless, small-caps are expected to maintain their advantage and deliver double-digit earnings growth. In terms of valuation, small-caps continue to trade at a discount relative to large-caps. Rising geopolitical risks in the Middle East and higher energy prices are factors of concern for the small-cap sector as well. However, many small-cap stocks possess idiosyncratic earnings drivers that are resilient to changes in the external environment. We intend to focus our efforts on identifying these high-potential opportunities.

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The Tokyo Stock Exchange launched its reform agenda for the equity market and index structure in 2022. Starting in 2025, the focus of these reforms is shifting toward small-cap companies, including measures aimed at tightening listing maintenance criteria for the notably sluggish TSE Growth market. The year 2026 will be a major turning point for the TSE Standard Market. Large companies in the Prime Market have already made substantial progress in improving governance. Notably, more than 90% of companies are now disclosing plans to improve capital efficiency. However, only about half of companies in the Standard Market have made similar plans public. We view this gap as a significant opportunity for growth. The Tokyo Stock Exchange is expected to encourage these slower-moving companies to improve, which should provide a catalyst for a long-awaited re-rating.

Another key change is the push to protect individual and minority shareholders. The TSE Standard Market includes many companies controlled by parent companies or founding families. New rules coming in 2026 will make board elections more transparent and increase board independence. Authorities are also beginning to address the long-standing management practice at some family-owned firms of deliberately maintaining low share prices for tax-related reasons. These reforms aim to refocus attention on proper business priorities: growing the company and rewarding shareholders.

For investors, these changes could be a powerful catalyst. At the end of February 2026, the latest draft of the revised Corporate Governance Code — Japan's best-practice guide for how companies should be run — was announced. This marked the first update in five years. This will pressure small companies that hold significant idle cash balances to deploy the capital for growth or to return it to shareholders via dividends and buybacks. At the same time, efforts to make it easier to buy and sell these stocks will likely attract more investors, unlocking value in companies that were previously overlooked.

In our portfolio, we continue to emphasize undervalued stocks while selectively holding domestically focused growth names with lower exposure to global political risks. Furthermore, we will strive to identify companies poised to benefit from the expanding wave of AI-related investment, as well as those with distinctive strengths in robotics. With the upcoming Tokyo Stock Exchange changes in 2026 and stricter listing rules, the management teams of many companies have already begun to improve. We intend to support this positive trend through direct engagement with companies that have the greatest potential to enhance value.

We will maintain a balanced, value-oriented approach, prioritizing companies with robust balance sheets, clear catalysts for enhanced shareholder returns, and measurable progress in governance. Our bottom-up research will focus on businesses that are less vulnerable to tariff policy changes, those capable of sustaining high earnings visibility amid macroeconomic uncertainty, and under-researched companies where internal reforms are beginning to translate into tangible performance improvements. This positions the portfolio to benefit from both the cyclical tailwinds and structural re-rating opportunities.

The Fund appreciates your continuing support.

Sincerely,

![](yusukesign.jpg)

Yusuke Andoh

President

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#### JAPAN SMALLER CAPITALIZATION FUND, INC.

#### PERFORMANCE (Unaudited)
ANNUALIZED RETURNS AS OF FEBRUARY 28, 2026

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| | | | |
|:---|:---|:---|:---|
|  | **1 Year** | **5 Year** | **10 Year**  |
| Net Asset Value<sup>(a)</sup>  | 55.8% | 11.0% | &nbsp;&nbsp; 10.9%  |
| Market Price<sup>(a)</sup>  | 66.9% | 11.4% | &nbsp;&nbsp; 11.4%  |
| Russell/Nomura Small Cap™ Index  | 48.0% | 9.3% | &nbsp;&nbsp; 9.6% |

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&nbsp;&nbsp;&nbsp;&nbsp;(a) Reflects the percentage
 change in share price adjusted for reinvestment of income dividends, ordinary income distributions, and long-term capital gain distributions.

#### Performance of a $10,000 Investment (as of February 28, 2026)
The graph shows the change in value of a hypothetical investment of $10,000 in the Fund for the period indicated. For comparison, the same investment is shown in the indicated index. The graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the sale of Fund shares.

![](nomurachart_efp-24220.jpg)

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| |
|:---|
| **DISCLOSURES**  |
| &nbsp;&nbsp; Sources: Nomura Asset Management U.S.A. Inc., Nomura Asset Management Co., Ltd., and Bloomberg L.P. Past performance is not indicative of future results. There is a risk of loss.<br>The NAV price is adjusted for reinvestment of income dividends, ordinary income distributions, long-term capital gain distributions, and capital share transactions. The New York Stock Exchange's closing market price is adjusted for reinvestment of income dividends, ordinary income distributions, and long-term capital gain distributions. The Fund's performance does not reflect sales commissions.<br>This material contains the current opinions of the Fund's manager, which are subject to change without notice. This material should not be considered investment advice. Statements concerning financial market trends are based on current market conditions, which will fluctuate. There is no guarantee that these investment strategies will work under all market conditions, and each investor should evaluate their ability to invest for the long term.<br>Comparisons between changes in the Fund's net asset value or market price per share and changes in the Fund's Benchmark should be considered in light of the Fund's investment policy and objective, the characteristics and quality of the Fund's investments, the size of the Fund, and variations in the Yen/U.S. Dollar exchange rate. This report is for informational purposes only. Investment products offered are not FDIC insured, may lose value, and are not bank guaranteed.<br>Indices are unmanaged. An index cannot be directly invested into.<br>Certain information discussed in this report may constitute forward-looking statements within the meaning of the U.S. federal securities laws. The Fund believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions and can give no assurance that the Fund's expectations will be achieved. Forward-looking information is subject to certain risks, trends and uncertainties that could cause actual results to differ materially from those projected.<br>Russell/Nomura Small Cap Index covers small cap stocks listed on Japanese stock exchanges. This index contains the bottom 15% of the Russell/Nomura Total Market Index in terms of adjusted market capitalization. |

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|:---|
| **SHAREHOLDERS ACCOUNT INFORMATION**  |
| &nbsp;&nbsp; Shareholders whose accounts are held in their own name may contact the Fund's registrar, Computershare Trust Company, N.A., at 1-800-426-5523 for information concerning their accounts. |

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|:---|
| **PROXY VOTING**  |
| &nbsp;&nbsp; A description of the policies and procedures that the Fund uses to vote proxies <br>relating to portfolio securities is available (1) without charge, upon request, by calling toll-free 1-800-833-0018; (2) on the website of the Securities and Exchange Commission ("SEC") at http://www.sec.gov; and (3) on the website of the Fund at http://www.nomura-asset.com/investment-solutions/funds/closed-end-funds/jof. <br>Information about how the Fund voted proxies relating to securities held in the Fund's portfolio during the most recent 12-month period ended June 30 is available (1) without charge, upon request, by calling toll-free 1-800-833-0018; and (2) on the SEC's website at http://www.sec.gov.<br>Additional information about the Fund's Board of Directors is available (1) without charge, upon request, by calling toll-free 1-800-833-0018; and (2) on the website of the SEC at http://www.sec.gov in the Fund's most recent proxy statement filing. |

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|:---|
| **AVAILABILITY OF QUARTERLY SCHEDULE OF** <br>**INVESTMENTS**  |
| &nbsp;&nbsp; The Fund files a schedule of investments with the SEC for the first and third quarters of each fiscal year on Form N-PORT. The Fund's Forms N-PORT are available on the SEC's website at http://www.sec.gov. |

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| **FUND CERTIFICATIONS**  |
| &nbsp;&nbsp; In December 2025 the Fund filed its Principal Executive Officer Certification with the New York Stock Exchange pursuant to Section 303A.12(a) of the New York Stock Exchange Corporate Governance Listing Standards.<br>The Fund's Principal Executive Officer and Principal Financial Officer Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 were filed with the Fund's Form N-CSR and are available on the SEC's website at http://www.sec.gov. |

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|:---|
| **SHARE REPURCHASES**  |
| &nbsp;&nbsp; Notice is hereby given in accordance with Section 23(c) of the Investment Company Act of 1940 that from time to time the Fund may repurchase shares of its common stock in the open market. |

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| **INTERNET WEBSITE** <br>|
| &nbsp;&nbsp; Nomura Asset Management U.S.A. Inc. has established an Internet website which highlights its history, investment philosophy, process and products, which include the Fund.<br>The Internet web address is http://www.nomura-asset.com/investment-solutions/ funds/closed-end-funds/jof. |

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#### JAPAN SMALLER CAPITALIZATION FUND, INC.

#### FUND HIGHLIGHTS — FEBRUARY 28, 2026 (Unaudited)

#### KEY STATISTICS

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| | |
|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp; Net Assets | $391326471  |
| &nbsp;&nbsp;&nbsp;&nbsp; Net Asset Value per Share | $13.81  |
| &nbsp;&nbsp;&nbsp;&nbsp; Market Price | $12.37  |
| &nbsp;&nbsp;&nbsp;&nbsp; Percentage Change in Net Asset Value per Share<sup>(a)(b)</sup> | 55.8%  |
| &nbsp;&nbsp;&nbsp;&nbsp; Percentage Change in Market Price<sup>(a)(b)</sup> | 66.9% |

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#### MARKET INDICES

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| | | |
|:---|:---|:---|
| Percentage change in market indices:<sup>(a)</sup> | **YEN** | **U.S.$**  |
| &nbsp;&nbsp;&nbsp;&nbsp; Russell/Nomura Small Cap™ Index  | 51.6% | 48.0%  |
| &nbsp;&nbsp;&nbsp;&nbsp; Tokyo Price Index | 45.4% | 41.8%  |
| &nbsp;&nbsp;&nbsp;&nbsp; Nikkei Stock Average Index  | 56.5% | 52.9% |

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&nbsp;&nbsp;&nbsp;&nbsp;(a) From March 1, 2025 through
 February 28, 2026.

&nbsp;&nbsp;&nbsp;&nbsp;(b) Reflects the percentage
 change in share price adjusted for reinvestment of income dividends and ordinary income distributions.

#### INDUSTRY DIVERSIFICATION

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| | |
|:---|:---|
|  | **% of Net** <br>**Assets**  |
| Wholesale Trade | &nbsp;&nbsp;&nbsp;&nbsp;12.0  |
| Chemicals | &nbsp;&nbsp;&nbsp;&nbsp;9.4 |
| Banks | &nbsp;&nbsp;&nbsp;&nbsp;8.2 |
| Construction | &nbsp;&nbsp;&nbsp;&nbsp;7.6 |
| Information and Communication | &nbsp;&nbsp;&nbsp;&nbsp;7.0 |
| Machinery | &nbsp;&nbsp;&nbsp;&nbsp;6.9 |
| Transportation Equipment | &nbsp;&nbsp;&nbsp;&nbsp;6.5 |
| Glass and Ceramics Products | &nbsp;&nbsp;&nbsp;&nbsp;5.8 |
| Services | &nbsp;&nbsp;&nbsp;&nbsp;5.2 |
| Retail Trade | &nbsp;&nbsp;&nbsp;&nbsp;4.8 |
| Metal Products | &nbsp;&nbsp;&nbsp;&nbsp;3.6  |

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| | |
|:---|:---|
|  | **% of Net** <br>**Assets**  |
| Electric Appliances | &nbsp;&nbsp;&nbsp;&nbsp;3.6  |
| Financing Business | &nbsp;&nbsp;&nbsp;&nbsp;3.1  |
| Food | &nbsp;&nbsp;&nbsp;&nbsp;3.0  |
| Precision Instruments | &nbsp;&nbsp;&nbsp;&nbsp;2.6  |
| Textiles and Apparel | &nbsp;&nbsp;&nbsp;&nbsp;2.1  |
| Other Products | &nbsp;&nbsp;&nbsp;&nbsp;1.7  |
| Pharmaceutical | &nbsp;&nbsp;&nbsp;&nbsp;1.7  |
| Utilities | &nbsp;&nbsp;&nbsp;&nbsp;1.3  |
| Real Estate | &nbsp;&nbsp;&nbsp;&nbsp;1.2  |
| Land Transportation | &nbsp;&nbsp;&nbsp;&nbsp;1.0 |

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#### TEN LARGEST HOLDINGS

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| | |
|:---|:---|
| **Security** | **% Net** <br>**Assets**  |
| Sakata INX Corporation | &nbsp;&nbsp;&nbsp;&nbsp;6.4  |
| Daishi Hokuetsu Financial Group, Inc. | &nbsp;&nbsp;&nbsp;&nbsp;3.7  |
| Yondenko Corporation | &nbsp;&nbsp;&nbsp;&nbsp;3.2  |
| The Musashino Bank, Ltd. | &nbsp;&nbsp;&nbsp;&nbsp;3.0  |
| Nippon Seiki Co., Ltd. | &nbsp;&nbsp;&nbsp;&nbsp;3.0  |
| SWCC Corporation | &nbsp;&nbsp;&nbsp;&nbsp;2.8  |
| BuySell Technologies Co., Ltd. | &nbsp;&nbsp;&nbsp;&nbsp;2.8  |
| Citizen Watch Co., Ltd. | &nbsp;&nbsp;&nbsp;&nbsp;2.6  |
| RYODEN Corporation | &nbsp;&nbsp;&nbsp;&nbsp;2.4  |
| Sangetsu Corporation | &nbsp;&nbsp;&nbsp;&nbsp;2.0 |

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#### JAPAN SMALLER CAPITALIZATION FUND, INC.

#### REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and the Board of Directors of Japan Smaller Capitalization Fund, Inc.

#### Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities of Japan Smaller Capitalization Fund, Inc. (the "Fund"), including the schedule of investments, as of February 28, 2026, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund at February 28, 2026, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and its financial highlights for each of the five years in the period then ended, in conformity with U.S. generally accepted accounting principles.

#### Basis for Opinion
These financial statements are the responsibility of the Fund's management. Our responsibility is to express an opinion on the Fund's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Fund is not required to have, nor were we engaged to perform, an audit of the Fund's internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Fund's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of February 28, 2026, by correspondence with the custodian and brokers. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

![](youngsign2.jpg)

We have served as the auditor of one or more Nomura investment companies since 2020.

New York, New York

April 28, 2026

10<br>

------

#### JAPAN SMALLER CAPITALIZATION FUND, INC.

#### SCHEDULE OF INVESTMENTS

#### FEBRUARY 28, 2026

---

| | | |
|:---|:---|:---|
|  | **Shares** | **Fair Value**  |
| **JAPANESE EQUITY SECURITIES**<br>|  |  |
| **Banks — 8.2%**<br>|  |  |
| Daishi Hokuetsu Financial Group, Inc. | &nbsp;&nbsp;&nbsp; 1114300 | &nbsp;&nbsp; $14571753  |
| Rakuten Bank, Ltd.<sup>(a)</sup> | &nbsp;&nbsp;&nbsp; 19100 | &nbsp;&nbsp; 778685  |
| The Musashino Bank, Ltd. | &nbsp;&nbsp;&nbsp; 282400 | &nbsp;&nbsp; 11797200  |
| The Shiga Bank Ltd. | &nbsp;&nbsp;&nbsp; 51700 | &nbsp;&nbsp; 2994509  |
| Tokyo Kiraboshi Financial Group, Inc. | &nbsp;&nbsp;&nbsp; 28300 | &nbsp;&nbsp; 2121480  |
|  |  | &nbsp;&nbsp; **32263627** |
| **Chemicals — 9.4%**<br>|  |  |
| Nihon Tokushu Toryo Co., Ltd. | &nbsp;&nbsp;&nbsp; 143200 | &nbsp;&nbsp; 2335057  |
| Nippon Soda Co., Ltd. | &nbsp;&nbsp;&nbsp; 83100 | &nbsp;&nbsp; 2228246  |
| Osaka Soda Co., Ltd. | &nbsp;&nbsp;&nbsp; 50000 | &nbsp;&nbsp; 754125  |
| Sakai Chemical Industry Co., Ltd. | &nbsp;&nbsp;&nbsp; 246400 | &nbsp;&nbsp; 6551722  |
| Sakata INX Corporation | &nbsp;&nbsp;&nbsp; 1456700 | &nbsp;&nbsp; 25013333  |
|  |  | &nbsp;&nbsp; **36882483** |
| **Construction — 7.6%**<br>|  |  |
| Kumagai Gumi Co., Ltd. | &nbsp;&nbsp;&nbsp; 500000 | &nbsp;&nbsp; 6471248  |
| MIRAIT ONE Corporation | &nbsp;&nbsp;&nbsp; 128700 | &nbsp;&nbsp; 3349540  |
| Nishimatsu Construction Co., Ltd. | &nbsp;&nbsp;&nbsp; 53700 | &nbsp;&nbsp; 2364073  |
| Taikisha Ltd. | &nbsp;&nbsp;&nbsp; 199400 | &nbsp;&nbsp; 5014544  |
| Yondenko Corporation | &nbsp;&nbsp;&nbsp; 924600 | &nbsp;&nbsp; 12511646  |
|  |  | &nbsp;&nbsp; **29711051** |
| **Electric Appliances — 3.6%**<br>|  |  |
| Ferrotec Corporation | &nbsp;&nbsp;&nbsp; 32100 | &nbsp;&nbsp; 1306007  |
| Horiba, Ltd. | &nbsp;&nbsp;&nbsp; 14300 | &nbsp;&nbsp; 1928198  |
| Idec Corporation | &nbsp;&nbsp;&nbsp; 208200 | &nbsp;&nbsp; 4408784  |
| Oki Electric Industry Co., Ltd. | &nbsp;&nbsp;&nbsp; 192400 | &nbsp;&nbsp; 3981752  |
| Ulvac, Inc. | &nbsp;&nbsp;&nbsp; 34100 | &nbsp;&nbsp; 2289720  |
|  |  | &nbsp;&nbsp; **13914461** |
| **Financing Business — 3.1%**<br>|  |  |
| Credit Saison Co., Ltd. | &nbsp;&nbsp;&nbsp; 139700 | &nbsp;&nbsp; 4271334  |
| Mizuho Leasing Co., Ltd. | &nbsp;&nbsp;&nbsp; 653900 | &nbsp;&nbsp; 6405978  |
| NS Group, Inc. | &nbsp;&nbsp;&nbsp; 148000 | &nbsp;&nbsp; 1649028  |
|  |  | &nbsp;&nbsp; **12326340** |

---

<sup>See notes to financial statements</sup>

11<br>

------

#### JAPAN SMALLER CAPITALIZATION FUND, INC.

#### SCHEDULE OF INVESTMENTS (Continued)

#### FEBRUARY 28, 2026

---

| | | |
|:---|:---|:---|
|  | **Shares** | **Fair Value**  |
| **Food — 3.0%**<br>|  |  |
| Morinaga & Co., Ltd. | &nbsp;&nbsp;&nbsp;&nbsp; 157600 | &nbsp;&nbsp; $2917733  |
| Nichirei Corporation | &nbsp;&nbsp;&nbsp;&nbsp; 162900 | &nbsp;&nbsp; 2217402  |
| Nippn Corporation | &nbsp;&nbsp;&nbsp;&nbsp; 93700 | &nbsp;&nbsp; 1721211  |
| S Foods, Inc. | &nbsp;&nbsp;&nbsp;&nbsp; 74300 | &nbsp;&nbsp; 1523370  |
| S&B Foods, Inc. | &nbsp;&nbsp;&nbsp;&nbsp; 110000 | &nbsp;&nbsp; 3259651  |
|  |  | &nbsp;&nbsp; **11639367** |
| **Glass and Ceramics Products — 5.8%**<br>|  |  |
| Asia Pile Holdings Corporation | &nbsp;&nbsp;&nbsp;&nbsp; 654200 | &nbsp;&nbsp; 6618496  |
| Maruwa Co., Ltd. | &nbsp;&nbsp;&nbsp;&nbsp; 15000 | &nbsp;&nbsp; 5889476  |
| Nichiha Corporation | &nbsp;&nbsp;&nbsp;&nbsp; 74900 | &nbsp;&nbsp; 1782819  |
| Noritake Co., Ltd. | &nbsp;&nbsp;&nbsp;&nbsp; 96000 | &nbsp;&nbsp; 4305622  |
| Sumitomo Osaka Cement Co., Ltd. | &nbsp;&nbsp;&nbsp;&nbsp; 132400 | &nbsp;&nbsp; 3937856  |
|  |  | &nbsp;&nbsp; **22534269** |
| **Information and Communication — 7.0%**<br>|  |  |
| Cover Corporation<sup>(a)</sup> | &nbsp;&nbsp;&nbsp;&nbsp; 198800 | &nbsp;&nbsp; 2222688  |
| DAIKO XTECH Ltd. | &nbsp;&nbsp;&nbsp;&nbsp; 336700 | &nbsp;&nbsp; 2332037  |
| Future Corporation | &nbsp;&nbsp;&nbsp;&nbsp; 365700 | &nbsp;&nbsp; 4262107  |
| GMO internet group, Inc. | &nbsp;&nbsp;&nbsp;&nbsp; 203200 | &nbsp;&nbsp; 3901909  |
| Plus Alpha Consulting Co., Ltd. | &nbsp;&nbsp;&nbsp;&nbsp; 368000 | &nbsp;&nbsp; 5281563  |
| Toei Animation Co., Ltd. | &nbsp;&nbsp;&nbsp;&nbsp; 71600 | &nbsp;&nbsp; 1117066  |
| Tsuzuki Denki Co., Ltd. | &nbsp;&nbsp;&nbsp;&nbsp; 115600 | &nbsp;&nbsp; 3092295  |
| Vision, Inc. | &nbsp;&nbsp;&nbsp;&nbsp; 609100 | &nbsp;&nbsp; 5151446  |
|  |  | &nbsp;&nbsp; **27361111** |
| **Land Transportation — 1.0%**<br>|  |  |
| Hamakyorex Co., Ltd. | &nbsp;&nbsp;&nbsp;&nbsp; 226800 | &nbsp;&nbsp; 2849622  |
| Maruzen Showa Unyu Co., Ltd. | &nbsp;&nbsp;&nbsp;&nbsp; 20000 | &nbsp;&nbsp; 1175076  |
|  |  | &nbsp;&nbsp; **4024698** |
| **Machinery — 6.9%**<br>|  |  |
| Miura Co., Ltd. | &nbsp;&nbsp;&nbsp;&nbsp; 220800 | &nbsp;&nbsp; 4562422  |
| Nabtesco Corporation | &nbsp;&nbsp;&nbsp;&nbsp; 89700 | &nbsp;&nbsp; 2921321  |
| Sansei Technologies, Inc. | &nbsp;&nbsp;&nbsp;&nbsp; 361900 | &nbsp;&nbsp; 6156300  |
| THK Co., Ltd. | &nbsp;&nbsp;&nbsp;&nbsp; 181300 | &nbsp;&nbsp; 6548058  |
| TPR Co., Ltd. | &nbsp;&nbsp;&nbsp;&nbsp; 309900 | &nbsp;&nbsp; 2799673  |
| YAMABIKO Corporation | &nbsp;&nbsp;&nbsp;&nbsp; 163800 | &nbsp;&nbsp; 4030062  |
|  |  | &nbsp;&nbsp; **27017836** |

---

<sup>See notes to financial statements</sup>

12<br>

------

#### JAPAN SMALLER CAPITALIZATION FUND, INC.

#### SCHEDULE OF INVESTMENTS (Continued)

#### FEBRUARY 28, 2026

---

| | | |
|:---|:---|:---|
|  | **Shares** | **Fair Value**  |
| **Metal Products — 3.6%**<br>|  |  |
| G-Tekt Corporation | &nbsp;&nbsp;&nbsp;&nbsp; 236700 | &nbsp;&nbsp; $3134768  |
| SWCC Corporation | &nbsp;&nbsp;&nbsp;&nbsp; 109500 | &nbsp;&nbsp; 10839500  |
|  |  | &nbsp;&nbsp; **13974268** |
| **Other Products — 1.7%**<br>|  |  |
| Komatsu Wall Industry Co., Ltd. | &nbsp;&nbsp;&nbsp;&nbsp; 315400 | &nbsp;&nbsp; 6183720  |
| Nishikawa Rubber Co., Ltd. | &nbsp;&nbsp;&nbsp;&nbsp; 14800 | &nbsp;&nbsp; 430985  |
|  |  | &nbsp;&nbsp; **6614705** |
| **Pharmaceutical — 1.7%**<br>|  |  |
| Rohto Pharmaceutical Co., Ltd. | &nbsp;&nbsp;&nbsp;&nbsp; 131700 | &nbsp;&nbsp; 2060621  |
| Tsumura & Co | &nbsp;&nbsp;&nbsp;&nbsp; 164200 | &nbsp;&nbsp; 4408124  |
|  |  | &nbsp;&nbsp; **6468745** |
| **Precision Instruments — 2.6%**<br>|  |  |
| Citizen Watch Co., Ltd. | &nbsp;&nbsp;&nbsp;&nbsp; 812800 | &nbsp;&nbsp; 9962431  |
|  |  | &nbsp;&nbsp; **9962431** |
| **Real Estate — 1.2%**<br>|  |  |
| JINUSHI Co., Ltd. | &nbsp;&nbsp;&nbsp;&nbsp; 219500 | &nbsp;&nbsp; 4802771  |
|  |  | &nbsp;&nbsp; **4802771** |
| **Retail Trade — 4.8%**<br>|  |  |
| ASKUL Corporation | &nbsp;&nbsp;&nbsp;&nbsp; 354100 | &nbsp;&nbsp; 2956221  |
| Geo Holdings Corporation | &nbsp;&nbsp;&nbsp;&nbsp; 367000 | &nbsp;&nbsp; 4230229  |
| JM Holdings Co., Ltd. | &nbsp;&nbsp;&nbsp;&nbsp; 531600 | &nbsp;&nbsp; 5895881  |
| Komehyo Holdings Co., Ltd. | &nbsp;&nbsp;&nbsp;&nbsp; 112500 | &nbsp;&nbsp; 3333734  |
| Qol Holdings Co., Ltd. | &nbsp;&nbsp;&nbsp;&nbsp; 193600 | &nbsp;&nbsp; 2441165  |
|  |  | &nbsp;&nbsp; **18857230** |
| **Services — 5.2%**<br>|  |  |
| Charm Care Corporation KK | &nbsp;&nbsp;&nbsp;&nbsp; 92200 | &nbsp;&nbsp; 860120  |
| HIS Co., Ltd. | &nbsp;&nbsp;&nbsp;&nbsp; 112100 | &nbsp;&nbsp; 919353  |
| Koshidaka Holdings Co., Ltd. | &nbsp;&nbsp;&nbsp;&nbsp; 152500 | &nbsp;&nbsp; 1143200  |
| Kyoritsu Maintenance Co., Ltd. | &nbsp;&nbsp;&nbsp;&nbsp; 183800 | &nbsp;&nbsp; 3147240  |
| Quants Research Institute Holdings, Inc. | &nbsp;&nbsp;&nbsp;&nbsp; 347000 | &nbsp;&nbsp; 1687477  |
| Relo Group, Inc. | &nbsp;&nbsp;&nbsp;&nbsp; 230000 | &nbsp;&nbsp; 2838251  |
| SIGMAXYZ Holdings, Inc. | &nbsp;&nbsp;&nbsp;&nbsp; 712700 | &nbsp;&nbsp; 3351734  |
| Step Co., Ltd. | &nbsp;&nbsp;&nbsp;&nbsp; 196500 | &nbsp;&nbsp; 3229361  |
| Tokyotokeiba Co., Ltd. | &nbsp;&nbsp;&nbsp;&nbsp; 80000 | &nbsp;&nbsp; 3060067  |
|  |  | &nbsp;&nbsp; **20236803** |

---

<sup>See notes to financial statements</sup>

13<br>

------

#### JAPAN SMALLER CAPITALIZATION FUND, INC.

#### SCHEDULE OF INVESTMENTS (Continued)

#### FEBRUARY 28, 2026

---

| | | |
|:---|:---|:---|
|  | **Shares** | **Fair Value**  |
| **Textiles and Apparel — 2.1%**<br>|  |  |
| Sanyo Shokai, Ltd. | &nbsp;&nbsp;&nbsp;&nbsp; 220800 | &nbsp;&nbsp; $6132744  |
| World Co., Ltd. | &nbsp;&nbsp;&nbsp;&nbsp; 206800 | &nbsp;&nbsp; 2187582  |
|  |  | &nbsp;&nbsp; **8320326** |
| **Transportation Equipment — 6.5%**<br>|  |  |
| HI-LEX Corporation | &nbsp;&nbsp;&nbsp;&nbsp; 80100 | &nbsp;&nbsp; 2055425  |
| Kyokuto Kaihatsu Kogyo Co., Ltd. | &nbsp;&nbsp;&nbsp;&nbsp; 236500 | &nbsp;&nbsp; 5303540  |
| Morita Holdings Corporation | &nbsp;&nbsp;&nbsp;&nbsp; 267300 | &nbsp;&nbsp; 5124213  |
| Nichirin Co., Ltd. | &nbsp;&nbsp;&nbsp;&nbsp; 51700 | &nbsp;&nbsp; 1449223  |
| Nippon Seiki Co., Ltd. | &nbsp;&nbsp;&nbsp;&nbsp; 637300 | &nbsp;&nbsp; 11661886  |
|  |  | &nbsp;&nbsp; **25594287** |
| **Utilities — 1.3%**<br>|  |  |
| Shikoku Electric Power Co., Inc. | &nbsp;&nbsp;&nbsp;&nbsp; 86900 | &nbsp;&nbsp; 986064  |
| Tohoku Electric Power Co., Inc. | &nbsp;&nbsp;&nbsp;&nbsp; 473900 | &nbsp;&nbsp; 3933605  |
|  |  | &nbsp;&nbsp; **4919669** |
| **Wholesale Trade — 12.0%**<br>|  |  |
| BuySell Technologies Co., Ltd. | &nbsp;&nbsp;&nbsp;&nbsp; 285000 | &nbsp;&nbsp; 10773666  |
| Central Automotive Products, Ltd. | &nbsp;&nbsp;&nbsp;&nbsp; 260700 | &nbsp;&nbsp; 3791696  |
| Kanaden Corporation | &nbsp;&nbsp;&nbsp;&nbsp; 417800 | &nbsp;&nbsp; 6322881  |
| Macnica Holdings, Inc. | &nbsp;&nbsp;&nbsp;&nbsp; 92300 | &nbsp;&nbsp; 1637242  |
| Restar Corporation | &nbsp;&nbsp;&nbsp;&nbsp; 235800 | &nbsp;&nbsp; 4759058  |
| RYODEN Corporation | &nbsp;&nbsp;&nbsp;&nbsp; 399200 | &nbsp;&nbsp; 9514810  |
| Sangetsu Corporation | &nbsp;&nbsp;&nbsp;&nbsp; 370600 | &nbsp;&nbsp; 7966446  |
| Tachibana Eletech Co., Ltd. | &nbsp;&nbsp;&nbsp;&nbsp; 106100 | &nbsp;&nbsp; 2314724  |
|  |  | &nbsp;&nbsp; **47080523** |
| **TOTAL INVESTMENTS — 98.3% (cost $279,414,696)** | **TOTAL INVESTMENTS — 98.3% (cost $279,414,696)** | &nbsp;&nbsp; **$384507001** |
| **TOTAL FOREIGN CURRENCY — 1.5% (cost $6,018,497)<sup>(b)</sup>** | **TOTAL FOREIGN CURRENCY — 1.5% (cost $6,018,497)<sup>(b)</sup>** | &nbsp;&nbsp; **$5990439** |
| **TOTAL INVESTMENTS AND FOREIGN CURRENCY — 99.8%**<br>**(cost $285,433,193)** | **TOTAL INVESTMENTS AND FOREIGN CURRENCY — 99.8%**<br>**(cost $285,433,193)** | &nbsp;&nbsp; **$390497440** |
| **TOTAL OTHER ASSETS AND LIABILITIES — 0.2%** | **TOTAL OTHER ASSETS AND LIABILITIES — 0.2%** | &nbsp;&nbsp; **$829031** |
| **TOTAL NET ASSETS — 100.0%** | **TOTAL NET ASSETS — 100.0%** | &nbsp;&nbsp; **$391326471** |

---

&nbsp;&nbsp;&nbsp;&nbsp;(a) Non-income producing security.

&nbsp;&nbsp;&nbsp;&nbsp;(b) Japanese Yen - Interest bearing
 account.

<sup>See notes to financial statements</sup>

14<br>

------

#### JAPAN SMALLER CAPITALIZATION FUND, INC.

#### STATEMENT OF ASSETS AND LIABILITIES

#### FEBRUARY 28, 2026

---

| | |
|:---|:---|
| **ASSETS:**<br>|  |
| &nbsp;&nbsp;&nbsp;&nbsp; Investments in Japanese equity securities, at fair value <br>(cost — $279,414,696) | $384507001  |
| &nbsp;&nbsp;&nbsp;&nbsp; Foreign currency, at fair value (cost — $6,018,497) | 5990439  |
| &nbsp;&nbsp;&nbsp;&nbsp; Receivable for investments sold | 1866796  |
| &nbsp;&nbsp;&nbsp;&nbsp; Receivable for dividends | 1285527  |
| &nbsp;&nbsp;&nbsp;&nbsp; Cash | 33983  |
| &nbsp;&nbsp;&nbsp;&nbsp; Prepaid expenses | 482225  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total Assets | 394165971  |
| **LIABILITIES:**<br>|  |
| &nbsp;&nbsp;&nbsp;&nbsp; Payable for investments purchased | 2210465  |
| &nbsp;&nbsp;&nbsp;&nbsp; Accrued management fee | 246911  |
| &nbsp;&nbsp;&nbsp;&nbsp; Accrued audit and tax fees | 145045  |
| &nbsp;&nbsp;&nbsp;&nbsp; Accrued directors' fees and expenses | 39297  |
| &nbsp;&nbsp;&nbsp;&nbsp; Other accrued expenses | 197782  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total Liabilities | 2839500  |
| **NET ASSETS:**<br>|  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Capital stock (28,333,893 shares of capital stock outstanding,<br>100,000,000 shares authorized, par value $0.10 each) | 2833389  |
| &nbsp;&nbsp;&nbsp;&nbsp; Paid-in capital | 286055217  |
| &nbsp;&nbsp;&nbsp;&nbsp; Total distributable gain | 102437865  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net Assets | $391326471  |
| &nbsp;&nbsp;&nbsp;&nbsp; Net asset value per share | $13.81 |

---

<sup>See notes to financial statements</sup>

15<br>

------

#### JAPAN SMALLER CAPITALIZATION FUND, INC.

#### STATEMENT OF OPERATIONS

#### FOR THE YEAR ENDED FEBRUARY 28, 2026

---

| | |
|:---|:---|
| **INCOME:**<br>|  |
| Dividend income (net of $1,053,500 withholding taxes) | $9481499  |
| Interest income | 57038  |
| &nbsp;&nbsp;&nbsp;&nbsp; Total Income | $9538537  |
| **EXPENSES:**<br>|  |
| Management fee | 2802225  |
| Discount Management Consulting fee | 2312775  |
| Legal fees | 551572  |
| Directors' fees and expenses | 339871  |
| Other expenses | 687937  |
| &nbsp;&nbsp;&nbsp;&nbsp; Total Expenses | 6694380  |
| **INVESTMENT INCOME — NET** | 2844157  |
|  **REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY:**<br>|  |
| Realized gain on investments and foreign currency transactions:<br>|  |
| Net realized gain on investments | 48328550  |
| Net realized loss on foreign currency transactions | (217986)  |
| Net realized gain on investments and foreign currency transactions | 48110564  |
| Net change in unrealized appreciation on investments | 93664044  |
|  Net change in unrealized depreciation on foreign currency transactions and translation | (1147341)  |
|  Net realized and unrealized gain on investments and foreign currency transactions and translation | 140627267  |
| **NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS** | $143471424 |

---

<sup>See notes to financial statements</sup>

16<br>

------

#### JAPAN SMALLER CAPITALIZATION FUND, INC.

#### STATEMENTS OF CHANGES IN NET ASSETS

---

| | | |
|:---|:---|:---|
|  | **For the** <br>**Year Ended** <br>**February 28,** <br>**2026** | **For the** <br>**Year Ended** <br>**February 28,** <br>**2025**  |
| **FROM OPERATIONS:**<br>|  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Net investment income | $2844157 | $4600489  |
| &nbsp;&nbsp;&nbsp;&nbsp; Net realized gain on investments | 48328550 | 14052962  |
| &nbsp;&nbsp;&nbsp;&nbsp; Net realized loss on foreign currency transactions | (217986) | (416826)  |
| &nbsp;&nbsp;&nbsp;&nbsp; Net change in unrealized appreciation (depreciation) on investments | 93664044 | (23595526)  |
| &nbsp;&nbsp;&nbsp;&nbsp; Net change in unrealized appreciation (depreciation) on foreign currency transactions and translation | (1147341) | 12971337  |
| &nbsp;&nbsp;&nbsp;&nbsp; Net increase in net assets resulting from operations | 143471424 | 7612436  |
| **FROM DISTRIBUTIONS TO SHAREHOLDERS:** | **FROM DISTRIBUTIONS TO SHAREHOLDERS:** | **FROM DISTRIBUTIONS TO SHAREHOLDERS:** |
| &nbsp;&nbsp;&nbsp;&nbsp; Distributions to shareholders | (20105730) | (8834508)  |
| &nbsp;&nbsp;&nbsp;&nbsp; Decrease in net assets derived from distributions to shareholders | (20105730) | (8834508)  |
| **NET ASSETS:**<br>|  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Beginning of year | 267960777 | 269182849  |
| &nbsp;&nbsp;&nbsp;&nbsp; End of year | $391326471 | $267960777 |

---

<sup>See notes to financial statements</sup>

17<br>

------

#### JAPAN SMALLER CAPITALIZATION FUND, INC.

#### NOTES TO FINANCIAL STATEMENTS
&nbsp;&nbsp;&nbsp;&nbsp;1. **Significant Accounting Policies** 

Japan Smaller Capitalization Fund, Inc. (the "Fund") is registered under the Investment Company Act of 1940, as amended (the "Investment Company Act"), as a closed-end management investment company. The Fund operates as diversified as defined under the Investment Company Act. The Fund was incorporated in Maryland on January 25, 1990 and investment operations commenced on March 21, 1990. The Fund's investment objective is to seek long-term capital appreciation through investments primarily in smaller capitalization Japanese equity securities.

The accompanying financial statements have been prepared in accordance with United States ("U.S.") generally accepted accounting principles ("GAAP") and are stated in U.S. dollars. The Fund is an investment company that follows the accounting and reporting guidance in accordance with the Financial Accounting Standards Board ("FASB") Accounting Standards Codification Topic 946 *Financial Services – Investment Companies*. The following is a summary of the significant accounting and reporting policies used in preparing the financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Valuation of Securities — Investments traded in the over-the-counter market are fair valued at the last reported sales price as of the close of business on the day the securities are being valued or, if none is available, at the most recent quoted bid price or, if none is available, the last reported sales price. Portfolio securities which are traded on stock exchanges are fair valued at the last sales price on the principal market on which securities are traded or, lacking any sales, at the last available bid price. Securities and other assets, including futures contracts and related options, that cannot be fair valued using one of the previously mentioned methods are stated at fair value as determined in good faith by or under the direction of the Board of Directors of the Fund (the "Board").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Foreign Currency Transactions — Transactions denominated in Yen are recorded in the Fund's records at the prevailing exchange rate at the time of the transaction. Asset and liability accounts that are denominated in Yen are adjusted to reflect the current exchange rate at the end of the period. Transaction gains or losses resulting from changes in the exchange rate during the reporting period or upon settlement of foreign currency transactions are included in the results of operations for the current period.

The net assets of the Fund are presented at the exchange rates and fair values on February 28, 2026. The Fund isolates that portion of the results of operations arising as a result of changes in the foreign exchange rates on investments from the fluctuations arising from changes in the market prices of securities held at February 28, 2026. Net realized gains or losses on investments include gains or losses arising from sales of portfolio securities and sales and maturities of short-term securities. Net realized gains or losses on foreign currency transactions arise from sales of foreign currencies, currency gains or losses realized on securities transactions between trade and settlement date, and the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund's books and the U.S. dollar equivalent of the amounts actually received or paid.

18<br>

------

#### JAPAN SMALLER CAPITALIZATION FUND, INC.

#### NOTES TO FINANCIAL STATEMENTS (Continued)
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Security Transactions, Investment Income and Distributions to Shareholders — Security transactions are accounted for on the trade date. Dividend income and distributions are recorded on the ex-dividend dates and interest income is recorded on an accrual basis. Realized gains and losses on the sale of investments are calculated on the first in, first out basis.

Distributions from net investment income and net realized capital gains are determined in accordance with Federal income tax regulations, which may differ from U.S. GAAP. To the extent these "book/tax" differences are permanent in nature (i.e., that they result from other than timing of recognition — "temporary"), such accounts are reclassified within the capital accounts based on their Federal tax-basis treatment; temporary differences do not require reclassification.

Pursuant to a securities lending agreement with Brown Brothers Harriman & Co., the Fund may lend securities to qualified institutions. It is the Fund's policy that, at origination, all loans shall be secured by collateral of at least 102% of the value of U.S. securities loaned and 105% of the value of foreign securities loaned. It is the Fund's policy that collateral equivalent to at least 100% of the fair value of securities on loan must be maintained at all times (when applicable). Collateral is provided in the form of cash, which would be invested in certain money market funds. The Fund is entitled to receive all income on securities loaned, in addition to a portion of the income earned as a result of the lending transaction. Although each security loan is fully collateralized, there are certain risks. On November 21, 2008, the Fund suspended its participation in the securities lending program. The Fund may resume its participation in the future. During the fiscal year ended February 28, 2026, the Fund did not earn any fees from lending fund portfolio securities, pursuant to the securities lending agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Operating Segments — The Fund adopted FASB Accounting Standards Update 2023-07, Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures ("ASU 2023-07"). Adoption of the new standard impacted financial statement disclosures only and did not affect the Fund's financial position or its results of operations. The intent of ASU 2023-07 is, through improved segment disclosures, to enable investors to better understand an entity's overall performance and to assess its potential future cash flows. Yusuke Andoh, the Fund's President and Principal Executive Officer (effective April 11, 2025, previously Yuichi Nomoto), acts as the Fund's chief operating decision maker (CODM) assessing performance and making decisions about resource allocation. The CODM has determined that the Fund has a single operating segment based on the fact that the CODM monitors the operating results of the Fund as a whole and the Fund's long-term strategic asset allocation is pre-determined in accordance with a single investment objective which is executed by the Fund's investment manager. The financial information provided to and reviewed by the CODM is consistent with that presented in the Fund's schedule of investments, statements of changes in net assets and financial highlights. Segment assets are reflected on the accompanying statement of assets and liabilities as "total assets" and significant segment expenses are listed on the accompanying statement of operations.

19<br>

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#### JAPAN SMALLER CAPITALIZATION FUND, INC.

#### NOTES TO FINANCIAL STATEMENTS (Continued)
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Income Taxes — A provision for U.S. income taxes has not been made since it is the intention of the Fund to continue to qualify as a regulated investment company under the Internal Revenue Code and to distribute within the allowable time limit all taxable income to its shareholders.

Under Japanese tax laws, a withholding tax is imposed on dividends at a rate of 15.315% and such withholding taxes are reflected as a reduction of the related revenue. The withholding tax rate of 15.315% was reduced to 10% upon the submission of Form 17 - Limitation on Benefits Article. There is no withholding tax on realized gains.

In accordance with U.S. GAAP requirements regarding accounting for uncertainties in income taxes, management has analyzed the Fund's tax positions taken or expected to be taken on federal and state income tax returns for all open tax years (the current and the prior three tax years), and has concluded that no provision for income tax is required in the Fund's financial statements. The Fund recognizes interest and penalties, if any, related to uncertain tax positions as income tax expense in the statement of operations. During the current year and for the prior three tax years, the Fund did not incur any interest or penalties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Use of Estimates in Financial Statement Preparation — The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from these estimates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) Concentration of Risk — A significant portion of the Fund's net assets consists of Japanese securities which involve certain considerations and risks not typically associated with investments in the U.S. In addition to the smaller size, and greater volatility, there is often substantially less publicly available information about Japanese issuers than there is about U.S. issuers. Future economic and political developments in Japan could adversely affect the value of securities in which the Fund is invested. Further, the Fund may be exposed to currency devaluation and other exchange rate fluctuations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) Indemnifications — Under the Fund's organizational documents, its officers and directors are indemnified against certain liabilities arising from the performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts that contain a variety of representations which provide general indemnifications. The Fund's maximum exposure under these agreements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. However, based on experience, the Fund expects the risk of loss to be remote and as such no additional accruals were recorded on the Statement of Assets and Liabilities.

&nbsp;&nbsp;&nbsp;&nbsp;2. **Management Agreement and Transactions With Affiliated Persons** 

Nomura Asset Management U.S.A. Inc. ("NAM-U.S.A." or the "Manager") acts as the Manager of the Fund pursuant to a management agreement. Under the management agreement, the Manager provides all office space, facilities and personnel necessary to perform its duties. Pursuant to such management agreement, the Manager has retained its parent company, Nomura Asset Management Co., Ltd. ("NAM" or the "Investment Adviser"), as Investment Adviser to the Fund.

20<br>

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#### JAPAN SMALLER CAPITALIZATION FUND, INC.

#### NOTES TO FINANCIAL STATEMENTS (Continued)
As compensation for its services to the Fund, the Manager receives a monthly fee at the annual rate of 0.90% of the value of the Fund's average weekly net assets not in excess of $250 million and 0.80% of the Fund's average weekly net assets in excess of $250 million.

Under the management agreement, the Fund incurred fees to the Manager of $2,802,225

for the fiscal year ended February 28, 2026. Under the investment advisory agreement,

the Investment Adviser earned investment advisory fees of $1,240,247 from the Manager, not the Fund, for the fiscal year ended February 28, 2026. At February 28, 2026, the management fee payable to the Manager by the Fund was $246,911.

Certain officers and/or directors of the Fund are officers and/or directors of the Manager. Affiliates of Nomura Holdings, Inc. (the Manager's indirect parent) did not earn any fees in commissions on the execution of portfolio security transactions for the fiscal year ended February 28, 2026. The Fund pays each Director not affiliated with the Manager an annual fee of $30,000. In addition, the Fund pays each Director not affiliated with the Manager $3,300 per in-person or virtually held meeting attended, $2,200 per telephonic special meeting attended, and Director expenses related to attendance at meetings. The Chairperson of the Board, presently Marcia L. MacHarg, is paid an additional annual fee of $10,000. The Chairman of the Audit Committee, presently David B. Chemidlin, is paid an additional annual fee of $5,000. The Chairman of the Nominating Committee, presently Arthur B. Laby, is paid an additional annual fee of $2,500. The Chairman of the Governance and Compliance Committee, presently Paige P. Ouimet, is paid an additional annual fee of $2,500. Such fees and expenses for unaffiliated Directors aggregated to $339,871 for the fiscal year ended February 28, 2026.

&nbsp;&nbsp;&nbsp;&nbsp;3. **Purchases and Sales of Investments** 

Purchases and sales of investments, exclusive of foreign currency and investments in short-term securities, for the fiscal year ended February 28, 2026 were $166,082,584 and $187,818,219 respectively.

&nbsp;&nbsp;&nbsp;&nbsp;4. **Federal Income Tax** 

As of February 28, 2026, net unrealized appreciation on investments, exclusive of foreign currency, for federal income tax purposes was $91,813,913, of which $128,263,274 related to appreciated securities and $36,449,361 related to depreciated securities. The cost of investments, exclusive of foreign currency of $6,018,497 at February 28, 2026 for federal income tax purposes was $292,693,088.

At February 28, 2026, the components of accumulated earnings on a tax basis consisted of unrealized appreciation on investments and foreign currency transactions of $91,785,362, undistributed ordinary income of $10,652,503, and a capital loss carryforward of $0. The differences between book basis and tax basis for unrealized appreciation on investments and foreign currency transactions are attributable to the tax deferral of losses on wash sales and the tax treatment of passive foreign investment companies.

At February 28, 2026, for federal tax purposes, the Fund does not have any capital loss carryforwards available to offset future capital gains. During the year ended February 28, 2026, the Fund utilized $28,674,413 of capital loss carryforwards.

21<br>

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#### JAPAN SMALLER CAPITALIZATION FUND, INC.

#### NOTES TO FINANCIAL STATEMENTS (Continued)
During the year ended February 28, 2026, the Fund transitioned to a monthly distribution schedule. The Fund paid total ordinary income distributions of $20,105,730, which represents an aggregate of $0.7096 per share, to shareholders of record throughout the fiscal year.

During the year ended February 28, 2025, the Fund paid an ordinary income distribution of $8,834,508, which represents $0.3118 per share, to shareholders of record as of December 19, 2024. The distribution was paid on December 27, 2024.

During this reporting period, the Fund adopted FASB Accounting Standards Update No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09), which requires annual disclosure of the amount of income taxes paid (net of refunds received) disaggregated by federal, state, and foreign taxes, and further disaggregated by individual jurisdiction in which income taxes paid is equal to or greater than 5% of total income taxes paid. The adoption of ASU 2023-09 did not result in any changes to the Fund's financial statement presentation or disclosure.

&nbsp;&nbsp;&nbsp;&nbsp;5. **Fair Value Measurements** 

In accordance with 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 frame work 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.

&nbsp;&nbsp;&nbsp;&nbsp;• Level 1 — quoted prices
 in active markets for identical investments

&nbsp;&nbsp;&nbsp;&nbsp;• Level 2 — other
 significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

&nbsp;&nbsp;&nbsp;&nbsp;• Level 3 — significant
 unobservable inputs (including the Fund's own assumptions in determining the fair value of investments)

At February 28, 2026, all of the Fund's investments were determined to be Level 1 securities.

During the fiscal year ended February 28, 2026, the Fund did not hold any instrument which used significant unobservable inputs (Level 3) in determining fair value.

22<br>

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#### JAPAN SMALLER CAPITALIZATION FUND, INC.

#### NOTES TO FINANCIAL STATEMENTS (Continued)
&nbsp;&nbsp;&nbsp;&nbsp;6. **Subsequent Events** 

The Fund has adopted financial reporting rules regarding subsequent events which require an entity to recognize in the financial statements the effects of all subsequent events that provide additional evidence about conditions that existed at the date of the balance sheet.

On April 17, 2026 the Board announced that it had completed its review of the Fund's trading discount during the nine-month measurement period beginning on July 1, 2025 and ending on March 31, 2026 in connection with the conditional tender offer ("CTO") announced by the Board on June 6, 2025. Based on this review, the Board determined that the Fund's shares traded at an average daily market price discount of 10.5% to the Fund's net asset value during such nine-month period, satisfying the CTO trigger threshold of 9%. Accordingly, and after considering market conditions and other factors it deems relevant, the Board expects to proceed with a tender offer for 10% of the Fund's outstanding shares. The final offer size, price at which shares may be tendered, timing of the offer and other terms and conditions of the tender offer will be determined by the Board in its discretion based on market conditions at that time and other factors it deems relevant. Following a meeting of the Board scheduled for late May 2026, the Fund expects to announce additional details about the tender offer, including the anticipated commencement date and other material terms.

On June 6, 2025, the Fund announced that its Board approved a Level Distribution Plan (the "LDP") under which the Fund will pay monthly distributions at an annualized rate of 10% of the Fund's NAV as of May 31, 2025. Under the LDP, distributions may be derived from any combination of: (i) net investment income, (ii) realized capital gains, and/or (iii) a return of shareholder capital. Distributions of long-term capital gain may be restricted under SEC regulations. On April 2, 2026, the Fund received SEC exemptive relief to permit the Fund to make more frequent distributions of capital gain than otherwise contemplated by such restrictions, subject to various conditions. It is anticipated that the Fund will rely on the exemptive relief for the Fund's monthly distributions commencing May 2026.

Management has concluded that there are no other recognized or nonrecognized subsequent events relevant for financial statements disclosure.

23<br>

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#### JAPAN SMALLER CAPITALIZATION FUND, INC.

#### FINANCIAL HIGHLIGHTS
For a share of common stock outstanding throughout each year:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **For the Year Ended**  | **For the Year Ended**  | **For the Year Ended**  | **For the Year Ended**  | **For the Year Ended**  |
|  | **February 28,**  | **February 28,**  | **February 29,**  | **February 28,**  | **February 28,**  |
|  | **2026** | **2025** | **2024** | **2023** | **2022**  |
| Net asset value, beginning of year | $9.46 | $9.50 | &nbsp;&nbsp;&nbsp; $8.12 | $8.99 | $10.23  |
| Investment Operations:<br>|  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Net investment income<sup>(1)</sup> | 0.10 | 0.16 | &nbsp;&nbsp;&nbsp;&nbsp;0.11 | 0.10 | 0.11  |
| &nbsp;&nbsp;&nbsp;&nbsp; Net realized and unrealized gain (loss) on investments and foreign currency | 4.96 | 0.11 | &nbsp;&nbsp;&nbsp;&nbsp;1.54 | (0.92) | (0.74)  |
| Total from investment operations | 5.06 | 0.27 | &nbsp;&nbsp;&nbsp;&nbsp;1.65 | (0.82) | (0.63)  |
| Less Distributions:<br>|  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Distributions from ordinary income | (0.71) | (0.31) | &nbsp;&nbsp;&nbsp; (0.27) | (0.05) | (0.21)  |
| &nbsp;&nbsp;&nbsp;&nbsp; Distributions from capital gains | – | – | &nbsp;&nbsp;&nbsp; – | – | (0.40)  |
| Total from distributions | (0.71) | (0.31) | &nbsp;&nbsp;&nbsp; (0.27) | (0.05) | (0.61)  |
| Net asset value, end of year | $13.81 | $9.46 | &nbsp;&nbsp;&nbsp; $9.50 | $8.12 | $8.99  |
| Market price, end of year | $12.37 | $7.91 | &nbsp;&nbsp;&nbsp; $7.82 | $6.77 | $7.63  |
| Total investment return based on:<sup>(2)</sup><br>|  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Net Asset Value | 55.8% | 3.7% | &nbsp;&nbsp;&nbsp; 21.2% | (9.0%) | (5.4%)  |
| &nbsp;&nbsp;&nbsp;&nbsp; Market price | 66.9% | 5.3% | &nbsp;&nbsp;&nbsp; 19.6% | (10.6%) | (8.6%)  |
| Ratio/Supplemental Data:<br>|  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Net assets, end of year (000) | $391326 | $267961 | &nbsp;&nbsp;&nbsp; $269183 | $229951 | $254647  |
| &nbsp;&nbsp;&nbsp;&nbsp; Ratio of expenses to average net assets | 2.09%<sup>(3)</sup> | 1.30% | &nbsp;&nbsp;&nbsp; 1.28% | 1.47% | 1.20%  |
| &nbsp;&nbsp;&nbsp;&nbsp; Ratio of net income to average net assets | 0.89% | 1.69% | &nbsp;&nbsp;&nbsp; 1.25% | 1.29% | 1.07%  |
| &nbsp;&nbsp;&nbsp;&nbsp; Portfolio turnover rate | 52% | 46% | &nbsp;&nbsp;&nbsp; 53% | 46% | 27% |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) Based on average shares outstanding.

&nbsp;&nbsp;&nbsp;&nbsp;(2) The Market price total
 return is adjusted for reinvestment of income dividends, ordinary income distributions, long-term capital gain distributions, and capital
 share transactions. Total return does not reflect sales commissions. Net Asset Value total return is calculated on the same basis, except
 that the Fund's net asset value is used on the purchase and sale and the lower of market value or net asset value is used for dividend
 reinvestment dates.

&nbsp;&nbsp;&nbsp;&nbsp;(3) Includes Discount Management
 Consulting fee ("DMC"). Excluding DMC fee the ratio would be 1.37%.

<sup>See notes to financial statements</sup>

24<br>

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#### JAPAN SMALLER CAPITALIZATION FUND, INC.

#### SUPPLEMENTAL SHAREHOLDER INFORMATION
(Unaudited)

The 2025 annual meeting of the shareholders of the Fund was held at the offices of

NAM-U.S.A. on November 13, 2025 (the "Meeting"). The purpose of the Meeting was

(1) to elect six Directors to serve for a term of one year and until their successors are duly elected and qualify, (2) to transact such other business as may properly come before the Meeting or any adjournments or postponements thereof.

1. To elect six Directors:

At the Meeting, Yusuke Andoh, David B. Chemidlin, Arthur B. Laby, Marcia L. MacHarg, Yuichi Nomoto, and Paige P. Ouimet were re-elected and Tina Jones was elected to serve as Directors of the Fund for a term expiring at the annual meeting of shareholders to be held in 2026 and until their successors are duly elected and qualify. The results of the voting at the Meeting were as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **Shares** <br>**Voted For** | **Shares Voted** <br>**Withhold** <br>**Authority** | **Votes** <br>**Abstained**  |
| Yusuke Andoh | 17629696 | &nbsp;&nbsp; 6399725 | 155113  |
| David B. Chemidlin | 17565634 | &nbsp;&nbsp; 6432512 | 186388  |
| Tina Jones | 21131910 | &nbsp;&nbsp; 2868791 | 183833  |
| Arthur B. Laby | 21814624 | &nbsp;&nbsp; 2218808 | 151102  |
| Marcia L. MacHarg  | 17478460 | &nbsp;&nbsp; 6530469 | 175605  |
| Paige P. Ouimet | 21809710 | &nbsp;&nbsp; 2224053 | 150771 |

---

25<br>

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#### JAPAN SMALLER CAPITALIZATION FUND, INC.

#### SUPPLEMENTAL SHAREHOLDER INFORMATION

#### (Continued)(Unaudited)

---

| | |
|:---|:---|
| **INDEPENDENT DIRECTORS** |  |
| Name, Age, Position(s) Held with the Fund, Length of Service, Other Directorships Held by Director, Number of Portfolios in Fund Complex/Outside Fund Complexes Currently Overseen by Director | Principal Occupation(s) During Past 5 Years:  |
| **David B. Chemidlin (69)**<br>**Director and Chairman of the Audit Committee Director and Chairman of the Audit Committee since: 2006**<br>**Director of one fund in the Fund Complex** | Owner and President of AbidesWorks LLC (accounting and business support services) since 2016; Corporate Controller, Advance Magazine Publishers, Inc. (d/b/a Conde Nast) from 1995- 2016.  |
| **Tina Jones (52)**<br>**Director Nominee**<br>**Director Nominee since: November 2025** | Head of U.S. Asset Management of Rothschild & Co. from 2019-2023; Chief Investment Officer of Asset Management US from 2018-2023; Board Member of Asset Management US from 2018-2023; Portfolio Manager from 2017-2023  |
| **Arthur B. Laby (62)**<br>**Director and Chairman of the Nominating Committee**<br>**Director and Chairman of the Nominating Committee since: November 2024**<br>**Director of one fund in the Fund Complex** | Vice Dean at Rutgers Law School since 2023; Co-Director of the Rutgers Center for Corporate Law and Governance since 2015; Professor of Law at Rutgers Law School since 2011; Associate Professor from 2006-2011; Assistant General Counsel for the U.S. Securities and Exchange Commission from 2001-2005.  |
| **Marcia L. MacHarg (77)**<br>**Director and Chairperson of the Board** <br>**Director since: 2013**<br>**Chairperson of the Board since: 2024**<br>**Director of one fund in the Fund Complex** | Partner, Debevoise & Plimpton LLP (an international law firm) from 1987-2012; Of Counsel, Debevoise & Plimpton LLP since 2013; Trustee, Board of Trustees of Smith College from 2014-2022 and Chair of the Audit Committee of the Board of Trustees from 2016- 2022; Member of the Executive Committee of the Friends of Smith College Libraries from 2013-2015.  |
| **Paige P. Ouimet (50)**<br>**Director and Chairperson of the Governance and Compliance Committee**<br>**Director and Chairperson of the Governance and Compliance Committee since: 2021**<br>**Director of one fund in the Fund Complex** | Kenan-Flagler Business School Professor at the University of North Carolina at Chapel Hill since 2021; Executive Director of the Kenan Institute of Private Enterprise since 2023; Associate Dean of the PhD Program from 2022-2024; Associate Professor from 2016-2020; Assistant Professor from 2008-2015. |

---

26<br>

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#### JAPAN SMALLER CAPITALIZATION FUND, INC.

#### SUPPLEMENTAL SHAREHOLDER INFORMATION

#### (Continued)(Unaudited)

---

| | |
|:---|:---|
| **INTERESTED DIRECTOR**<br>|  |
| Name, Age, Position(s) Held with the Fund, Length of Service, Other Directorships Held by Director, Number of Portfolios in Fund Complex/Outside Fund Complexes Currently<br>Overseen by Director | Principal Occupation(s) During Past 5 Years:  |
| **Yuichi Nomoto (53)\***<br>**President and Director**<br>**President and Director from: April 2019 to April 2025** <br>**Director of one fund in the Fund complex** | President and Chief Executive Officer of Nomura Asset Management U.S.A. Inc. ("NAM-U.S.A.") from 2019- 2025; Head of Global Business Strategy Department of Nomura Asset Management Co., Ltd. ("NAM") from April 2022 to March 2023; Managing Director of NAM-U.S.A. since 2018; Head of Client Services and Marketing of NAM-U.S.A. from 2016-2020; Executive Director of NAM-U.S.A. from 2016- 2018.  |
| **Yusuke Andoh (46)\***<br>**President and Director**<br>**President and Director since: April 2025** <br>**Director of one fund in the Fund complex** | President and Chief Executive Officer of NAM- U.S.A. since April 2025; Executive Director, Head of the Japanese Marketing Team since 2024 of NAM-U.S.A. Fund Manager leading different teams in the Business Development and Marketing, Wholesale and Marketing Department at NAM from 2014 to 2024. |

---

\* Mr. Nomoto and Mr. Andoh are "interested persons," as defined in the Investment Company Act, of the Fund based on their positions with NAM-U.S.A. and NAM.

*Committees and Directors' Meetings. The Board of Directors has a standing Audit Committee, a standing Nominating Committee, and a standing Governance and Compliance Committee, each of which consists of the Directors who are not "interested persons" of the Fund within the meaning of the Investment Company Act and are "independent" as defined in the New York Stock Exchange listing standards. Currently, David B. Chemidlin, Arthur B. Laby, Tina Jones, Marcia L. MacHarg and Paige P. Ouimet are members of the Committees. The Fund has no standing Compensation Committee.* 

Each incumbent director attended at least 75% of the aggregate number of meetings of the Board of Directors held during the period for which they served and, if a member, of the aggregate number of meetings of the Audit, Nominating and Special Committees held during the period for which they served.

27<br>

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#### JAPAN SMALLER CAPITALIZATION FUND, INC.

#### SUPPLEMENTAL SHAREHOLDER INFORMATION

#### (Continued)(Unaudited)

---

| | |
|:---|:---|
| **OFFICERS OF THE FUND** |  |
| Name, Address, Age, Position(s) Held with the Fund, Term of Office\* and Length of<br>Time Served | Principal Occupation(s) During Past 5 Years:  |
| **Yuichi Nomoto\*\* (53)**<br>**President and Director**<br>**President and Director since: April 2019 to April 2025** <br>**Director of one fund in the Fund complex** | President and Chief Executive Officer of Nomura Asset Management U.S.A. Inc. ("NAM-U.S.A.") from 2019- 2025; Head of Global Business Strategy Department of Nomura Asset Management Co., Ltd. ("NAM") from April 2022 to March 2023; Managing Director of NAM-U.S.A. since 2018; Head of Client Services and Marketing of NAM-U.S.A. from 2016-2020; Executive Director of NAM-U.S.A. from 2016- 2018.  |
| **Yusuke Andoh\*\* (46)**<br>**President and Director**<br>**President and Director since: April 2025** <br>**Director of one fund in the Fund complex**  | President and Chief Executive Officer of NAM- U.S.A. since April 2025; Executive Director, Head of the Japanese Marketing Team since 2024 of NAM-U.S.A. Fund Manager leading different teams in the Business Development and Marketing, Wholesale and Marketing Department at NAM from 2014 to 2024.  |
| **Shinichi Masuda\*\* (55)**<br>**Vice President**<br>**Vice President since: 2022** | Chief Administrative Officer of NAM-U.S.A. since September 2022; Chief Project Manager, Asset Management Research Center of NAM from 2020 to 2022; Managing Director of the Product Planning and Development Department of NAM from 2018 to 2020; General Manager/Deputy General Manager of Nomura Bank (Luxembourg) S.A. from 2012 to 2018.  |
| **Michael A. Morrongiello\*\* (67)**<br>**Vice President**<br>**Vice President since: 2021** | Executive Director of NAM-U.S.A. since 2007; Head of Operations of NAM-U.S.A. since 1998.  |
| **Maria R. Premole\*\* (64)**<br>**Vice President**<br>**Vice President since: 2013** | Executive Director, Head of the Closed End Fund Business Development since October of 2023; Vice President in the Business Strategy Department from April 2022 to October of 2023; Vice President of NAM-U.S.A. since 2013. |

---

28<br>

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#### JAPAN SMALLER CAPITALIZATION FUND, INC.

#### SUPPLEMENTAL SHAREHOLDER INFORMATION

#### (Continued)(Unaudited)

---

| | |
|:---|:---|
| Name, Address, Age, Position(s) Held with the Fund, Term of Office\* and Length of<br>Time Served | Principal Occupation(s) During Past 5 Years:  |
| **Neil A. Daniele\*\* (65)**<br>**Secretary and Chief Compliance Officer**<br>**Secretary since: 2002**<br>**Chief Compliance Officer since: 2005** | Chief Compliance Officer of NAM-U.S.A. since 2005 and Managing Director of NAM-U.S.A. since 2007; Chief Compliance Officer of Nomura Corporate Research and Asset Management Inc. since 2009 and Chief Compliance Officer of Nomura Capital Management LLC since 2024; Corporate Secretary of NAM-U.S.A. since 2013.  |
| **Thomas Perugini (56)**<br>**Treasurer**<br>**Treasurer since: May 2024**<br>**ACA Group** <br>**190 Middle St, Suite 301** <br>**Portland, ME 04101** | Senior Principal Consultant/Fund Principal Financial Officer of ACA Group since 2023; Vice President for Fund Administration Product at State Street Corporation from 2019 to 2023. |

---

\* Elected and appointed by the Board of Directors and hold office until they resign, are removed or are otherwise disqualified to serve.

\*\*

The address of the officer listed above is Worldwide Plaza, 309 West 49<sup>th</sup> Street, New York,

New York 10019.

29<br>

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#### JAPAN SMALLER CAPITALIZATION FUND, INC.

#### INVESTMENT OBJECTIVE AND POLICIES (Unaudited)
The investment objective of the Fund is long-term capital appreciation through investments in Japanese smaller capitalization companies. The Fund's investment policy is to invest, under normal market conditions, at least 80% of its total assets in smaller capitalization Japanese equity securities traded on the Tokyo, Nagoya, Fukuoka and Sapporo Stock Exchanges and included or traded on other indices or markets, as applicable, determined by the Investment Adviser to be appropriate indices or markets, for smaller capitalization companies in Japan ("Smaller Capitalization Companies"). Neither the Fund's investment objective nor its investment policy may be changed without the approval of the holders of a majority of the outstanding Shares. A majority vote, as defined by the Investment Company Act, means the affirmative vote of the lesser of (i) 67% of the shares represented at a meeting at which more than 50% of the outstanding shares are represented, or (ii) more than 50% of the outstanding shares.

Under normal market conditions, at least 80% of the Fund's total assets are invested in equity securities of Smaller Capitalization Companies. Currently, the Investment Adviser considers Smaller Capitalization Companies to be those companies whose equity securities are included, at the time of purchase, in the Russell/Nomura Small Cap™ Index and certain other companies described below that are not represented in the Russell/Nomura Small Cap™ Index. The Russell/Nomura Small Cap™ Index measures the performance of small companies (in terms of adjusted market capitalization) and as of February 28, 2026 consists of 1,044 of the equity securities of the smallest companies included in the Russell/Nomura Total Index, representing the bottom 15% of the total market capitalization of the Russell/Nomura Total Market™ Index. The Russell/Nomura Total Market™ Index as of February 28, 2026 is comprised of 1,295 of the largest Japanese equity securities as determined by total market capitalization (in terms of adjusted market capitalization) and measures the performance of the broad Japanese equity market. Companies representing the bottom 2% of the total Japanese equity market (in terms of adjusted market capitalization) are not included in the Russell/Nomura Total Index and therefore are not included in the Russell/Nomura Small Cap™ Index. However, because the companies that belong to this bottom 2% have small market capitalizations, the Investment Adviser considers these companies to be Smaller Capitalization Companies. In addition, the Investment Adviser may deem other companies to be Smaller Capitalization Companies. As of February 28, 2026, the largest of the Smaller Capitalization Companies in the Russell/Nomura Total Index has an approximate market capitalization of 981 billion Yen which is approximately 7 billion in U.S. dollars terms. The market capitalizations of companies in the Russell/Nomura Small Cap™ Index change with market conditions and the composition of the Russell/Nomura Small Cap™ Index.

The Fund may invest its assets in a broad spectrum of industries. The Fund seeks to identify and invest in companies it believes offer potential for long-term capital appreciation. In evaluating prospective investments, the Investment Adviser utilizes internal financial, economic and credit analysis resources as well as information obtained from other sources. In selecting industries and companies for investment, the Investment Adviser considers overall growth prospects, financial conditions, competitive position, technology, research and development, productivity, labor costs and sources, profit margins, return on

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#### JAPAN SMALLER CAPITALIZATION FUND, INC.

#### INVESTMENT OBJECTIVE AND POLICIES (Continued)(Unaudited)
investment, structural changes in local economies, capital resources, the degree of government regulation or deregulation, management and other factors. There can be no assurance that the Fund will realize its investment objective.

Securities of Smaller Capitalization Companies are traded in a number of separate markets in Japan that have been developed in response to increased attention to this section of the securities market. At the time the Fund commenced operations in 1990, securities of emerging Japanese companies were traded primarily on the Japanese over-the-counter market and securities of these companies were not generally eligible for listing on major securities exchanges.

The Fund has adopted certain other policies as set forth below:

***Assets Not Invested in Smaller Capitalization Companies, Other than Cash. The Fund may invest in equity securities of companies not considered Smaller Capitalization Companies, and also invest in fixed income securities. These fixed-income securities include non-convertible preferred stock, debt securities, obligations issued or guaranteed by the U.S. or Japanese government or their agencies or instrumentalities and money market instruments (such as short term obligations issued or guaranteed by the U.S. or Japanese government, commercial paper and time deposits, certificates of deposit and bankers' acceptances of U.S. or Japanese banks).***

***Repurchase Agreements. Repurchase agreements are contracts pursuant to which the seller of a security agrees at the time of sale to repurchase the security at an agreed upon date and price in a specified currency, thereby determining the yield during the term of the agreement. When the Fund enters into a repurchase agreement, the seller is required to maintain the value of the securities subject to the repurchase agreement, marked to market daily, at not less than their repurchase price. This results in a fixed rate of return for the Fund that is insulated from market fluctuation during such period although the rate of return may be affected by currency fluctuations.***

***Lending Portfolio Securities. In order to increase income, the Fund is authorized to lend portfolio securities from time to time to brokers, dealers and financial institutions and receive collateral in the form of cash or U.S. government securities. The Fund currently has suspended its securities lending program but may resume participation in the future. Under the Fund's procedures, collateral for such loans must be maintained at all times in an amount equal to at least 100% of the current market value of the loaned securities (including interest accrued on the loaned securities). The interest accruing on the loaned securities will be paid to the Fund, and the Fund will have the right, on demand, to call back the loaned securities. The Fund may pay fees to arrange the loans. The Fund will neither lend portfolio securities in excess of 30% of the values of its assets nor lend its portfolio securities to any officer, director, employee or affiliate of the Fund, the Manager or the Investment Adviser. Although the Fund is authorized to lend portfolio securities, it does not currently do so. However, it may resume the practice at any time.***

***Borrowings. The Fund is authorized to borrow money in amounts of up to 10% of the value of its total assets at the time of such borrowings.***

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#### JAPAN SMALLER CAPITALIZATION FUND, INC.

#### INVESTMENT OBJECTIVE AND POLICIES (Continued)(Unaudited)
***Hedging Foreign Currency. The Fund is authorized to deal in forward foreign exchange between the U.S. dollar and the Yen as a hedge against possible variations in the foreign exchange rate between these currencies. This is accomplished through contractual agreements to purchase or sell a specified currency at a specified future date (up to one year) and price at the time of the contract. The Fund's dealings in forward foreign exchange are limited to hedging involving either specific transactions or portfolio positions. The Fund does not intend to utilize hedging techniques to a significant extent.***

The Fund is also authorized to purchase or sell listed or over the counter foreign currency options, foreign currency futures and related options on foreign currency futures as a short or long hedge against possible variations in foreign exchange rates. Such transactions may be effected with respect to hedges on non-U.S. dollar-denominated securities owned by the Fund, sold by the Fund but not yet delivered, or committed or anticipated to be purchased by the Fund.

Hedging against a decline in the value of a currency does not eliminate fluctuations in the prices of portfolio securities or prevent losses if the prices of such securities decline, and it precludes the opportunity for gain if the value of the hedged currency should rise. Moreover, it may not be possible for the Fund to hedge against a devaluation that is so generally anticipated that the Fund is not able to contract to sell the currency at a price above the devaluation it anticipates. The cost to the Fund of engaging in foreign currency transactions varies with such factors as the currency involved, the length of the contract period and the market conditions then prevailing. Since transactions in foreign currency exchange are usually conducted on a principal basis, no fees or commissions are involved.

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#### JAPAN SMALLER CAPITALIZATION FUND, INC.

#### RISK FACTORS AND SPECIAL CONSIDERATIONS
(Unaudited)

#### Risks of Investing in Equity Securities
Common and preferred stocks represent equity ownership in a company. Stock markets are volatile. The price of equity securities will fluctuate and can decline and reduce the value of a portfolio investing in equities. The value of equity securities purchased by the Fund could decline if the financial condition of the companies the Fund invests in declines or if overall market and economic conditions deteriorate. The value of equity securities may also decline due to factors that affect a particular industry or industries or due to general market conditions that are not specifically related to a company or industry, such as real or perceived adverse economic conditions, changes in the general outlook for corporate earnings, changes in interest or currency rates or generally adverse investor sentiment.

One or more markets in which the Fund invests may go down in value, with the possibility that the markets will go down sharply and unpredictably. The value of a security or other asset may decline due to changes in general market conditions, economic trends or events that are not specifically related to the issuer of the security or other asset, or factors that affect a particular issuer or issuers, exchange, country, group of countries, region, market, industry, group of industries, sector or asset class. Local, regional or global events such as war, acts of terrorism, the spread of infectious illness or other public health issues like pandemics or epidemics, recessions, or other events could have a significant impact on the Fund and its investments. Securities selected by Fund management may underperform the markets, the relevant indices or the securities selected by other funds with similar investment objectives and investment strategies.

#### Risks of Investing in Japan
***General. There are special risks associated with investments in Japan and the value of the Fund's shares may vary widely in response to political and economic factors affecting companies in Japan. Political, social or economic disruptions in Japan or in other countries in the region may adversely affect the values of Japanese securities and thus the Fund's holdings.***

Japan's economy could be negatively impacted by many factors, including rising interest rates, tax increases and budget deficits. Economic downturns or political instability in its key trading partners, which include the United States and China, could have an adverse effect on the Japanese economy. Currency fluctuations also could adversely impact Japan's export market and its economy. If the Japanese government were to intervene in the currency market, as it has in the past, the yen's value could fluctuate sharply and unpredictably, which could cause losses to investors. In the longer term, Japan will have to address the effects of an aging population, such as a shrinking workforce and higher welfare costs.

To date, Japan has had restrictive immigration policies that, combined with other demographic concerns, could have a negative impact on the economy. In addition, Japan lacks many natural resources and relies heavily on imports of oil and other commodities. Price increases, shortages or volatility in commodities markets could have a negative effect on Japan's economy.

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#### JAPAN SMALLER CAPITALIZATION FUND, INC.

#### RISK FACTORS AND SPECIAL CONSIDERATIONS

#### (Continued)(Unaudited)
In March 2011, a powerful earthquake and resulting tsunami struck northeastern Japan causing major damage along the coast, including damage to nuclear power plants in the region. Future similar disasters, and the resulting damage, could have a severe and negative impact on the Fund's investment portfolio and, in the longer term, could impair the ability of issuers in which the Fund invests to conduct their businesses in the manner normally conducted.

The growth of Japan's economy historically has lagged that of its Asian neighbors and other major developed economies and it may continue to remain low. The Japanese economy is heavily dependent on international trade and has been adversely affected by trade tariffs, other protectionist measures, competition from emerging economies, and the economic conditions of its trading partners.

***Currency Risks. The value of the Fund's securities as measured in U.S. dollars may be affected by fluctuations in the value of the Yen relative to the U.S. dollar. The Yen has shown volatility over the past two decades. Such volatility could affect returns in the future. The Yen may also be affected by currency volatility elsewhere in Asia, especially Southeast Asia. Depreciation of the Yen will decrease the value of the Fund's holdings. Japan has, in the past, intervened in the currency markets to attempt to maintain or reduce the value of the Yen. Japanese intervention in the currency markets could cause the value of the Yen to fluctuate sharply and unpredictably and could cause losses to investors.***

The Fund's assets will be invested principally in securities of Japanese issuers and substantially all of the income received by the Fund will be in Yen. However, the Fund will compute and distribute its income in U.S. dollars. Currency exchange rate fluctuations can decrease or eliminate income available for distribution. For example, if the value of the Yen falls relative to the U.S. dollar between the earning of the income and the time at which the Fund converts the Yen to U.S. dollars, the Fund may be required to liquidate securities in order to make distributions if the Fund has insufficient cash in U.S. dollars to meet distribution requirements. Furthermore, the Fund may incur costs in connection with conversions between U.S. dollars and the Yen.

The Fund's ability to hedge against foreign currency risks may adversely affect the Fund's net asset value. The Fund may engage in a variety of foreign currency exchange transactions. Hedging involves special risks, including possible default by the other party to the transaction, illiquidity and, to the extent the Investment Adviser's view as to certain market movements is incorrect, the risks that the use of hedging could result in losses greater than if they had not been used.

***Regulatory and Judicial Risks. Issuers in Japan are subject to accounting, auditing and financial standards and requirements that differ, in some cases significantly, from those applicable to U.S. issuers. In particular, the assets and profits appearing on the financial statements of a Japanese issuer may not reflect its financial position or results of operations in the way they would be reflected had such financial statements been prepared in accordance with U.S. generally accepted accounting principles.***

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#### JAPAN SMALLER CAPITALIZATION FUND, INC.

#### RISK FACTORS AND SPECIAL CONSIDERATIONS

#### (Continued)(Unaudited)
Legal principles relating to corporate affairs and the validity of corporate procedures, directors' fiduciary duties and liabilities and shareholders' rights for issuers in Japan may differ from those that may apply in the U.S. Shareholders' rights under Japanese law may not be as extensive as those that exist under the laws of the U.S. The Fund may therefore have more difficulty asserting its rights as a shareholder of a Japanese company in which it invests than it would as a shareholder of a comparable U.S. company.

It may be difficult for the Fund to obtain a judgment in a court outside the U.S. with respect to any claim that the Fund may have against any such issuer or its directors and officers. If the Fund obtains a judgment in a U.S. court, it may be difficult to enforce such judgment in Japan.

The Investment Adviser is a Japanese corporation with its principal place of business in Tokyo, Japan. Therefore, it may not be possible for shareholders to enforce against the Investment Adviser, in U.S. courts or foreign courts, judgments obtained in U.S. courts predicated upon the civil liability provisions of the federal securities laws of the U.S. In addition, it is not certain that a foreign court would enforce, in original actions, liabilities against the Investment Adviser predicated solely upon the securities laws of the U.S.

The Fund may hold its foreign securities and cash in foreign banks and securities depositories. There may be less regulatory oversight over their operations than in the case of U.S. financial institutions. Also, certain Japanese laws may put limits on the Fund's ability to recover its assets if a foreign bank, depository or issuer of a security, or any of their agents, goes bankrupt.

***Concentration Risk. From time to time, the Fund may invest a greater proportion of its assets in the securities of companies that are part of specific sectors and related industries of the Japanese economy. The Fund is therefore subject to greater risk of loss with respect to its portfolio securities as a result of its focus on such sectors and related industries.***

Investing in a significantly reduced number of issuers may result in greater performance volatility, as the Fund will be more exposed to the risks associated with and developments affecting an individual issuer than if the Fund's investments were less concentrated.

#### Risks of Investing in Smaller Capitalization Companies
The Fund invests a substantial portion of its assets in the securities of smaller capitalization companies in Japan. Investments in the securities of these companies may present greater opportunities for growth, but also involve greater risks than are customarily associated with investments in securities of more established and larger capitalized companies. The securities of smaller capitalization companies have fewer market makers and wider price spreads, which may in turn result in more abrupt and erratic market price movements and make the Fund's investments more vulnerable to adverse general market or economic developments than would investments only in large, more established Japanese companies. It is more difficult to obtain information about smaller capitalization companies because they tend to be less well known and have shorter operating histories and because

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#### JAPAN SMALLER CAPITALIZATION FUND, INC.

#### RISK FACTORS AND SPECIAL CONSIDERATIONS

#### (Continued)(Unaudited)
they tend not to have significant ownership by large investors or be followed by many securities analysts. Additionally, these companies may have limited product lines, markets or financial resources, or they may be dependent upon a limited management group that may lack depth and experience. Investments in larger and more established companies present certain advantages in that such companies generally have greater financial resources, more extensive research and development, manufacturing, marketing and service capabilities, more stability and greater depth of management and technical personnel.

#### Additional Risks
War, terrorism, geopolitical uncertainties, public health issues and other business interruptions have caused and could cause damage or disruption to international commerce and the global economy, and thus could have a material adverse effect on the Fund. The Fund's business operations are subject to interruption by, among others, natural disasters, whether as a result of climate change or otherwise, fire, power shortages, nuclear power plant accidents and other industrial accidents, terrorist attacks and other hostile acts, labor disputes, public health issues and other events beyond its control. Should major public health issues, including pandemics, arise, the Fund could be adversely affected by market downturns.

For example, the outbreak of an infectious coronavirus (COVID-19) that developed into a global pandemic negatively affected economies, markets and individual companies throughout the world, including those in which the Fund invests. The impact of other epidemics and pandemics that may arise in the future could affect the economies of many nations, individual companies and the market in general in ways that cannot necessarily be foreseen at the present time.

Additionally, a global trade war initiated by the imposition of tariffs could lead to increased market volatility, disruptions in supply chains, and reduced economic growth, all of which could negatively impact the value of the Fund's investments.

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#### JAPAN SMALLER CAPITALIZATION FUND, INC.

#### TAX INFORMATION (Unaudited)
We are required by subchapter M of the Internal Revenue Code of 1986, as amended, to advise you within 60 days of the Fund's fiscal year ended February 28, 2026 as to the federal tax status of distributions received by shareholders during such fiscal year. Accordingly, the Fund designates $1,053,500 as foreign tax credit with the associated foreign gross income of $10,534,999.

Shareholders should not use the above information to prepare their tax returns. The information necessary to complete your income tax returns will be included with your Form 1099 DIV which was sent to you separately in January 2026.

#### REVIEW OF THE FUND'S MARKET PRICE COMPARED TO

#### NET ASSET VALUE (Unaudited)
Shares of closed-end investment companies, including funds focusing on a single country, have at various times traded at both premiums and discounts to their net asset value ("NAV"). Although the shares of the Fund have traded at such a premium, they also have traded at a discount from NAV.

Since the Fund was established, the Board of Directors on a quarterly basis has reviewed the market price of the Fund's shares. The purpose of such review has been to determine whether a discount exists and, if so, whether it would be in the shareholders' overall best interests for the Fund to conduct share repurchases, make an issuer tender offer for shares or consider another means of possibly reducing the discount. For example, the Board of Directors has also considered whether it would be in the best interests of the Fund to convert to an open-end fund or to an interval fund, which is a form of investment company that makes periodic share repurchases at prices based on NAV.

In addition, on May 26, 2016, the Board of Directors approved a Discount Management Plan. Under the plan, the Fund is authorized to make open-market share repurchases on the New York Stock Exchange. Such repurchases may be made from time to time as authorized by the Board of Directors.

To date, the Board of Directors has not authorized open-market share repurchases or a tender offer for shares of the Fund (except in respect of the CTO discussed below and at Note 6. Subsequent Events). The Board of Directors also has not felt that it would be in the best interests of the Fund or its shareholders to convert to an open-end fund or an interval fund. As a "country fund" emphasizing a smaller capitalization segment of the market, the Fund's NAV is more volatile than might be the case for a fund with a broader investment focus. The Board of Directors believes that converting the Fund to either an open-end or interval fund would subject the Fund to redemptions or repurchases at times when liquidation of portfolio securities could disadvantage remaining shareholders, and the Directors believe that the recent volatility of the financial markets in Japan supports their view. Additionally, since an open-end fund has a limited ability to invest in illiquid securities, such a conversion could hinder the Fund's ability to pursue its investment objectives. The Board of Directors intends to continue to review, on a quarterly basis, the trading market for the Fund's shares.

During the fiscal year, the Board engaged an unaffiliated financial adviser, UBS Securities LLC, to advise on potential corporate actions. The professional fees associated

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#### JAPAN SMALLER CAPITALIZATION FUND, INC.

#### REVIEW OF THE FUND'S MARKET PRICE COMPARED TO

#### NET ASSET VALUE (Continued) (Unaudited)
with this limited-duration engagement are being borne by the Fund, a portion of which were paid during the fiscal period and the remainder of which will be paid through August 2026. These fees resulted in an increase in the Fund's expense ratio during the period and are expected to result in an increase through fiscal year ending February 2027, after which the expense ratio is expected to return to prior historic levels.

On June 6, 2025, the Fund announced that its Board approved a LDP under which the Fund will pay monthly distributions at an annualized rate of 10% of the Fund's Net Asset Value ("NAV") as of May 31, 2025. The LDP is intended to provide shareholders with a constant, though not guaranteed, fixed rate of distribution each month. In approving the LDP, the Board considered, among other factors, the potential impact of the LDP as a tool to narrow the discount to NAV at which the Fund's shares have historically traded, the Fund's ability to sustain the LDP, and the possibility that making regular distributions could enhance liquidity for common shareholders and potentially attract new investors. The Fund cannot predict what effect, if any, the LDP will have on the market price of its shares, or whether such market price will trade at a narrower or wider discount to NAV compared to levels prior to the LDP's adoption. The Board may terminate or modify the parameters of the LDP at any time without prior notice to the Fund's shareholders if circumstances warrant. The amendment or termination of the LDP could have an adverse effect on the market price of the Fund's shares.

On June 6, 2025, the Board announced the adoption of a policy pursuant to which the Fund intends to conduct a CTO for 10% of its outstanding shares, provided that the Fund's shares trade at an average daily market price discount of 9% or greater to NAV during the nine-month measurement period beginning on July 1, 2025 and ending on March 31, 2026 (and for each one-year performance period thereafter) (the "Performance Policy"). The offer size, price at which shares are to be tendered, and other terms and conditions of such CTO would be determined by the Board in its discretion based on its review and consideration of market conditions at that time and any other factors it deems relevant. The Board would proceed with the CTO pursuant to the Performance Policy only to the extent it would be consistent with the best interests of the Fund and its stockholders under then-current circumstances. The Board may terminate or modify the parameters of the CTO at any time without prior notice to the Fund's shareholders if circumstances warrant. The amendment or termination of the CTO could have an adverse effect on the market price of the Fund's shares.

For more current information on the Fund's CTO and LDP, see Note 6. Subsequent Events.

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#### JAPAN SMALLER CAPITALIZATION FUND, INC.

#### BOARD REVIEW OF THE MANAGEMENT AND INVESTMENT ADVISORY AGREEMENTS (Unaudited)
The Board of Directors of the Fund consists of six directors, five of whom are independent or non-interested directors (the "Independent Directors"). The Board considers matters relating to the Fund's management and investment advisory agreements throughout the year. On an annual basis, the Board specifically considers whether to approve the continuance of these agreements for an additional one-year period. The specific agreements (the "Agreements") consist of the Fund's management agreement (the "Management Agreement") with Nomura Asset Management U.S.A. Inc. (the "Manager") and the investment advisory agreement between the Manager and its parent, Nomura Asset Management Co., Ltd. (the "Investment Adviser").

The Board, including the Independent Directors, most recently approved the continuance of the Agreements at a meeting held on November 13, 2025. In connection with their deliberations at that meeting and at a separate meeting of the Independent Directors held on November 3, 2025, the Independent Directors received materials that included, among other items, information provided by the Manager including (i) copies of the Agreements and actions taken regarding such Agreements including approval history, (ii) a presentation on the Investment Adviser, the Fund's investment strategy, Nomura Japan Small Cap Value Equity Strategy, and Other Accounts under Management, (iii) the organizational structure of the Investment Adviser and Manager including biographical information about the personnel performing management and investment advisory services for the Fund, (iv) responses to questionnaires from the Manager and the Investment Adviser concerning their respective resources, services they provide to the Fund, and other current matters, (v) the most current financial statements and profitability of the Manager and the Investment Adviser including the management fee paid by the Fund to the Manager and the advisory fee paid by the Manager to the Investment Adviser, (vi) historical performance of the Fund, performance of comparative small-cap funds, and performance of the Fund's Benchmark, (vii) historical fund and financial highlights and historical ratio of expenses to average net assets, (viii) an analysis of the management fee structure compared to closed-end funds with Asia Equity strategies including assumed economies of scale, assets under management, and expense ratio. The Independent Directors were advised by, and received materials (including a detailed memorandum reviewing the applicable legal standards and factors to be taken into account in considering the renewal of investment management agreements, as set forth by the Supreme Court and other relevant court decisions) from their independent counsel in considering these matters and the continuance of the Agreements.

In considering the continuance of the Agreements at the meeting held on November 13, 2025, the Board, including the Independent Directors, did not identify any single factor as determinative. Matters considered by the Directors in connection with their review of the Agreements included the following:

*The nature, extent and quality of the services provided to the Fund under the Agreements. The Board considered the nature, extent and quality of the services provided to the Fund by the Manager and the Investment Adviser and the resources dedicated by the Manager and the Investment Adviser. These services included both investment advisory services and related services such as the compliance oversight provided by the Manager.* 

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#### JAPAN SMALLER CAPITALIZATION FUND, INC.

#### BOARD REVIEW OF THE MANAGEMENT AND INVESTMENT ADVISORY AGREEMENTS (Continued) (Unaudited)
Based on its review of all of the services provided by the Manager and the Investment Adviser, the Board, including the Independent Directors, concluded that the nature, extent and quality of these services supported the continuance of the Agreements.

*Performance. The Board considered performance information provided by the Manager regarding the Fund's performance over a number of time periods, including the three-month, year to date, one-year, three-year, five-year, and ten-year periods ended September 30, 2025. The Manager provided information about the performance of the Fund compared to the Fund's Benchmark and comparative small-cap funds, Fund highlights and Fund financial highlights for the last three fiscal year ends, data on the Fund's expense ratio and summary of expenses for the last semi-annual period and prior five fiscal year ends, and comparative management fee structure, expense ratio, and other information on other closed-end funds with Asian Equity strategies.* 

*The costs of the services to be provided and the profits to be realized by the Manager and its affiliates from their advisory relationships with the Fund. The Board considered the fee under the Fund's management agreement in connection with other information provided for the Directors' consideration. The Board considered information provided by the Manager regarding fees charged by the Manager and its affiliates to institutional accounts and other investment companies having investment objectives similar to the Fund's investment objective, including Japanese retail unit trusts. The Board recognized that the nature of the services provided by the Manager and the Investment Adviser to other investment vehicles and separate accounts differed from the range of services provided to the Fund.* 

The Manager also provided the Board with information prepared by the Manager and the Investment Adviser indicating the profitability of the Agreements to these respective advisers. This presentation included information regarding methodologies used to allocate expenses in considering the profitability of the Agreements to the Manager and the Investment Adviser. The Independent Directors reviewed this information with the Manager to understand expense allocation methodology utilized by the Investment Adviser.

After reviewing the information described above including investment performance and fee structures of comparative funds, the Independent Directors concluded that the management fee proposed to be charged to the Fund was reasonable and the profitability of the Agreements to the Manager and the Investment Adviser supported the continuance of the Agreements.

Based on an evaluation of all factors deemed relevant, including the factors described above and taking into account information received throughout the preceding year, the Board, including each of the Independent Directors, concluded that the Agreements should be continued through December 31, 2026.

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#### JAPAN SMALLER CAPITALIZATION FUND, INC.

#### DIVIDEND REINVESTMENT PLAN (Unaudited)
The Dividend Reinvestment Plan (the "Plan") is available automatically for any holder of Common Stock with shares registered in his/her own name who wishes to purchase additional shares with income dividends or long-term capital gain distributions received on shares owned, unless such shareholder elects to receive all dividends and capital gain distributions in cash, paid by check and mailed to the shareholder. If a shareholder holds shares in his/her own name, communications regarding the Plan should be addressed to Computershare Trust Company, N.A., (the "Plan Agent"), P.O. Box 505000 Louisville, KY 40233. Under the Plan, shareholders appoint the Plan Agent to reinvest dividends and distributions in shares of the Fund. Such shares will be acquired by the Plan Agent for shareholders either through open market purchases if the Fund is trading at a discount or through the issuance of authorized but unissued shares if the Fund is trading at net asset value or a premium. If the market price of a share on the payable date of a dividend or distribution is at or above the Fund's net asset value per share on such date, the number of shares to be issued by the Fund to each shareholder receiving shares in lieu of cash dividends or distributions will be determined by dividing the amount of the cash dividends or distributions to which such shareholder would be entitled by the greater of the net asset value per share on such date or 95% of the market price of a share on such date. If the market price of a share on such distribution date is below the net asset value per share, the number of shares to be issued to such shareholders will be determined by dividing such amount, less brokerage commission, by the per share market price.

Purchases will be made by the Plan Agent from time to time on the New York Stock Exchange or elsewhere to satisfy dividend and distribution investment requirements under the Plan. Purchases will be suspended on any day when the closing price (or the mean between the closing bid and ask prices if there were no sales) of the shares on the Exchange on the preceding trading day was higher than the net asset value per share. If on the dividend payable date, purchases by the Fund are insufficient to satisfy dividend or distribution investments and on the last trading day immediately preceding the dividend payable date the closing price or the mean between the closing bid and ask prices of the shares is lower than or the same as the net asset value per share, the Plan Agent will continue to purchase shares until all investments by shareholders have been completed or the closing price or the mean between the bid and ask prices of the shares becomes higher than the net asset value, in which case the Fund will issue the necessary additional shares from authorized but unissued shares. If on the last trading day immediately preceding the dividend payable date, the closing price or the mean between the bid and ask prices of the shares is higher than the net asset value per share and if the number of shares previously purchased on the Exchange or elsewhere is insufficient to satisfy dividend investments, the Fund will issue the necessary additional shares from authorized but unissued shares. There will be no brokerage charges with respect to shares issued directly by the Fund to satisfy the dividend investment requirements. However, each participant will pay a pro rata share of brokerage commissions incurred with respect to the Fund's open market purchases of shares. In each case, the cost per share of shares purchased for each shareholder's account will be the average cost, including brokerage commissions, of any shares purchased in the open market plus the cost of any shares issued by the Fund. For the fiscal year ended February 28, 2026, the Fund issued no new shares for dividend reinvestment purposes.

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#### JAPAN SMALLER CAPITALIZATION FUND, INC.

#### DIVIDEND REINVESTMENT PLAN (Continued) (Unaudited)
Shareholders who elect to hold their shares in the name of a broker or other nominee should contact such broker or other nominee to determine whether they may participate in the Plan. To the extent such participation is permitted, the Plan Agent will administer the Plan on the basis of the number of shares certified from time to time by the broker as representing the total amount registered in the shareholder's name and held for the account of beneficial owners who are participating in such Plan. Shareholders that participate in the Plan holding shares in a brokerage account may not be able to transfer the shares to another broker and continue to participate in the Plan. Shareholders who are participating in the Plan may withdraw from the Plan at any time.

There will be no penalty for withdrawal from the Plan, and shareholders who have previously withdrawn from the Plan may rejoin it at any time. Changes in participation in the Plan should be made by contacting the Plan Agent if the shares are held in the shareholder's own name and must be in writing and should include the shareholder's name and address as they appear on the account registration. If the shares are held in the name of a broker or other nominee, such person should be contacted regarding changes in participation in the Plan. Upon withdrawal from the Plan, the appropriate number of full shares will be reflected in the Fund records and a cash payment for any fractional shares will be issued. The shareholder may also request the Plan Agent to sell part or all of the shareholder's shares at the market price and remit the proceeds to the shareholder, net of any brokerage commissions. A $2.50 fee plus $0.15 per share sold will be charged by the Plan Agent upon any cash withdrawal or termination. An election to withdraw from the Plan will, until such election is changed, be deemed to be an election by a shareholder to take all subsequent distributions in cash. An election will be effective only for a dividend or distribution if it is received by the Plan Agent not less than 10 days prior to such record date.

The Plan Agent will maintain all shareholders' accounts in the Plan, and furnish written confirmation of all transactions in such account, including information needed by shareholders for tax records. Shares in the account of each Plan participant may be held by the Plan Agent in non-certificated form in the name of the participant, and each shareholder's proxy will include those shares purchased or received pursuant to the Plan.

The automatic reinvestment of dividends will not relieve participants of any income taxes that may be payable (or required to be withheld) on such dividends. Shareholders receiving dividends or distributions in the form of additional shares pursuant to the Plan should be treated for Federal income tax purposes as receiving a distribution in an amount equal to the amount of money that the shareholders receiving cash dividends or distributions will receive and should have a cost basis in the shares received equal to such amount.

The Fund reserves the right to amend or terminate the Plan as applied to any dividend

paid subsequent to written notice of the change sent to participants in the Plan at least

90 days before the record date for such dividend. There is no service charge to participants in the Plan; however, the Fund reserves the right to amend the Plan to include a service charge payable by the participants. All correspondence concerning the Plan, including requests for additional information about the Plan, should be directed to the Trust Company, at Computershare Trust Company, N.A. P.O. Box 43006 Providence, RI 02940-3006.

42<br>

------

#### BOARD OF DIRECTORS
David B. Chemidlin

Tina Jones from November 2025

Arthur B. Laby

Marcia L. MacHarg

Yusuke Andoh from April 2025

Yuichi Nomoto to April 2025

Paige P. Ouimet

#### OFFICERS
Yusuke Andoh, President from April 2025

Yuichi Nomoto, President to April 2025

Shinichi Masuda, Vice President

Michael A. Morrongiello, Vice President

Maria R. Premole, Vice President

Neil A. Daniele, Secretary and Chief Compliance Officer

Thomas Perugini, Treasurer

#### MANAGER
Nomura Asset Management U.S.A. Inc.

Worldwide Plaza

309 West 49<sup>th</sup> Street

New York, New York 10019-7316

#### INTERNET ADDRESS
http://www.nomura-asset.com/investment-solutions/funds/closed-end-funds/jof

#### INVESTMENT ADVISER
Nomura Asset Management Co., Ltd.

2-2-1, Toyosu, Koto-ku,

Tokyo 135-0061, Japan

#### DIVIDEND PAYING AGENT, TRANSFER AGENT AND REGISTRAR
Computershare Trust Company, N.A.

P.O. Box 43006

Providence, RI 02940-3006

#### CUSTODIAN
Brown Brothers Harriman & Co.

50 Post Office Square

Boston, Massachusetts 02110-1548

#### COUNSEL
Sidley Austin LLP

787 Seventh Avenue

New York, New York 10019

#### INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Ernst & Young LLP

One Manhattan West

New York, New York 10001

JAPAN SMALLER CAPITALIZATION FUND, INC.

WORLDWIDE PLAZA

309 WEST 49TH STREET

NEW YORK, NEW YORK 10019-7316

This Report, including the Financial Statements, is transmitted to the Shareholders of Japan Smaller Capitalization Fund, Inc. for their information. This is not a prospectus, circular or representation intended for use in the purchase of shares of the Fund or any securities mentioned in the Report.

------

![](efp-24220_banner.jpg)

Rev. 5/2019

---

| | |
|:---|:---|
| **FACTS** | **WHAT DOES NOMURA ASSET MANAGEMENT U.S.A. INC. DO WITH YOUR PERSONAL INFORMATION?** |

---

---

| | |
|:---|:---|
| **Why?** | Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do. |

---

---

| | |
|:---|:---|
| **What?** | The types of personal information we collect and share depend on the product or service you have with us. This information can include: <br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**▪** Social Security number <br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**▪** Account balances <br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**▪** Transaction history <br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**▪** Account transactions <br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**▪** Transaction or loss history <br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**▪** Assets <br>When you are *no longer* our customer, we continue to share your information as described in the notice. |

---

---

| | |
|:---|:---|
| **How?** | All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons Nomura Asset Management U.S.A. Inc. chooses to share; and whether you can limit this sharing. |

---

---

| | | |
|:---|:---|:---|
| **Reasons we can share your personal information** | **Does Nomura Asset Management U.S.A. Inc. share?** | **Can you limit this sharing?** |
| **For our everyday business purposes –** <br>**such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus** | Yes | No  |
| **For our marketing purposes –** <br>**to offer our products and services to you** | No | We don't share.  |
| **For joint marketing with other financial companies** | No | We don't share.  |
| **For our affiliates' everyday business purposes – information about your transactions and experiences** | No | We don't share.  |
| **For our affiliates' everyday business purposes – information about your creditworthiness** | No | We don't share.  |
| **For our affiliates to market to you** | No | We don't share.  |
| **For nonaffiliates to market to you** | No | We don't share. |

---

---

| | |
|:---|:---|
| **Questions?** | Call 1-800-833-0018 or go to <u>http://www.nomura.com/nam-usa/</u> |

---

------

![](efp-24220_banner.jpg)

**Page 2** <br>

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| | |
|:---|:---|
| **Who we are**  | **Who we are**  |
| **Who is providing this notice?** | **Nomura Asset Management U.S.A. Inc.** |

---

---

| | |
|:---|:---|
| **What we do**  | **What we do**  |
| **How does Nomura Asset Management U.S.A. Inc. protect my personal information?** | To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings.  |
| **How does Nomura Asset Management U.S.A. Inc. protect my personal information?** | This privacy policy is jointly provided by Nomura Asset Management U.S.A. Inc. and the funds listed in "Other Institutions Included in This Notice" below.  |
| **How does Nomura Asset Management U.S.A. Inc. collect my personal information?** | We collect your personal information, for example, when you <br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**▪** Open an account <br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**▪** Deposit money <br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**▪** Enter into an investment advisory contract <br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**▪** Give us contact information <br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**▪** Seek advice about your investments <br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**▪** Make deposits or withdrawals from your account <br>We also collect your personal information from other companies.  |
| **Why can't I limit sharing?** | Federal law gives you the right to limit only <br> **▪** Sharing for affiliates' everyday business purposes–information <br> about your creditworthiness <br> **▪** Affiliates from using your information to market to you <br> **▪** Sharing for nonaffiliates to market to you <br>State laws and individual companies may give you additional rights to limit sharing. |

---

---

| | |
|:---|:---|
| **Definitions** | **Definitions** |
| **Affiliates** | Companies related by common ownership or control. They can be financial and nonfinancial companies.  |
| **Affiliates** | Nomura Asset Management U.S.A. Inc. does not share with our affiliates.  |
| **Nonaffiliates** | Companies not related by common ownership or control. They can be financial and nonfinancial companies.  |
| **Nonaffiliates** | Nonaffiliates we share with can include custodians, transfer agents, third-party operations service providers, and firms specializing in Anti-Money Laundering and Customer Identification services.  |
| **Joint marketing** | A formal agreement between nonaffiliated financial companies that together market financial products to you.  |
| **Joint marketing** | Nomura Asset Management U.S.A. Inc. does not jointly market. |

---

---

| |
|:---|
| **Other Institutions Included in This Notice**  |
| Japan Smaller Capitalization Fund, Inc. |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Not
 applicable.

**Item 2. Code of Ethics.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) and
 (b) As of February 28, 2026, the Registrant had adopted a Code of Ethics that applies to
 the Registrant's Principal Executive Officer and Principal Financial Officer. The Registrant's
 Principal Financial Officer also serves as the Principal Accounting Officer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) During the fiscal year ended February
 28, 2026, the Code of Ethics was amended. The Code of Ethics was reviewed as part of the annual compliance program testing. The
 review included a test against the regulatory requirements and implementation at the firm. Please reference Exhibit 19 (a) (1) for
 the full Code of Ethics.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Not
 applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Not
 applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) A
 copy of the Code of Ethics will be provided, without charge, upon request to the Registrant
 by calling toll-free 1-800-833-0018 or by emailing JOFInvestorRelations@nomura-asset.com.

**Item 3. Audit Committee Financial Expert.**

---

| | |
|:---|:---|
| (a)(1) | The Registrant's Board of Directors has determined that there is one member serving on the Registrant's Audit Committee that possesses the attributes identified in Instruction 2(b) of Item 3 to Form N-CSR to qualify as an "audit committee financial expert." |

---

(a)(2) The name of the audit committee financial expert is David B. Chemidlin. Mr. Chemidlin has been deemed to be "independent" as that term is defined in Item 3(a)(2) of Form N-CSR.

**Item 4. Principal Accountant Fees and Services.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Audit
 Fees

The aggregate audit fees billed for each of the last two fiscal years for professional services rendered by the Registrant's principal accountant (the "Auditor") for the audit of the Registrant's annual financial statements or services that are normally provided by the Auditor in connection with statutory and regulatory filings or engagements for those fiscal years were $113,640 for February 28, 2026 and $110,865 for February 28, 2025.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Audit-Related
 Fees

The aggregate fees billed in each of the last two fiscal years for assurance and related services by the Registrant's principal accountant that are reasonably related to the performance of the audit of the Registrant's financial statements and are not reported under paragraph (a) of this item were $0 for February 28, 2026 and $0 for February 28, 2025.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Tax
 Fees

The aggregate fees billed in each of the last two fiscal years for tax compliance, tax advice, and tax planning services by the Registrant's principal accountant were $31,405 for February 28, 2026 and $30,935 for February 28, 2025. The amount represents aggregate fees paid for tax compliance, tax advice and tax planning services, which include the filing of federal, state and local income tax returns, registered investment company qualification review, assistance with determination of Passive Foreign Investment Companies, and tax distribution and analysis planning.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) All
 Other Fees

There were no other services performed for each of the last two fiscal years by the Registrant's principal accountant other than the services reported in paragraphs (a) through (c) of this Item.

---

| | |
|:---|:---|
| (e)(1) | The Charter for the Audit Committee of the Registrant requires the Audit Committee (a) to pre-approve all auditing services to be provided to the Registrant by the Registrant's independent accountants; (b) to pre-approve all non-audit services, including tax services, to be provided to the Registrant by the Registrant's independent accountants in accordance with the Securities Exchange Act of 1934, as amended (the "1934 Act"); provided, however, that the pre-approval requirement with respect to the provision of non-audit services to the Registrant by the Registrant's independent accountants may be waived by the Audit Committee under the circumstances described in the 1934 Act; and (c) to pre-approve non-audit services to be provided to the Registrant's investment adviser (and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the Registrant) if the engagement relates directly to the operations and financial reporting of the Registrant. |
| (e)(2) | Not applicable. |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Not
 applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) Non-audit
 fees billed by the Registrant's principal accountant for services rendered to the Registrant
 in each of the last two fiscal years were $31,405 for February 28, 2026 and $30,935 for February
 28, 2025. The amount represents aggregate fees paid for tax compliance, tax advice and tax
 planning services, which include the filing of federal, state and local income tax returns,
 registered investment company qualification review, assistance with determination of Passive
 Foreign Investment Companies, and tax distribution and analysis planning.

Non-audit fees billed by the Registrant's principal accountant for services rendered to the Registrant's Manager and any entity controlling, controlled by, or under common control with the Registrant's Manager that provides ongoing services to the Registrant ("Service Affiliates") in each of the last two fiscal years were $3.9 million for March 31, 2026 and $3.1 million for March 31, 2025. These amounts represent aggregate fees paid for audit related services, tax compliance, tax advice and tax planning services and other advisory services concerning risk management and regulatory matters rendered by the Registrant's principal accountant to Service Affiliates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) The
 Registrant's Audit Committee has considered whether the provision of non-audit services
 that were rendered by the Registrant's principal accountant to Service Affiliates during
 the Registrant's most recent fiscal year which were not pre-approved (not requiring
 pre-approval) is compatible with maintaining the Registrant's principal accountant's
 independence. All services provided by the Registrant's principal accountant to the
 Registrant or to Service Affiliates which were required to be pre-approved were pre-approved
 as required.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Not
 applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) Not
 applicable.

**Item 5. Audit Committee of Listed Registrants**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The
 Registrant's Board of Directors has a standing Audit Committee, which consists of the
 Directors who are not "interested persons" of the Registrant within the meaning
 of the Investment Company Act of 1940, as amended (the "1940 Act"). Currently,
 David B. Chemidlin, Arthur B. Laby, Marcia L. MacHarg, Paige P. Ouimet and Tina Jones are
 members of the Audit Committee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Not
 applicable.

**Item 6. Investments.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The
 Registrant's investments in securities of unaffiliated issuers as of February 28, 2026
 are included in the report to shareholders filed under Item 1 of this Form.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Not
 applicable.

**Item 7. Financial Statements and Financial Highlights for Open-End Management Investment Companies.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Not
 applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Not
 applicable.

**Item 8. Changes in and Disagreements with Accountants for Open-End Management Investment Companies.**

Not applicable.

**Item 9. Proxy Disclosures for Open-End Management Investment Companies.**

Not applicable.

**Item 10. Remuneration Paid to Directors, Officers, and Others of Open-End Management Investment Companies.**

Not applicable.

**Item 11. Statement Regarding Basis for Approval of Investment Advisory Contract.**

Included as part of the Financial Statements filed under Item 1 of this form.

**Item 12. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.**

Global Proxy Voting Policy

This Policy applies to resolutions to be proposed at shareholders' meetings which are held on or after November 1, 2021 and the Policy on Japan Companies which is dated November 1, 2025.

These Policies apply for investee companies globally.

The Global Proxy Voting Policy is included herewith as Exhibit 19(a)(2).

**Item 13. Portfolio Managers of Closed-End Management Investment Companies.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) As
 of February 28, 2026, Mr. Atsushi Katayama acts as the Registrant's lead portfolio
 manager. Mr. Katayama is Senior Investment Officer and currently heads the Active Japanese
 Equity Investment Department Head of the Japan Small Cap team in Nomura Asset Management
 Co., Ltd. ("NAM Tokyo"), the Registrant's Investment Adviser. He started
 his equity investment career in 2006 at NAM Tokyo, where he provided fundamental research
 on Japanese small to mid-cap stocks. In 2008, Mr. Katayama joined TPG-Axon as an equity analyst
 covering Retail, Capital Goods, Financials, and Internet sectors. He worked at Point 72 Asia
 from 2014 to 2019 and at Dymon Asia Capital from 2019 to 2021, where he was a portfolio manager
 managing long-short Japan equity products and returned to NAM Tokyo as a senior portfolio
 manager in 2021. In 2023 He became the Head of the Japan Small Cap Team at NAM Tokyo. Mr.
 Katayama earned a Master of Science degree from Kyoto University in 2001 and his MBA from
 the University of Chicago in 2006. The portfolio manager is primarily responsible for the
 day-to-day portfolio management for the Registrant. He oversees investment decisions and
 activities and reviews research analysis.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) As
 of February 28, 2026, the portfolio manager was primarily responsible for the day-to-day
 portfolio management for the Registrant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) As
 of February 28, 2026, the portfolio manager receives a combination of base compensation and
 discretionary compensation. The methodology used to determine the portfolio manager's
 compensation is applied across all accounts managed by the portfolio manager. Generally,
 the portfolio manager receives fixed salary compensation based on his duties and performance.
 The amount of base salary is reviewed annually after completion of the formal performance
 appraisal process. In order to appraise the portfolio manager's performance, certain
 measures are used, such as a review of his specialties and expertise, a review of his capabilities
 to achieve assigned duties and a review of his management and communication skills. In addition
 to base compensation, the portfolio manager may receive discretionary compensation in the
 form of a cash bonus. The bonus, which is paid annually, is based on both quantitative and
 qualitative scores. The quantitative score is determined based on the outperformance of portfolio
 accounts measured against their specific benchmark. The qualitative score is determined by
 analyzing the portfolio manager's performance and contributions to the investment organization.
 There is more emphasis on the quantitative score and Portfolio Manager performance is assessed
 over multiple years, in principle over one, three and five years.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Not
 applicable.

**Item 14. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.**

During the period covered by this report, no purchases were made by or on behalf of the Registrant or any "affiliated purchaser," as defined in Rule 10b-18(a)(3) under the Exchange Act (17 CFR 240.10b-18(a)(3)), of shares or other units of any class of the Registrant's equity securities that is registered by the Registrant pursuant to Section 12 of the Exchange Act (15 U.S.C. 781).

**Item 15. Submission of Matters to a Vote of Security Holders.**

There were no changes to the procedures by which shareholders may recommend nominees to the Registrant's Board of Directors made or implemented after the Registrant last provided disclosure in response to the requirements of Item 407(c)(2)(iv) of Regulation S-K (17 CFR 229.407), or this Item.

**Item 16. Controls and Procedures.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The
 Registrant's Principal Executive Officer and Principal Financial Officer have concluded
 that the Registrant's disclosure controls and procedures (as defined in Rule 30a-3(c)
 under the Act (17 CFR 270.30a-3(c))), are effective based on their evaluation of these controls
 and procedures as of a date within 90 days of the filing date of this report.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) There
 was no change in the Registrant's internal control over financial reporting (as defined
 in Rule 30a-3(d) under the Act (17 CFR 270.30a-3(d)) that occurred during the period covered
 by this report that has materially affected, or is reasonably likely to materially affect,
 the Registrant's internal control over financial reporting.

**Item 17. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Not
 applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Not
 applicable.

**Item 18. Recovery of Erroneously Awarded Compensation.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Not
 applicable.

**Item 19. Exhibits.**

---

| | |
|:---|:---|
| (a)(1) | [See Item 2.](njscf-efp24220_ex99a1.htm) |
| (a)(2) | [See Item 12.](njscf-efp24220_ex19a2.htm) |
| (a)(3) | [Certifications required by Rule 30a-2(a) under the 1940 Act (17 CFR 270.30a-2(a)). See EX 99.CERT attached hereto.](njscf-efp24220_ex19a3.htm) |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) [Certifications required by Rule 30a-2 (b) under the 1940 Act (17 CFR 270.30a-2(b)), Rule 13a-14(b) or Rule15d-14(b) under the Exchange Act (17 CFR 240.13a-14(b) or 240.15d-14(b)), and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. 1350). See EX-99.906 CERT attached hereto.](njscf-efp24220_ex19b.htm)

**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/ Yusuke Andoh |
|  | Yusuke Andoh |
|  | Principal Executive Officer |

---

Date <u>May 5, 2026 </u>

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/ Yusuke Andoh |
|  | Yusuke Andoh |
|  | Principal Executive Officer |

---

Date <u>May 5, 2026 </u>

---

| | |
|:---|:---|
| By: | /s/ Thomas Perugini |
|  | Thomas Perugini |
|  | Principal Financial Officer |

---

Date <u>May 5, 2026 </u>

## Ex-99.(A)(1)

**Exhibit 19 (a)(1)**

**Code of Ethics**

**CODE OF ETHICS**

**Nomura Asset Management U.S.A. Inc.**

**Nomura Corporate Research and Asset Management Inc.**

**Japan Smaller Capitalization Fund, Inc.**

Effective Date <u>May 31, 2025</u> <br> <u>Applicable Entities</u> <u> Investment Advisers • Nomura Asset Management U.S.A. Inc. • Nomura Corporate Research and Asset Management Inc. U.S. Registered Investment Companies • Japan Smaller Capitalization Fund, Inc.</u>

**TABLE OF CONTENTS**

I. STATEMENT OF POLICY 4

A. General Principles 4

B. Disciplinary Action; Supervisor Responsibility 5

II. PERSONS COVERED UNDER THE CODE 5

III. STANDARDS OF CONDUCT 7

A. Compliance with Securities Laws, Rules and Regulations 7

B. Confidentiality 8

C. Protection of Corporate Assets 9

D. Employee Political and Charitable Contributions 9

E. Insider Trading 9

IV. OUTSIDE AFFILATIONS 10

A. Outside Employment, Advisory and Other Related Activities 10

B. Outside Board Memberships 12

C. Speaking, Teaching, Writing, and Broadcasting 13

V. OTHER POTENTIAL CONFLICTS OF INTEREST 13

A. Accepting and Giving Gifts and Entertainment 13

B. Disclosure of Personal Interests and Interests of Family Members 14

VI. PERSONAL TRADING POLICY 14

A. Persons Covered by the Procedures 14

B. Purpose of the Procedures 14

C. Securities Covered by the Procedures 15

D. Accounts Covered by the Procedures 15

E. Use of Approved Broker-Dealers 17

F. General Trading Prohibitions 17

G. Preclearance of Personal Securities Transactions 18

H. Investment Clubs 22

I. Trading in Nomura Securities 23

J. Section 16 Holding Periods 23

K. Reporting of Securities Transactions and Holdings 24

Page **2** of **32**

L. Expatriate Requirements 26

VII. SUPPLEMENTAL COMPLIANCE PROCEDURES 26

VIII. RESPONSIBILITIES OF JOF'S DIRECTORS 26

A. Approval by JOF's Directors 26

B. Annual Report to JOF's Directors 27

IX. WHISTLEBLOWING POLICY 27

X. WRITTEN ACKNOWLEDGEMENTS 28

A. Certification of Receipt 28

B. Annual Certification of Compliance 28

XI. RECORDKEEPING 28

<u>Schedule A:</u> U.S. Open-end Investment Companies Managed or Sub-advised by Nomura Advisers (Affiliated Mutual Funds)

<u>Schedule B:</u> U.S. Closed-End Investment Companies Managed by Nomura Advisers (Affiliated Exchange-Traded Closed-end Funds)

<u>Schedule C:</u> Approved Broker-Dealers

Page **3** of **32**

**Code of Ethics**

**Nomura Asset Management U.S.A. Inc.**

**Nomura Corporate Research and Asset Management Inc.**

**Japan Smaller Capitalization Fund, Inc.**

**I. STATEMENT OF POLICY** 

For the purposes of this policy, Nomura Asset Management U.S.A. Inc. ("**NAM-USA**") and Nomura Corporate Research and Asset Management Inc. ("**NCRAM**") are together referred to as "**Nomura**" or the "**firm**". The firm's reputation for integrity and ethics is one of its most important assets. In order to safeguard this reputation, we believe it is essential not only to comply with relevant U.S. and foreign laws and regulations but also to maintain high standards of personal and professional conduct at all times. This Code of Ethics (the "**Code**") is designed to ensure that our conduct is at all times consistent with these standards, with our fiduciary obligations to our clients, and with industry and regulatory standards for investment managers.

***A. General Principles***

The following fundamental principles underlying the Code are as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. The interests of our clients must always come first;

2. Our personal securities transactions must be conducted in such a manner as to be consistent with the
Code and to avoid any actual or potential conflicts of interest or any abuse of an employee's position of trust and responsibility;

3. Even if our clients are not harmed, we cannot take inappropriate advantage of our position as fiduciaries;

4. We must preserve the confidentiality of our clients' security holdings and
transactions, financial circumstances, and other client information that we have obtained within the scope of the manager-client relationship;
and

5. Our independence in the investment decision-making process is paramount. Accordingly, we cannot participate
in any business relationship or accept gifts and entertainment that could reasonably be expected to affect our independence, objectivity,
or loyalty to clients.

This Code contains detailed rules concerning personal securities transactions and other relevant issues. In addition, the Code sets forth the general principles that will apply even when the specific rules do not address a particular situation or are unclear or potentially inapplicable. In addition, this Code is intended to prevent employees from engaging in any act, practice or course of business prohibited by Rule 204A-1 under the Investment Advisers Act of 1940, as amended ("**Advisers Act**") and Rule 17j-1 under the Investment Company Act of 1940, as amended ("**Investment Company Act**"). This Code also serves as the Code of Ethics for the Japan Smaller Capitalization Fund, Inc. ("**JOF**").

Page **4** of **32**

Although the Code provides guidance with respect to many common types of situations, please remember that the Code cannot address all potential conflicts of interest. Whether or not a specific provision of this Code applies, you must conduct your activities in accordance with the general principles embodied in the Code. Our policy is to avoid conflicts and, where they unavoidably occur, to resolve them in a manner that clearly places the interests of our clients first. If you are uncertain whether a real or an apparent conflict exists in a particular situation, you should consult the US Investment Management Compliance Department ("**Compliance**" or the "**Compliance Department**") immediately.

***It bears emphasis that technical compliance with the letter of the Code's requirements and procedures will not automatically insulate from scrutiny transactions or actions that appear to indicate a pattern of abuse of your fiduciary duties to our clients.***

***B. Disciplinary Action; Supervisor Responsibility***

Failure to comply with the Code may result in disciplinary action. Moreover, you should be aware that failure to comply with certain elements of the Code may constitute a violation of federal and/or state law and may subject you and the firm to a wide range of criminal and/or civil liability. Violations or potential violations of the Code may be reported to the Board of Directors of JOF, and if warranted, to state and federal authorities, such as the Securities and Exchange Commission ("**SEC**").

If a violation has occurred, the firm's Chief Compliance Officer ("**CCO**") may, after determining the seriousness of the infraction, impose one or more of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Reversal of the trade, with profits (if any) donated to a charity;

• Monetary fine – to be donated to a charity;

• Partial or full restriction on personal trading; or

• Recommend suspension or termination of employment.

In addition, the federal securities laws<sup>1</sup> require Nomura and individual supervisors to reasonably supervise employees with a view toward preventing violations of law and of the Code. As a result, all employees who have supervisory responsibility should endeavor to ensure that the employees they supervise, including temporary employees and contractors, are familiar with, and remain in compliance with, the requirements of the Code.

**II. PERSONS COVERED UNDER THE CODE**

The Code applies to all employees, officers and directors of Nomura and JOF ("**Access Persons**"). Temporary staff, consultants and interns will be reviewed on a case-by-case basis by Compliance to determine whether or not they will be deemed Access Persons.

**<u>Disinterested Directors</u>**. A "Disinterested Director" means a director of JOF who is not an *Interested Person* of JOF. An Interested Person of another person, when used with respect to a fund, means (i) any affiliated person of the fund; (ii) any member of the immediate family of any natural

<sup>1</sup> Federal securities laws mean the Securities Act of 1933, the Securities Exchange Act of 1934, the Sarbanes-Oxley Act of 2002, the Investment Company Act, the Advisers Act, Title V of the Gramm-Leach-Biley Act, any rules adopted by the SEC under any of these statutes, the Bank Secrecy Act as it applies to funds and investment advisers, and any rules adopted thereunder by the SEC or the Department of the Treasury.

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person who is an affiliated person of the fund; (iii) any interested person of any investment adviser or principal underwriter for the fund; (iv) any person or partner or employee of any person who at any time since the beginning of the last two completed fiscal years of the fund has acted as legal counsel for the fund; (v) any broker or dealer registered under the Securities Exchange Act of 1934 or any affiliated person of such broker or dealer; or (vi) any natural person whom the SEC by order shall have determined to be an interested person by reason of having had, at any time since the beginning of the last two completed fiscal years of the fund, a material business or professional relationship with the fund or with the principal executive officer of such company or with any other investment company having the same investment adviser or principal underwriter or with the principal executive officer of such other investment company, provided, that no person shall be deemed to be an interested person of an investment company solely by reason of (aa) his or her being a member of its board of directors or advisory board or an owner of its securities, or (bb) his or her membership in the immediate family of any person specified in clause (aa) of this provision.

**<u>Non-Executive Affiliated Directors</u>**<u>.</u> A "Non-Executive Affiliated Director" means a board of director of the firm who (i) is not an employee of the firm (but rather an employee of a Nomura affiliate), (ii) does not make or participate in the making of recommendations for client accounts, and (iii) does not receive information about current client recommendations or trading, or who has knowledge of current client recommendations or trading activity only infrequently or inadvertently.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Compliance reviews and maintains copies of the ACA Code, along with any amendments.

2. ACA monitors the Principal Financial Officer/Treasurer's personal trading activity to ensure it
does not create conflicts of interest with respect to JOF and its portfolio trading activity.

3. Each quarter, ACA provides Compliance with a certification that the Principal Financial Officer/Treasurer
has complied with the ACA Code. ACA also provides Compliance with the personal trading activity of the Principal Financial Officer/Treasurer.
Compliance reviews the activity to ensure it does not create conflicts of interests with respect to JOF and its portfolio trading activity.

**<u>Applicability of the Policies Discussed in this Code to Disinterested Directors, Non-Executive Affiliated Directors, and the Outsourced JOF Principal Financial Officer/Treasurer</u>:** The table below summarizes the applicability of the policies discussed in this Code to certain types of Access Persons.

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---

| | | | |
|:---|:---|:---|:---|
| **Policy/Requirement** | **Does the Policy/Requirement Apply?** | **Does the Policy/Requirement Apply?** | **Does the Policy/Requirement Apply?** |
| **Policy/Requirement** | **Disinterested Directors** | **Non-Executive Affiliated**<br> **Directors** | **Outsourced JOF Principal Financial**<br> **Officer/Treasurer** |
| Personal Trading Policy – preclearance/reporting | No\* | No | No |
| Gifts and Entertainment Policy – preapproval/reporting | No\*\* | No\*\* | No |
| Speaking Engagements and Media Communications - preapproval | No\*\* | No\*\* | No\*\* |
| Political Contributions Policy – preapproval/reporting | No | Yes | No |

---

\* Not subject to the requirement to have personal securities transactions pre-approved by or reported to Compliance unless they have access to non-public information regarding any Nomura clients' transactions, or non-public information regarding the portfolio holdings of any client of Nomura (excluding JOF), or who are involved in making portfolio recommendations to clients, or who have access to such recommendations that are non-public.

\*\* Not required to pre-approve and report gifts, entertainment, speaking engagements or media communications unless provided or received in connection with their duties as a board member of Nomura or JOF.

**III. STANDARDS OF CONDUCT**

The Code sets forth certain minimum standards of conduct that must be observed by all Nomura Access Persons in light of their relationship with Nomura clients and funds.

***A. Compliance with Securities Laws, Rules and Regulations***

Access Persons must comply with applicable federal securities laws and applicable foreign laws, rules, and regulations. As part of this requirement, Access Persons are not permitted, in connection with the purchase or sale, directly or indirectly, of a security held or to be acquired by a client:

1) To defraud a client in any manner;

2) To mislead a client, including by making a statement that omits material facts;

3) To engage in any act, practice or course of conduct that operates or would operate as a fraud or deceit upon a client; and

4) To engage in any manipulative practice with respect to securities, including price manipulation.

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***B. Confidentiality***

The exercise of confidentiality extends to four major areas of our operations: internal operating procedures and planning, clients and fund shareholders, investment advice, and investment research. The duty to exercise confidentiality applies not only when you are employed by the firm, but also after you cease employment with the firm.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. *Internal Operating Procedures and Planning.* The firm has developed unique methods of operations
and portfolio management that we believe gives the firm a distinct advantage over its competitors. Accordingly, you should be guarded
in discussing our business practices with outsiders. Any requests from outsiders for specific information of this type should be cleared
with your supervisor before it is released.

---

| | |
|:---|:---|
|  | Also, from time to time, management holds meetings with personnel in which material, non-public information concerning the future plans of Nomura or any of its affiliates is disclosed. Access Persons should never discuss confidential information with, or provide copies of written material concerning the firm's internal operating procedures or projections for the future to, unauthorized persons outside the firm. |
| *2)* | *Clients and Fund Shareholders.* In many instances, when clients employ Nomura's services, we ask them to disclose fully their financial status and needs. This is done only after we have assured them that every member of our organization will hold this information in strict confidence. It is essential that we respect their trust. A simple rule for Access Persons to follow is that the names of our clients or fund shareholders or any information pertaining to their investments must never be divulged to anyone outside the firm, not even to members of their immediate families and must never be used as a basis for personal trades over which the Access Person has beneficial interest or control. |

---

<br> *3)* *Investment Tips.* There are two major considerations that dictate why we must not provide investment "tips":

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• From the point of view of our clients, it is not fair to give other people information that clients
must purchase.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• From the point of view of the firm, it is not desirable to create an outside demand for a security
when we are trying to buy it for our clients, as this will only serve to push the price up. The reverse is true if we are selling.

---

| |
|:---|
| In light of these considerations, you must never disclose to outsiders our buy and sell recommendations, securities we are considering for future investment, or the portfolio holdings of our clients or funds unless the disclosure is required by law or is necessary in connection with your job responsibilities. |
| The practice of giving investment advice informally to members of your immediate family should be restricted to very close relatives. Any transactions resulting from such advice are subject to the prior approval and reporting requirements of this Code (see Section VI. Personal Trading Policy). Under no circumstances should an employee receive compensation directly or indirectly (other than from Nomura or its affiliates) for rendering advice to either clients or non-clients. |

---

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*4)* *Investment Research.* Any report circulated by a research analyst employed by Nomura or its affiliates is confidential in its entirety and should not be reproduced or shown to anyone outside of our organization, except to our clients or prospective clients where appropriate or as approved by Compliance.

 

*Client Account Information and Company Records.* The accounts of clients and fund shareholders are the sole property of Nomura and/or JOF. This applies to all clients for whom Nomura acts as investment adviser; regardless of how or through whom the client relationship originated and regardless of whom within the Nomura Group the client has a direct relationship. At the time of termination of employment with Nomura, an employee must: (1) surrender to Nomura in good condition all materials, reports or records (including all copies in his or her possession or subject to his or her control) developed by him or her or any other person which are confidential information of Nomura (except copies of any research material in the production of which the employee participated to a material extent); and (2) refrain from communicating, transmitting or making known to any person or firm any information relating to any materials or matters whatsoever which are considered by Nomura to be confidential.

Access Persons must use care in disposing of any confidential records or correspondence. Confidential material that is to be discarded should be torn up or shredded.

***C. Protection of Corporate Assets***

Access Persons are responsible for taking measures to ensure that Nomura's assets are properly protected. This responsibility not only applies to our business facilities, equipment and supplies, but also to intangible assets such as proprietary research or marketing information, corporate trademarks and service marks, and copyrights.

***D. Employee Political and Charitable Contributions***

Nomura realizes, as active members of the community and involved citizens, its employees often participate in political and charitable projects and activities that may include donations and contributions by employees to political candidates or charitable organizations. Although Nomura encourages civic and community involvement by its employees, Nomura desires to avoid any situation that raises a conflict of interest or that creates an appearance of impropriety in the context of Nomura's business relationships.

Access Persons are required to obtain *<u>prior written approval</u>* from Compliance for any political contribution. Nomura's policy on political contributions is contained in its *Political Contributions Policy and Procedures* and should be reviewed.

***E. Insider Trading***

Various SEC rules, and federal and state laws prohibit the misuse of confidential non-public information. Accordingly, Nomura has developed an insider trading policy which provides guidance on steps employees must take when they believe they are in possession of material non-public information. Violations of this policy can not only lead to job termination, but could expose both you and the firm to criminal and/or civil liability.

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Access Persons may not transact in a security while in possession of material, non-public information relating to the issuer of the security. This prohibition applies to trading on behalf of client accounts and personal accounts. In addition, Access Persons may not convey material, nonpublic information about publicly traded issuers to others outside the company. Access Persons should immediately contact Compliance if they believe they have received material, nonpublic information in the course of contacts with representatives of public companies. Please refer to the firm's *Insider Trading Policy* regarding the handling of material, nonpublic information.

**IV. OUTSIDE BUSINESS ACTIVITIES**

***A. Outside Employment, Advisory and Other Related Activities***

 ****

Access Persons are expected to devote their full time and loyalty to the interests of Nomura during regular business hours and during any additional time that may be required. In addition, Nomura may impose certain limitations on activities conducted by Access Persons outside of the firm in order to avoid an actual or potential conflict that might be inconsistent with the interests of Nomura or its clients, or create possible reputational risk to the firm. Furthermore, FINRA rules require registered personnel of securities firms to obtain prior permission from their employer firms for most outside activities.

Access Persons may also engage in private investments, but must obtain pre-approval from Compliance before doing so. Investments in private investments such as hedge funds or private funds are subject to the Personal Trading Policy discussed below in Section VI of the Code.

**1. Outside Business Activities**

Outside business activities are broadly defined and include, but are not limited to, the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• An Access Person's own business venture or employment by another person or entity (e.g., waitress,
bartender, disc jockey, arbitrator/mediator);

• Crypto-currency investments;

• Teaching positions and professorships;

• Service as director/board member (including any non-executive directorship), officer, partner, consultant
or advisor to a for-profit enterprise (including a family business);

• Service as director/board member, officer, employee of, consultant or advisor to a non-profit organization;

• Civic activities such as elected or appointed political or governmental posts (e.g., services as an
officer of a campaign or party committee or as an appointee to a federal, municipal or local advisory board);<sup>2</sup>

• Philanthropic community enterprises (e.g., director/board member or trustee of a charity);

• Engaging in ongoing or significant publication arrangements (e.g., writing a
 weekly/monthly/quarterly article for publication or writing a book);

<sup>2</sup> These outside activities are subject to additional approvals and certain limitations. Please refer to the firm's *Political Contributions Policy and Procedures*.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Acting as a legal fiduciary (trustee, conservator, executor, custodian or guardian, etc.) in a personal
capacity for any individual or organization with which the firm has a current or potential business relationship including clients, vendors
and suppliers of goods and services<sup>3</sup>.

 **2. Related Party Transactions**

A related party transaction consists of instances in which a member of an Access Person's immediate family: (a) owns more than 10% of the voting interest of a legal entity not owned or controlled by the Nomura Group; (b) controls the composition of the governing body (e.g., board of directors) of any legal entity not owned or controlled by the Nomura Group; or (c) directly or indirectly influence significantly the management or operating policies of any legal entity not owned or controlled by the Nomura Group (e.g., by serving in capacities such as directors, senior officers, heads of principal functions or other deciders of policy or strategy).

For purposes of this section only, "immediate family" means a family member who might control or significantly influence an employee, or whom the employee might control or significantly influence, because of the Access Person's family relationship. Common examples include the Access Person's spouse, children and other family members living in the Access Person's household, and also parents, step-parents, siblings, in-laws or other relatives where the element of control or influence exists due, for example, to financial support.

**3. Disclosure and Consent Requirements**

Access Persons must disclose the existence of all their outside business activities and seek written consent from their relevant designated supervisor and Compliance at the commencement of their association with the firm and, thereafter, prior to undertaking any other outside business activities. Disclosure of outside business activities must be made by completing and submitting to the relevant supervisor and Compliance, for their review and approval, the Outside Business Activity Request in PTCC. Consent by the supervisor or Compliance shall not imply that the outside affiliation is being undertaken at the direction or request of the firm, or that Nomura is somehow involved or sponsoring the outside activity. Any material changes to the nature of the outside affiliation will also require written consent by the above-reference parties. Unpaid community or charitable work (other than as a director or officer) and educational and recreational activities unrelated to Nomura's business do not require disclosure or prior written consent.

**4. Restrictions on Outside Business Activities**

Certain outside business activities are generally discouraged and may be prohibited. These include, but are not limited to, the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Becoming involved in any commission-sharing arrangements with other broker-dealers or any other non-Nomura
person or entity;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Receiving income for financial advice from any source;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Accepting finder's, introductory or referral fees;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Serving on a board, advisory board or in advisory position in a publicly traded company, see section
B. below for additional details;

<sup>3</sup> All brokerage accounts under the control of an employee as a result of his or her service as a legal fiduciary are subject to Nomura's Personal Trading Policy

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Entering into an independent business relationship with a firm client or vendor;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Participation in "expert networks" or other primary research organizations that provide
specialist background or insight into particular business sectors, industries, markets, etc.

Furthermore, the following additional restrictions apply to any outside investment or outside activity that is approved by the firm:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• All outside business activities must be undertaken outside of Nomura's normal business hours and
should be performed primarily off Nomura's premises;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Any remuneration for outside business activities must be reasonably related to the time spent;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Outside business activities must not interfere with Nomura's employment priorities or the individual's
efficiency within the firm;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• No Nomura stationary, marketing materials, or equipment are to be used in connection with an approved
activity or investment;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• No solicitation of Nomura's client, potential clients or firm personnel, directly or indirectly
is permitted;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Should an employee be asked about Nomura's involvement in the outside venture, it must be made
clear that Nomura does not sponsor or offer any opinion regarding the affiliation or investment;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Should the scope of the employee's duties, responsibilities, involvement or compensation materially
change in the future, Nomura policy requires that the employee once again seek the approval of his or her supervisor and the review of
the Compliance Department;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Employees are prohibited from utilizing proprietary client information in connection with an outside
business activity or venture/investment.

**5. Registered Personnel**

Personnel registered with FINRA must disclose certain outside business activities other than those that are non-investment related and exclusively charitable, civic, religious or fraternal **<u>and</u>** recognized as tax exempt when completing a Uniform Application for Securities Industry Registration or Transfer (Form U-4). This means that an employee is required to disclose all reportable outside business activities on the Form U-4 when initially applying for registration. After becoming registered, employees must file an amended Form U-4 when commencing such activities.

***B. Outside Board Memberships***

**1. General Policy**

Access Persons may serve on a board of directors, act as an officer, consultant or advisor to any non-public company or any non-profit organization, or similar governing bodies of business entities only with the prior approval by the firm in accordance with the review and approval process described above.

**2. Individual Capacity versus Representative Capacity**

An Access Person permitted to serve as an outside board member, other than at the firm's request (an "Independent Director"), should understand that he or she is acting in an individual capacity and not as a representative of the firm. Accordingly, an Access Person's service as an Independent

Page **12** of **32**

Director is not covered by any indemnification or insurance provided by the firm, and an Access Person, who serves as such, should consult the Compliance Department to determine any actions or steps that should be taken to maintain his or her independent status. However, if an employee becomes a board member at the request of the firm (a "Designated Director"), the Access Person may be entitled to indemnification or insurance coverage provided by the firm.

&nbsp;&nbsp;&nbsp;&nbsp;3. Disclosure Requirements

Access Persons should consult the Compliance Department at an early stage to determine relevant information such as, limits on director/officer interlocks, SEC filings and disclosures in research reports that may need to be made regarding an employee's affiliation as a board member of a company, irrespective of whether such affiliation was undertaken at the request of the firm.

&nbsp;&nbsp;&nbsp;&nbsp;4. Chinese Wall

Access Persons who serve as outside directors, either Independent or Designated, should be sensitive about information they acquire in these capacities and should consult with the Compliance Department about any restrictions that may need to be imposed or precautions that may need to be taken as a consequence of possessing or having access to such information.

***C. Speaking, Teaching, Writing, and Broadcasting***

 ****

Any Access Person intending to engage in any speaking, teaching, writing or broadcasting activities must, prior to commencing such activities, obtain the approval of his or her supervisor as well as review the activities with the Compliance and NHA Corporate Communication Departments. These activities include, but are not limited to: appearing on radio or television, providing comments or market/industry related information for use on radio, television or on-line, writing or being identified as the author of any articles or columns, providing comments or market/industry related information for any newspaper or magazine (whether in print or on-line), and sponsoring or participating in any speaking engagements such as seminars, lectures, or classes including on-line forums.

Approval can be obtained by completing a Communications with the Public Form (contact Compliance).

**V. OTHER POTENTIAL CONFLICTS OF INTEREST**

&nbsp;&nbsp;&nbsp;&nbsp;A. Accepting and Giving Gifts and Entertainment

Access Persons should not accept or give gifts or entertainment that might in any way create, or appear to create, a conflict of interest or interfere with the impartial discharge of our responsibilities to clients or place our firm in a difficult or embarrassing position. For specific requirements on the receipt and giving of gifts, please see Nomura's *Gifts and Entertainment Policy.*

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&nbsp;&nbsp;&nbsp;&nbsp;B. Disclosure of Personal Interests and Interests of Family Members

It may be a conflict of interest in recommending, implementing or considering any securities transaction in a security on behalf of a Nomura client, if you have a personal interest in that security, without first disclosing that personal interest. Therefore, if you are a portfolio manager or an analyst and have a personal interest in a security, you are required to disclose that personal interest to your supervisor.

It is important to note that the potential for a conflict of interest also can arise if a member of your immediate family is employed in the securities industry, or has a significant economic interest in any organization with which Nomura does business or invests in. If a member of your immediate family has such an employment relationship or such an economic interest, please notify Compliance promptly.

**VI. PERSONAL TRADING POLICY**

In accordance with the requirements of the securities laws of the United States (i.e., the Advisers Act, the Investment Company Act, the Securities Exchange Act of 1934, as amended, and the Insider Trading and Securities Fraud Enforcement Act of 1988, as amended), Nomura has adopted the following personal trading procedures (the "**Procedures**").

&nbsp;&nbsp;&nbsp;&nbsp;A. Persons Covered by the Procedures

These Procedures apply to all Access Persons or to other personnel as determined on a case-by-case basis by Compliance. For purposes of these Procedures, the fund vehicles and other client accounts that Nomura manages are referred to collectively as "**Clients**."

All of the provisions and requirements of the Code, including the rules pertaining to preclearance of personal securities transactions, also apply to persons who are closely connected persons, which include any family member who is presently living in your household, or to whose financial support you make a significant contribution, and trusts or estates over which you have investment control. In case of any doubt, please contact Compliance.

Unless specified otherwise, these procedures shall not apply to Access Persons who are Disinterested Directors (as defined in Section II of this Code).

&nbsp;&nbsp;&nbsp;&nbsp;B. Purpose of the Procedures

These Procedures were developed to help guide Access Persons in the conduct of their personal transactions and to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Mitigate the possibility of a transaction occurring that the SEC or other regulatory bodies would view
as illegal, such as *front running* (see *General Trading Prohibitions* below);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Avoid situations where it might appear that Nomura or JOF or any of their officers,
directors or employees benefited at the expense of a Client or taken inappropriate advantage of their fiduciary positions; and

Page **14** of **32**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Prevent, as well as detect, the misuse of material, nonpublic information.

All those covered by these Procedures are urged to consider the reasons for the adoption. The reputations of Nomura and JOF could be adversely affected as a result of even a single transaction considered questionable in light of the fiduciary duties of Nomura and the Disinterested Directors of JOF.

&nbsp;&nbsp;&nbsp;&nbsp;C. Securities Covered by the Procedures

For purposes of this Code, the term "Securities" means any note, stock, treasury stock, bond debenture, evidence of indebtedness, certificate of interest or participation in any profit-sharing agreement, collateral-trust certificate, preorganization certificate or subscription transferable share, investment contract, voting-trust certificate, certificate of deposit for a security, futures contracts and options traded on a commodities exchange, including currency futures, fractional undivided interest in oil, gas, or other mineral rights, any put, call, straddle, option or privilege on any security (including a certificate of deposit) or on any group or index of securities (including any interest therein or based on the value thereof), or any put, call, straddle, option or privilege entered into on a national securities exchange relating to foreign currency or, in general, any interest or instrument commonly known as a security or any certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase, any of the foregoing.

The term Securities does ***<u>not</u>*** include the following ***Exempt Securities***:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Securities that are direct obligations of the U.S. Government (e.g. U.S. Treasury obligations).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Shares of money market funds.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Bankers' acceptances, bank certificates of deposit, commercial paper, and other high quality
short-term debt instruments, including repurchase agreements. *High quality short-term debt instruments are interpreted to mean any instrument that has a maturity at issuance of less than 366 days and that is rated in one of the two highest rating categories by a Nationally Recognized Statistical Rating Organization.* 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. Shares of *non-affiliated* open-end investment companies.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. Shares of *non-affiliated* unit investment trusts that are invested exclusively in one or more *non-affiliated* open-end investment companies.

An investment company is considered "affiliated" if Nomura acts as a manager or adviser to the fund. Affiliated US open-end investment companies ("Affiliated Mutual Funds") are listed on Schedule A.

Please note that foreign exchange *spot* trades in any currency are not considered Securities transactions and therefore not subject to the requirements of the Code.

&nbsp;&nbsp;&nbsp;&nbsp;D. Accounts Covered by the Procedures

The following types of accounts are covered by these Procedures:

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. All accounts in the name of an Access Person;

2. All accounts of an Access Person's spouse or partner;

3. All accounts of any children or other relatives (by marriage or otherwise) living in the Access Person's
home; and

4. All accounts in which any of the foregoing persons have any beneficial ownership interest or over which
he or she exercises control or investment influence.

For the purposes of #4 above, you are considered to have ***Beneficial Ownership*** of Securities if you have or share a direct or indirect ***Pecuniary Interest*** in such Securities.

You have a Pecuniary Interest in Securities if you have the opportunity, directly or indirectly, to profit or share in any profit derived from a transaction in the Securities. Therefore, you would be considered to have Beneficial Ownership in any Security that is held by you, or by others for your benefit (such as custodians, trustees, executors, etc.); held by you as a trustee for members of your immediate family (child, stepchild, grandchild, parent, stepparent, grandparent, spouse, partner, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, and any adoptive relationship); or held in the name of your spouse, or minor children (including custodians under the Uniform Gifts to Minors Act) or any relative of yours or of your spouse (including an adult child) who is sharing your home, whether or not you supervise such investments. You will also be considered to have Beneficial Ownership of any Security for which you have a contract, understanding, relationship, agreement, or other arrangement that gives you, or any person described above, a present or future direct or indirect benefit substantially equivalent to an ownership interest in that Security. For example, you may have Beneficial Ownership of the following: 1) a Security held by a partnership in which you are a partner; 2) a Security held by a limited liability company in which you are a manager or member; 3) a Security held by an investment club in which you are a member; or 4) an investment held by a trust of which you are the settler, unless the consent of all of the beneficiaries is required in order for you to revoke the trust.

There is the presumption that you can exert some measure of influence or control over accounts in which you serve as guardian, executor or trustee for individuals that are not considered members of your immediate family, but this presumption may be rebutted if you certify in writing (and periodically re-certify, as applicable) that you have no such control or influence.

*Control* means the power to exercise a controlling influence over management or policies of a company, whether through ownership of securities, by contract, or otherwise. Any person who owns beneficially, either directly or through one or more controlled companies, 25% or more of a company's outstanding voting securities is presumed to control such company. Such presumption may be countered by the facts and circumstances of a given situation.

Note that Securities accounts that are only eligible to transact in mutual fund shares (e.g., certain 529 Plans) are not covered by these procedures.

*Note: The above list of examples is non-exhaustive. If in doubt as to whether you have Beneficial Ownership of Securities, the Compliance Department should be consulted.*

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&nbsp;&nbsp;&nbsp;&nbsp;E. Use of Approved Broker-Dealers

Generally, Access Persons may maintain an account only with authorized broker-dealers. The current list of Approved Broker-Dealers, which is subject to change from time to time, is included in **<u>Schedule C</u>**. Any exceptions to this general provision must be approved by Compliance.

Access Persons must notify the Compliance Department promptly upon establishing a new brokerage account.

&nbsp;&nbsp;&nbsp;&nbsp;F. General Trading Prohibitions

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1. *Inside Information****:* Access Persons are prohibited from engaging in any transaction in a Security at a time when the Access Person is in possession of material, non-public information regarding the Security or the issuer of the Security.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***2. Front Running****:* Access Persons are prohibited from engaging in front running. Front running is generally defined as the purchase or sale of a security by an officer, director or employee of an investment adviser or fund in anticipation of and prior to the adviser effecting similar transactions for its clients in order to take advantage of or avoid changes in market prices affected by the clients' transactions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3. *Preclearance Required***: Access Persons are prohibited from engaging in any Securities transaction without obtaining the appropriate preclearance as set forth in this Code (unless the transaction is exempt from preclearance as set forth below in Section G).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4. *Blackout Period****:* As a general matter, no Access Person may purchase or sell a Security other than an Exempt Security during the seven (7) calendar days before and after the day it has been traded in for a Client (i.e., if a Client transacts in a Security on Monday, the Access Person may not personally trade in the Security from the Monday before until the Monday after the Client transaction).

The seven-day blackout period *before* a Client trades is designed to deter front-running transactions. The blackout period *after* a Client trades is designed to allow dissipation of the market effect of a Client's trade before an Access Person trades. It is also designed to prevent Access Persons from benefiting from a trade that is opposite a Client's trade (e.g., the sale of a Security shortly after the Client purchased the Security and boosted its price).

Please note that Access Persons are permitted to invest in equity securities of issuers whose fixed income instruments are being held and/or transacted in by Clients. The seven-day blackout period requirement does not apply to such situations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5. *Short-Term Trading and Holding Period Requirements***: Securities issued by Nomura Holdings, Inc. or its subsidiaries ("**Nomura Group Securities**") must be held for at least 180 calendar days (see Section I below). Most positions in your accounts, other than Nomura Group Securities, must be held for at least 15 calendar days, measured from the date of purchase/opening of the position. Accordingly, all derivative positions, including options, must have at least 15 calendar days until maturity or expiration at the inception/opening of the investment.

Page **17** of **32**

Access Persons must also alert the Compliance Department whenever the mechanics of a derivative transaction may cause them to hold a position less than the full 15 days (e.g., when the Access Person writes a short put or call, or a covered written option that is assigned within the 15 days).

Please remember the holding period requirements are measured on a last-in first-out basis (LIFO). Certain transactions may be exempt from the holding period rule as set forth below in Section G.12).

 

*It is recognized that this prohibition effectively limits the utility of options trading, short sales of Securities, and various legitimate and non-abusive hedging activities by Access Persons. Accordingly, exceptions to this prohibition may be allowed by Compliance on a case-by-case basis, but only where no abuse is involved and the equities of the situation strongly support an exception.*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6. *Market Timing and Other Abusive Trading Practices****:* The term "**Market Timing**" is defined as excessive trading in mutual funds. Such activities can be detrimental to long-term shareholders, and consequently fund companies must maintain policies and procedures to detect and prevent market timing abuses and other short-term trading. Market timing and other abusive trading practices, such as time zone arbitrage, involving any Client account managed or sub-advised by Nomura is strictly prohibited.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7. *Acting as Trustees for Client Accounts***: Access Persons are prohibited from becoming trustees for Client assets or obtaining powers of attorney for Clients separate and apart from the firm.

&nbsp;&nbsp;&nbsp;&nbsp;G. Preclearance of Personal Securities Transactions

All Access Persons must obtain approval from Compliance prior to entering into personal securities transactions involving the purchase or sale of any Security, including any Security to be acquired in a private transaction, absent an exemption.

Nomura reserves the right to restrict the purchase or sale by an Access Persons of any Security at any time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.**  ***Use of PTCC*** 

Preclearance requests should generally be made via the PTCC system. PTCC will automatically send any preclearance request to Compliance if it requires a manual approval. If PTCC is not available, please contact Compliance**.**

Requests will normally be processed on the same day that they are received; however additional time may be required in certain circumstances (e.g., to allow checks to be made with affiliates as necessary).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.**  ***Length of Preclearance Approval*** 

Preclearance is effective for two (2) business days, inclusive of the day approval is granted (or in the case of a private placement purchase, the closing of a private placement transaction). If preclearance is given after the market is closed, it is valid for the next two business days. If the trade is not executed before the preclearance period expires, the Access Person must again seek preclearance if he/she wishes to execute the trade.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.**  ***Limit, GTC and Stop-Loss Orders*** 

Limit orders, GTC and Stop-Loss instructions must be withdrawn by the end of the second business day after preclearance (inclusive of the day approval is granted), unless a new approval is obtained.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.**  ***Maintaining Margin Accounts*** 

Access Persons are permitted to maintain margin accounts. Securities sales by Access Persons pursuant to margin calls are not subject to preclearance provided the Access Person does not have advance knowledge of or influence over such Securities transactions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.**  ***Initial Public Offerings*** 

Access Persons are generally prohibited from acquiring securities in an equity initial public offering ("IPO"). In the event that an Access Person holds securities in a company that has announced that it will engage in an IPO, he or she must immediately notify Compliance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.**  ***Special Preclearance Procedures for Private Placements*** 

 ****

A *private placement* is defined as an offering of a Security not being made to "the public," but made rather to a limited number of investors and deemed not to require registration with the SEC. Access Persons are permitted to acquire securities through a private placement provided that they obtain prior approval from Compliance. Access Persons are not required to obtain approval when divesting of a private placement holding.

Please note that private placements transactions include transactions in shares of or interests in privately held companies, non-publicly traded limited partnerships and privately offered funds, such as hedge funds (including privately offered funds managed by the firm or its affiliates).

Access Persons requesting permission to execute a private placement transaction must complete a Private Placement Request Form in PTCC and provide the respective document(s) regarding the investment, such as offering memorandum.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.**  ***De Minimus Transactions*** 

Preclearance will generally be granted for certain Access Persons, as determined by Compliance, for U.S. equity Securities whose issuers have a market capitalization of $6 billion or more. Transactions meeting the de minimus threshold will not be subject to blackout period restrictions discussed in Section F. above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.**  ***Deferred Compensation Plan Securities from Previous Employers*** 

Equity shares acquired from a previous employer under a deferred compensation plan must be reported as a holding in PTCC.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.**  ***Securities Given as Gifts*** 

Gifts of Securities made to others, such as relatives or charities, are treated as a disposition of Beneficial Ownership, and must be precleared like any other securities transaction prior to the transfer of the securities. There may be instances where it may not be possible to identify with precision the date on which a gift transfer will actually take place. For that reason, Compliance may, in its discretion, waive certain technical pre-clearance requirements with respect to gifts of Securities if (i) the gift transaction was precleared in advance, but the transfer of the Securities was delayed beyond the pre-clearance date, or (ii) if the facts and circumstances warrant.

Securities received as gifts are generally exempt from preclearance. See *Exceptions to Preclearance Requirements* below.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10.**  ***Automatic Investment Plan Transactions*** 

Securities transactions pursuant to an Automatic Investment Plan (including dividend reinvestment plans) are not subject to the preclearance or transaction reporting requirements in this Policy, except where such plan has been overridden. For example, automatic purchases in an employee stock purchase plan do not require preclearance or reporting, however, sales of shares from an employee stock purchase plan do require preclearance and reporting as the instruction is an override of the plan by the Access Person. Note that Securities holdings resulting from Automatic Investment Plan transactions must be reported in accordance with Section K. below.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11.**  ***Disinterested Directors* and Non-Executive Affiliated Directors** 

Disinterested Directors and Non-Executive Affiliated Directors are not required to preclear personal Securities transactions unless he or she knows or, in the ordinary course of the fulfillment of his or her official duties as a director or officer of Nomura or JOF, should have known that during the 15-day period immediately preceding or after the date of a transaction in a Security by that person, such a Security was purchased or sold by Clients, or that the purchase or sale of that Security was considered by Nomura for its Clients. In addition, Disinterested Directors and Non-Executive Affiliated Directors are not required to report their personal Securities transactions on a quarterly basis, or to report their holdings on an annual basis, to Nomura.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**12. *Transactions Excluded from the Preclearance Requirement (but still subject to the Reporting Requirements discussed in Section K below)***

All Securities transactions listed below are subject to the reporting requirements described in Section K. below.

The following Securities transactions are not subject to the preclearance and holding period requirements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) <u>Securities Transactions with No Knowledge</u>. Purchases or sales effected in any account over which
the Access Person has no direct or indirect influence, knowledge or control. For example, transactions in Securities effected for the
Access Person by a trustee or a blind trust, or discretionary trades made by an investment manager retained by the Access Person, in connection
with which the Access Person is neither consulted nor advised of the trade before it is executed;

Page **20** of **32**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) <u>Non-Volitional Transactions</u>. Transaction as to which you do not exercise
investment discretion at the time of the transaction ("non-volitional transactions"). Examples of non-volitional transactions
include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. Any acquisition of a Security through stock dividends, dividend reinvestments, stock splits, reverse
stock splits, mergers, consolidations, spin-offs, or other similar corporate reorganizations or distributions generally applicable to
all holders of the same class of the Security;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii. Any acquisition of a Security through the exercise of rights issued by an issuer
pro rata to all holders of a class of its securities, to the extent the rights were acquired in the issue; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iii. Any disposition of a Security through a tender offer, mandatory call or other corporate action equally
available to all holders of such Security (or class of Security);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) <u>Securities Received as Gifts.</u> Securities received as gifts from an account in which the Access
Person has no Beneficial Ownership. Gifts of Securities received depend on the nature of the gift. In the ordinary case, if you receive
Securities as a gift, receipt of that gift is non-volitional on your part, and you cannot control the timing of the gift. Therefore, as
a practical matter, you are not required to pre-clear the receipt of Securities in such cases. Please remember, however, that you cannot
use the gift rules to circumvent the preclearance requirements. Therefore, if a gift of Securities that you receive is not truly non-volitional,
you must preclear that gift like any other Securities acquisition. Once received, a Security is subject to the applicable preclearance,
holding period and reporting requirements of these Procedures. Additionally, Nomura personnel are subject to the firm's *Gifts and Entertainment Policy* and must report gifts given or received in accordance with requirements specified in the policy.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d) <u>Municipal Obligations</u>. Purchases or sales of municipal bonds and futures
and options with respect to such instruments.

The following Securities transactions are not subject to the preclearance requirements but must follow the holding period requirements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e) <u>Exchange Traded Funds and Exchange Traded Notes, Closed-end Funds, and Affiliated Mutual Funds</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. Purchases or sales of exchange traded funds or exchange traded notes that (1) invest in or are linked to a
broad-based index or sector (i.e., consisting of at least 15 constituents) or (2) are linked to commodities, commodity indices or derivative-based
indices (such as volatility indices). Note: exchange traded funds or exchange traded notes that do not meet this criteria must be pre-cleared
(e.g., exchange traded funds with less than 15 constituents);

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii. Purchases or sales of U.S. closed-end investment companies. Purchases and sales of U.S. closed-end
investment companies managed or sub-advised by Nomura ()"**Affiliated Closed-end Funds**") are also subject to the Code's
preclearance requirements (see Schedule B).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iii. Purchases or sales of Affiliated Mutual Funds (i.e., funds managed or sub-advised by Nomura must be
reported but do not need to be pre-cleared).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f) <u>Derivative Transactions</u>. Purchases or sales of commodity futures and options thereon; currency
futures, currency forwards and options thereon; futures on broad-based indices, options on futures and options on broad-based indices;
and swaps with respect to currencies, interest rates or broad-based indices.

Other Securities and/or transactions may be exempt from preclearance and/or holding period requirements as so designated by Compliance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**13.**  ***Other Preclearance Exceptions*** 

An Access Person may apply for a waiver from preclearance under the following circumstances:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• An account under the exclusive discretion of an Access Person's spouse or partner, where the
spouse or partner is employed by an investment firm  **<u>and</u>** where the spouse is subject to comparable preclearance requirements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• An account whose exclusive investment discretion is delegated to an outside party; provided such outside
party is not associated with Nomura or any affiliate of Nomura. Note that such delegation must be subject to a written contract and a
copy must be provided to Compliance. The Access Person must certify in writing that he or she has not discussed, and will not discuss,
potential investment decisions with the party to whom investment discretion has been delegated; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Any other situation where a waiver of preclearance is deemed appropriate by Compliance.

A waiver from preclearance is available at the discretion of Compliance. Transactions occurring in accounts that have obtained a waiver from preclearance are ***not*** exempt from the reporting requirements described in Section K. below.

&nbsp;&nbsp;&nbsp;&nbsp;H. Investment Clubs

An Access Person is prohibited from participating in an investment club unless such participation has been approved in writing by Compliance. The following conditions must be satisfied:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) The Access Person's participation does not create any actual or potential conflicts of interest;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) The Access Person does not control investment decision-making for the investment club; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) The Access Person has made satisfactory arrangements to ensure that duplicate trade confirmations of
investment club activity and quarterly statements of investment club holdings are provided to Compliance by brokers acting on behalf of
the investment club.

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Should the Access Person contribute, but not necessarily control, investment decision-making for the investment club, all Securities transactions by the investment club would be subject to preclearance.

&nbsp;&nbsp;&nbsp;&nbsp;I. Trading in Nomura Securities

Access Persons have additional responsibilities with respect to transactions in Nomura Holdings, Inc. ADRs ("NMR") and other publicly-traded securities issued by the Nomura Group (collectively, "Nomura Securities"), and must be sensitive to any appearance of impropriety. The following restrictions apply to all transactions in Nomura Securities in your accounts. These restrictions are in addition to all other legal or regulatory restrictions that may apply to Access Persons:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.  ***Trading Nomura Securities*** . All requests to purchase or sell Nomura Securities must be
submitted through PTCC and pre-cleared by the Access Person's designated supervisor and the Compliance Department. Access Persons
may not effect transactions in Nomura Securities during the firm's "Blackout Period" designated by the Compliance Department.
The Blackout Period generally begins 30 days before the public announcement of Nomura Holdings, Inc.'s quarterly earnings and ends
at the start of the trading day following the announcement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.  ***Holding Period*** *.* Transactions in Nomura Group securities are subject to a 180
 day hold period. Exceptions may be made for shares acquired through the Nomura Group's deferred compensation plan. Please
 consult with Compliance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.  ***Short Sales.*** Access Persons may not sell Nomura Group securities short.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.  ***Margin Transactions*** *.* Access Persons generally may not purchase publicly traded
Nomura Securities on margin. However, employees may margin Nomura securities in connection with a cashless exercise of an employee stock
option, and may use Nomura Securities to collateralize loans for non-securities purposes or for the acquisition of securities other than
those issued by the Nomura Group.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.  ***Option Transactions*** *.* Access Persons generally may not execute option transactions
referencing Nomura Securities. Access Persons, however, may execute option transactions in connection with a firm-sponsored compensation
or employee option plan or similar program.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.  ***Major Nomura Events*** *.* Access Persons who have knowledge of any pending material
confidential information, including any unannounced or non-public information, concerning the Nomura Group or its securities are prohibited
from buying or selling the publicly traded securities of Nomura before such public announcements, even if the employee believes the event
does not constitute material non-public information

 ****

&nbsp;&nbsp;&nbsp;&nbsp;J. Section 16 Holding Periods

 ****

If you are a reporting person under Section 16 of the Securities Exchange Act of 1934, with respect to any closed end fund advised or sub-advised by Nomura, you are subject to a six month holding period and you must make certain filings with the SEC. It is your responsibility to determine if you are subject to Section 16 requirements and to arrange for appropriate filings. Please consult Compliance for more information.

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&nbsp;&nbsp;&nbsp;&nbsp;K. Reporting of Securities Transactions and Holdings

The Compliance Department receives automatic feeds of transactions and holdings from Approved Broker-Dealers. However, for Securities accounts maintained away from Approved Broker-Dealers, Access Persons must arrange for Compliance to receive, on a timely basis, duplicate copies of confirmations of all personal Securities transactions and/or copies of periodic statements for such Securities accounts. This information will be used to check for conflicts of interest against Nomura's preclearance records, Quarterly Securities Transaction Reports and Annual Holdings Reports.

*1)* *Blind Trusts/Managed Accounts*

An exemption from the preclearance and reporting requirements of the Code may be requested for Securities that are held in a blind or quasi-blind trust arrangement or a managed (discretionary) account. For the exemption to be available, you or a member of your immediate family must not have authority to advise or direct Securities transactions of the trust or managed account. Employees must certify that they or the members of their immediate family does not advise or direct transactions. Access Persons are responsible for ensuring that Compliance receives statements at least quarterly for transactions within the trust or managed account.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(2)* *Exemptions from Reporting* 

 

Exempt Securities identified in Section VI.C. above are not subject to the reporting requirements of this Section. The reporting requirements do ***not*** apply to accounts over which the employee has no direct or indirect control or influence.

*2)* *Initial Holdings Report*

<u>Within 10 calendar days of commencement of employment</u> (or within 10 calendar days of obtaining Access Person status) all Access Persons must disclose to Compliance all personal Securities holdings in which they have Beneficial Ownership through PTCC (if PTCC is not available, please contact Compliance)**.** The report must contain the information listed below and must be current as of a date no more than 45 days prior to the date the person becomes an Access Person:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) The title and type of Security, and as applicable the exchange ticker symbol or CUSIP number, number
of shares, and principal amount of each Security holding;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) The name of each broker, dealer or bank with which the Access Person maintains an account in which Securities
are held for the Access Person's direct or indirect benefit; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) The date the Access Person submits the report to Compliance.

<br> *3)* *Annual Holdings Report*

All Access Persons must submit to Compliance an annual holdings report on or before February 14th of each year reflecting holdings as of a date no earlier than December 31<sup>st</sup> of the preceding year. The report must contain the information listed below:

Page **24** of **32**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) The title and type of Security, and as applicable the exchange ticker symbol or CUSIP number, number
of shares, and principal amount of each Security holding;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) The name of each broker, dealer or bank with which the Access Person maintains an account in which Securities
are held for the Access Person's direct or indirect benefit; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) The date the Access Person submits the report to Compliance.

In PTCC, Access Persons will be required to certify annual holdings and brokerage account information for accuracy and completeness.

*4)* *Quarterly Securities Transactions Report*

Not later than 30 calendar days after the end of each calendar quarter, each Access Person must submit through PTCC a quarterly transactions report with respect to all transactions in Securities effected during the quarter, including those not executed through a broker, dealer or bank (e.g., trades executed with the issuer of a Security). If PTCC is not available, please contact Compliance**.** Note that transactions effected pursuant to an automatic investment plan are not required to be reported. However, any transaction that overrides the preset schedule or allocations of the automatic investment plan must be included in a quarterly transaction report.

With respect to transactions, the report must contain the information listed below:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) The date of the transaction, a description of the Security, and as applicable the exchange ticker symbol
or CUSIP number, interest rate and maturity date, number of shares, and principal amount of the Security;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) The nature of the transaction (i.e., purchase, sale, or any other type of acquisition or disposition);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) The price of the Security at which the transaction was effected;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d) The name of the broker, dealer, bank or other institution with or through which the transaction was
effected;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e) For any brokerage account opened during the quarter in which the Access Person has Beneficial Ownership,
the name of the broker, dealer or bank and date the account was established; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f) The
date the Access Person submits the report to Compliance.

In filing the report please note:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) You must file a report every quarter whether or not there were any reportable transactions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) Reports must show sales, purchases, or other acquisitions or dispositions, including
securities received as gifts, exercise of conversion rights and the exercise or sale of subscription rights.

Page **25** of **32**

Note that a Disinterested Director and Non-Executive Affiliated Director are not required to submit a quarterly transaction report unless the Disinterested Director or Non-Executive Affiliated Director knew or, in the ordinary course of fulfilling his or her official duties as a director, should have known that during the 15-day period immediately before or after the director's transaction in a Security, the Client purchased or sold the Security, or the Client or Nomura considered purchasing or selling the Security.

In PTCC, Access Persons will be required to certify securities transaction and brokerage account information for accuracy and completeness.

*5)* *Review of Transactions and Holding Reports*

Securities transactions reports and holding reports will be reviewed by appropriate management or compliance personnel according to procedures established by Compliance.

Nomura reserves the right to monitor accounts for up to 45 days after termination of employment. In addition, should it be reasonably demonstrated that the Access Person derives no economic benefit from, and exercises no control over an account, Compliance may consider this policy does not apply to the account (rebut the presumption). Other exceptions must be submitted to the Compliance Department and will only be granted under limited circumstances.

&nbsp;&nbsp;&nbsp;&nbsp;L. Expatriate Employees

Expatriate employees are reminded that in addition to the requirements outlined in the Code, the personal trading requirements of their local Nomura company may also apply to them. In many cases, these requirements will be more restrictive than those contained in the Code. When a conflict arises between Nomura's requirements and the requirements of employees' local company, consult the Compliance Department.

**VII. SUPPLEMENTAL COMPLIANCE PROCEDURES**

The firm may establish, at its discretion, compliance procedures that are supplemental to those set forth in this Code in order to provide additional assurance that the purposes of the Procedures and/or the Code are fulfilled and/or assist the firm in the administration of the Code. These procedures may be more, but shall not be less, restrictive than the provisions of this Code and may include imposing additional restrictions on the trading activities on all or certain groups of Access Persons. These procedures, and amendments made to them, do not require the approval of the directors of JOF. Please consult with the Compliance Department for any additional restrictions that may apply.

**VIII. RESPONSIBILITIES OF JOF'S DIRECTORS**

&nbsp;&nbsp;&nbsp;&nbsp;***A.***  ***Approval by the JOF's Directors*** 

 ****

The directors of JOF are required to make a determination that this Code contains provisions reasonably necessary to prevent Access Persons from violating the anti-fraud provisions of Rule 17j-1

Page **26** of **32**

under the Investment Company Act. A majority of JOF's directors, including a majority of JOF's independent directors, is required to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Approve the Code when initially engaging Nomura; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Approve any subsequent material changes to the Code within six months of the change.

Prior to approving the Code or any material change to the Code, the directors of JOF shall receive a certification from Nomura that the procedures are reasonably necessary to prevent employees from violating the Code.

&nbsp;&nbsp;&nbsp;&nbsp;***B***.  ***Annual Report to JOF's Directors*** 

Nomura will provide a written report, at least annually, to the directors of JOF, summarizing efforts to ensure compliance by the directors, officers and employees of Nomura with their fiduciary obligations to JOF. The report will, at a minimum:

1) Summarize existing procedures regarding personal Securities transactions, and any material changes in such procedures during the prior year;

2) Describe issues that arose under this Code, including material violations of this Code, if any, which resulted in remedial action during the prior year;

3) Describe any significant conflicts of interest that arose involving personal investment policies of the organization, even if the conflicts did not result in a violation of the Code;

4) Discussion of any material waivers to the Code that were granted during the prior year;

5) Describe any recommended changes in existing procedures or restrictions based upon experience with this Code, evolving industry practices, or developments in applicable laws or regulations; and

6) Certify to the directors that the organization has adopted procedures reasonably necessary to prevent Access Persons from violating the Code.

The managers and/or boards of the Affiliated Mutual Funds may require Nomura to provide similar information on their funds.

**IX. WHISTLEBLOWING POLICY**

If an Access Person becomes aware of a possible violation of the Code, or if an Access Person becomes aware of conduct, including accounting and auditing matters, that they believe is illegal or unethical, they must promptly notify the firm's CCO or Deputy CCO. The CCO or Deputy CCO will take appropriate steps to investigate whether and how such misconduct occurred and, when necessary, to correct it and prevent its reoccurrence.

Page **27** of **32**

Alternatively, Access Persons who wish to report such matters anonymously may do so by calling the NHA Compliance Hotline (1-877-642-8477), which is available toll-free 24 hours a day, 7 days a week, and not leave their names or other identifying information.

In addition, these reporting obligations to the firm do not prevent employees from communicating with the SEC, the Commodity Futures Trading Commission, other federal agencies or state authorities and/or self-regulatory organizations concerning possible violations of applicable laws, rules or regulations. However, employees are not authorized generally to share information subject to the attorney-client privilege or the work product doctrine, unless specifically permitted by applicable law, rule or regulation.

Failure by Access Persons to comply with the Code may lead to sanctions, fines, suspensions and potentially termination of employment.

**X. WRITTEN ACKNOWLEDGMENTS**

&nbsp;&nbsp;&nbsp;&nbsp;A. Certification of Receipt

Compliance will distribute the Code and any amendments thereon, to all Access Persons. Within 10 calendar days of receipt of the Code or any such amendments, you are required to provide a written acknowledgement of your receipt of the Code and any amendments. Acknowledgments may be made through PTCC or through other means as determined by Compliance.

&nbsp;&nbsp;&nbsp;&nbsp;B. Annual Certification of Compliance

You must certify annually that you (a) have read and understand the Code; and (b) complied with the principles and requirements of the Code.

**XI. RECORDKEEPING**

Compliance shall maintain records in a manner and to the extent set forth below in accordance with Rule 204-2 of the Advisers Act, Rule 31a-2 under the Investment Company Act, as well as the requirements of other applicable foreign jurisdictions.

1) A copy of this Code, and any Nomura code of ethics that was in effect within the past five years, must be maintained in an easily accessible place;

2) A record of any violation of the Code, and of any action taken as a result of the violation for five years from the end of the fiscal year in which the violation occurred;

3) A record of all written acknowledgements of receipt of the Code and amendments for each person who is currently, or within the last five years, was an Access Person;

4) A copy of each initial holdings report, annual holdings report and quarterly transactions report made by an Access Person pursuant to the Code, including any brokerage confirmation and account statements made in lieu of these reports shall be preserved for a period of not less than five years from the end of the fiscal year in which it is made, the first two years in an easily accessible place;

Page **28** of **32**

5) A list of all persons who, within the last five years have been required to make reports pursuant to this Code, or who were required to review these reports;

6) A record of any decision and the reason supporting the decision that grant Access Persons waivers from or exceptions to the Code; and

7) A copy of reports provided to the JOF's Board of Directors regarding the Code.

All Securities transactions reports and any other information filed with Compliance pursuant to this Code shall, to the greatest extent practicable, be treated as confidential.

Effective: February 2005

Revised: November 2006

Revised: April 2008

Revised: February 2009

Revised: May 2010

Revised: October 2011

Revised: July 2012

Revised: January 2013

Revised: August 2013

Revised: June 1, 2017

Revised: January 31, 2018

Revised: June 30, 2020

Revised: October 1, 2022

Revised: May 31, 2025

Page **29** of **32**

**<u>Schedule A</u>**

**U.S. Open-end Investment Companies Managed or Sub-advised by the Nomura Advisers**

**(Affiliated Mutual Funds)**

American Century Investment Trust High Income Fund\*

American Century Select High Yield ETF\*\*

PACE Select Advisors Trust – PACE High Yield Investments\*\*\*

Northern Funds Multi-Manager High Yield Opportunity Fund\*\*\*

\* This fund was formally known as the Advisors' Inner Circle Fund III - Nomura High Yield Fund. The lead manager of this fund is American Century Investment Management, Inc. NCRAM serves as sub-adviser to the fund.

\*\* The lead manager of this fund is American Century Investment Management, Inc. NCRAM serves as sub-adviser to the fund.

\*\*\* The lead manager of this fund is a third-party investment manager. NCRAM serves as sub-adviser to the fund.

Page **30** of **32**

**<u>Schedule B</u>**

**U.S. Closed-end Investment Companies Managed by the Nomura Advisers (Affiliated Closed-end Funds)**

Nomura Alternative Income Fund\*

Japan Smaller Capitalization Fund, Inc.\*\*

The Taiwan Fund, Inc.\*\*

\* The fund is a continuously offered interval closed end fund. The lead manager of the fund is NCM. <br>\*\* The fund is an exchange-traded closed-end fund. The lead manager of the fund is Nomura Asset Management U.S.A. Inc.

Page **31** of **32**

**<u>Schedule C</u>**

**Approved Broker-Dealers (as of May 31, 2025)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Fidelity

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Charles Schwab

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Merrill Lynch

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. Morgan Stanley (Retail)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. Interactive Brokers

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. UBS

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. JP Morgan Securities

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. Citigroup

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. Wells Fargo

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. JP Morgan Private Bank

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. Vanguard

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12. Chase Investment Services Corp.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13. Raymond James

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14. Ameriprise Financial

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15. William Blair

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16. Stifel Financial

Page **32** of **32**

## Ex-99.(A)(2)

**Exhibit 19 (a)(2)**

![](img001.jpg)

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| | |
|:---|:---|
| &nbsp;&nbsp;**Global Proxy Voting Policy** | &nbsp;&nbsp;**Proxy Voting Standards for Japanese Companies** |
| &nbsp;&nbsp;November 1, 2021 | &nbsp;&nbsp;November 1, 2025 |
| &nbsp;&nbsp;Nomura Asset Management | &nbsp;&nbsp;Nomura Asset Management |
| &nbsp;&nbsp;This Policy applies to resolutions to be proposed at shareholders' meetings which are held on or after November 1, 2021. | &nbsp;&nbsp;These Proxy Voting Standards apply to resolutions to be proposed at shareholders' meetings which are held on or after November 1, 2025. |
| &nbsp;&nbsp;This Policy applies for investee companies globally. | &nbsp;&nbsp; Based on the "Global Proxy Voting Policy," these Proxy Voting Standards define the proxy voting standards required specifically for investee companies that are listed in Japan. |
| &nbsp;&nbsp; <br>**1. Policy for Proxy Voting** | &nbsp;&nbsp;Companies are expected to provide general shareholders with a thorough and easy-to-understand explanation in their business reports, reference documents for shareholders' meetings and other materials to allow them to make proper judgments on the exercise of their voting rights with sufficient understanding of the contents of respective issues and management status. |
| &nbsp;&nbsp; NOMURA ASSET MANAGEMENT ("we" hereafter) has the fiduciary duty (a duty to manage our business activities in the best interest of our clients) to do our best to enhance returns for our clients as an investment manager. To fulfill our duties as well as our role, we will encourage investee companies to realize appropriate management practices (including initiatives directed at ESG issues) and thereby encourage them to enhance corporate value and achieve sustainable growth by engaging with them and exercising our proxy voting rights in a proper manner based on this Policy we have established. We also encourage investee companies to operate their businesses in the best interests of their shareholders over the long term through our proper proxy voting activity.<br>(Note) ESG refers to environment, social and corporate governance. We place emphasis on ESG issues, as they need to be considered in the context of corporate social responsibility and sustainability. |  |
| &nbsp;&nbsp;**2. Proxy Voting Guidelines** |  |
| &nbsp;&nbsp; When exercising proxy voting rights, we will vote for resolutions that are deemed to enhance shareholder value, while voting against those that are deemed harmful to shareholder value. We do not exercise our proxy voting rights solely as a means to address specific social or political issues, irrespective of the investment returns of the company.<br> When making a judgment on the exercise of proxy voting rights, we regard any misconduct, violation of laws and regulations and rules of stock exchanges, or any |  |

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NOMURA ASSET MANAGEMENT 1

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|:---|:---|
| &nbsp;&nbsp; act that is deemed questionable in view of initiatives directed at ESG issues or social norms, as being harmful to shareholder value.<br> We closely examine voting resolutions that meet one or more of the conditions listed below. Where we believe that a specific resolution is not in the best interest of shareholders, we will, in principle, decide to vote against the resolution. |  |
| &nbsp;&nbsp; (1) The company continuously reports sluggish business performance. Sluggish business performance indicators that are considered when judging the exercise of proxy voting rights, include performance that leads to a significant decline in the investment returns of the company, such as recording a deficit for three consecutive years. Business performance is based on consolidated accounts. However, if consolidated accounts are not reported, business performance is based on non-consolidated accounts. (The same shall apply hereafter.) |  |
| &nbsp;&nbsp;(2) The company accumulates a large amount of excess funds that are deemed not to be used effectively and/or are not distributed to shareholders adequately. |  |
| &nbsp;&nbsp;(3) The company's disclosure is considered inadequate and harmful to shareholder value. |  |
| &nbsp;&nbsp;(4) The auditor's opinion on the issuer is qualified. |  |
| &nbsp;&nbsp; (5)The composition and/or size of the company's board of directors, or the composition and/or size of its board of statutory auditors, audit committee or any other committee is deemed to be inadequate and may harm shareholder value. |  |
| &nbsp;&nbsp;(6) Extraordinary resolutions that are deemed highly likely to harm shareholder value. |  |
| &nbsp;&nbsp;**3. Positions on Specific Issues** |  |
| &nbsp;&nbsp;(1) Election of Directors | &nbsp;&nbsp;1. Election of Directors |
| &nbsp;&nbsp; The board of directors is expected to consist of a diverse range of persons who are qualified for the position with sufficient skills and experience and the capability to supervise the execution of the business on behalf of shareholders.<br> If the company is found to have engaged in any activity that is materially harmful to shareholder value, or if the company's business performance remains sluggish over a long period, or if any similar issue is found with regard to the company, we will in principle vote against the election of directors who are deemed to be responsible for such issues/activities. Also, if the investee company had been encouraged by us to address the inadequacy in its initiatives to realize appropriate management practices pointed out by us through engagement but failed to engage adequately in initiatives and is not expected to make improvements, and if this is deemed to be hindering, or highly likely to hinder in the medium/long run, the | &nbsp;&nbsp; The board of directors is expected to function as a monitoring board whose main role and responsibility is to supervise management execution. These Proxy Voting Standards set forth below the minimum requirements that a monitoring board should satisfy and define the board of directors of a company as a monitoring board if the company satisfies all these requirements:<br> ① The number of directors is 5 or more, but less than 20;<br> ② Outside directors who satisfy all the independence requirements provided for in (8) account for the majority of the board of directors;<br> ③ A statutory or voluntary nomination/remuneration committee chaired by an outside director has been established, and outside directors account for the majority of it; |

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NOMURA ASSET MANAGEMENT 2

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|:---|:---|
| &nbsp;&nbsp; enhancement of corporate value and sustainable growth, we will in principle vote against the election of directors who are deemed to be responsible for such inadequacy.<br>In principle, we vote for the election of outside directors. However, we pay special attention to the directors' qualifications, such as their independence. We determine the independence of the outside directors from a comprehensive perspective on whether they are representatives of major shareholders, have received a large amount of income other than executive remuneration from the company in question, and are related to other executive members.<br> The number of directors should be adequate and appropriate considering the nature of the company's business and its scale. | &nbsp;&nbsp; ④ Female directors account for at least 15% of directors;<br> ⑤ The company has not introduced an anti-takeover measure;<br> ⑥ The company does not hold an excessive amount of strategically held stocks (Note);<br> ⑦ In the case of a company with a board of auditors, the term of office of a director is one year; and<br> ⑧ If there is a controlling shareholder, the board of directors is chaired by an outside director.<br> (Note) "Does not hold an excessive number of strategically held stocks" means strategically held stocks held by a company account for less than 25% of its net assets if the company is a financial institution and 10% of its invested capital if the company is a company other than a financial institution. In this context, the term "financial institution" is defined as a company that falls under "Banks," "Securities and Commodities Futures," "Insurance," or "Other Financing Business" in the 33 industry sectors defined by the TSE, the term "strategically held stocks" is defined as shares held not solely for investment purposes as per the annual securities report for the previous fiscal year, and the term "invested capital" is defined as the total amount of net assets and interest-bearing debt stated in the consolidated financial statements (or non-consolidated financial statements if consolidated financial statements are not prepared) presented in the same annual securities report. |
| &nbsp;&nbsp; enhancement of corporate value and sustainable growth, we will in principle vote against the election of directors who are deemed to be responsible for such inadequacy.<br>In principle, we vote for the election of outside directors. However, we pay special attention to the directors' qualifications, such as their independence. We determine the independence of the outside directors from a comprehensive perspective on whether they are representatives of major shareholders, have received a large amount of income other than executive remuneration from the company in question, and are related to other executive members.<br> The number of directors should be adequate and appropriate considering the nature of the company's business and its scale. | &nbsp;&nbsp; We also prescribe the following definitions concerning governance on nomination and remuneration, which is particularly important in the supervision of management execution:<br>*"*Effective governance on nomination is established" means a situation in which a statutory or voluntary nomination committee has been established, and outside directors constitute a majority of its members. However, for shareholders' meetings held in or before October 2026, the latter condition above shall be replaced with "its members include two or more outside directors, and the number of inside directors among the members is fewer than the number of outside directors among the members.*"*<br>*"*Effective governance on remuneration is established" means a situation in which a statutory or voluntary remuneration committee has been established, and outside directors constitute a majority of its members. However, for shareholders' meetings held in or before October 2026, the latter condition above shall be replaced with |

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NOMURA ASSET MANAGEMENT 3

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| |
|:---|
| &nbsp;&nbsp;"its members include two or more outside directors, and the number of inside directors among the members is fewer than the number of outside directors among the members."<br>|
| &nbsp;&nbsp; (1) If the company is found to have engaged in any activity that is materially harmful to shareholder value and if an individual person is found to be responsible for such activity, we will vote against the election of the relevant person as a director.<br> When making a judgment on the exercise of proxy voting rights, we regard any misconduct, violation of laws and regulations and rules of stock exchanges, or any act that is deemed questionable in view of initiatives directed at ESG issues or social norms, as being harmful to shareholder value. |
| &nbsp;&nbsp;(Note) ESG refers to environment, social and corporate governance. We place emphasis on ESG issues, as these need to be addressed in the context of corporate social responsibility and sustainability.<br>|
| &nbsp;&nbsp; (2) If the investee company had been encouraged by us to address the inadequacy in its initiatives to realize appropriate management practices (including initiatives directed at ESG issues) pointed out by us through engagement but failed to engage adequately in initiatives and is not expected to make improvements, and if this is deemed to be hindering, or highly likely to hinder in the medium/long run, the enhancement of corporate value and sustainable growth, the matter will be escalated to the exercise of voting rights, and we will in principle vote against the re-election of a director who has been in the position of chairperson and president, etc.<br> In these Proxy Voting Standards, "chairperson and president, etc." refers to the chairperson, president, bank president, chief executive officer (CEO), and any person who assumes a position equivalent thereto. |
| &nbsp;&nbsp; (3) In particular, we expect those companies whose stocks are constituents of TOPIX 100 to become role models for other Japanese companies by actively working to realize "appropriate management practices. "We will in principle vote against the re-election of a director who has been in the position of chairperson and president, etc., if we determine that the following efforts on sustainability issues in particular are clearly insufficient:<br>① Information disclosure that integrates ESG issues: To disclose information in appropriate media, including integrated report, in accordance with |

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NOMURA ASSET MANAGEMENT 4

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|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; internationally accepted standards and to obtain third party assurances for numerical data as much as possible;<br> ② Climate change: To set medium- to long-term net-zero targets for GHG emissions and obtain SBT certification and to clarify governance, strategy, risk management, metrics & targets concerning the climate change issue;<br> ③ Gender diversity: To disclose of the ratio of women in managerial position and to set and disclose medium- to long-term targets to increase the ratio; and<br> ④ Outside directors with effective skills: To disclose a skills matrix of directors in materials for shareholders' meeting to indicate that outside directors have relevant skills and experience, including those in the areas of management, finance, and ESG. |
| &nbsp;&nbsp; (4) If the return on equity (ROE) of the company in question has been below the prescribed minimum level for the most recent 3 consecutive fiscal years, except in cases where the board of directors is a monitoring board and efforts for management improvement have been demonstrated, we will in principle vote against the re-election of a director who has been in the position of chairperson and president, etc., for the most recent 3 or more consecutive fiscal years. However, this provision does not apply to a company which has not been listed for 5 years as of the last day of the most recent fiscal year.<br> In these Proxy Voting Standards, financial data principally refers to data published on a consolidated basis. If no financial data on a consolidated basis has been published, the data on a non-consolidated basis shall be used (the same applies hereinafter).<br> The "minimum level" of ROE shall be as follows:<br> ・ In the case of a cash-rich company, the minimum level shall be the lower of 8% and the 50th percentile of the industry.<br> ・ In the case of a non-cash-rich company, the minimum level shall be the lower of 5% and the 33rd percentile of the industry.<br> A *"*cash-rich company*"* is a company that satisfies all the criteria listed in ①, ②, and ③ below for the most recent 2 consecutive fiscal years:<br> ① Shareholders' equity ratio > 50%<br> ② Net financial assets / Sales > 30% |

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NOMURA ASSET MANAGEMENT 5

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|:---|
| &nbsp;&nbsp; ③ Net financial assets / Total assets > 30%<br> (Note) Net financial assets = Cash and deposits + Long- or short-term securities and deposits paid – Interest-bearing liabilities (excluding long- and short-term securities and deposits paid for financial institution).<br> *"*50th percentile and 33rd percentile of the industry" is obtained from listed companies that are constituents of TOPIX (Tokyo Stock Price Index), and is based on the 33 industrial classifications of the Tokyo Stock Exchange. If the calculated value is below 0%, it is 0%. The phrase "cases where... efforts for management improvement have been demonstrated" refers to any cases falling under either ① or<br> ② below. However, both ① and ② exclude cases where the total of net profits reported during the most recent 3 consecutive fiscal years is a negative figure.<br> ① Recurring profit (if no recurring profit is reported, pretax profit; hereinafter the same applies) for the last fiscal year or the net profit has increased compared with the previous fiscal year.<br> ② Recurring profit for the last fiscal year or the net profit has increased compared with 3 fiscal years ago. |
| &nbsp;&nbsp; (5) In any of the following cases, we will in principle vote against the re-election of a director who has been in the position of chairperson and president, etc.:<br> ① Unless the board of directors has satisfied all the requirements for a monitoring board (excluding requirements concerning strategically held stocks), strategically held stocks held by a financial institution account for more than 40% of its net assets or if strategically held stocks held by a company other than a financial institution account for more than 15% of its invested capital, or<br> ② With regard to the appropriation of surpluses or the introduction or renewal of anti-takeover measures resolved by the board of directors, without being proposed at a shareholders' meeting, it would have been reasonable for us to vote against said appropriation of surpluses measures or introduction or renewal of anti-takeover measures pursuant to these Proxy Voting Standards if such appropriation or introduction/renewal had been presented at the shareholders' meeting. |
| &nbsp;&nbsp;(6) If any inappropriate information disclosure is made, if shareholder value decreases due to management, financial or capital strategies, or if any other conduct |

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NOMURA ASSET MANAGEMENT 6

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| |
|:---|
| &nbsp;&nbsp; that clearly damages shareholder value is committed, we will in principle vote against the election of a director who is found to be responsible for the conduct. If the disclosure of financial information is delayed and it becomes difficult to make a judgment on the exercise of proxy voting rights, it will be deemed that the information disclosure was inappropriate. It is desirable that necessary financial information is disclosed at least 1 month prior to the day of the shareholders' meeting.<br> If a cash-rich company that has a parent company has extended a loan, etc. to the parent company or its group company as per the annual securities report for the previous fiscal year, the company's shareholder value is determined to have decreased due to financial or capital strategies.<br>|
| &nbsp;&nbsp; (7) If the number, the composition, or the term of office of directors falls under any of the following cases, we will in principle vote against the re-election of a director who has been in the position of chairperson and president, etc.:<br> ① The number of directors is less than five or 20 or more;<br> ② The number of outside directors is fewer than the minimum level.<br> The *"*minimum level*"* is in principle more than half the number of directors. In the case of a company without a controlling shareholder that has established effective governance on nomination, the "minimum level" is one third of the number of directors;<br> ③The number of female directors is below the minimum level. The "minimum level" is in principle 10% of the number of directors; or<br> ④ The director's term of office is two years in a company with a board of auditors. |
| &nbsp;&nbsp; (8) In these Proxy Voting Standards, independence requirements are as listed below. We will in principle vote against the election of a candidate as an outside director if the candidate fails to satisfy any of the independence requirements.<br> ① A person whose incumbency period is less than 12 years as at the close of the shareholders' meeting;<br> ② A person who is notified as an independent executive to the related stock exchange. It also includes someone who is stated in a business report or reference document for a shareholders' meeting as a person expected to be nominated as an independent executive.; and |

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NOMURA ASSET MANAGEMENT 7

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| |
|:---|
| &nbsp;&nbsp; ③ A person who never have served with any company which is a major shareholder of the company in question during the 3-year period immediately prior to the time he/she first assumed the position as an outside director. "Major shareholder" refers to a shareholder whose share holdings ratio listed in the "Top 10 Shareholders" list in the business report of the company in question for the most recent fiscal year is 10% or more; provided, however, that any person who is clearly likely to have a conflict of interest with general shareholders shall be regarded as a person who does not satisfy independence requirements.<br> Although a candidate to fill an outside director vacancy is not subject to the stock exchange notification as an independent director, we will request that a statement be included in the reference document for a shareholders' meeting indicating whether the candidate is expected to be notified as an independent director when he/she assumes the office of director. The statement will allow us to confirm this point. If such a statement is not contained in the document, we consider that the candidate dose not satisfy independence requirements, and we will vote against the election of the candidate.<br>|
| &nbsp;&nbsp; (9) If it is obvious that outside directors failed to fully fulfill their expected roles during the most recent fiscal year, we will in principle vote against the re-election.<br> "Expected roles of outside directors" refers to those described in Principle 4.7 of Japan's Corporate Governance Code. |
| &nbsp;&nbsp; [Japan's Corporate Governance Code Principle 4.7 Roles and Responsibilities of Independent Directors]<br> Companies should make effective use of independent directors, taking into consideration the expectations listed below with respect to their roles and responsibilities:<br> i) Provision of advice on business policies and business improvement based on their knowledge and experience with the aim to promote sustainable corporate growth and increase corporate value over the mid- to long-term;<br> ii) Monitoring of management through important decision-making at the board including the appointment and dismissal of senior management;<br> iii) Monitoring of conflicts of interest between the company and management or the controlling shareholders; and<br> iv) Appropriately representing the views of minority shareholders and other stakeholders in the boardroom from a standpoint independent of the management and controlling shareholders. |

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NOMURA ASSET MANAGEMENT 8

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|  | &nbsp;&nbsp;(10) In the case of an outside director who is expected to be re-elected, if the outside director's ratio of attendance at the board of directors meetings held over the last fiscal year is less than 75%, we will in principle vote against the re-election. In the case of a person who is expected to be re-elected as an audit committee member for a company with a nominating committee, etc., we will in principle vote against the re-election if the person's ratio of attendance at the audit committee meetings held over the last fiscal year is less than 75%; and in the case of a person who is expected to be re-elected as an audit and supervisory committee member for a company with an audit and supervisory committee, we will in principle vote against the re-election, if the person's ratio of attendance at the audit and supervisory committee meetings held in the last fiscal year is less than 75%. If the person who is expected to be re-elected has been elected as an outside director mid-way through the last fiscal year, the ratio of attendance at the board of directors meetings, audit committee meetings, and audit and supervisory committee meetings referred to above will be calculated with respect to the board of directors meetings, audit committee meetings, and audit and supervisory committee meetings held after the election as an outside director in the last fiscal year. If there is no disclosure of information necessary for the calculation of the attendance ratio, we will in principle vote against the re-election.<br>|
| &nbsp;&nbsp;(2) Election of Auditors | &nbsp;&nbsp;2. Election of Statutory Auditors |
| &nbsp;&nbsp; Auditors are expected to be qualified to audit the business on behalf of shareholders, and are also expected to function adequately for that purpose. Where the company is found to have engaged in any activity that is materially harmful to shareholder value or if any similar issue is found with regard to the company in question, and an auditor is found responsible for any part thereof, or is deemed to have failed to fully perform his/her duties, we will vote against the reelection of the auditor.<br> It is desirable that outside auditors are independent of management. It is not desirable to have a board of statutory auditors and an audit committee composed of outside auditors, all of whom lack independence. We determine the independence of the outside auditors from a comprehensive perspective on whether they are representatives of major shareholders, have received a large amount of income other than executive remuneration from the company in question, and are related to other executive members.<br> Where a reduction in the number of auditors is proposed, there should be proper justification for such a reduction. | &nbsp;&nbsp;(1) If the company is found to have engaged in any activity that is materially harmful to shareholder value, we will vote against the election of auditors who are deemed to be responsible for such activity.<br>|
| &nbsp;&nbsp; Auditors are expected to be qualified to audit the business on behalf of shareholders, and are also expected to function adequately for that purpose. Where the company is found to have engaged in any activity that is materially harmful to shareholder value or if any similar issue is found with regard to the company in question, and an auditor is found responsible for any part thereof, or is deemed to have failed to fully perform his/her duties, we will vote against the reelection of the auditor.<br> It is desirable that outside auditors are independent of management. It is not desirable to have a board of statutory auditors and an audit committee composed of outside auditors, all of whom lack independence. We determine the independence of the outside auditors from a comprehensive perspective on whether they are representatives of major shareholders, have received a large amount of income other than executive remuneration from the company in question, and are related to other executive members.<br> Where a reduction in the number of auditors is proposed, there should be proper justification for such a reduction. | &nbsp;&nbsp; (2) We will in principle vote against the election of a candidate as an outside auditor if the candidate fails to satisfy any of the independence requirements (as defined in (8) under "1. Election of Directors" above).<br> Although a candidate for outside auditor to fill a vacancy is not subject to notification requirements to the stock exchange as an independent auditor, we will request that that a statement be included in the reference document for a shareholders' meeting indicating whether a candidate is expected to be notified as an independent auditor when he/she assumes the office of auditor. The statement will allow us to confirm this point. If such a statement is not contained in the document, we consider that the candidate does not satisfy independence requirements, and we will vote against the election of the candidate. |

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NOMURA ASSET MANAGEMENT 9

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|  | &nbsp;&nbsp;(3) In the case of a person who is expected to be re-elected as an outside auditor, we will in principle vote against the re-election, if either the person's ratio of attendance at the board of directors meetings held during the last fiscal year (or, if the person was elected as an outside auditor in the middle of the last fiscal year, the board of directors meetings held after the election as an outside auditor during the last fiscal year), or the person's ratio of attendance at the board of auditors meetings held during the last fiscal year (or, if the person was elected as an outside auditor in the middle of the last fiscal year, the board of auditors meeting held after the election as an outside auditor during the last fiscal year), is less than 75%. If there is no disclosure of information necessary for the calculation of the attendance ratio, we will in principle vote against the re-election. |
| &nbsp;&nbsp;(3) Election of Accounting Auditors | &nbsp;&nbsp;3. Election of Accounting Auditors |
| &nbsp;&nbsp; In principle, we will vote for the election of accounting auditors except where it is found that:<br> ・The accounting auditor has an interest in the company and lacks independence.<br> ・Excessive non-audit remuneration has been paid to the accounting auditor by the company.<br> ・The accounting auditor has expressed inaccurate opinions on the company's financial conditions. | &nbsp;&nbsp; In principle, we will vote for the election of an accounting firm as the company's accounting auditor except where it is found that:<br> ① The accounting firm has an interest in the company and lacks independence.<br> ② Excessive non-audit remuneration has been paid to the accounting firm by the company.<br> ③ The accounting firm has expressed inaccurate opinions on the company's financial conditions. |
| &nbsp;&nbsp;(4) Executive Remuneration | &nbsp;&nbsp;4. Executive Remuneration |
| &nbsp;&nbsp; It is desirable that executive remuneration plans are reasonable and are aligned with the long-term performance of the company.<br> We vote against remuneration plans, if the company is found to have engaged in any activity that is materially harmful to shareholder value, or the amount of remuneration is inconsistent with or inequitable compared to the company's overall financial condition, or plans are deemed to substantially harm shareholder value. In particular, we will vote against resolutions on executive bonuses when there is a significant decline in business performance, or when the bonus payment amount is found to be unreasonably large in relation to past achievements and the current financial conditions of the company, or as compared with other competitors.<br> In particular, we will vote against resolutions on offering company stocks (including stock options) when there is a significant decline in business performance, or when the value of stock remuneration is found to be unreasonably | &nbsp;&nbsp;(1) If effective governance on remuneration is not established, we will in principle vote against the resolution. |
| &nbsp;&nbsp; It is desirable that executive remuneration plans are reasonable and are aligned with the long-term performance of the company.<br> We vote against remuneration plans, if the company is found to have engaged in any activity that is materially harmful to shareholder value, or the amount of remuneration is inconsistent with or inequitable compared to the company's overall financial condition, or plans are deemed to substantially harm shareholder value. In particular, we will vote against resolutions on executive bonuses when there is a significant decline in business performance, or when the bonus payment amount is found to be unreasonably large in relation to past achievements and the current financial conditions of the company, or as compared with other competitors.<br> In particular, we will vote against resolutions on offering company stocks (including stock options) when there is a significant decline in business performance, or when the value of stock remuneration is found to be unreasonably | &nbsp;&nbsp;(2) If the company is found to have engaged in any activity that is materially harmful to shareholder value, or in the case of a company whose board of directors is not a monitoring board, the ROE is below 5% for the most recent 3 consecutive fiscal years, we will in principle vote against an increase of executive remuneration and the payment of executive bonuses, unless a satisfactory explanation is made. |
| &nbsp;&nbsp; It is desirable that executive remuneration plans are reasonable and are aligned with the long-term performance of the company.<br> We vote against remuneration plans, if the company is found to have engaged in any activity that is materially harmful to shareholder value, or the amount of remuneration is inconsistent with or inequitable compared to the company's overall financial condition, or plans are deemed to substantially harm shareholder value. In particular, we will vote against resolutions on executive bonuses when there is a significant decline in business performance, or when the bonus payment amount is found to be unreasonably large in relation to past achievements and the current financial conditions of the company, or as compared with other competitors.<br> In particular, we will vote against resolutions on offering company stocks (including stock options) when there is a significant decline in business performance, or when the value of stock remuneration is found to be unreasonably | &nbsp;&nbsp;(3) We will in principle vote against a resolution on bonus payments to outside directors, directors who are audit committee members or directors who are audit and supervisory committee members, or statutory auditors. |

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NOMURA ASSET MANAGEMENT 10

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| &nbsp;&nbsp; high in view of past achievements and the current financial conditions of the company, or as compared with other competitors. In principle, we vote for stock remuneration plans when the terms and conditions of the plan, such as eligibility and scale, are properly set forth for the purpose of incentivizing executives.<br> However, we vote against such plans when the terms and conditions of the plan, including eligibility and scale, are deemed to be improper.<br> We will determine whether to vote for or against resolutions on the granting of stock remuneration to the company's employees or outside parties by applying mutatis mutandis the rules on stock remuneration plans for executives mentioned above. We will require sufficient explanation on stocks offered to outside parties in light of whether it leads to the enhancement of shareholder value. | &nbsp;&nbsp; (4) We will in principle vote against resolutions on offering company stocks (including stock options) as remuneration, in the following cases:<br> ① The cumulative share dilution ratio to the total number of issued shares will exceed 10%; If the calculation period of the cumulative share dilution ratio is unknown, it is assumed to be 10 years:<br> ② If the period until a person who receives company stocks is no longer restricted to sell them (in the case of stock options, the period from the granting of stock options until the person who are granted them is no longer restricted to sell stocks that have been acquired by exercising the stock options) is less than two years; and<br> ③ If the persons eligible for receiving company stocks include the following persons:<br> &nbsp;&nbsp;&nbsp;&nbsp;(i) If the board of directors is a monitoring board and such remuneration is not subject to performance achievement conditions, statutory auditors or any external parties who are found to be inappropriate to receive the stock incentive. However, even if company stocks are offered to external parties, we will vote for the resolution, if explanation is provided in an appropriate manner and it is found that the offering of company stocks as remuneration to the external parties contributes to the improvement of shareholder value; and<br> &nbsp;&nbsp;&nbsp;&nbsp;(ii) In cases other than those referred to above, outside directors, directors who are audit committee members or directors who are audit and supervisory committee members, statutory auditors, or any external parties who are found to be inappropriate to receive the stock incentive. However, even if company stocks are offered to external parties, we will vote for the resolution, if explanation is provided in an appropriate manner and it is found that the offering of company stocks as remuneration to the external parties contributes to the improvement of shareholder value. |
| &nbsp;&nbsp; high in view of past achievements and the current financial conditions of the company, or as compared with other competitors. In principle, we vote for stock remuneration plans when the terms and conditions of the plan, such as eligibility and scale, are properly set forth for the purpose of incentivizing executives.<br> However, we vote against such plans when the terms and conditions of the plan, including eligibility and scale, are deemed to be improper.<br> We will determine whether to vote for or against resolutions on the granting of stock remuneration to the company's employees or outside parties by applying mutatis mutandis the rules on stock remuneration plans for executives mentioned above. We will require sufficient explanation on stocks offered to outside parties in light of whether it leads to the enhancement of shareholder value. | &nbsp;&nbsp; (5) In cases other than those referred to above, we will consider an increase of executive remuneration after giving comprehensive consideration to the reason for the change in executive remuneration, and the appropriateness of the amount of such executive remuneration, etc. We will in principle vote against the resolution, if the offering of company stocks as remuneration will give an excessive profit to specific eligible persons, or if the offering of company stocks is inappropriate or inequitable to a significant degree. |

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NOMURA ASSET MANAGEMENT 11

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| &nbsp;&nbsp; (5) Retirement Bonus for Directors and Auditors | &nbsp;&nbsp; 5. Retirement Bonus for Directors and Auditors |
| &nbsp;&nbsp;We will vote against resolutions on retirement bonuses for retiring executives when the company is found to have engaged in any activity that is materially harmful to shareholder value, or when there is a significant decline in business performance or share price, or when the amount of the retirement bonus payment is found to be unreasonably large considering past achievements and the current financial conditions of the company, or as compared with other competitors. | &nbsp;&nbsp;(1) If the amount is found to be unreasonably large taking into consideration the past business performance or the current financial conditions or in comparison with other companies in the same industry, etc., we will in principle vote against the resolution. Furthermore, if effective governance on remuneration is not established or if outside directors do not account for a majority of directors, we will in principle vote against the resolution. |
|  | &nbsp;&nbsp;(2) We will in principle vote against the payment of a retirement bonus to an executive who has been involved in any activity that is materially harmful to shareholder value or who is found to be responsible for serious misconduct. |
|  | &nbsp;&nbsp;(3) If the ROE is below 5% for the most recent 3 consecutive fiscal years and there is a deficit, or if the total of the current net profits during the most recent 3 fiscal years is a negative figure, we will in principle vote against the resolution. |
|  | &nbsp;&nbsp;(4) We will in principle vote against resolutions on payment to an outside director or a director of an audit committee member of companies that have a board with an audit committee structure or statutory auditors. |
| &nbsp;&nbsp;(6) Allocation of Dividends and Profits | &nbsp;&nbsp;6. Allocation of Dividends and Profits |
| &nbsp;&nbsp; In deciding on distributions to its shareholders, the company should ensure that such distributions are consistent with its long-term investment plan and capital policies. In principle, it is desirable that excess funds are distributed to shareholders.<br> While considering whether the company's allocation of dividends and profits is consistent with its long-term investment plan and capital policies, we shall vote against allocation policies that are deemed to be significantly inadequate and harmful to shareholder value. | &nbsp;&nbsp; (1) We will in principle vote against a resolution on the appropriation of surpluses, if it is proposed by a cash-rich company whose ROE during the most recent fiscal year is below 10% unless its shareholder's return ratio is 50% or more. However, this provision does not apply to any company which has not been listed for 5 years as of the last day of the most recent fiscal year and where how surplus funds are used is clearly defined. |
| &nbsp;&nbsp; In deciding on distributions to its shareholders, the company should ensure that such distributions are consistent with its long-term investment plan and capital policies. In principle, it is desirable that excess funds are distributed to shareholders.<br> While considering whether the company's allocation of dividends and profits is consistent with its long-term investment plan and capital policies, we shall vote against allocation policies that are deemed to be significantly inadequate and harmful to shareholder value. | &nbsp;&nbsp;(Note) Shareholders' return ratio = (Dividends + Share repurchase) / Current net profit<br>|
|  | &nbsp;&nbsp;(2) We will vote against resolutions on dividend policy or the appropriation of surpluses which are found to be harmful to shareholder value. |

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NOMURA ASSET MANAGEMENT 12

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|  | &nbsp;&nbsp;(3) We will vote against resolutions on the appropriation of surpluses, in any other cases where it is found that shareholders' returns are insufficient to a significant degree.<br>|
| &nbsp;&nbsp;(7) Acquisition of the Company's Own Stock | &nbsp;&nbsp;7. Acquisition of the Company's Own Stock |
| &nbsp;&nbsp;While we view the acquisition of the company's own stock positively as a means to enhance shareholder value, we would oppose such a resolution when it is deemed to be inappropriate for the sake of the company's capital structure. | &nbsp;&nbsp;We will in principle vote for resolutions on the acquisition of the company's own stock. |
| &nbsp;&nbsp; <br> (8) Change in Number of Authorized Shares | &nbsp;&nbsp; <br> 8. Change in Number of Authorized Shares |
| &nbsp;&nbsp;When said purposes are inappropriate, We will in principle vote against a company's proposed increase in the number of authorized shares. | &nbsp;&nbsp;When said purposes are inappropriate, such as in the case of a company that has introduced anti-takeover measures, we will in principle vote against a company's proposed increase in the number of authorized shares.<br>|
| &nbsp;&nbsp;(9) Issuance of Preferred and Other Classes of Shares | &nbsp;&nbsp;9. Issuance of Preferred and Other Classes of Shares |
| &nbsp;&nbsp;We will in principle vote for resolutions if the purpose is deemed to be clear and appropriate, and the issuance of such shares is deemed not to harm the interests of general shareholders in consideration of appropriate application requirements, the fairness of voting rights, beneficiaries and other relevant matters. Otherwise, we would oppose the resolution in principle. | &nbsp;&nbsp;We will in principle vote for resolutions if the purpose is deemed to be clear and appropriate, and the issuance of such shares is deemed not to harm the interests of general shareholders in consideration of appropriateness of application requirements, the fairness of voting rights, beneficiaries and other relevant matters. Otherwise, we would oppose the resolution in principle.<br>|
| &nbsp;&nbsp;(10) Corporate Restructuring and Capital Policy (Mergers, Acquisitions, Sale/Transfer of Business, Corporate Separation, Capital Increase, etc.) | &nbsp;&nbsp; 10. Corporate Restructuring and Capital Policy (Mergers, Acquisitions, Sale/Transfer of Business, Corporate Separation, Capital Increase, etc.) |
| &nbsp;&nbsp;We will vote for proposed corporate restructuring and capital policies, if they are deemed appropriate after considering the contents of the respective resolutions, financial conditions (including premiums), effects on shareholder value, basis and rationality of management judgment, fair disclosure, etc., from an overall perspective. Otherwise, we would oppose the resolutions. When general shareholders receive a consideration, whether in the form of shares, money or otherwise, in relation to corporate restructuring or capital policy, we would emphasize the appropriateness of the consideration when forming a judgment on whether to vote for or against the resolutions. | &nbsp;&nbsp; We will vote for proposed corporate restructuring and capital policy, if they are deemed appropriate in consideration of the contents of respective resolutions, the possibility of conflict of interest with minority shareholders, measures to protect the interest of minority shareholders, effects on shareholder value, basis and rationality of management judgment, financial condition (including premiums), fair disclosure, etc., from an overall perspective.<br> In particular, we will in principle vote against a resolution that falls under favorable issuance of shares (excluding resolutions falling under "4. Executive Remuneration<br> (4)" above) unless an effect to enhance shareholder value is clearly indicated. However, we will in principle vote for a resolution for a third-party allotment |

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NOMURA ASSET MANAGEMENT 13

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|  | &nbsp;&nbsp; whose purpose is to use dividend from the allotted shares to fund activities that contribute to the resolution of ESG issues if all of the following conditions are met:<br> ① The dilution ratio of voting rights is less than 1%;<br> ② No voting rights will be exercised on the allotted shares;<br> ③ The company has not introduced an anti-takeover measure; and<br> ④ The company does not hold strategically held stocks that fall under *"*1. Election of Directors (5)①" above. |
| &nbsp;&nbsp; <br> (11) Anti-Takeover Measures | &nbsp;&nbsp; <br> 11. Anti-Takeover Measures |
| &nbsp;&nbsp;We individually analyze anti-takeover measures. We would oppose such resolutions unless shareholder value is protected. | &nbsp;&nbsp;We will in principle vote against a resolution that is found to set an anti-takeover measure. |
| &nbsp;&nbsp;(12) Amendment of Articles | &nbsp;&nbsp;12. Amendment of Articles |
| &nbsp;&nbsp;We will determine whether to vote for or against resolutions on amendments to the articles of incorporation on a case by case basis from the perspective of the long-term enhancement of shareholder value or the protection of shareholder value from impairment. We will vote for (against) such resolutions if we find them appropriate (inappropriate) from these perspectives. | &nbsp;&nbsp;(1) In the case of a resolution under which the articles of incorporation are to be changed in order to authorize the board of directors to carry out a discretionary distribution of surplus, we will in principle vote for the resolution, if the company's appropriation of surpluses is appropriate, a distribution of surplus by a resolution of the shareholders' meeting is not precluded, and the number of outside directors is not fewer than the minimum level prescribed in "1. Election of Directors (7)". As used in these Proxy Voting Standards, the appropriateness of the appropriation of surpluses will be determined in accordance with the standards stipulated in "6. Allocation of Dividends and Profits." |
|  | &nbsp;&nbsp;(2) In the case of a resolution under which an anti-takeover measure is to be prescribed in the articles of incorporation, if we should vote against the introduction of the anti-takeover measure in accordance with the standards set out in "11. Anti-Takeover Measures" above, we will in principle vote against the resolution. |
|  | &nbsp;&nbsp;(3) In the case of a resolution to change the articles of incorporation in order to authorize the board of directors to add a record date for voting rights by its decision, we will vote for the resolution if the purpose of the change is clearly explained and is found to be reasonable. |

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NOMURA ASSET MANAGEMENT 14

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| &nbsp;&nbsp;(4) In the case of a resolution to change the articles of incorporation in order to increase the total number of authorized shares, we will consider whether to vote for the resolution in accordance with the standards set out in "8. Change in Number of Authorized Shares" above. |
| &nbsp;&nbsp;(5) In the case of a resolution to change the articles of incorporation in relation to classes of shares, we will consider whether to vote for the resolution in accordance with the standards set out in "9. Issuance of Preferred and Other Classes of Shares" above. |
| &nbsp;&nbsp;(6) If a change in the governing body structure of the company is proposed, we will in principle respect the opinion of the board of directors; provided, however, that we will vote against any such change that will not contribute to the improvement of corporate governance. |
| &nbsp;&nbsp; (7) Regarding the following amendments to the articles of incorporation, we will in principle vote against the resolution from the perspective of governance reform:<br> ① To make the requirements for the dismissal of directors stricter<br> ② To make the requirements for a resolution on organizational restructuring stricter or to establish additional requirements for a resolution on organizational restructuring<br> ③ To relax quorum requirements of the shareholders' meeting<br> ④ To reduce or exempt the responsibilities of an accounting auditor<br> ⑤ To set the maximum number of directors at 20 or above<br> ⑥ To set a substantial limit on the number of outside directors or highly-independent outside directors |
| &nbsp;&nbsp; (8) Regarding the following amendments to the articles of incorporation, we will in principle vote for the resolution from the perspective of governance reform:<br> ① To formulate the basic policy for initiatives concerning ESG issues or to disclose risks and business opportunities concerning ESG issues<br> ② To enhance the diversity of the board of directors |

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NOMURA ASSET MANAGEMENT 15

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|  | &nbsp;&nbsp; ③ To propose the *"*separation between the chair of the board of directors and the chief executive officer (CEO)*"*<br> ④ To proceed with the abolition of advisory positions such as *"*Sodanyaku*"* or *"*Komon*"* or any other similar position to be assumed by a person who is not a director<br> ⑤ To determine that the director's term of office is one year in a company with a board of auditors<br> ⑥ To establish a voluntary nominating/remuneration committee in a company with a board of auditors or a company with an audit and supervisory committee<br> ⑦ To make a company that has a listed subsidiary engage in initiatives to ensure the effectiveness of the governance system of such listed subsidiary<br> ⑧ To enable the convocation of a virtual-only shareholders' meeting.<br>|
| &nbsp;&nbsp;(13) Shareholder Resolution | &nbsp;&nbsp;13. Shareholder Resolution |
| &nbsp;&nbsp;We will determine whether to vote for or against shareholder resolutions on a case by case basis from the perspective of long-term enhancement of shareholder value or the protection of shareholder value from impairment. We will vote for (against) such resolutions if we find them appropriate (inappropriate) from these perspectives. | &nbsp;&nbsp; (1) We will individually consider a shareholders' resolution, from the perspective of improving shareholder value on a long-term basis or preventing any deterioration in shareholder value. We will in principal vote against a resolution in which a potential conflict of interest exists between the company or a shareholder and the proposer, a resolution which is found to restrict the latitude of company management, or a resolution in which it is found that the proposer does not provide sufficient explanation about the effect to enhance shareholder value. At the time of the consideration, we will also take into account the opinion of the board of directors.<br> It is desirable that the shareholder proposing a resolution and the board of directors provide general shareholders with easily comprehensible and thorough explanations from their own standpoint through the perspective of shareholder value to enable them to make judgments based on proper understanding of the contents of the proposal.<br>|
|  | &nbsp;&nbsp; (2) If a shareholders' resolution falls under one of the following items, we will in principle vote against the resolution.<br> ① The resolution is not made from the perspective of shareholder value, and the purpose of the resolution is to make a social or political statement. |

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NOMURA ASSET MANAGEMENT 16

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| &nbsp;&nbsp; ② A resolution on amendments to the articles of incorporation, when the amendments include any content related to individual and specific business execution.<br> ③ The contents of the resolution are ambiguous and lacking concrete information, and the resolution does not satisfy the requirements for a resolution.<br> Therefore, on the part of a shareholder proposing a resolution, it is desirable that he/she submits a proposal with clear and specific contents which satisfy the requirements for a resolution.<br> On the part of the board of directors, if the contents of the resolution are ambiguous and lack concrete information and the resolution does not satisfy the requirements for a resolution, it is desirable that the board clearly indicates such facts in the reference document for the shareholders' meeting.<br>|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (3) We will in principle vote for a shareholder resolution on amendments to the articles of incorporation which fall under any of the following items, but do not correspond to any items in the existing articles of incorporation and do not fall under (2)① or ③. A resolution requesting amendments:<br> ① to formulate the basic policy for initiatives concerning ESG issues and to require<br> information disclosure on governance, strategy, risk management, metrics & targets concerning the climate change issue;<br> ② to disclose important information concerning a resolution for the election of directors and auditors;<br> ③ to seek the number of outside directors that is not fewer than the minimum level prescribed in *"*1. Election of Directors (7)";<br> ④ to seek an outside director to serve as the chair of the board of directors;<br> ⑤ to prohibit or remove the chief executive officer from serving as the chair of the board of directors;<br> ⑥ to elect one or more female directors;<br> ⑦ to abolish the position of *"*Sodanyaku*"* or *"*Komon*"* to be assumed by a person who is not a director;<br> ⑧ to disclose remuneration for an individual director or auditor or an individual who is not a director, but holds the position of *"*Komon*"* or *"*Sodanyaku*"* or any |

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NOMURA ASSET MANAGEMENT 17

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| &nbsp;&nbsp; <br>(14) Other | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; other similar position;<br> ⑨ to established guidelines on shareholdings by directors<br> ⑩ to abolish the provisions of the articles of incorporation which prohibit the payment of dividends by resolution of the shareholders' meeting (if the company's appropriation of surpluses for the most recent fiscal year is inappropriate or if the number of outside directors is fewer than the minimum level prescribed in "1. Election of Directors (7)"), or to abolish the provisions of the articles of incorporation which authorize the board of directors to make a decision on the payment of dividends;<br> ⑪ to sell stocks held by the company that are deemed to be problematic in light of the improvement of corporate value and sustainable growth;<br> ⑫ to formulate or disclose the basic policy on the exercise of voting rights related to strategically held stocks, and to disclose the results of the exercise of voting rights;<br> ⑬ to determine that the director's term of office is one year in a company with a board of auditors;<br> ⑭ to establish a voluntary nominating/remuneration committee in a company with a board of auditors or a company with an audit and supervisory committee;<br> ⑮ to make a company that has a listed subsidiary engage in initiatives to ensure the effectiveness of the governance system of such listed subsidiary; or<br> ⑯ to enable the convocation of a virtual-only shareholders' meeting.<br>|
| &nbsp;&nbsp; <br>(14) Other | &nbsp;&nbsp;(4) In the case of a shareholders' resolution requesting the election of directors, we will consider the resolution in comparison with the company resolution, in accordance with the standards set out in "1. Election of Directors" above by taking into account the corporate governance status and the reason for the proposal.<br>|
| &nbsp;&nbsp; <br>(14) Other | &nbsp;&nbsp;(5) In the case of a shareholders' resolution concerning the appropriation of surplus, we will consider the resolution in comparison with the company resolution, in accordance with the standards set out in "6. Allocation of Dividends and Profits" by taking into account the reason for the proposal, the effect on share price formation and corporate governance status.<br>|
| &nbsp;&nbsp; <br>(14) Other | &nbsp;&nbsp;14. Other |

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NOMURA ASSET MANAGEMENT 18

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| &nbsp;&nbsp;We will determine whether to vote for or against resolutions on any other issues on a case by case basis from the perspective of the long-term enhancement of shareholder value or the protection of shareholder value from impairment. We will vote for (against) such resolutions if we find them appropriate (inappropriate) from these perspectives. | &nbsp;&nbsp; Any campaigns initiated by shareholders other than the Company to recommend that other shareholders vote against company proposals shall be evaluated in accordance with the standards for company proposals and shareholder proposals set forth above. It is desirable that necessary information is disclosed at least 1 month prior to the day of the shareholders' meeting.<br> We will vote for any other resolution that is found to be appropriate from the perspective of improving shareholder value on a long-term basis or preventing any deterioration of shareholder value; and we will vote against any other resolution that is found to be inappropriate from the same perspective.<br>|
|  | &nbsp;&nbsp;15. Waiver of Rights |
| &nbsp;&nbsp; <br>**4. Conflict-of-Interest Management Policy** | &nbsp;&nbsp;In principle, we will not waive the rights in the shareholders' meeting where we possess voting rights. However, the voting rights may be waived if the waiver is found to be appropriate. |
| &nbsp;&nbsp; We conduct business in good faith and consider the fair treatment of our clients, and we appropriately manage conflicts of interest based on our "Conflict-of-Interest Management Policy."<br> To manage the risk of a conflict of interest arising, we conduct our business in an appropriate manner by giving first priority to the clients' interests.<br> With regard to proxy voting, the Responsible Investment Committee which consists of members who are independent of the investment division, is in charge of policy-makings and final proxy voting decisions. In cases where we exercise proxy voting rights for securities issued by Group Companies and subsidiaries or affiliates of Nomura Holdings Inc., and/or concerning the Group Companies' interests, after making such facts clear, we refer to opinions from multiple proxy advisors and make decisions at the Responsible Investment Committee to protect the clients' interests. The Responsible Investment Council validates whether such decisions are adequate and if necessary may make a recommendation to the Responsible Investment Committee. When receiving the recommendation, the Responsible Investment Committee reviews the related proxy voting decision again and makes the final decision.<br>|  |
| &nbsp;&nbsp;**5.Other** |  |

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NOMURA ASSET MANAGEMENT 19

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|:---|
| &nbsp;&nbsp;We may be unable to vote or may decide to abstain from voting in certain circumstances. The following list, although not exhaustive, highlights some potential instances in which a proxy may not be voted:<br>|
| &nbsp;&nbsp;(1) Securities Lending |
| &nbsp;&nbsp;When securities are offered for loan as of the record date of exercising a proxy vote, they need to be collected before exercising the vote. We may not exercise a proxy vote after considering the practical implications of such an exercise and the cost incurred for collecting such securities.<br>|
| &nbsp;&nbsp;(2) Share Blocking |
| &nbsp;&nbsp;Some countries and regions require shareholders to deposit their shares with a designated depository during a specific period shortly before a shareholders' meeting as a condition for exercising a proxy vote. Shares cannot be sold during this blocking period. In such a case, we may not exercise the proxy vote due to practical considerations and the potential for opportunity loss.<br>|
| &nbsp;&nbsp;(3) Re-registration |
| &nbsp;&nbsp;In some countries and regions, re-registration of shares is required to exercise a proxy vote. We may choose not to exercise a proxy vote in consideration of the fact that the shares cannot be sold during the re-registration period.<br>|
| &nbsp;&nbsp;(4) Other |
| &nbsp;&nbsp; For example, when we are unable to obtain adequate information, e.g. if the period between receipt of the resolutions and the exercise of voting is insufficient. Also, if the cost of voting the proxy outweighs the possible benefit to the client, we may also choose not to exercise the proxy vote. |

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NOMURA ASSET MANAGEMENT 20

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[Appendix]

**Appropriate management practices of Investee Companies**

NOMURA ASSET MANAGEMENT ("we" hereafter) stipulates the appropriate management practices of investee companies in order for investee companies to enhance corporate value and achieve sustainable growth, which is a driver of investment performance, and actively encourages investees through stewardship-related activities.

&nbsp;&nbsp;&nbsp;&nbsp;1. Proper Efforts on Environmental and Social Issues

We believe that making proper efforts on global environmental and social issues from the perspectives of risk management and the pursuit of business opportunities will lead to increase in corporate value and sustainable growth. We also see such efforts as a prerequisite for a company to be accepted as a member of the society. Examples of issues that we consider are particularly important and efforts on them that investee companies need to make are as follows:

&nbsp;&nbsp;&nbsp;&nbsp;(1) Basic policy: Establishment of a basic policy regarding the company's efforts on ESG issues and
establishment of a system to promote and supervise the efforts;

&nbsp;&nbsp;&nbsp;&nbsp;(2) Key issues (materiality): Identification of key issues by the management, verification of business portfolio
and promotion of technological innovation to respond to key issues, responses to and disclosure of risks that are identified as key issues
(e.g., product liability, etc., as well as those listed in (3) through (8)), disclosure of business opportunities that are identified
as key issues;

&nbsp;&nbsp;&nbsp;&nbsp;(3) Climate change: Information disclosure on governance, strategy, risk management, metrics & targets
concerning the climate change issue, setting of a net zero target for medium- to long-term greenhouse gas (GHG) emissions (including approval
of or commitment to science based targets (SBTs)), measurement of avoided emissions and absorption of GHG as climate change opportunities,
and introduction of internal carbon pricing;

&nbsp;&nbsp;&nbsp;&nbsp;(4) Natural capital: Setting of policies and targets to respond to risks and opportunities associated with
biodiversity, water resources, and circular economy toward the realization of nature positive business practices and information disclosure
in line with the recommendations of the Task Force on Nature-related Financial Disclosures (TNFD);

&nbsp;&nbsp;&nbsp;&nbsp;(5) Human rights: Development of a policy on human rights at investee companies that is consistent with
international norms, human rights due diligence or audits including supply chain, corrective action and relief mechanism, and disclosure
of due diligence results;

&nbsp;&nbsp;&nbsp;&nbsp;(6) Human capital with diverse values: Formulation of a human capital strategy that is linked to management
strategies, setting a medium- to long-term target for the percentage of women among board members, senior executives, or managers, developing
a personnel system to enhance diversity, equity, inclusion, and the sense of belonging (including measures to prevent employees from leaving
employment due to a life event, provision of fair opportunities, employee engagement survey including the disclosure of survey results
and improvement measures, etc.), and creation of a corporate culture that embraces diversity and inclusion;

&nbsp;&nbsp;&nbsp;&nbsp;(7) Well-being society: Formulation and disclosure of strategies (including innovation driven by digital
technologies) that incorporate contribution to the resolution of social issues, such as access to medicine, health and nutrition, antimicrobial
resistance, animal welfare, and regional revitalization, as business opportunities, and measurement and disclosure of impact toward the
resolution of social issues;

&nbsp;&nbsp;&nbsp;&nbsp;(8) Risk management in digital society: Establishment of a cybersecurity management system (e.g. appointment
of an officer in charge of cybersecurity, development and assignment of dedicated employees, and development of processes to respond to
any incidents), as well as ethical and safe design, development, implementation, and use of artificial intelligence (AI) throughout its
life cycle; and

&nbsp;&nbsp;&nbsp;&nbsp;(9) Cooperation with stakeholders, such as participation in initiatives that are related to the issues listed above.

&nbsp;&nbsp;&nbsp;&nbsp;2. Value Creation through Capital Efficiency

We believe that in order for investee companies to enhance corporate value and achieve sustainable growth, it is necessary for investees to create value that exceeds the cost of capital over the medium to long term by utilizing capital efficiently under proper risk management and constructing a business portfolio that has a high growth potential and is efficient. To this end, we consider that the following efforts are particularly important:

NOMURA ASSET MANAGEMENT 21

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&nbsp;&nbsp;&nbsp;&nbsp;(1) To formulate a growth strategy and an investment plan to create value that exceeds the cost of capital
and to conduct proper progress management; To determine the cost of capital in due consideration of opinions of investors obtained through
dialogue with them as well as stock price levels and changes thereof;

&nbsp;&nbsp;&nbsp;&nbsp;(2) To verify the business portfolio against the growth strategy and replace businesses in the portfolio
as necessary;

&nbsp;&nbsp;&nbsp;&nbsp;(3) To sell assets that do not contribute to the creation of value that exceeds the cost of capital and,
in particular, to reduce cross-shareholdings;

&nbsp;&nbsp;&nbsp;&nbsp;(4) To implement group governance to enable the optimal allocation of management resources, etc.; If there
is a listed company within the group, to regularly verify the reasonableness of maintaining a listed company within the group; to properly
manage the conflict of interest with general shareholders; and to support the listed company's efforts to strengthen corporate governance;

&nbsp;&nbsp;&nbsp;&nbsp;(5) To properly manage the risks associated with businesses, etc.;

&nbsp;&nbsp;&nbsp;&nbsp;(6) To implement a capital structure and shareholder returns that reflect (1) through (5) above; and

&nbsp;&nbsp;&nbsp;&nbsp;(7) To properly disclose information about (1) through (6) above.

&nbsp;&nbsp;&nbsp;&nbsp;3. Adequate Performance of Corporate Governance Function

We believe that it is necessary for a company to have sufficiently functioning corporate governance as a prerequisite for value creation through the efficient utilization of capital and proper efforts on environmental and social issues. We postulate the appropriate corporate governance to realize this as follows:

&nbsp;&nbsp;&nbsp;&nbsp;(1) The board consists of an adequate number of qualified and diverse members who have
the ability and experience, including those in the areas of management, finance, and ESG, for supervising the execution of management
and any conflict of interest with the management, controlling shareholder, or any other parties on behalf of shareholders and functions
effectively.

&nbsp;&nbsp;&nbsp;&nbsp;(2) The audit committee, audit and supervisory committee or the board of auditors consists
of qualified members who are capable of auditing directors' operations on behalf of shareholders and functions effectively.

(3) Committees relating to nomination and compensation have been established, each of which consists of qualified and independent members and adequately fulfills the necessary roles and responsibilities in (4) and (5) below.

&nbsp;&nbsp;&nbsp;&nbsp;(4) Standards and processes to determine whether the replacement of senior executives
is required have been established, and a succession plan in case of such replacement has been formulated.

&nbsp;&nbsp;&nbsp;&nbsp;(5) Compensation of senior executives is appropriate as their incentive and commitment
for value creation through the efficient utilization of capital and proper efforts on environmental and social issues.

&nbsp;&nbsp;&nbsp;&nbsp;(6) The board of directors makes appropriate judgment from the perspective of the best
interest of minority shareholders on any transaction involving a conflict of interest or a fight for control of the company. In our view,
as anti-takeover measures limit the rights of shareholders to buy and sell shares freely, they are unnecessary unless there is a risk
that such a transaction or fight will significantly impair corporate value and common interest of shareholders.

&nbsp;&nbsp;&nbsp;&nbsp;(7) The board of directors monitors environmental and social issues and business and
other risks and oversees initiatives by senior executives, and corporate governance systems are in place to ensure sufficient internal
control in terms of compliance and internal auditing

&nbsp;&nbsp;&nbsp;&nbsp;(8) Business operations comply with laws and regulations, market rules, etc., and requirements
of the Corporate Governance Code, etc., are properly addressed.

&nbsp;&nbsp;&nbsp;&nbsp;4. Adequate information disclosure and a dialogue with investors

We believe that it is important for companies to fulfill their accountability for the matters stated in 1. through 3. To this end, we consider that the following efforts are particularly important:

&nbsp;&nbsp;&nbsp;&nbsp;(1) To disclose information appropriately on a timely basis in compliance with relevant
standards, etc., based on developments in national regulators and international initiatives and to obtain third party audits or assurances
as much as possible particularly for quantitative information;

&nbsp;&nbsp;&nbsp;&nbsp;(2) To actively hold dialogue with each investor in order to appropriately reflect investors'
opinions in corporate management; and

&nbsp;&nbsp;&nbsp;&nbsp;(3) If a company is found to have engaged in any activity that is materially harmful
to corporate value, it is important for the company to provide sufficient disclosure and explanations on investigations of cause, clarification
of where responsibility lies, and the formulation and dissemination of effective recurrence countermeasures.

NOMURA ASSET MANAGEMENT 22

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<u>NOMURA ASSET MANAGEMENT \| Investment Risks and Costs</u>

NOMURA ASSET MANAGEMENT 23

## Ex-99.(A)(3)

**Exhibit 19 (a)(3)**

**CERTIFICATION PURSUANT TO RULE 30A-2(A) UNDER THE 1940 ACT**

**AND SECTION 302 OF THE SARBANES-OXLEY ACT**

I, Yusuke Andoh, Principal Executive Officer of Japan Smaller Capitalization Fund, Inc., certify that:

1. I have reviewed this report on Form N-CSR 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 financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the Registrant as of, and for, the periods presented in this report;

4. The Registrant's other certifying officer(s) 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 period covered by this report 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(s) and I have disclosed to the Registrant's auditors and the audit committee of the Registrant's board of directors (or persons performing the 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: | May 5, 2026 | /s/ Yusuke Andoh |
|  |  | Yusuke Andoh |
|  |  | Principal Executive Officer |

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**CERTIFICATION PURSUANT TO RULE 30A-2(A) UNDER THE 1940 ACT**

**AND SECTION 302 OF THE SARBANES-OXLEY ACT**

I, Thomas Perugini, Principal Financial Officer of Japan Smaller Capitalization Fund, Inc., certify that:

1. I have reviewed this report on Form N-CSR 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 financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the Registrant as of, and for, the periods presented in this report;

4. The Registrant's other certifying officer(s) 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 period covered by this report 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(s) and I have disclosed to the Registrant's auditors and the audit committee of the Registrant's board of directors (or persons performing the 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: | May 5, 2026 | /s/ Thomas Perugini |
|  |  | Thomas Perugini |
|  |  | Principal Financial Officer |

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## Ex-99.(B)

**Exhibit 19(b)**

CERTIFICATION PURSUANT TO RULE 30A-2(B) UNDER THE 1940 ACT AND SECTION 906 OF THE SARBANES-OXLEY ACT

The undersigned officers of Japan Smaller Capitalization Fund, Inc. (the "Registrant"), certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

1. The Form N-CSR of the Registrant on behalf of Japan Smaller Capitalization Fund, Inc. for the annual period ended February 28, 2026 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

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| | |
|:---|:---|
| Date: May 5, 2026 | /s/ Yusuke Andoh |
|  | Yusuke Andoh<br> Principal Executive Officer |

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| | |
|:---|:---|
| Date: May 5, 2026 | /s/ Thomas Perugini |
|  | Thomas Perugini<br> Principal Financial Officer |

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