Tokyo, February 25, 2022
To Our Shareholders
JAPAN TOBACCO INC.
Supplementary Explanation Regarding Proposition “Item 3: Partial Amendment tothe Articles of Incorporation (ii)” to Be Submitted at the 37th Ordinary General
Meeting of Shareholders
Japan Tobacco Inc. (JT) (TSE:2914) provides a supplementary explanation on its views fora proposition, “Item 3: Partial Amendment to the Articles of Incorporation (ii)” (hereinafterreferred to as the “Proposition”), which we will submit to the 37th Ordinary General Meetingof Shareholders scheduled to be held on March 23, 2022. The details are as follows.
We sincerely ask you to understand backgrounds and request approval of this Proposition.

The purpose of the Proposition is to increase choices for the method for holding a General
Meeting of Shareholders. If the Proposition is approved and the amendment to the articles
of incorporation takes effect, in addition to the current physically-conducted shareholder
meeting (Note 1) and the hybrid virtual shareholder meeting (Note 2), a virtual-only
shareholders’ meeting (Note 3) will be available.
Since the pandemic of the novel coronavirus disease (COVID-19), practicing “A New Lifestyle”
has been called for. Even in the post-COVID-19 world and under a new normal, there areconcerns about a pandemic outbreak of a new infectious disease and occurrence of a largescale disaster.
Under such environment, the Act for Partially Amending the Industrial Competitiveness
Enhancement Act and Other Related Acts (Act No. 70 of 2021) was enforced on June 16,2021, which enables listed companies that have received confirmation by the Minister ofEconomy, Trade and Industry and the Minister of Justice, to stipulate in their articles ofincorporation that they may hold a virtual-only shareholders’ meeting, and listed companies
that have this provision in the articles of incorporation may hold a virtual-only shareholders’meeting. In addition, as a transitional measure considering the impact of COVID-19, listedcompanies that have received the aforementioned confirmation may be deemed as having
the said provision in the articles of incorporation for two years from the date of enforcementof the Act.

Putting the highest priority on securing opportunities for dialogue, JT intends to continuously
retain an option for holding a virtual-only shareholders’ meeting for the future so thatshareholders can attend a General Meeting of Shareholders even if it is physically difficult to
go to the venue. In addition, JT believes that under such uncertain external circumstances,
ensuring this option as early as possible will contribute to interests of shareholders. Therefore,
JT presents the Proposition.
Having said that, in view of the current situation in Japan where practical treatment for virtualonly shareholders’ meeting has not been established, JT has no plan to immediately hold avirtual-only shareholders’ meeting under normal circumstances. Furthermore, in the casewhere dialogue with shareholders is particularly necessary, JT will never convene a virtualonly shareholders’ meeting for the purpose of unfairly impairing the interests of shareholders
who request to have a dialogue at a physical place.
When the Proposition is approved, giving the highest priority to guarantee of shareholders’rights and safety, JT will conduct careful consideration of the method of holding a General
Meeting of Shareholders in light of societal requirements as well as circumstances of themoment surrounding shareholders and JT, and JT’s Board of Directors will make a decision
on said method.
JT recognizes that it is extremely important to establish a method of operation when a virtualonly shareholders’ meeting is held. For the establishment of an infrastructure base for the IT
system and the system of the shareholder registry administrator, the fair treatment for theexercise of voting rights, the establishment of measures against communication failure, thebuilding of a support system for shareholders who are unfamiliar with the Internet, and theelimination of arbitrary operation in relation to enquiries from shareholders and shareholderpropositions and motions, JT will comply with guidelines including the one issued by theMinistry of Economy, Trade and Industry, and after examining and preparing for fair treatmentof shareholders in association with above matters from multifaceted perspectives, JT will
establish an operation method that does not infringe on shareholders’ rights, and make adecision through careful deliberation by the Board of Directors.
(Note 1) A General Meeting of Shareholders held at any physical place where Membersof the Board, shareholders and others meet in person.
(Note 2) A General Meeting of Shareholders which, in addition to holding a physically-conducted shareholder meeting, shareholders who are not at the venue for thephysically-conducted shareholder meeting can attend, or at which suchshareholders can check or hear deliberations using any means such as theInternet.
(Note 3) A General Meeting of Shareholders that Members of the Board, shareholders
and others attend using any means such as the Internet, without any physicalvenue set.