March 10, 2023
To Our Shareholders
Japan Tobacco Inc.

The Company’s Opinion on the Proxy Advisory Firm’s Reports on the Agenda Items for theCompany’s General Meeting of Shareholders
Japan Tobacco Inc. (the “Company”) hereby announces the Company’s opinions on Item 5, for which the proxyadvisory firms Glass, Lewis & Co., LLC (“Glass Lewis”) and Institutional Shareholder Services Inc. (“ISS”) havestated differing opinions and recommendations in the reports they released respectively for their customers
regarding the shareholder proposals (the “Shareholder Proposals”) to be submitted to the 38th Ordinary General
Meeting of Shareholders (the “Ordinary General Meeting of Shareholders”) of the Company scheduled to be heldon March 24, 2023.
As shown in the following, the recommendation by Glass Lewis to vote for or against the Shareholder Proposals is
consistent with the Company’s opinions. Meanwhile, the recommendations by ISS to vote for or against theShareholder Proposals overlook the information that the Company has already disclosed and the fundamental
problems of Item 5.
We would like to ask our shareholders to kindly refer to the explanatory material and the Company’s Notice ofConvocation to understand the opinion of the Board of Directors of the Company.

1. Recommendations to vote for or against the Shareholder Proposals by Glass Lewis and ISS
Opinion of theGlass Lewis
ISS
Company’sShareholder Proposal Items
recommendations to recommendations toBoard ofvote for or against
vote for or against
Directors
Item 5
Partial Amendment to the Articles ofIncorporation (Management of Subsidiaries)

AgainstRecommend toagainst

Recommend tovote for

Item 6
Partial Amendment to the Articles ofIncorporation (Prohibition Against Former
Directors and Employees Serving in Director
Positions at Listed Subsidiaries)

AgainstRecommend toagainst

Recommend toagainst

Item 7
Partial Amendment to the Articles ofIncorporation (Prohibition Against Using theCash Management System (CMS) for
Financing with Listed Subsidiaries)

AgainstRecommend toagainst

Recommend toagainst

Item 8Acquisition of Treasury Shares

AgainstRecommend toagainst

Recommend toagainst2. About the Glass Lewis Report(1)

Details of the report
Glass Lewis recommends voting against all of the Shareholder Proposals.
With respect to Item 5 of the Shareholder Proposals, Glass Lewis has expressed question on the merit ofthis shareholder proposal as the reason for recommending voting against it, because the reasons formaintaining TORII PHARMACEUTICAL CO., LTD. (“TORII”) as a listed subsidiary and the specificmeasures to ensure the effectiveness of governance have already been prescribed in the Company’s“Corporate Governance Report,” and the possibility of speculation based on pre-determined information
and unforeseen consequences if the deliberations of our Board of Directors regarding the possible
transfer or sale of TORII as required by the Shareholder Proposals were to be made public.

(2)

The Company’s opinion
As stated in the Glass Lewis Report, the Company has already disclosed its views on the groupmanagement and the significance of owing a listed subsidiary in our “Corporate Governance Report”. Inaddition, we believe that it is NOT appropriate to uniformly and fixedly stipulate in the Articles ofIncorporation, which is the fundamental norm of the organization, that specific details regarding theacquisition of 100% ownership or sale of a subsidiary must be disclosed even at the stage ofconsideration, because as the Glass Lewis Report states, there is a risk of causing unnecessary
speculation in the capital market. Even if the Company was evaluating the acquisition of 100%
ownership or sale of a subsidiary with taking into account future changes to our group management
policy, efforts to engage in dialogue with shareholders and investors, and other considerations, theCompany believes that the Board of Directors should carefully consider the content, timing, method, etc.,of the announcement of specific details, and then disclose such details in a timely and appropriate manner
once it has reached a conclusion that should be announced.
The Company welcomes Glass Lewis report, because the Company understand that Glass Lewis, a global
advisor on the exercise of voting rights, reached the same conclusion as the Board of Directors of theCompany as a result of analyzing the proposals for the Ordinary General Meeting of Shareholders from astandpoint independent of the Company.

3. About the ISS Report(1)

Details of the report
While ISS is recommending against Shareholder Proposals of Items 6, 7 and 8, it is recommending infavor of Item 5 on the grounds that the Company’s Board of Directors needs to seriously consider
whether the current approach to TORII (maintaining the parent-subsidiary listing) is appropriate, and thatthe rationale for maintaining TORII as a listed subsidiary should be made more transparent.

(2)The Company’s opinion
ISS recommends voting for Item 5 without taking into consideration following points that Glass Lewis
showed in its report.
The Company has already disclosed in the “Corporate Governance Report” the reasons formaintaining TORII as a listed company and the specific measures for ensuring the effectiveness ofgovernance.

Periodically announcing in the “Corporate Governance Report” the status of deliberations by theBoard of Directors regarding the possibility of the transfer or sale of TORII, as required under theshareholder proposal, could conceivably have a negative effect.

In addition, Item 5 was evaluated by ISS without verifying whether there are potential disadvantages ofthe shareholder proposal itself and whether the disclosure methods are inappropriate.
Furthermore, ISS express the view on our Group management policy not limited to recommendation tovote for or against to this Shareholder Proposal.
From above standpoints, the Company has a strong sense of discomfort with ISS report.
The Company’s Board of Directors has confirmed TORII’s situation through discussions on management
plans, corporate governance, and other matters, and is constantly reviewing the appropriate managementof the Group. We believe that it is an important responsibility of the Company to ensure effective
governance of a listed subsidiary, taking into consideration the interests of the minority shareholders of
the listed subsidiary, and we will continue to discuss and deliberate on appropriate group management.
In addition, we believe that disclosing our group management policy to listed subsidiaries is a given
responsibility and a step that a listed company should naturally comply with, and we will continue toconstantly examine ways to enhance disclosure to better engage in a dialogue with the capital market.
The full text of the Company’s Board of Directors’ opinions on the Shareholders Proposals is available in theCompany’s Notice of Convocation and on the Company’s website (see note below).
(Note) https://www.jt.com/media/news/2023/pdf/20230214_16.pdf (English)
Shareholders are kindly requested to understand the points above and exercise their voting rights after due
consideration.