[This is an English translation prepared for the convenience of non-resident shareholders. Should there be any
inconsistency between the translation and the official Japanese text, the latter shall prevail.]

Securities Code: 2914
May 31, 2012
To Our Shareholders
Hiroshi Kimura
President, Chief Executive Officer andRepresentative Director

Japan Tobacco Inc.
2-1, Toranomon 2-chome, Minato-ku, TokyoNOTICE OF CONVOCATION OF
THE 27TH ORDINARY GENERAL MEETING OF SHAREHOLDERS
You are cordially invited to attend the 27th ordinary general meeting of shareholders of Japan Tobacco Inc.
(“JT” or the “Company”) to be held as set forth below.
If you cannot attend the meeting, you may exercise your voting rights in written form or byelectromagnetic means including the Internet. Please see the “Reference Documents for the General
Meeting of Shareholders” hereinafter described and exercise your voting rights by 6:00 p.m., on
Thursday, June 21, 2012, by returning to us by that time the Voting Rights Exercise Form enclosed
herewith indicating whether you are for or against each of the items, or by accessing the web-site
designated by us for the exercise of voting rights (http://www.evote.jp/).
Particulars
1. Date and Time of the Meeting: Friday, June 22, 2012, at 10:00 a.m.
2. Place of the Meeting:Tokyo Prince Hotel
3-1, Shibakoen 3-chome, Minato-ku, Tokyo

3. Purpose of the Meeting:
Matters to be Reported:

1. Report on the Business Report, the Consolidated Financial Statements,
and the Accounting Auditors’ Report and JT’s Board of Company
Auditors Report on the Consolidated Financial Statements for the 27th
Business Term (From April 1, 2011 to March 31, 2012)
2. Report on the Non-Consolidated Financial Statements for the 27th
Business Term (From April 1, 2011 to March 31, 2012)

Matters to be Resolved:
Company’s Proposals (Item 1 to Item 4)
Appropriation of Surplus
Item 1:
Partial Amendments to the Articles of Incorporation
Item 2:
Election of Nine (9) Directors
Item 3:
Election of One (1) Company Auditor
Item 4:
Shareholder’s Proposals (Item 5 to Item 8)
Dividend Proposal
Item 5:
Share Buy-backItem 6:
Partial Amendments to the Articles of Incorporation
Item 7:
Cancellation of All Existing Treasury Shares
Item 8:-1-

4. Other Decisions on the Convocation of the Meeting(1) If the voting right is exercised both by return of the Voting Rights Exercise Form and via the Internet,
only the exercise of the voting right via the Internet shall be valid.
(2) If the voting right is exercised more than once via the Internet, only the last exercise of the voting rightshall be valid.

[Instructions for Exercising Your Voting Rights]

1. Exercise of the Voting Rights by post:
Please indicate whether you are for or against each of the items on the Voting Rights Exercise Form
enclosed herewith and return it to us.
2. Exercise of the Voting Rights via the Internet:
Please access the designated web-site for the exercise of voting rights (http://www.evote.jp/) from yourcomputer or smartphone and indicate whether you are for or against each of the items following thedirections on the web-site using the “Log-in ID” and “Temporary Password” described in the Voting
Rights Exercise Form enclosed herewith. You are requested to refer to “Direction for Exercise of the
Voting Rights via the Internet” (Japanese only).
3. JT participates in the electromagnetic voting rights exercise system (Voting Rights Exercise Platform)
operated and administered by ICJ, Inc.

4. Relation between Item 1 and Item 5
Item 1 and Item 5 are incompatible. Accordingly, please note that, in cases where you exercise yourvoting rights to vote for both Item 1 and Item 5 in written form or by electromagnetic means, theexercise of the voting rights concerning Item 1 and Item 5 will be invalid.

[Information on matters posted on JT’s web-site]
1. Notes to Consolidated and Non-Consolidated Financial Statements are posted on our web-site(http://www.jti.co.jp/) in accordance with laws and regulations, and the provision in Article 14 of the
Articles of Incorporation. Therefore, they are not included in this Notice of Convocation of the 27th
Ordinary General Meeting of Shareholders.
In addition to documents stated in the reference documents attached to the Notice of Convocation of
the 27th Ordinary General Meeting of Shareholders, Notes to Consolidated and Non-Consolidated
Financial Statements posted on the Company’s web-site are included in Consolidated and NonConsolidated Financial Statements audited by Company Auditors and the Accounting Auditors in thecourse of preparing Audit Report and Accounting Auditors’ Report respectively.

2. If there is any amendment to the “Reference Documents for the General Meeting of Shareholders,”
Business Report (Japanese only), or Non-Consolidated and Consolidated Financial Statements(Japanese only), it will be published on our web-site (http://www.jti.co.jp/).

* For those attending, please present the enclosed Voting Rights Exercise Form at the reception desk onarrival at the meeting. Also, please bring this Notice of Convocation of the 27th Ordinary General Meetingof Shareholders with you.
* Please note that the meeting will be conducted in Japanese only without an interpreter.

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REFERENCE DOCUMENTS
FOR THE GENERAL MEETING OF SHAREHOLDERS
Items and Relevant Information
Company’s Proposals (Item 1 to Item 4)
Item 1: Appropriation of Surplus
The surplus is proposed to be appropriated as follows:
Year-end dividends
The year-end dividends on shares of Common Stock for the 27th Business Term which is the last businessyear of the JT-11 medium-term management plan, are proposed to be paid with a consolidated dividend
payout ratio (after deducting the goodwill amortization effect) at 30.7%, achieving a target of 30%, on thefollowing terms.
(1) Type of assets to be paid as dividends:
Cash(2) Allotment of assets to be paid as dividends and their aggregate amount:¥6,000 per share of Common Stock of JT

Aggregate amount: ¥57,128,844,000

Together with the interim dividends of ¥4,000 per share paid in December 2011, the annual dividends
for the 27th Business Term will be ¥10,000 per share, increasing by ¥3,200 year-on-year.
(3) Effective date for distribution of surplus:
June 25, 2012-3-

Item 2: Partial Amendments to the Articles of Incorporation
1. Reasons for amendments(1) For the purpose of enlarging the Company’s investor base through reduction of the investment unit
amount of the Company’s shares, and in light of the decision of the Japanese Stock Exchanges
Conference to standardize the trading unit, the Board has passed a resolution on April 13, 2012 to split
the Company’s stock at the ratio of 1:200 or 200 shares to one share, and adopt the share unit system,
setting a share trading unit to 100 shares effective July 1, 2012.
As a result, the company is newly establishing provision on the rights with respect to shares which areless than one share unit (Proposed amendment of Article 8) and provision for the demand for the sale ofshares which are less than one share unit (Proposed amendment of Article 9).
(2) Following the establishment of the provisions described above, Articles 7 to 31 will be renumberedaccordingly.
2. Details of amendments
Details of amendments are as follows:
The amendment is effective July 1, 2012
(Underlined portions designate amendments to be resolved on for the subject agenda item.)
Current Articles of Incorporation
Proposed Amendments(Authorized shares)(Authorized shares)

Article 6. The total number of shares to be issued by
the Company shall be forty million (40,000,000)
shares.

Article 6. The total number of shares to be issued by
the Company shall be eight billion (8,000,000,000)
shares.

(Newly established)(The number of shares per share unit)
Article 7. The number of shares per share unit of theCompany shall be one hundred (100) shares.

(Newly established)(Rights in respect of shares less than one share unit)
Article 8. Any shareholder of the Company may not
exercise any rights in respect of shares less than one
share unit other than those listed below:(1) the rights as provided for in the items of Article
189, Paragraph 2 of the Companies Act;(2) the rights to the allocation of shares offered toshareholders and stock acquisition rights offered
to shareholders, in proportion to the numbers of
their respective shares; and(3) the rights to exercise a demand as provided for in
Article 9 hereof.

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Current Articles of Incorporation(Newly established)

Proposed Amendments(Demand for sale of shares less than one share unit)
Article 9. Any shareholder of the Company may
demand the Company to sell the number of sharesthat would, collectively with the number of his/hershares less than one share unit, constitute one share
unit.

Article 7. to Article 31. (Provisions omitted)

Article 10. to Article 34. (Same as at present)(Note) With regard to Article 6 and Article 7 of the amendment proposal stated above, a resolution was passed
at the Board of Directors’ Meeting held on April 13, 2012, with July 1, 2012, as the effective date.

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Item 3: Election of Nine (9) Directors
The terms of office of all eight (8) present Directors will expire at the conclusion of this ordinary general
meeting of shareholders. Accordingly, the election of nine (9) Directors including two (2) Outside Directors is
proposed in order to enhance the management system.
The candidates for the office of Director are as follows:
Candidate
NumberName(Date of Birth)

Hiroshi Kimura
1(April 23, 1953)

Brief Personal History, Positions and Responsibilities
in the Company, and Significant Concurrent Positions
outside the Company
Apr. 1976
Joined the Company (Japan Tobacco andSalt Public Corporation)
Jan. 1999
Vice President of Corporate Planning
Division
May 1999
Senior Manager in Tobacco Business
Planning Division, Tobacco Business
Headquarters
Executive Vice President, JT International
S.A.
Jun. 1999
Member of the Board
Jun. 2001
Retired from Member of the Board
Jun. 2005
Member of the Board
Jun. 2006
President, Chief Executive Officer andRepresentative Director(Current Position)
Apr. 1981
Jun. 2001
Jun. 2003
Jun. 2004

Jun. 2006
Mitsuomi Koizumi
2Jun. 2007(April 15, 1957)
Jul.

2007

Jun. 2009

Joined the Company (Japan Tobacco andSalt Public Corporation)
Vice President of Corporate Planning
Division
Senior Vice President, and Head of Human
Resources and Labor Relations Group
Senior Vice President, and Vice President ofTobacco Business Planning Division,
Tobacco Business Headquarters
Executive Vice President, and Vice
President of Tobacco Business Planning
Division, Tobacco Business Headquarters
Member of the Board, Executive Vice
President, and Head of Marketing & Sales
General Division, Tobacco Business
Headquarters
Member of the Board, Executive Vice
President, and Chief Marketing & Sales
Officer, Tobacco Business Headquarters
Representative Director, Executive Deputy
President, and President, Tobacco Business(Current Position)(Significant Concurrent Positions outside the Company)
Chairman, JT International Holding B.V.

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Number of theCompany’s
Shares Held

133

95

Candidate
NumberName(Date of Birth)

Yasushi Shingai
3(January 11, 1956)

Brief Personal History, Positions and Responsibilities
Number of thein the Company, and Significant Concurrent Positions
Company’s
outside the Company
Shares Held
Apr. 1980
Joined the Company (Japan Tobacco andSalt Public Corporation)
Jul. 2001
Vice President of Financial Planning
Division
Jun. 2004
Senior Vice President, Head of FinanceGroup
Jul. 2004
Senior Vice President, and Chief Financial
OfficerJun. 2005
Member of the Board, Senior Vice
86
President, and Chief Financial Officer
Jun. 2006
Member of the Board
Executive Vice President, JT International
S.A.
Jun. 2011
Executive Deputy President, Representative
Director, Assistant to CEO in Strategy, HR,
Legal and Food Business(Current Position)
Apr. 1983
Apr. 2000
Jun. 2002
Jun. 2004

Noriaki Okubo
4(May 22, 1959)

Jun. 2006

Jun. 2009

Apr. 1985
Jun. 2005
Jun. 2007(Newly appointed)
Jun. 2008
5

Akira Saeki(August 25, 1960)
Jun. 2010

Joined the Company (Japan Tobacco andSalt Public Corporation)
Vice President of Business Development
Dept., Pharmaceutical Division
Vice President of Business Planning Dept.,
Pharmaceutical Division
Member of the Board, Senior Vice
President, and President, PharmaceuticalBusiness
Member of the Board, Executive Vice
President, and President, PharmaceuticalBusiness
Member of the Board, Senior Executive
Vice President, and President,
Pharmaceutical Business(Current Position)
Joined the Company
Vice President of Corporate Strategy
Division
Senior Vice President, Head of Tobacco
Business Planning Division, Tobacco
Business
Senior Vice President, Head of Tobacco
Business Planning Division, Tobacco
Business and Chief External Affairs
Planning Officer
Executive Vice President, Head of Tobacco
Business Planning Division, Tobacco
Business(Current Position)

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42

46

Candidate
NumberName(Date of Birth)(Newly appointed)
6

Hideki Miyazaki(January 22, 1958)

Brief Personal History, Positions and Responsibilities
in the Company, and Significant Concurrent Positions
outside the Company
Apr. 1980
Joined Nomura Securities Co., Ltd.
Jul. 2005
Senior Manager of Accounting Division of
the Company
Jan. 2006
Deputy Chief Financial Officer
Jun. 2008
Senior Vice President, and Chief Financial
OfficerJun. 2010
Executive Vice President, and Chief
Financial Officer(Current Position)
Apr. 1983
Jun. 2003
Jun. 2005
Jun. 2006
Jun. 2008

Mutsuo Iwai
7

Jun. 2010(October 29, 1960)
Jun. 2011

Joined the Company (Japan Tobacco andSalt Public Corporation)
Vice President of Corporate Planning
Division
Senior Vice President, and Vice President ofFood Business Division, Food Business
Member of the Board, Executive Vice
President, and President, Food Business
Executive Vice President, and Chief
Strategy Officer
Member of the Board, Executive Vice
President, Chief Strategy Officer andAssistant to CEO in Food Business
Member of the Board(Current Position)
Executive Vice President, JT International
S.A.
(Current Position)

Number of theCompany’s
Shares Held32

80

(Significant Concurrent Positions outside the Company)
Executive Vice President, JT International S.A.
Apr.
Jun.
Apr.
Apr.

1966
1994
1998
2001

(Newly appointed)
8Motoyuki Oka(September 15, 1943)

Jun. 2001
Jun. 2007

Joined Sumitomo Corporation
Director, Sumitomo Corporation
Managing Director, Sumitomo Corporation
Senior Managing Director, Sumitomo
Corporation
President and CEO, Sumitomo Corporation
Chairman of the Board of Directors,
Sumitomo Corporation(Current Position)(Significant Concurrent Positions outside the Company)
Chairman of the Board of Directors, Sumitomo Corporation-8-0

Candidate
NumberName(Date of Birth)(Newly appointed)
9Main Kohda(April 25, 1951)

Brief Personal History, Positions and Responsibilities
in the Company, and Significant Concurrent Positions
outside the Company
Sep. 1995
Started independently as Novelist(Current Position)
Jan. 2003
Member of Financial System Council,
Ministry of Finance Japan
Apr. 2004
Visiting professor, Faculty of Economics,
Shiga University
Mar. 2005
Member of the Council for Transport
Policy, Ministry of Land, Infrastructure,
Transport and Tourism
Nov. 2006
Member of the Tax Commission, Cabinet
Office, Government of Japan
Jun. 2010
Member of the Board of Governors, Japan
Broadcasting Corporation(Current Position)

Number of theCompany’s
Shares Held0

(Significant Concurrent Positions outside the Company)
Novelist
Member of the Board of Governors, Japan Broadcasting
Corporation(Notes) 1. No conflict of interest exists between the Company and each of the above candidates.
Although JT has had a business relationship related to manufacturing machine, etc. with Sumitomo
Corporation for which Motoyuki Oka has served as a chairman of the board of directors, the transaction
amount accounted for just about 0.1% of our consolidated sales revenue in the fiscal year ended March
31, 2012, which has no material impacts to generate special interest.
2. Motoyuki Oka and Main Kohda are candidates for the office of Outside Director.
3. Relevant matters concerning the candidates for the office of Outside Director are described as follows:(1) For Motoyuki Oka
The election of Motoyuki Oka as Outside Director is proposed, as he would be able to reflect his
abundant experience and extensive insight into management of global companies in management of
the Company.
(2) For Main Kohda
The election of Main Kohda as Outside Director is proposed, as she has abundant insight into
international finance, and would be able to reflect her extensive experience as university professor
and member of governmental advisory bodies, etc. and deep insight and objective point of viewused through activities as a novelist in management of the Conpany.
4. Should the election of Motoyuki Oka and Main Kohda be approved, pursuant to the provision of Article
23 of the Articles of Incorporation, the Company intends to enter into an agreement with each of themto limit their liabilities sptipulated in Article 423, Paragraph 1 of the Companies Act to the extent
permitted by the laws and ordinances.
5. The Company intends to register Motoyuki Oka and Main Kohda as independent director provided
under the stock exchange rules to the stock exchange.

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Item 4: Election of One (1) Company Auditor
Company Auditor Gisuke Shiozawa will resign at the conclusion of this ordinary general meeting ofshareholders. Accordingly, the election of one (1) Company Auditor as his replacement is proposed.
The Board of Company Auditors has approved this proposition.
The candidate for the office of Company Auditor is as follows:
Name(Date of Birth)

Brief Personal History, Positions in the Company,
and Significant Concurrent Positions outside the Company
Apr. 1981(Newly appointed)

Jul. 2004
Sep. 2005

Futoshi Nakamura(November 23, 1957)

Jul.
Jul.

2009
2010

Joined the Company (Japan Tobacco and Salt Public
Corporation)
Head of Procurement Planning Division
Senior Manager of Operational Review and Business
Assurance Division
Vice President, JT International Holding B.V. Vice
President
Senior Manager of Accounting Division
Head of Operational Review and Business Assurance
Division(Current Position)(Note) No conflict of interest exists between the Company and the above candidate.

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Number of theCompany’s
Shares Held5

Shareholder’s Proposals (Item 5 to Item 8)
The proposals from Item 5 to Item 8 were made by a shareholder. The number of voting rights of theshareholder (one) is 49,379.
The following are the agenda and reasons for the proposals made by the shareholder which are stated as theyare.

Item 5: Dividend Proposal
1. Agenda
The year-end dividends on shares of Common Stock for the 27th fiscal year shall be paid in the amount of
JPY20,000 per share of Common Stock.
2. Reason of Proposal
The Company has sufficient cash and retained earnings to pay a higher dividend. The Company has on
average returned 25% of its earnings to shareholders as dividends and share buybacks in the last three years
which is a substantially lower dividend payout ratio compared to its international competitors. Over the same
period JT’s competitors, British American Tobacco and Philip Morris International respectively returned on
average 70% and 120% of their earnings to shareholders.
The Board of Directors’ view on Item 5
The Board of Directors is opposed to this proposal.
The Company aims to achieve sustainable profit growth over the medium to long-term with a view thatinvesting in business for future profit growth is in the best interests of all shareholders. The Company has
achieved a combined annual EBITDA growth rate of 5.7% over the past 10 years through business
investments thus far which include the acquisitions of RJR International and Gallaher. Concurrently, we havebeen returning capital to shareholders by progressively increasing our consolidated dividend payout ratio
excluding the impact of goodwill amortization to a most recent level of 30% in the fiscal year ended March 31,
2012, on the basis of the Board of Directors’ recommendation, thereby attaining the target announced by theCompany in its efforts to improve the attractiveness of shareholder return.
On the other hand, the Board of Directors believes that delivery of a substantially high return as stated in the
proposals is short-term focused, and it would result in constrained business investment for future profit growth,loss of business competitiveness and shareholder value.
In Business plan 2012, we have set out the dividend payout ratio target of 40% in the fiscal year ending March
31, 2014, followed by a further increase to 50% over medium-term subsequently.

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Item 6: Share Buy-back
1. Agenda
Pursuant to Article 156.1 of the Companies Act, the Company will acquire its shares of Common Stock in
exchange for cash as follows:・ Shares to be acquired: 1,600,000*;・ Maximum aggregate amount of consideration: JPY800,000,000,000 (the “Proposed Amount”); provided
that, if the aggregate amount for acquisition as permitted under the Companies Act (the “Distributable
Amount” as set forth in Article 461 of the Companies Act) is less than the Proposed Amount, it shall be
reduced to such amount as permitted under the Companies Act; and・ Period for the acquisition: Within 1 year from the end of this general shareholders meeting
2. Reason of Proposal
The capital structure of the Company is under levered and the Shares are undervalued. The Company should
use its cash resources to buy back shares and then to raise its dividend payout in line with its international
peers. This will ensure the Board delivers on its pledge to prioritise the return of profits to shareholders and todeliver a competitive shareholder return.
*Following our Board of Directors’ resolution of April 13, 2012 concerning stock split at the ratio of 200
shares to one share effective July 1, 2012, this equals to 320,000,000 shares after the stock split comes into
effect.

The Board of Directors’ view on Item 6
The Board of Directors is opposed to this proposal.
The Company aims to achieve sustainable profit growth over the medium to long-term with a view thatinvesting in business that will drive future profit growth is in the best interests of all shareholders.
On the other hand, the Board of Directors believes that the large share buyback proposed by the shareholder
could negatively impact the Company’s flexibility to make business investments and financing, resulting inloss of business competitiveness and shareholder value.
JT has introduced an EPS growth rate target as a key performance indicator (KPI). As part of managing the
EPS growth rate set out as one of our shareholder return initiatives, the Company will actively monitor thebusiness environment and expeditiously buy back shares at appropriate times.
In addition, taking into account the current cash flow projections, anticipated business investments and credit
rating considerations, the Company is considering a possible buy-back of up to ¥250 billion in the event of theJapanese Government share offering, which is a portion of the anticipated shares to be offered.

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Item 7: Partial Amendments to the Articles of Incorporation
1. Agenda
The following new provision will be added as Article 16.2 in Chapter 3 “Shareholders’ Meeting” of the
Articles of Incorporation:
Article 16.2
The shareholders’ meeting can resolve the matters in respect of cancellation of treasury
shares including the type and number of shares to be cancelled, in addition to the matters set forth in the
Companies Act of Japan.
2. Reason of Proposal
The Company has been holding treasury shares without using them properly or cancelling them. If thetreasury shares are to be allocated to the public or particular third parties, the interest of the existing
shareholders will be significantly damaged. In order to protect the interest of the shareholders, theshareholders meeting should have the authority to resolve the matters in respect of cancellation of treasury
shares by its resolution.
The Board of Directors’ view on Item 7
The Board of Directors is opposed to this proposal.
We believe that the Board of Directors should retain authority on the cancellation and use of treasury stock, afunding source, owing to the need to evaluate and act with speed in the current business environment.
Accordingly, there is no need to amend the articles of incorporation for shareholders meetings to resolve thesematters, in line with the principle of the Companies Act of Japan.
We view treasury stock as a funding source, similar to new share issuances in our evaluation of futurebusiness investments including acquisitions, and taking into account our constraints on financing through newshare issuances due to the Japan Tobacco Inc. Law.
The EPS growth rate managed as our KPI will exclude treasury stock. Any decision reached to utilize treasury
stock for future business investments will only be made after giving careful consideration to whether it
contributes to long-term sustainable profit growth and best serves the interest of all shareholders.

Item 8: Cancellation of All Existing Treasury Shares
1. Agenda
Based on the amendment of the Articles of Incorporation in Item 7, we propose the following:
All shares of Common Stock owned by the Company are cancelled.
2. Reason of Proposal
The Company has no need to hold Shares in Treasury. Cancelling shares also ensures that the benefits ofrepurchasing shares are fully obtained. If the treasury shares are to be allocated to the public or particular third
parties, the interest of the existing shareholders will be significantly damaged.
The Board of Directors’ view on Item 8
The Board of Directors is opposed to this proposal.
Currently, the Company does not intend to cancel all the treasury shares, taking into account the potential useof treasury stock for business investments through future acquisitions and the constraints on financing throughnew share issuances due to the Japan Tobacco Inc. Law.

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