Kyowa Hakko Announces Acceptance of Judgment
by the Court of First Instance
Regarding a Price-Fixing Cartel for Lysine
(Feed-Grade Amino Acids)

 Kyowa Hakko Kogyo Co., Ltd. has been examining a judgment pronounced by the Court of First Instance for Europe as of July 9, 2003 that the Court accepts the decision made as of June 7, 2000 by the European Commission to impose a fine equivalent to 13.2 million euro on Kyowa Hakko Kogyo and its European subsidiary Kyowa Hakko Europe GmbH as a penalty for having formed a cartel to fix lysine prices.

 While we are greatly unsatisfied with the Court’s dismissal of our objection, we have decided to accept and comply with the Court’s judgment in paying the aforementioned fine to the Commission, in the interest of time and costs that may be required if we were to pursue further trial.

 In this regard, we had already allocated 1.12 million euro for a part of the penalty as accrued expenses in the consolidated and non-consolidated balance sheets for the year ended March 31, 2003.

 Following our final decision to accept the judgment, we intend to appropriate in extraordinary losses in the income statements for the interim period ending September 30, 2003, the balance between the sum of the fine payable to the European Commission with the litigation-related costs and the above-mentioned 1.12 million euro already allocated as accrued expenses. Revision, if any, of our consolidated and non-consolidated earnings forecasts for the year ended March 31, 2004, which we announced on May 14, 2003, resulting from this additional extraordinary loss, will be made and announced at a later date.

Note:
This document is an English translation of the original Japanese press release that was filed at the Tokyo Stock Exchange in Japan at 15:00 on July 29, 2003.