REPORT OF THE INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS ON
THE CONSOLIDATED FINANCIAL STATEMENTS

The Board of Directors
Kawasaki Steel Corporation

We have examined the consolidated balance sheets of Kawasaki Steel Corporation and its consolidated subsidiaries as of March 31,1999 and 1998, and the related consolidated statements of operations and stockholders' equity for the years then ended, all expressed in yen. Our examinations were made in accordance with auditing standards, procedures and practices generally accepted and applied in Japan and, accordingly, included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances.

In our opinion, the accompanying consolidated financial statements present fairly the financial position of Kawasaki Steel Corporation and its consolidated subsidiaries at March 31, 1999 and 1998, and the results of their operations for the years then ended, in conformity with accounting principles and practices generally accepted in Japan consistently applied.

The U.S. dollar amounts in the accompanying consolidated financial statements with respect to the year ended March 31, 1999 are presented solely for convenience. Our examination also included the translation of yen amounts into U.S. dollar amounts and, in our opinion, such translation has been made on the basis described in Note 1 to the consolidated financial statements.

Osaka, Japan

June 29, 1999