To the Board of Directors and Stockholders of
Kobe Steel, Ltd.

We have audited the accompanying consolidated balance sheets of Kobe Steel, Ltd. (a Japanese corporation) and subsidiaries at March 31, 1997 and 1996 and the related consolidated statements of income, stockholders' equity and cash flows for the years then ended, expressed in Japanese yen. Our audits were made in accordance with generally accepted auditing standards 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 consolidated financial statements referred to above present fairly the consolidated financial position of Kobe Steel, Ltd. and subsidiaries at March 31, 1997 and 1996 and the consolidated results of their operations and their cash flows for the years then ended, in conformity with generally accepted accounting principles in Japan, applied on a consistent basis.

We have provided advice and counsel to Kobe Steel, Ltd. as to principles of accounting under International Accounting Standards promulgated by the International Accounting Standards Committee. In our opinion, the accounting policies set out in Note 2 of the Notes to Consolidated Financial Statements are in accordance with International Accounting Standards in all material respects, except as described in Note 3 of the Notes to Consolidated Financial Statements.

We have also reviewed the translation of the statements mentioned above into U.S. dollars on the basis described in Note 1. In our opinion, such statements have been properly translated on such basis.

Osaka, Japan
June 27, 1997

(Member Firm of Andersen Worldwide SC)