Inspection ReportSGS Report No.IN-NB-5301-11095-002IN-NB-5301-11095SGS Order ntact PersonTelephoneEmailClientMacmahonContact PersonClient Contact InformationTelephoneEmailPrimary SupplierPrimary Supplier Contact InformationContact PersonTelephoneEmailManufacturerManufacturer Contact InformationContact PersonTelephoneEmailEquipment/Material Inspected1. 32pcs - 18m long 900mm OD x 20mm wall thickness,grade S355JR steel pile casings, including 900mm OD x50mm wt x 1000mm driving shoe2. 38pcs - 10m long 900mm OD x 20mm wall thicknessgrade S355JR steel pile casings, with one end beveled3. 40pcs - Splicing backing ringsTechnical SpecificationAPI 5L , EN10025 and ANNEXURE A – SCOPE OFWORKSProject NameInspection LocationClient Ref. No.N/ADate of inspection3Dec. 11,15 19andManufacturer Order No.N/AInspectorIsaac Li &Todd Guo &Kim Xu& Arvin Wang&22 23 Dec., 2011Junquan Liu & Ivan PanInspection ItemsCriteriaResults (Acceptable /Unacceptable/Pending)DisclaimerThis document is issued by the Company under its General Conditions of Service accessible atlimitation of liability, indemnification and jurisdiction issues defined therein. and conditions.htm.Attention is drawn to theAny other holder of this document is advised that information contained hereon reflects the Company’s findings at the time of its intervention only and within the limits of Client’sinstructions, if any. The Company’s sole responsibility is to its Client and this document doesnot exonerate parties to a transaction from exercising all their rights andobligations under the transaction documents. Any unauthorized alteration, forgery or falsification of the content or appearance of this document is unlawful and offenders may beprosecuted to the fullest extent of the law.SGS-CSTC Standards Technical Services Co., Ltd.Industrial ServicesMember of the SGS Group (Société Générale de Surveillance)

Documents reviewEN10025 andASME Section IXAcceptableRaw material receivinginspectionEN 10025AcceptableWitness Test10% UT inspectionAPI 5LAPI 5LAcceptableAcceptableDimension checkAPI 5LAcceptableInternal and external, visualinspection of welding seam,repair weldingAPI 5LAcceptableLoading/AcceptableAbnormal items issueN/AEquipment/Material inspectedDuring this visit, the ordered goods in below table were provided for SGS inspection, detail as follows:No.Model & Type of commodityOrder Qty.Finished and Inspected Qty.20No. 18m long 900mm OD x 20mm wall thickness,1grade S355JR steel pile casings, including 900mmOD x 50mm wt x 1000mm driving shoe32pcs32pcs and 32pcs passed20No. 10m long 900mm OD x 20mm wall thickness2grade S355JR steel pile casings, with one endbeveled38pcs38pcs and 38pcs passed3Splicing backing rings OD860*6Total40pcs110pcs40pcs and 40pcs passed110pcs and 110pcs passedReference Documents-API 5L 2007 Specification for Line PipeEN10025:2004 European structural steel standardInstruments UsedDuring the inspection, the following instrument calibration status has been checked for inspection:No.1INSTRUMENT DESCRIPTIONImpact testing machineCALIBRATION STATUSEffectiveCERTIFICATE NO. (OPTIONAL)XJ11000264-00582Electronic digital caliperEffective3XJ11000266-00083Ultrasonic thickness meterEffective3XJ11000266-00304Portable ctiveCO3-2010026Report Form Rev. 02Effective date 6 Feb 2006Page 2 of 14

67Welding inspection rulerUniversal test 0001Remark: All instruments were on the valid period.Inspection Narrative Summation1.Documents Review1.1 When SGS inspector arrived at the factory, following documents were prepared for SGS inspector review:- WPS/PQR,- Welder qualification,- NDE operator qualification,-Raw material inspection reportAnd Instrument calibration certificates.1.2 When the pipes were finished; below documents were submitted to SGS inspector for reviewed, which wasacceptable.-The weld join tensile test report,Mechanical performance testing report,Chemical analysis for raw material,Inspection record of pipesAnd quality certificate for pipes.Remark: WPS/PQR was prepared as per ASME Section Ⅸ and compliance with this standard, which wereaccepted by client.2.Material Receiving InspectionMaterials receiving inspection was performed by SGS inspection. Details are as follows:ItemThicknessCoil NoHeat No.Steel Grade(mm)A111121A039R, 043R, 031R,112A06950S355JR042R, 036R, 037R, 029R, 032R,19.4 19.61030RA111121A041R,040R, 034R,111A06951S355JR219.4 19.6035R, 033R, 038RFlawNoNoRemark: The result was acceptable.3. Witness TestThe following tests were witnessed by SGS inspector during the inspection, details are as below.3.1 Mechanical properties & chemical composition retest for raw material-One sample of each heat No. was cut from raw material for tensile test, chemical composition test and impacttest, the result was acceptable.Report Form Rev. 03Effective Date: 7 October, 2008Page 3 of 14

-1pc welding bead sample was cut from pile casing for tensile test and bending test, the result was acceptable.The detail is as below:3.1.1 Physics retest for raw Heat 205-2ResultEL(%)BendingtestAkV(J) 20 28.2No crackNo .2 Chemical composition retest for raw materialHeat No.111A06951GradeS355JRSpecimen 7ResultPassPassRemark: 1.The result was acceptable according to EN 10025:2004 and API 5L PSL1 2007.2. The below table was corresponding heat No. and products size.Heat No111A06951Products sizeOD900*20112A06950OD900*203.2 Physical for weld beadPipe ANo crackNo crackResultPassPassPass3.3 UT and MT testSample size: 10% UT and MT7pcs pipes were selected randomly for UT and MT test witness, the result was acceptable as per API 5L PSL 12007.3.3.1MT testDuring this visit, 7 pipes (No.28-3221, No.03-3167, No.07-3175, No.08-3177, No.11-3185, No.02-3170 andNo.03-3175) were carried out MT test which was witnessed by SGS inspector, the result is as follow,Before carried out testing, NDT operator had calibrated the equipment, then done the testing according toprocess and no defect which go beyond the limit of the standard of level II has been found, the result wasacceptable.3.3.2UT testDuring this visit, 7 pipes (No.28-3221, No.03-3167, No.07-3175, No.08-3177, No.11-3185, No.02-3170 andNo.03-3175) were carried out UT test which was witnessed by SGS inspector, the result is as follow,Before carried out testing, NDT operator had calibrated the equipment, then done the testing according toprocess and no defect which go beyond the limit of the standard of level II has been found, the result wasacceptable.Report Form Rev. 03Effective Date: 7 October, 2008Page 4 of 14

4.Dimension CheckDuring manufacturing, all finished products were selected for dimension check.The OD, Length and roundness was acceptable according to API 5L PSL1 20075.Internal and external, visual inspection of welding bead, welding repairDuring this inspection, visual inspection of welding bead was carried out after repaired welding bead were finished.Undercut 0.8mm, internal weld reinforcement 3.5mm and external weld reinforcement 4.5mm, no obviousdefect was found.No porosity, crack, spatter, weld flash and weld defect were found on pile casings.The internal concavity was found and not lower than the base metal. The detail is as below,The inner welding beadRemark: The result was acceptable.6.Loading Supervision- Pre-loading and loading supervision surveyWe report the following:6.1. The loading to the port from factorySeveral pipes were loaded onto a truck and tightened with nylon rope, total 13 trucks, and delivered to Shanghaiport on 19 Dec., 2011.Report Form Rev. 03Effective Date: 7 October, 2008Page 5 of 14

Loading onto the truck at the factoryLoading onto the truck at the factory6.2. Pre-loading inspectionPre-loading inspection was carried out on 22nd, December 2011 at Shanghai port.Weather condition at the time of survey: Cloudy.6.2.1 Storage:Total 70 pieces of the pile casings (declared to be SSAW Pipe LSAW Pipe) were stored on open yard of LUOJINGterminal of Shanghai port, China. The storage ground was noted cement ground and to be in clean condition andfree from chemical job and nearby river.Cargo were found stored on yards up to 3 tiers high without covering protection. And without dunnage supportedto separation ground and bottom tubes.Total 40 pieces of the cargo (LSAW PIPE, SIZE: 860X6) were found stored in warehouse of LUOJING terminal ofShanghai port, China. The storage ground was noted cement ground and to be in clean condition and free fromchemical job.6.2.2 Packing:Tubes were found packed in bare condition.6.2.3 Marking:Each tube was supplied on pipe’s inner surface of both ends, which read in English, for example:API5L PSL1Φ900X20X10000S355JRHEAT NO. 112A06950HEAT NO. 111A069510631736.3. Loading supervision at port:A cargo loading supervision had been carried out at pier side of vessel M.V.”ALEXANDERGRACHT” duringloading on 22nd, December 2011Report Form Rev. 03Effective Date: 7 October, 2008Page 6 of 14

Weather Condition during Loading: Overcast6.3.1 Time logVessel Arrived, Shanghai PortBerthed at PierCommenced LoadingCommenced lashingCompleted loadingCompleted SecuringETD: 2100, 21: 1230, 22: 1620, 22: 2230, 22: 2230, 22: 2320, 22: 0100, 23December 2011December 2011December 2011December 2011December 2011December 2011December 20116.3.2 Brief Description of VesselM.V.” ALEXANDERGRACHT” was found to be a bulk carrier with three single cargos holds all forward ofaccommodation and machinery space.The vessel laid securely moored starboard side to LUOJING port terminal, Shanghai, China.6.3.3 Shifting from yardPieces were shifted onto port trailers from the port yard using vehicle cranes, and then transferred to loadingberth. On port yards, pieces were lifted using nylon straps with hooks.Each trailer carried up to 4 pieces.6.3.4 Loading alongside the vesselAlongside the vessel, the consignment was loaded directly from port trailers to vessel’s and using one shorecrane, the pipes were lifted by steel hooks, up to 2 pieces per sling.6.3.5 StorageBefore loading, the hold No.2 of the vessel was visual inspected by SGS surveyor and noted to be in dry andclean condition. Our cargo was loaded and stowed in hold No.2 and deck.6.3.6 Dunnage and lashing/securingDuring loading, wooden timbers were used between the deck and pipe to avoid cargo touch the ship directly.After the loading completion, our cargos (Steel pipes) were lashed by up to 6 pieces of steel wire on deck. Theentire lashing and securing checked by Chief Mate and SGS surveyor found in sound condition.6.3.7 TallyA tally survey to determine the quantity of the goods loaded on board was carried out during loading, as per ourtally, found total 40 pieces were loaded into hold No.2 , and total 70 pieces of the pipe were stowed on deck of thevessel MV “ALEXANDERGRACHT”, the detail as follow:ItemID (mm)WT (mm)Length (m)1a、SSAW Pipe9002018501Quantity (pcs)Weight(MT)156.255201b、LSAW Pipe900Report Form Rev. 03Effective Date: 7 October, 2008HoldOn deck20.962Page 7 of 14

2、LSAW Pipe90020103a、SSAW Pipe90020182086.80893.753123b、LSAW Pipe900504、SSAW Pipe900205、SSAW Pipe9008606、LSAW Pipe1On Total:On deckOn deckOn deckIn hold No.26.3.8 Visual cargo condition inspection during loadingA visual cargo condition inspection was carried out during preloading and loading operation.As far as visible and accessible, all of the steel pipes were found slight scrape and rust stained on the surface.Document ReviewThe SGS inspectors reviewed the following documents:-WPS/PQRWelder QualificationNDE Operator QualificationRaw material inspection report except Splicing backing ringsMaterial certificateFinished inspection reportSteel mill MTCInstrument calibrationPhotoReport Form Rev. 03Effective Date: 7 October, 2008Page 8 of 14

FormingSteel pipe on the product lineDimension checkRepairing weld beadWeldingCutting the pile casingFinished productsThe end of pile casingReport Form Rev. 03Effective Date: 7 October, 2008Page 9 of 14

Check the thickness of raw materialThe label on the raw materialChemical composition testImpact testTensile testThe bending test specimens of raw materialReport Form Rev. 03Effective Date: 7 October, 2008Page 10 of 14

The sample of welding beadMaterial tensile test for welding beadBending test for welding beadUT testWhite markingWhite markingReport Form Rev. 03Effective Date: 7 October, 2008Page 11 of 14

Storage cargo condition on open yardSize:900 x20x19000mmStorage cargo condition on open yardSize:900x20x10000mmShoes: 900x50x1000mmSplicing backing rings: 860x6mmRust stained on surfaceRust stained on surfaceReport Form Rev. 03Effective Date: 7 October, 2008Page 12 of 14

Carrying vesselDuring loadingStowed on deckStowed on deckBlankLashingBlankRemarks1.This report only reflects our findings at time and place indicated above only and does not referto any other matters.Report Form Rev. 03Effective Date: 7 October, 2008Page 13 of 14

2.3.This inspection has been carried out to the best of our knowledge and ability and ourresponsibility is limited to the exercise of reasonable care.All orders are accepted and all reports and certificates issued subject to the General Conditionsof Service. (copy available upon request)Issued byIsaac LiInspectorIndustrial ServicesSGS-CSTC Nanjing office23 Dec., 2011Report Form Rev. 03Effective Date: 7 October, 2008Reviewed byMailer MaoInspection SupervisorIndustrial ServicesSGS-CSTC Nanjing office26 Dec., 2011Pag