KNTOTAL

Annual Report l No. 3 l March 2017 IN THIS ISSUE IMPORTANT WATERWAY PARTICULAR PIPES LIGHT AT THE END OF TUNNEL TOTALINSIGHT 2 CONTENTS 01 INTRODUCTION 02 MOST IMPORTANT WATERWAY 03 PROMPT ACTION DEPENDS ON ABILITY 04 FINALIZED PROLONGED DISCUSSION 05 PARTICULAR PIPES IN KUWAIT 06 DETOUR WITH ARMY (CIS ROAD SURVEY) 07 THERE’S LIGHT AT THE END OF TUNNEL 08 NEWS 3 4 01 INTRODUCTION 02 MOST IMPORTANT WATERWAY 03 PROMPT ACTION DEPENDS ON ABILITY 04 FINALIZED PROLONGED DISCUSSION 05 PARTICULAR PIPES IN KUWAIT 06 DETOUR WITH ARMY (CIS ROAD SURVEY) 07 THERE’S LIGHT AT THE END OF TUNNEL 08 NEWS 5 01

++ INTRODUCTION Welcome to KNTOTAL Co., Ltd. I hope year 2016 has been meaningful and valuable for all of you. Thanks to the support from our clients and partners, we were able to provide more mature and secure service than before. This year’s Annual Report shows all about capturing our dynamic performance during 2016. You will find our successful projects carried in Middle East, CIS region, North America and Korea that covered our project shipment which is performed in Azerbaijan and Kuwait, heavy lift and triangle transport in land and sea. We hope you can see our determined and

boundary-pushing minds on every page of this report, also made a remarkable progress in 2016, but we know we still have a demanding road ahead to become a strong company. To achieve our goal, we will take action to secure competitiveness and to support the success of our customers in logistics and transport. In line with our business plan, we also will take steps to improve our operations and connections to Iran and CIS regions. KNTOTAL's motto, "Honesty, Accuracy and Cleanliness" motivate us to run business transparently and form our company's culture as well. Based on our motto, we promise

to be your best partner in challenging environments of year 2017. Thanks you for your support and confidence now and in the future. KIM KYUNG HEE CEO 6 1. DANGJIN PORT, KOREA / NEW ORLEANS PORT, USA / BARDS TOWN TSA 2. COMMODITY : 1,200TON T/F SERVO PRESS 3. PERIOD : MID AUG 2016 TO BEGINNING NOV 2016 4. WORK SCOPE : FROM UNDER HOOK NEW ORLEANS PORT TO FOT USA JOBSITE 5. VESSEL PERFORMED DURING ON-SHORE BUILT 2006, GT/NT/DWT 12,936/5,824/17,500Mtons LOA/BM/DM 143.13/22.80/13.30Meters CRANES 2X80T, Combined to 160Mtons 6. INLAND EQUIPMENTS PERFORMED DURING ON-SHORE & OFF-SHORE “Total distance

of transport in USA was 1,800km. What is the unique of this shipment was that cargoes were moved 1,670km by tug boat on the river of Mississippi ” 01 INTRODUCTION 02 MOST IMPORTANT WATERWAY 03 PROMPT ACTION DEPENDS ON ABILITY 04 FINALIZED PROLONGED DISCUSSION 05 PARTICULAR PIPES IN KUWAIT 06 DETOUR WITH ARMY (CIS ROAD SURVEY) 07 THERE’S LIGHT AT THE END OF TUNNEL 08 NEWS 7 Every project starts with an extensive preparation phase executed by a team of experienced transport expert. This includes the planning of the vessel's stability, the stowage, the required material and the lifting operation.

As we did before, we carefully inspected allotted space for the cargoes and found it to be clean, dry and fit for the stowage/ carriage of the shipments to be loaded at this port. Total distance of transport in USA was 1,800km. What is the unique of this shipment was that cargoes were moved 1,670km by tug boat on the river of Mississippi and the distance of inland trucking was only 130km from river terminal to final destination, TSA. In case of transport by river, tug boat was replaced three times at half point of river so shipment could be transported safely and delivered cargoes in the

expected time without any delay which could be occurred by mechanical problem of boat. For your reference, the Mississippi River is the country’s most important waterway where under normal conditions about $7 billion worth of commodities is shipped in December and January alone. Some 55 to 65 percent of U.S. corn, soybean, and wheat shipments exit the country via the Gulf, and within the country itself products such as, petroleum, fertilizer, sand, gravel, mulch, steel, are shipped up and down its major tributaries. For barges to travel safely along the more than 2,000 miles of the

Mississippi, a minimum 3 meter depth and 30.50 meter width must be maintained. 02 ++ MOST IMPORTANT WATERWAY 8 01 INTRODUCTION 02 MOST IMPORTANT WATERWAY 03 PROMPT ACTION DEPENDS ON ABILITY 04 FINALIZED PROLONGED DISCUSSION 05 PARTICULAR PIPES IN KUWAIT 06 DETOUR WITH ARMY (CIS ROAD SURVEY) 07 THERE’S LIGHT AT THE END OF TUNNEL 08 NEWS 1. 2,654.40MTS/6,579.48CBM/MAX. WT PER UNIT 109 MTS OF PRESS EQUIPMENTS 2. DANGJIN PORT, KOREA / ALTAMIRA PORT, MEXICO / RAMOS ARIPEZ GM, MEXICO 3. PERIOD : MID OCT 2016 TO END JAN 2017 4. WORK SCOPE : FROM UNDER HOOK ALTAMIRA PORT TO FOT MEXICO JOBSITE 5.

VESSEL PERFORMED DURING ON-SHORE BUILT 2009, GT/DWT 9,627/12,748Mtons LOA/BM/DM 131.00/21.00/8.00Meters CRANES 2X150T, Combined to 300Mtons 6. INLAND EQUIPMENTS PERFORMED DURING OFF-SHORE The port of Altamira, located on Mexico's northeastern Gulf Coast, is industrial port that handles over 15 million tons of commercial cargo per year. Nearly all the traffic handled is international and port has been showed steady growth since the port was opened for operation in 1996. We handled Press Machineries from Korea to Mexico which were the same shipments we did last year. We designed a transport from

Door to Door last year but, we counseled the inland transport 03 ++ PROMPT ACTION DEPENDS ON ABILITY 03 ++ PROMPT ACTION DEPENDS ON ABILITY 9 from discharging port to final destination, Ramos Aripez, Mexico this year. It takes more than 4 weeks to receive transport permission for heavy lift from Roads and Transport Authority in Mexico so the notice of departure from Dangjin port was informed to transport company in Mexico once vessel was started sailing. In case of this transport, we fully discussed to berth at Altamira Port Terminal (ATP) with them in advance but we were unexpectedly informed

that it was impossible to berth at ATP due to the equipment malfunction for discharging by ATP. As a result, we urgently changed the jetty to IPA terminal then we could discharge this shipment without any problem thanks to speedy action. Even loading operation was not our scope, we paid attention at loading port to provide high-quality services as well. Loading operation took three and half days and discharging operation at Altamira port took one and half days. The speed and quality of loading and discharging was very favorable and satisfactory but stevedoring charge at shore side at Altamira

was pretty higher than other ports. 10 01 INTRODUCTION 02 MOST IMPORTANT WATERWAY 03 PROMPT ACTION DEPENDS ON ABILITY 04 FINALIZED PROLONGED DISCUSSION 05 PARTICULAR PIPES IN KUWAIT 06 DETOUR WITH ARMY (CIS ROAD SURVEY) 07 THERE’S LIGHT AT THE END OF TUNNEL 08 NEWS 11 Masan sea port has a long history since it was established in 1899 and is located in on the southeastern coast about 64.8km by sea from Pusan. It is natural harbour well sheltered in all directions and also geographical convenience. Thanks to geometrical benefits, Masan port has contributed greatly as an international trading

port for the growth of the national economy. Since end of last year, we had discussed to transport these shipments with our client then after long discussion for about one year, we finally got these shipments and we could perform this business successfully. Of course like any projects, there were difficulties and it is not always fair or easy. We were informed weight for the heaviest cargo was 50MTON first and we arranged geared vessel which has capacity maximum 60MTON. But its actual weight turned out approximately 70MTON when shipper lifted cargo to load onto a trailer. We had already

finished making a fixture note with owner and we could not change the vessel. Fortunately, this cargo was heavy and huge so, it needed plenty of time to transport from shipper's jobsite to Masan port by road. Then, there were some times to arrange a mobile crane which has capacity maximum 400MTON and we were able to load the cargo without any problem. There were also 20MTON cargo and small eight packages. Small packages were loaded under deck and heavier cargo of 70MTON and 20MTON were loaded on deck properly. Loading operation started at about 0800LT and finished at 1300LT on 25th November,

2016. These heavy shipments successfully arrived at Bandar Abbas port then each shipment was loaded on one SPT equipped 6 Axel, 2 Low bed equipped 7 axel and two normal truck in order to transport from Bandar Abbas port to Assaluyeh site. 04 ++ FINALIZED PROLONGED DISCUSSION 1. 95.150MTS/523.800CBM/MAX. WT PER UNIT 70MTS OF INCINERATOR 2. MASAN, KOREA / BANDAR ABBAS, IRAN 3. PERIOD : END NOV TO END DEC 2016 4. WORK SCOPE : UNDER HOOK MASAN TO FOT JOBSITE IN IRAN 5. VESSEL PERFORMED DURING ONSHORE FLAG PANAMA, BUILT 2009, KR CLASS GT/NT/DWT 11,481/5,850/17,556MTONS LOA/BM/SUMMER DRAFT

131.9/22.0/14.5M DECK CRANE 3X30MT(COMBINE 1 X 60MT) 12 01 INTRODUCTION 02 MOST IMPORTANT WATERWAY 03 PROMPT ACTION DEPENDS ON ABILITY 04 FINALIZED PROLONGED DISCUSSION 05 PARTICULAR PIPES IN KUWAIT 06 DETOUR WITH ARMY (CIS ROAD SURVEY) 07 THERE’S LIGHT AT THE END OF TUNNEL 08 NEWS 13 This project to transport concrete pipe is planned to transport 6batches throughout December, 2016 and April, 2017 from Pyeongtaek port, Korea to Shuaiba port, Kuwait. The first batch, 972pkg, 11,080.6mton was loaded onto MV DENEB and departed on 18 December and arrived at Shuaiba port on 15 January. These

cargoes are loaded and discharged onto/ from vessel from/onto trailer directly. In case of this project, all cargoes have to be stacked and lashed according to cargo handling instruction provided by owner. All pipes are surrounded by concrete and there are risks of breakages of each end of pipe so, we proceed with utmost caution when loading these shipments. What we paid particular attention was stacking operation. Pipes of 30 inches shall be stacked 3tier and pipes of 10 inches can be stacked 5tier. Moreover, plywood was placed 4 points under each pipe and we lashed all cargoes at 4 points.

There was longitudinal structure in the middle of ceiling of first vessel which was MV DENEB so available space to load pipes was too small from deck to the structure. As a result, we spent plenty of time to load shipment under the structure but fortunately, we got used to do loading operation then the speed of loading was getting faster. We will finalize this project on April successfully and provide our client the best service to transport this cargo as we always do. Located 45 kms south of Kuwait city, Shuaiba port is Kuwait’s second most important commercial port. The port has 20

commercial and container berths as well as an oil pier (which is operated by Kuwait National Petroleum Co). The oil pier has a depth of 16 meters. Shuaiba has an extensive conveyor network for handling bulk petrochemical exports, as well as several modern workshops for maintenance of marine harbour craft and other equipment. The port has two basins for small craft and barges. The craft basin has a depth alongside of 4meters and comprises three piers. The barge basin has a depth of 6meters and offers four piers ranging from 157meters to 287meters in length. What is unique about this port is

that there is no facility of storing cargoes after discharging from the vessel. That is why all cargoes must be discharged on direct delivery basis. Only containers, no other cargoes, can be stored inside of the port area. 1. 71.104.89MTS/7,371PKGS(+/- MOLCO) 2. PYEONGTAEK, KOREA / SHUAIBA, KUWAIT 3. PERIOD : DECEMBER 2016 ~ ARIL 2017 4. WORK SCOPE : UNDER HOOK PYEONGTAEK, KOREA TO FOT JOBSITE IN SHUAIBA, KUWAIT 5. VESSEL PERFORMED DURING ONSHORE 27,414 DWT ON 10.427M BUILT 2006 / B.V CLASS PANAMA FLAG GRT/NRT 20,471/10,630 L/B/ D: 178.80 m / 27.20 m / 14.20 m GRAIN 37,868/ CBM CRANES 2X45MT,

2X40MT / 5H/9H 05 ++ PARTICULAR PIPES IN KUWAIT 14 01 INTRODUCTION 02