The case holding that it is difficult for Company A to see that Company A intentionally concealed the cost for construction works at the time when most detailed design for specific construction works is completed, on the grounds that: (a) after reporting the increase in estimated cost of construction works at the construction site from the project manager, the public announcement was reflected in the business report; (b) the cost inspection was conducted on the construction site where at least 95% of the detailed design was conducted; (c) there was no problem in light of corporate accounting standards, etc.; or (d) Company A had already been aware of losses in the construction site in the process; (b) due to the characteristics of the construction method mainly used for overseas plant business, it is difficult to see that Company A intentionally determined the cost of construction works at the time when most detailed design for specific construction works is completed; and (c) Company A intentionally verified the detailed content of the construction site at the construction site at the construction site at the construction site at the construction site at the construction site at the construction site at the construction site at the construction site at the construction site at the construction site at the construction site at the construction site at the construction site at the construction site at the construction site at the cost increase in the construction site or the construction site.

July 17, 2020

2. The costs of lawsuit shall be borne by the plaintiff (representative party).

The defendant shall pay 43,77,824,170 won to the plaintiff (representative party) and 5% per annum from April 10, 2013 to the service date of the application for modification of the purport of the claim as of December 3, 2019, and 15% per annum from the following day to the day of full payment.

A. Status of the parties

1) The Defendant is a stock-listed corporation under Article 9(15)3 of the Financial Investment Services and Capital Markets Act (hereinafter “Capital Markets Act”), which runs the business of newly constructing houses, selling, repairing, maintaining, and leasing houses, specialized overseas and construction businesses, overseas resources development projects, the business of installing and operating integrated energy facilities, the business of designing, manufacturing, purchasing, constructing, and operating plant engineering, the business of trial operation, and the business of maintaining, repairing and operating plant facilities.

2) Plaintiff (Representative Party) and the rest of the Plaintiffs (hereinafter collectively referred to as “Plaintiffs”) and the rest of the Plaintiffs (hereinafter referred to as “representatives”) shall be the persons holding Defendant’s shares as of April 10, 2013, by acquiring the Defendant’s shares through the securities market and publicly announcing the provisional performance from March 29, 2013, which was submitted by the Defendant during the 2012-year business report from March 29, 2013 to April 17:33, 2013.

B. The defendant's orders for overseas plant construction

1) After the global foreign exchange crisis in 2008, the Defendant began to reduce the importance of domestic construction and housing projects and increase the weight of overseas plant projects. On November 5, 2009, the Defendant ordered construction of a large number of overseas plant construction works abroad from the end of 2009 to the year 2011, including taking orders for construction of the UAE oil refining facilities (No. 2 failure) in size of USD 310,000,000.

2) The details of major overseas plant construction works awarded by the Defendant from the end of 2009 to the end of 2010 are as listed below.

The title of the table contained in the main text (as of December 31, 2012) Nos. 1 Rwinis Refinion - PKG2 (hereinafter “LL 2”) on November 3, 2009, approximately 3.4922 billion won on February 13, 2014 - PKG 7 (hereinafter “PY 3.5 billion won”) on December 14, 2014, approximately 1.5 billion (as of December 31, 2012) and approximately 1.5 billion (as of December 31, 2012), 2.3 billion won on February 13, 2014, approximately 1.5 billion (hereinafter “PY 3.5 billion won”) on December 14, 2014, approximately 205 billion (hereinafter “PP 3.4 billion won on February 13, 2014”).

C. The Defendant’s large-scale financing and disclosure of the provisional business performance in 2012

1) The Defendant issued corporate bills of KRW 300 billion on January 23, 2013 and KRW 200 billion on May 29, 2013, and issued corporate bonds of KRW 380 billion on February 5, 2013, and issued corporate bills of KRW 50 billion on February 20, 2013 and KRW 100 billion on June 20, 2013.

2) On February 7, 2013, the Defendant issued a non-disclosure performance report to securities companies. The Defendant explained that “The cost rate of the construction project in the International RP2 reaches 111%, and then appropriated the appropriation for construction loss of KRW 110 billion at the construction site in the quarter of 2012, and accordingly, the quarterly operating income in the year 2012 reduced to KRW 160 billion.” The Defendant stated that “The low-price price was inevitable due to competition at the time of receiving the contract, and the subsequent cost was increased to a large scale.” Moreover, on February 7, 2013, the Defendant announced the “business performance prospects, etc.” with the content that the sales amount in the year 2012 would amount to KRW 9.289 billion, KRW 160 billion, and KRW 160.4 billion.

D. Public disclosure of the instant business report, etc.

1) After that, on March 29, 2013, the Defendant made a public announcement of the business report for the 44th period (from January 1, 2012 to December 31, 2012) (hereinafter “business report of this case”) reflecting the losses of the ICP2, as seen above. Of the financial statements attached to the business report of this case, the consolidated income statement was written by the Defendant that accounts for approximately KRW 9,289,50,56,489, the sales amount of 2012, and KRW 8,573,361,856,618, operating income amount of 160,384,251,361, net income amount of 108,380,795,251, and KRW 108,930,000,000,000 won in total, KRW 969,6964,696,69666,69666.

2) On April 10, 2013, the Defendant published the instant business report on April 10, 2013: (a) on the public notice of the business report of this case, stating the following: “The outlook for the business performance, etc.” stating that “no significant change exists in the outlook for the rate of receiving orders and receiving orders, but if the estimated cost of the project in progress as a result of a cost inspection changes in the estimated cost ratio of the project, the project will be reflected in the first half of 2013, the amount of KRW 674.4 billion, and KRW 124.4 billion in the second half of 2013, and (b) on the one quarter of 2013, the Defendant published the “business performance” on the basis of consolidated financial statements (hereinafter collectively referred to as the “provisional disclosure”).

E. After the provisional publication of the instant case, the Defendant’s change in the share price is inferred.

1) The Defendant’s share price (based on the closing price; hereinafter the same shall apply) reached KRW 49,400, around April 10, 2013. However, after the provisional publication of the instant case was made on April 10, 2013, the Defendant’s share price fell rapidly, resulting in a decline of KRW 29,300 on April 23, 2013. From April 25, 2013 to around 30,000.

2) Meanwhile, on May 24, 2013, the Korean Enterprise Credit Rating Co., Ltd., the Korean Enterprise Credit Rating Co., Ltd., Korea, and the Korean Credit Rating Co., Ltd., adjusted the Defendant’s credit rating from “A-” to “A+”.

(f) Imposition of penalty surcharges on the defendant by the Financial Services Commission;

On April 4, 2014, the Financial Services Commission omitted a large amount of business performance malicious (195 billion won) and 30 billion won issued on January 23, 2013, when it acknowledged that the Defendant was aware of the fact that he was 1,95 billion won in an overseas plant sector, and reflected it in the Defendant’s management plan and financing plan in January 2013, 2013, but omitted a resolution on the possibility of additional 60 billion won in an investment risk on February 4, 2013 (200 billion won) with regard to the issuance of corporate bonds on January 24, 2013, the Financial Services Commission issued the above large-scale business performance malicious (195 billion won) and on January 23, 2013, and omitted a resolution on the possibility of additional 200 billion won in the industrial complex issuance (200 billion won) on the investment risk factor of the corrective statement on February 4, 2013.

(g) Confirmation, etc. of a decision to permit class action related to securities;

1) On October 8, 2013, Plaintiff (Representative Party) asserted that “The Defendant prepared a false financial statement corresponding to an important matter in the instant business report, and thus, pursuant to Article 162 of the Financial Investment Services and Capital Markets Act, he/she is liable for damages to the parties who incurred losses after acquiring the Defendant’s shares in trust in the said business report,” and filed a class action against the Defendant regarding the instant securities at the same time, and filed an application for permission of the instant securities-related class action with this Court No. 2013Ka6824, Feb. 12, 2015.”

2) Accordingly, the Defendant appealed to Seoul High Court Decision 2015Ra539 on February 17, 2015, but the said court dismissed the Defendant’s appeal on January 29, 2016, and the said decision of permission for a lawsuit became final and conclusive on June 10, 2016 by the Supreme Court’s ruling of dismissal of reappeal (2016Ma253).

(h) relevant regulations;

본문내 포함된 표 자본시장법 제162조(거짓의 기재 등에 의한 배상책임) ① 제159조 제1항의 사업보고서ㆍ반기보고서ㆍ주요사항보고서(이하 ‘사업보고서 등’이라 한다) 및 그 첨부서류(회계감사인의 감사보고서는 제외한다) 중 중요사항에 관하여 거짓의 기재 또는 표시가 있거나 중요사항이 기재 또는 표시되지 아니함으로써 사업보고서 제출대상법인이 발행한 증권(그 증권과 관련된 증권예탁증권, 그 밖에 대통령령으로 정하는 증권을 포함)의 취득자 또는 처분자가 손해를 입은 경우에는 다음 각호의 자는 그 손해에 대하여 배상의 책임을 진다. 다만 배상의 책임을 질 자가 상당한 주의를 하였음에도 불구하고 이를 알 수 없었음을 증명하거나 그 증권의 취득자 또는 처분자가 그 취득 또는 처분을 할 때에 그 사실을 안 경우에는 배상의 책임을 지지 아니한다. 1. 그 사업보고서 등의 제출인과 제출 당시의 그 사업보고서 제출대상법인의 이사 ③ 제1항 및 제2항에 따라 배상할 금액은 청구권자가 그 증권을 취득 또는 처분함에 있어서 실제로 지급한 금액 또는 받은 금액과 다음 각호의 어느 하나에 해당하는 금액(처분의 경우에는 제1호에 한한다)과의 차액으로 추정한다. 1. 제1항 및 제2항에 따라 손해배상을 청구하는 소송의 변론이 종결될 때의 그 증권의 시장가격(시장가격이 없는 경우에는 추정 처분가격을 말한다) 2. 제1호의 변론종결 전에 그 증권을 처분한 경우에는 그 처분가격 기업회계기준서 제1010호 보고기간 후 사건(2007. 11. 23. 제정, 2011. 11. 18. 개정) 용어의 정의 3. 이 기준서에서 사용하는 용어의 정의는 다음과 같다. 보고기간 후 사건: 보고기간 말과 재무제표 발행승인일 사이에 발생한 유리하거나 불리한 사건. 보고기간 후 사건은 다음 두 가지 유형으로 구분한다. (1) 보고기간 말에 존재하였던 상황에 대해 증거를 제공하는 사건(수정을 요하는 보고기간 후 사건) (2) 보고기간 후에 발생한 상황을 나타내는 사건(수정을 요하지 않는 보고기간 후 사건) 6. 경영진은 별도의 감독이사회(비집행이사로만 구성)의 승인을 얻기 위하여 재무제표를 발행하는 경우가 있다. 그러한 경우 경영진이 감독이사회에 재무제표를 제출하기 위하여 승인한 날이 재무제표 발행승인일이다. 공시 18. 재무제표 발행승인일 후에 발생하는 사건의 영향은 재무제표에 반영하지 않으므로 재무제표 발행승인일의 공시는 이용자에게 중요한 정보가 된다. 기업회계기준서 제1011호 건설계약(2007. 11. 23. 제정) 목적 이 기준서의 목적은 건설계약과 관련한 수익과 원가의 회계처리를 정하는 데 있다. 건설계약에 따른 활동의 성격으로 인해, 계약활동이 시작되는 날과 종료되는 날은 보통 다른 회계기간에 귀속한다. 그러므로 건설계약의 회계처리에 대한 핵심 사항은 계약수익과 계약원가를 건설공사가 수행되는 회계기간에 배분하는 것이다. 계약수익과 비용의 인식 22. 건설계약의 결과를 신뢰성 있게 추정할 수 있는 경우, 건설계약과 관련한 계약수익과 계약원가는 보고기간 말 현재 계약활동의 진행률을 기준으로 각각 수익과 비용으로 인식한다. 건설계약에 손실이 예상되는 경우에는 문단 36에 따라 관련 손실을 즉시 비용으로 인식한다. 25. 계약의 진행률을 기준으로 수익과 비용을 인식하는 방법을 진행기준이라고 한다. 이 방법에 따르면 계약수익은 특정 진행률에 도달하기까지 발생한 계약원가에 대응되며, 그 결과로 공사진행률에 비례하여 수익, 비용 및 이익이 보고된다. 이 방법은 특정 기간의 계약활동과 성과에 대하여 유용한 정보를 제공한다. 26. 진행기준하에서 계약수익은 공사가 수행된 회계기간의 당기손익에 수익으로 인식하며, 계약원가도 통상적으로 관련 공사가 수행된 회계기간의 당기손익에 비용으로 인식한다. 그러나 당해 계약의 총계약원가가 총계약수익을 초과할 것으로 예상되는 경우 당해 초과액은 문단 36에 따라 즉시 비용으로 인식한다. 28. 건설계약의 결과는 그 계약과 관련된 경제적 효익이 건설사업자에게 유입될 가능성이 높은 경우에만 신뢰성 있게 측정할 수 있다. 그러나 당기손익에 계약수익으로 이미 인식한 금액의 회수가능성에 불확실성이 발생한 경우, 회수 불가능한 금액이나 더 이상 회수가능성이 높다고 볼 수 없는 금액은 계약수익을 조정하기보다는 당기비용으로 인식한다. 29. (생략) 건설사업자는 계약의 진행에 따라 계약수익과 계약원가의 추정치를 재검토하고 필요한 경우에는 추정치를 수정한다. 추정치를 수정할 필요가 있다고 해서 계약의 결과를 신뢰성 있게 추정할 수 없다는 것을 의미하는 것은 아니다. 30. 계약의 진행률은 다양한 방식으로 결정될 수 있다. 건설사업자는 수행한 공사를 신뢰성 있게 측정하는 방법을 사용한다. 계약의 성격에 따라 다음과 같은 방법 등으로 측정할 수 있다. (1) 수행한 공사에 대하여 발생한 누적계약원가를 추정총계약원가로 나눈 비율 33. 계약의 초기단계에는 계약의 결과를 신뢰성 있게 추정할 수 없는 경우가 많다. 그럼에도 불구하고 발생한 계약원가는 회수가능성이 높은 경우가 있을 수 있다. 따라서 이러한 경우 계약수익은 회수가능할 것으로 기대되는 발생원가를 한도로 인식한다. 계약의 결과를 신뢰성 있게 추정할 수 없으므로 이익은 인식하지 않는다. 그러나 계약의 결과를 신뢰성 있게 추정할 수 없는 경우라도, 총계약원가가 총계약수익을 초과할 가능성이 높은 경우에는 예상되는 초과금액을 문단 36에 따라 즉시 비용으로 인식한다. 예상손실의 인식 36. 총계약원가가 총계약수익을 초과할 가능성이 높은 경우, 예상되는 손실을 즉시 비용으로 인식한다. 38. 진행기준은 매 회계기간마다 누적기준으로 계약수익과 계약원가의 현행 추정치에 적용한다. 따라서 계약수익이나 계약원가의 추정치 변경의 효과나 계약 결과의 추정치 변경의 효과는 회계추정의 변경으로 회계처리한다. 변경된 추정치는 변경이 이루어진 회계기간과 그 후 기간의 당기손익으로 인식되는 수익과 비용의 금액 결정에 사용한다.

[Reasons for Recognition] Facts without dispute, Gap's statements in Gap's 1 through 12, 14 through 32, 34, 38, 39, 44 (including each number; hereinafter the same shall apply), Eul's statements in Eul's evidence 2, the purport of the whole pleadings

2. The assertion and judgment

A. Summary of the parties' arguments

1) Plaintiffs’ assertion

In the process of receiving orders for overseas plant construction for which half of the total sales are imminent, the Defendant prepared false material facts in the financial statements attached to the instant business report or omitted material facts in the financial statements by excessively using sales and operating profits, etc. because it did not properly estimate the total contract cost of large-scale overseas plant construction from the beginning or reflect the estimated total contract cost according to the degree of construction progress. Accordingly, the Defendant is liable to compensate for damages to the Plaintiffs who suffered losses upon the acquisition of Defendant’s issued stocks in trust in the instant business report in accordance with Article 162 of the Capital Markets Act.

2) Defendant’s assertion

The Defendant, according to the Korean International Financial Reporting Standards (Korean International Financial Reporting Standards) (hereinafter “Korea International Financial Reporting Standards”) (hereinafter “Korea International Financial Reporting Standards”) (hereinafter “Korea Financial Services Commission”) made a lawful accounting and publicly announced the matters to be entered in the instant business report within a reasonable period of time, and there was no benefit or motive gained by delaying the disclosure of the matters to be published on eight business days, and ③ the Financial Services Commission’s imposition of a penalty surcharge of KRW 2 billion against the Defendant on April 4, 2014 is an overall information about the aggravation of profitability, and the possibility of additional losses in overseas plant business is an overall information about the aggravation of profitability, and the possibility of additional losses in overseas plant business was not secured, and thus, did not be reflected in the financial statements attached to the instant business report. Considering the point at which the Korea General Contract Costs was confirmed through the cost inspection of overseas plant business, the result of the said cost inspection does not constitute “after the reporting period of the 2012

B. Relevant legal principles

Article 162(1) of the Financial Investment Services and Capital Markets Act provides, “Any person who acquires or disposes of securities issued by a corporation obligated to submit a business report due to a false description or representation of a material fact or an omission of a description or representation of a material fact in the business report, semi-annual report, quarterly report, material fact report, and accompanying documents thereof (excluding audit reports by an accounting auditor) shall be liable for damages incurred by the person who acquired or disposed of the securities issued by the corporation obligated to submit the business report.” The term “material fact” refers to “matters that may seriously affect investors’ reasonable judgment on investment or the value of the relevant financial investment instrument” (Article 47(3) of the Financial Investment Services and Capital Markets Act). This refers to matters highly probable for reasonable investors to take into account when making a decision or making a decision on investment related to financial investment instruments. Whether there is a false description, indication, or omission of such description or representation should be determined at the time such description, indication, or omission was made (see, e.g., Supreme Court Decision 2012Da16063, Dec. 10).

Therefore, even if the intentional accounting fraud, such as the window dressing accounting, is low with respect to important matters, and there is an omission by negligence, the presenter of the business report, etc. is liable to compensate for the damages suffered by the acquisitor of the securities issued by the corporation.

C. Determination

1) The following facts are acknowledged in full view of the evidence mentioned above and the statements mentioned in Gap evidence Nos. 35, 58, 66, and 67.

A) Around the time when the Defendant ordered a large number of plant construction works from abroad in 2009 to 2011, many domestic construction companies, including the Defendant, including the Defendant, also endeavored to order foreign plant construction. As to this, there were many questions, such as excessive competition among media engineers, high cost rates, and significance of profitability, such as news reports, which concern that the unreasonable low-cost contracts among domestic companies did not occur.

B) With respect to the Defendant’s raising of approximately KRW 1.20 billion through commercial papers, etc. around early 2013, there was a press report with the effect that the Defendant’s raising of large-scale funds in advance was the cause of delay in construction competition recovery, but there was a major cause of decline in the inflow of advance payments due to the aggravation of the profitability of the overseas business that caused low-prices. In this report, the Defendant’s related persons were reflected in the sales since the construction of the project in 2009 to 2011, and the cost rate is more than 10%, and there was a cost rate is anticipated to be more than 10%, and there was a loss recognition to be the latter part of 2013, and there was a proposal for the issuance of commercial papers related to large-scale financing, but the conditions were not bad, and it was explained to the effect that such commercial papers were issued before the issuance of the registration statement even in the case of the issuance of commercial papers for more than one year from May 2013.

C) The report “plan to enhance transparency in the accounting of fisheries” published by the Financial Services Commission with the Financial Supervisory Service, the Korea Certified Public Accountants Association, and the Korea Accounting Institute, states that where the increase in the estimated total contract cost is not reflected in a timely manner, the excessive evaluation phenomenon, such as the progress rate of construction, construction profits, profits and losses, and the amount of non-claimed construction works, has occurred, and eventually, the excessive appraised profits have accumulated, which eventually led to a problem of recognizing large-scale losses at a specific point, such as the so-called Big Sbath note 1).

D) In the case of a part of an overseas plant construction in progress by the Defendant, the progress rate was lower than that of the first quarter of 2012 compared to that of the fourth quarter of 2012. In particular, the construction progress rate was reduced from 84% to 81% in the case of Harar 2, from 94% in the case of Harar 7, from 95% in the case of Harar 7, from 90% in the case of EVA construction, from 90% to 82% in the case of EVA construction.

E) The Defendant’s amount of non-claimed construction works in the overseas plant sector increased alternatively in 2012, and the specific details of changes in the amount of non-claimed construction works are as follows.

The table (unit: won) period included in the main sentence shall be December 2011, 201, which December 3, 2012, 2012: < Amended by Presidential Decree No. 24153, Sep. 3, 2012; Presidential Decree No. 23580, Sep. 3, 2012; Presidential Decree No. 244830, Sep. 3, 2012; Presidential Decree No. 241883, Jun. 6, 2012; Presidential Decree No. 244778, Jul. 8, 2011; Presidential Decree No. 24678, Jan. 1, 91999, 1720

F) Since the provisional publication of this case, securities companies' investment analysis firms have a large amount of losses from overseas plant business because most of the profits known in the year from 2010 to 2012 were returned in a lump sum due to changes in the estimated cost rate.

2) However, considering the above evidence, Gap evidence Nos. 31, Eul evidence Nos. 31, Eul evidence Nos. 1, 3 through 7, 13, 14, 19, 20, 25, 31, 32, and 34, each statement of evidence Nos. 19, 20, 25, 31, 32, and 34, and each testimony of non-party Nos. 1, 2, 3, and 4 obtained by adding the whole purport of the pleadings to the testimony of non-party Nos. 1, 2, 3, and 4, it is insufficient to recognize that the above facts alone are false or omitted, and there is no other evidence to support this. Accordingly, the plaintiffs' assertion on this premise is without merit without any need to further examine other points such as

A) Construction companies, like the Defendant, engaged in overseas plant business, have project managers for each workplace of construction, and have each workplace operate and cost management. PM at each workplace of construction intended to achieve the target cost through efforts to reduce costs in other items or to reduce air, even if any cost increase factor occurs in some items with discretion to a certain extent while managing detailed cost change factors of construction in the ongoing construction. PM at each workplace of construction intended to achieve the target cost through efforts to reduce costs in other items or to reduce air, and if a cost increase factor to the extent that it is impossible for PM to control by itself, it reported it to the head office and managed costs in the manner that reflects the estimated total contractor’s price.

B) On February 7, 2013, before the provisional publication of this case, the Defendant reflected the increase in the cost of construction due to the termination of the contract on the part of the sub-contractor, which is the sub-contractor with respect to the IRP2 construction in the provisional publication of February 7, 2013, as well as before that, in the second quarter of 2012, reflected the increase in cost due to the change of the contract with the ordering entity, and reflected the decrease in cost due to the partial reduction of material cost in the first quarter of 2013, and reflected the increase in cost due to the failure of the local government-invested company in the fourth quarter of April 2012 in relation to the EVA construction work, including reflecting the increase in cost due to the increase of materials required in the third quarter of March 2012 in relation to the EVA construction work, and thus, the estimated contract cost has been adjusted by reflecting it in the total cost and the estimated cost.

C) The Defendant conducted a cost inspection of major overseas plant construction and notified the result through the provisional publication of this case as follows.

Notice of refusal to trade part of the International RP2 construction site of December 29, 2012, contained in the main text, to the owner of the headquarters on January 14, 2013, 2013, reflecting the change in construction cost of the International RP2 construction site on January 14, 2013, the establishment of the business plan in 2013 - the prediction of additional losses of KRW 600 billion from the overseas plant business sector in 2013 - the announcement of the cost performance of the business year of 2012 (provisionally reflecting the change in the cost cost of the new overseas plant construction site of February 20, 2013) and the announcement of the installation performance of the headquarters in 30 billion won on February 20, 2013 (the announcement of the cost outlook of the new plant construction site of March 26, 2013) (the average of the cost outlook of the new plant construction site of March 26, 2013).

Note 2)

D) On December 29, 2012, the Defendant reported the increase in estimated cost at the construction site of the InternationalRP2 from the PMF, and reflected it in the publication of the business performance (provisional) and the instant business report on February 7, 2013, and March 29, 2013. Furthermore, due to the increase in large-scale cost in the construction site of the International RP2, the Defendant conducted a cost inspection on four construction sites, such as HL 2, HL 7, EVA 95% or more of the detailed design among overseas plant projects, and there is no evidence to prove that the aforementioned cost inspection process was problematic in light of corporate accounting standards, etc., and there is no evidence to prove that the Defendant had already known the losses incurred in overseas plant projects prior to the cost inspection.

E) The Plaintiffs asserted that the Defendant recognized the possibility of loss in the overseas plant business and that even before March 2013, the estimated total cost of construction could have been reflected in the loss caused by the increase in the estimated total cost of construction through the cost inspection. However, it seems that domestic companies, including the Defendant, including the Defendant, were able to specifically determine the costs required for the construction work at the time when the three-dimensional design of the factory is completed, namely, at the time when the three-dimensional design of the factory is completed, when the three-dimensional design of the factory is completed by 90 to 95%.

F) In addition, since the cost inspection on an overseas construction site requires considerable human resources and time and the construction period is delayed, construction companies, including the Defendant, including the Defendant, may not be deemed to have been performing the cost inspection on a regular basis. However, it is difficult to view that the Defendant intentionally concealed the cost of the scheduled construction project on March 2013 on the ground that the Defendant conducted the cost inspection on the major overseas construction sites.

G) The Plaintiffs asserted to the effect that the Defendant failed to properly manage the cost, such as the Defendant’s failure to use the construction management system, such as TPPPPs, in connection with overseas construction works. However, the Defendant used the GAS system, not the system used at the domestic construction site, with respect to overseas construction works, to verify the specific disbursement details of overseas construction sites at the head office. As seen earlier, the Defendant managed the cost of the overseas construction site by means of management by PM at each construction site.

H) With respect to the increase in the amount of the U.S. construction, primarily, in the construction contract in the middle East Eastern region, the amount of the U.S. construction project would increase before obtaining the approval from the ordering authority by claiming construction cost upon completion of the unit construction work, and even in the case of the payment already made to the business entity of the equipment, it would be likely that the amount of the U.S. construction project would increase in the amount of the U.S. construction project.

(i) In addition, in cases of Hyundai Construction Co., Ltd., a company that is identical to the Defendant, in view of the fact that the amount of non-claimed construction works in the overseas plant sector increased by 69.3% compared to the quarter of April 2011, 201, the amount of construction works in the overseas plant sector increased by 37.8% during the same period, and that the Defendant’s non-claimed construction cost ratio compared to the base construction profit on December 2, 2012 was approximately 7%, 10% Hyundai Construction Co., Ltd. and 5% Daelim Industrial Co., Ltd., Ltd., the Defendant’s increase in the amount of non-claimed construction works related to the overseas plant industry, it cannot be readily concluded that there was a false statement or omission in material

(j) As a result of the Defendant’s above cost inspection, the total contract cost for the main overseas construction was changed. According to the corporate accounting standards as seen earlier, the cumulative contract cost up to the date is calculated by dividing the cumulative contract cost into the estimated total contract cost. Therefore, if the estimated total contract cost is changed, the construction progress rate is also changed. The fact that there was a change in the construction progress rate due to the reflection of the cost inspection result, it is difficult to view it as the ground that there was a false statement or omission in description as to the material fact immediately.

(k) The Financial Services Commission’s imposition of a penalty surcharge against the Defendant on the ground that the Defendant was not reflected in the investment risk element of the registration statement on the possibility of additional losses or losses in the International RP2 Corporation, which was aware at the time of issuing the corporate bonds, is not directly related to the Plaintiffs’ assertion that the losses in the overseas plant business sector were not reflected in the financial statements attached to the instant business report.

(l) In addition, the Defendant’s additional losses in the field of the plant business of KRW 600 billion, which was formulated and predicted by the business plan for the year 2013 at the end of January 2013, was established for the purpose of establishing an internal business plan. The total cost of the overseas plant business that was in progress at that time, is equivalent to KRW 13,00,000, which is the amount equivalent to KRW 3% of the ordinary operating income rate, as losses, and added the amount to KRW 20,000,000,000 in total, as reserve funds, is merely a prediction of losses in the said business plan, and it cannot be deemed that the losses in the said business plan is based on specific information and reasonable basis to the extent that it can be reflected in the financial statements of the instant business report.

(m) As seen earlier, Article 1010 proviso 3 of the corporate accounting standards provides that “the instant case after the reporting period is set at the end of the reporting period and the date of approval for the issuance of the relevant financial statements.” In the instant case, the end of the reporting period is December 31, 2012, which is the basic date for the preparation of the financial statements for the fiscal year 2012, and the date of approval for the issuance of the financial statements was reported on February 19, 2013, which is the date of resolution of the board of directors approving the issuance of the financial statements, by the Defendant on March 26, 2013, which is the date of the approval for the issuance of the financial statements, does not constitute “after the reporting period,” and thus, it is difficult to deem that the Defendant did not state the result of the cost inspection in the instant business report as the main text, thereby constituting omission of the material description

n) In addition, the specific cost increase factors reflected in the quarterly business report of 2013 also have significant factors that were found to have occurred after December 31, 2012, which is the end of the instant business report reporting period, and thus, it appears that the instant provisional disclosure could not reflect losses in the instant business report as it is,. For example, in the case of Rarar 2 construction around January 2013, the request for non-destructive testing and repair of the original pole of the ordering place, the request for the waiver of the remaining construction due to the workout of the electrical construction executing company, the request for change in the construction of the ordering place (as a result, nine changes have been made from January 31, 2013 to June 2015).

(o) The plaintiffs asserted that the defendant had reviewed the presumption of the expected cost of construction based on the 15-1 note 3) and the corporate accounting standards 12 Note 4. However, the above corporate accounting standards were enacted on December 29, 2015, which was subsequent to the instant case, and subparagraph 12 of the above corporate accounting standards was amended to review the cost estimate if necessary pursuant to the proviso of subparagraph 29 of Article 101 of the corporate accounting standards, which was enacted on November 23, 2007 by the adoption of the international accounting standards. In light of this, it does not seem that the defendant at the time of the instant case had the duty to review the cost estimate when necessary pursuant to the proviso of subparagraph 29 of Article 1011 of the corporate accounting standards.

(p) The “plan to enhance the transparency of accounting for receiving contracts” published by the Financial Services Commission, which was presented by the Plaintiffs, is an analysis of the causes and improvement measures based on the accounting suspicion case raised around the contracting industry, including Joseon and Construction in 2013 to 2014, as well as an analysis of the major causes and methods of arbitrary interpretation and accounting of the rules governing revenue and expenses according to the progress guidelines set forth in the International Financial Reporting Standards, and suggested measures to prepare guidelines for the construction of the contracting industry and to periodically re-examine the expected cost of construction. However, the above report was published on October 28, 2015, which was issued after the instant case, and it is difficult to view it as the general accounting standard at the time of the instant case, and even based on the above report’s own statement, it is difficult to recognize that there were 36 listed companies falling under the so-called “accounting saving wall” that occurred at once in 2013 to 2014.

q) In the case of Samsung Engineering Co., Ltd., which had been the main owner of an overseas plant business with the Defendant as the same company, recorded the business loss of KRW 7,46.8 billion in March 2013 due to reflection of overseas construction loss, and recorded the business loss of KRW 3,19.6 billion in April 2013 in the case of Large Forest Industry Co., Ltd.

(r) The Plaintiffs asserted to the effect that the major overseas construction works were completed in the second half of 2012, and thus, the losses that had already been recognized in the construction stop were reflected in all times. However, the Plaintiffs asserted that the Rotterdam Corporation No. 15, Nov. 15, 2016, and the Rotterdam Corporation No. 7, Oct. 1, 2015, and the EVA Corporation No. 2135, Feb. 21, 2015; the TraVP2 Corporation was completed on Mar. 31, 2015 and completed on Aug. 1, 2016; and, even after the instant business report, the estimated total contract cost of the said construction works was also changed.

(s) As seen earlier, Article 162 of the Financial Investment Services and Capital Markets Act provides that “If there is a false statement or omission of material facts in the business report and accompanying documents of a foreign corporation, and the liable person fails to prove that he could not know such fact even though he exercised considerable care, the person liable for compensation shall estimate the difference between the amount actually paid or received by the purchaser, etc. of the securities and the market price at the time of the closing of argument as damages and compensate for the difference.” In light of the language and legislative intent of the Financial Investment Services and Capital Markets Act, in relation to the fact that there was a false statement or omission in material facts, it is necessary for the claimant to prove that there was a false statement or omission in material facts based on specific evidence, and it is difficult to deem that the person who asserts damages bears the burden of proving

3. Conclusion

Therefore, each claim of the plaintiffs is dismissed as it is without merit. It is so decided as per Disposition.

[Attachment 1] List of Plaintiffs (Representative Parties): Omitted

[Attachment 2] List of Except-reported Members: Omitted

Judges Hongk (Presiding Judge)

1) Generally, a newly appointed manager means an accounting technique that leads the full-time officer to take over his responsibility for the failure of performance and to attract more performance in the following year by removing at once all losses accumulated in his predecessor’s tenure of office or by reflecting potential insolvencys in one fiscal year.

(2) At the beginning of 2013, Nonparty 5, one of the representative directors of the Defendant, was appointed as a new CFO (PFO) of the Defendant.

(4) If the cumulative total contract cost is calculated on the basis of the cumulative contract cost, the settlement of accounts should be reviewed every reporting period (including the interim reporting period) as to whether there is a significant change in the cumulative total contract cost, and the change should be reflected in calculating the current progress rate as at the end of the reporting period.

4) The presumption of the expected cost of the construction project under subparagraph 12 of the corporate accounting standards (amended by February 21, 2003) A30 (e) of the construction-type construction contract (amended by Presidential Decree No. 1203) shall be reviewed every time and revised by appropriately reflecting new information.