Company: MAGH
Filing Date: 2025-09-15
Form Type: 20-F
Source: 0001493152-25-013424
Chunk: 1

Company: Magnitude International Ltd
Filing Date: 2025-09-15
Form: 20-F
Item: Item 3
Chunk 1
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 or contract value of projects obtained
from our key customers and/or their significant delay in or failure to make payments could lead to loss of revenue and/or affect our
liquidity and thus adversely affect our business. Accordingly, if we are unable to enter into business relationships with new customers
to diversify our customer portfolio, our business may be adversely affected.

We
determine the tender price for a project based on our estimation of the time and costs involved, which may not be accurate, and any material
deviation from our estimate may lead to cost overruns or even losses on our projects.

We
determine the tender price for a project based on our estimated project costs (which will largely depend on the amount of time required
to complete the project) plus a mark-up margin. We have to maintain the competitiveness of our pricing while maximizing our profit margin.
If we perceive keen competition on a particular project, we may submit a more competitive tender price with a lower mark-up margin, thereby
reducing profitability. If the mark-up margin set by us is too low, we may be unable to cover the financial impact of any unfavorable
circumstances during project implementation. On the other hand, if we try to allow for unfavorable circumstances and set a higher mark-up
margin, our tender may become uncompetitive. There is no assurance that our pricing strategy and policy is effective or responsive to
market price changes and changes in customers’ demand or that we will always be able to price our tenders competitively, failing
which may cause us to be unsuccessful in the tender, thereby resulting in a decrease in the number of projects that may be awarded to
us. In turn, this would adversely affect our business, results of operations, financial condition and business prospects. Most of our
contracts with customers do not have any price adjustment mechanisms to accommodate any fluctuation in costs. As there is no assurance
that the costs estimated at the beginning of a contract will not be increased during the contract period, we have to bear the risk of
increasing costs accordingly. Cost overruns may result from inaccurate estimations of time and costs, increases in the costs of subcontracting,
materials and labor, additional costs derived from unexpected technical difficulties encountered during the progress of the projects
and rectification of work defects, adverse weather conditions, disputes with parties involved in the projects, changes in the regulatory
requirements and government policies, inflation and unforeseen problems and circumstances, some of which are beyond our control. Changes
or disagreements regarding project execution such