Company: MAGH
Filing Date: 2025-09-15
Form Type: 20-F
Source: 0001493152-25-013424
Chunk: 10

Company: Magnitude International Ltd
Filing Date: 2025-09-15
Form: 20-F
Item: Item 3
Chunk 10
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 a result of changes in costs of labor and materials or project-specific requirements. As we typically fixed the
schedule of rates for calculation of our contract sum with our customers at the time of the tender award, if the amounts that we are
required to pay to our subcontractors exceed our estimation due to project delays resulting from weather conditions or other unforeseen
circumstances, we may suffer cost overruns or even losses. Moreover, if a subcontractor fails to provide services as required under a
contract for any reason, we could be required to source another subcontractor. If we are unable to do so in a timely manner, delays or
higher than anticipated subcontracting costs may be triggered, which can impact our overall project costs and hence our profitability.

There
is also no assurance that our subcontractor selection and management system will always be effective to facilitate our monitoring of
the performance of our subcontractors. If our subcontractors fail to deliver or they deliver substandard works, we may be unable to engage
a replacement subcontractor to complete the works or rectify the substandard works in time, or at all. We also may be unable to replace
materials of inferior quality procured by our subcontractors in time, or at all, other than at extra costs. Any material non-performance,
delayed performance or substandard performance of our subcontractors could result in deterioration of the quality of our services or
unexpected delays of our scheduled commitment dates or even our ability to complete the projects, which could in turn harm our reputation
and potentially expose us to liability and damage claims under our contracts with our customers. Moreover, our subcontractors are subject
to various laws, rules and regulations, such as laws, rules and regulations in relation to work site safety and work permits for foreign
workers. There is no assurance that there will not be any violations by our subcontractors of any such laws, rules or regulations. If
such a violation occurs in the sites for which we are responsible as a main contractor and results in fines, claims or lawsuits, either
associated with personal injuries, death or damages to properties, against us or otherwise, our reputation, business, results of operations
and financial conditions may be adversely affected. The stability of the operations of our major subcontractors, which is beyond our
control, may also affect us. Any material disruptions to our subcontractors’ operations due to weather, riots, pandemic/epidemic,
natural disaster, fire, breach of internal controls or other technical or mechanical problems could affect our project completion