Company: MAGH
Filing Date: 2025-07-18
Form Type: F-1/A
Source: 0001641172-25-020173
Chunk: 112

Company: Magnitude International Ltd
Filing Date: 2025-07-18
Form: F-1/A
Chunk 112
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 by cash or other collateral and/or guarantees in favor of our customers to secure our performance under the contracts with our customers. We adopt a cost estimate plus mark-up pricing model for pricing our tenders and quotations. All contracts with our customers are at notional contract sums where the work performed will be measured and valued against agreed rates for progress and/or final payment.

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We typically pay the start-up costs, such as project insurance fees, costs of equipment and materials and subcontracting fees for certain start-up works, in advance of payment from our customers during the first three to six months following the commencement of a project. Apart from the start-up costs, we might be required to provide performance bonds backed by cash or other collateral and/or guarantees in favor of our customers for an amount equal to 5.0% to 10.0% of the notional contract sum. While we typically have to pay the start-up costs and the cash collateral required to secure performance bond during the first three to six months following the commencement of a project, our customers typically make progress payments on a monthly basis pursuant to contract with reference to the certified work done and with limited or no advance payment. This could result in a cash flow mismatch. We generally manage the cash flow mismatch by closely monitoring our capital and cash positions, closely managing our progress billings and the use of available banking facilities. In terms of management of projects, our project managers conduct regular project reviews with our COO who is responsible for supervising our projects. Our COO together with our project managers generally present and review project status with our CEO on a monthly basis. In terms of financial management of projects, our CFO prepares six-month cash flow forecasts for our projects on a bi-monthly basis and he reviews the financial report and forecast results of our projects with our CEO and COO on a monthly basis.

Customers

Our major customers include a number of reputable main contractors as well as some property developers or operators in Singapore. Consistent with market practice, our customers award contracts to us on a project-by-project basis that are non-recurring in nature. We have not entered into any long-term contract with any of our customers. During the fiscal years ended April 30, 2023 and 2024, our five largest customers accounted for approximately 87.9% and 85.5% of our revenue, respectively, and our largest customer accounted for approximately 70.4% and 52.2% of our revenue, respectively.

Vendors

Our major vendors include subcontract