Company: MAGH
Filing Date: 2025-09-15
Form Type: 20-F
Source: 0001493152-25-013424
Chunk: 55

Company: Magnitude International Ltd
Filing Date: 2025-09-15
Form: 20-F
Item: Item 4
Chunk 55
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. We normally receive progress payment from customers on a
monthly basis with reference to the value of works done. Generally, we submit payment applications on a monthly basis to our customers
based on our internal assessment of work progress and quantity of works completed and an estimation of subcontracting costs likely to
be incurred, which has to be certified by our customer’s authorized persons, such as the consulting quantity surveyors employed
by our customers. Upon receiving our payment application, the authorized person of the project will examine the portion of work completed
and issue a payment certificate after the examination, which normally takes about four to six weeks from the date of the payment application.
We will then proceed with billing the customer with the payment certificate received. Our customer will, upon receiving our invoice,
make payment to us based on the certified amount less any retention money (where applicable). In general, such payment is made within
35 days from the date of the presentation of our invoice to our customer.

In
most contracts with our customers, our customers have the right to hold up a portion, typically 10.0% of each progress payment, until
a specified percentage of the notional contract sum is reached and such sum of money is known as retention money. The retention money
for each project is generally 5.0% of the notional contract sum, the first half of which is usually released upon the issue of the certificate
of practical completion and the remaining portion is usually released after the expiry of the defect liability period.

Variation
orders

Our
customers generally have the right to order variations during the course of the project pursuant to the relevant contract terms. Variation
orders may include: (i) additions, omissions, substitutions, alterations, changes in quality, form, character, kind, position or dimension;
and (ii) changes to any sequence, method or timing of works, which may result in additional works or amendment to the drawings. The rates
for the works under such variation orders will follow the schedule of rates as provided in the relevant contracts or the fair value of
work, day rates or estimated cost and profit agreed between our customer and ourselves. In general, after receiving a variation order
from our customer describing the detailed works to be carried out as a result of such variation order, we make an estimation of the costs
likely to be involved and where appropriate, obtain quotations from our subcontractors and suppliers, before we prepare and submit a
proposed rate for such variation order to our customer for approval. The amount of