Rectitude Holdings Ltd(RECT) - 2025 Q4 - Annual Report

FORM 20-F Cover Page Filing Information Rectitude Holdings Ltd's FY2025 Annual Report on Form 20-F details its Nasdaq listing (RECT) and status as a non-accelerated filer, emerging growth, and shell company - Filing Type: Annual Report on Form 20-F for the fiscal year ended March 31, 2025[2] - Registrant: Rectitude Holdings Ltd, incorporated in the Cayman Islands[2] Title of each class | Title of each class | Trading Symbol(s) | Name of each exchange on which registered | | :------------------ | :---------------- | :---------------------------------------- | | Ordinary shares, par value $0.0001 | RECT | Nasdaq Capital Market | - Outstanding Shares: 14,500,000 Ordinary Shares issued and outstanding as of March 31, 2025[6] Large accelerated filer | Large accelerated filer | ☐ | Non-accelerated filer | ☒ | | :-------------------- | :- | :-------------------- | :- | | Accelerated filer | ☐ | Emerging growth company | ☒ | - Shell Company Status: Yes[10] Table of Contents Report Structure Overview This section outlines the annual report's structure, listing major parts and items with their starting page numbers for navigation INTRODUCTION Company Overview and Definitions This section defines key terms and clarifies Rectitude Holdings Ltd's corporate structure and reporting currency - Rectitude Holdings Ltd is a Cayman Islands holding company, conducting all operations through wholly-owned subsidiaries in Singapore[38] - The reporting currency is the U.S. Dollar[38] - The exchange rate used for Singapore dollars to U.S. dollars for the financial year ended March 31, 2025, was S$1.3445 to US$1.00[38] DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS Forward-Looking Statements Disclaimer This section advises that the annual report contains forward-looking statements subject to risks and uncertainties, with no obligation to update - The annual report contains forward-looking statements that are subject to risks and uncertainties, and actual future results may vary materially[41] - Factors that could cause actual results to differ include goals, strategies, financial condition, new product offerings, market demand, competition, government policies, and other risk factors discussed in Item 3.D[43] - The company does not intend or have an obligation to publicly update any forward-looking statements after the distribution of this annual report[42] PART I Item 1. Identity of Directors, Senior Management and Advisers This item is not applicable for annual reports on Form 20-F Item 2. Offer Statistics and Expected Timetable This item is not applicable for annual reports on Form 20-F Item 3. Key Information This section provides crucial company information, including reserved sections, capitalization, and a comprehensive overview of risk factors 3.A. Reserved This section is reserved and contains no information 3.B. Capitalization and Indebtedness This item is not applicable for annual reports on Form 20-F 3.C. Reasons for the Offer and Use of Proceeds This item is not applicable for annual reports on Form 20-F 3.D. Risk Factors This section outlines the principal risks and uncertainties that could adversely affect the company's business, financial condition, results of operations, cash flows, and prospects, categorized by business and securities Risks related to Our Business and Industry This subsection details operational and external risks, including economic conditions, personnel, competition, supply chain, and regulatory challenges - The company's business is affected by regional and worldwide political, regulatory, social, and economic conditions in the jurisdictions where it and its customers/suppliers operate[50][53] - Continued success is dependent on key management personnel, particularly Mr. Zhang Jian, and experienced/skilled personnel; loss of whom could severely disrupt the business[50][59] - The company is exposed to disputes and claims arising from site accidents due to the usage of its safety equipment, which could adversely affect reputation and profitability[51][65] - Increased competition in the safety equipment sales and rental business in Singapore and the region may affect market share and growth[51][68] - The business is susceptible to fluctuations in the prices and quantity of available safety equipment and industrial grade hardware[50][58] - Supply chain interruptions have not materially impacted financial results for FY2023-2025, but increased costs or disruptions could affect revenue and profitability. The company plans to diversify supply chains by sourcing more products from outside the PRC to mitigate UFLPA risks[72][73] - Cybersecurity risk is perceived as lower due to emphasis on physical retail and minimal e-commerce sales, but plans include rigorous supplier cybersecurity assessments, contractual clauses, and employee training[74] Risks related to our Securities This subsection addresses risks specific to the company's Ordinary Shares, including market volatility, delisting, lack of dividends, and controlling shareholder influence - An active trading market for Ordinary Shares may not continue, and the trading price may fluctuate significantly, potentially resulting in substantial losses for investors[90][93] - The company may not maintain its listing on Nasdaq, which could limit investors' ability to make transactions and subject the company to additional trading restrictions[91] - The company does not expect to pay dividends in the foreseeable future, requiring investors to rely solely on price appreciation for a return on investment[101] - Controlling Shareholders (Mr. Zhang and Ms. Xu Yukai) collectively own 72.7% of outstanding Ordinary Shares, giving them substantial influence over corporate transactions and potentially misaligning their interests with other shareholders[107][108] - As a 'controlled company' and 'foreign private issuer,' the company may choose to exempt itself from certain Nasdaq corporate governance requirements, which could provide less protection to public shareholders[109][110][120] - Shareholders may face difficulties protecting their interests and enforcing rights through U.S. courts due to the company's incorporation under Cayman Islands law and the location of assets, directors, and officers outside the U.S.[113][117] - The company is an 'emerging growth company' and 'foreign private issuer,' allowing it to take advantage of certain reduced reporting requirements and exemptions from provisions applicable to U.S. domestic public companies[118][120] Item 4. Information on the Company This section provides detailed information on the company's history, corporate structure, business operations, and strategic direction 4.A. History and Development of the Company Rectitude Holdings Ltd, incorporated in Cayman Islands in June 2023, completed a reorganization in January 2024 and expanded product offerings in March 2025 - Rectitude Holdings Ltd was incorporated in the Cayman Islands on June 1, 2023[127] - A reorganization was completed on January 3, 2024, resulting in RPL, PTH, and ALS becoming wholly-owned subsidiaries[132][134][135] - The company successfully delivered its first batch of All-in-One Intelligence Micro-grid System (AIMS) in February 2025, generating S$450,000 in revenue[136] - Strategic partnerships with Bosch Limited and AkzoNobel NV were announced in March 2025, expanding product offerings to include power tools and Dulux paints[137] 4.B. Business Overview The company's core business is safety equipment and industrial hardware in Singapore and Southeast Asia, with FY2025 revenue growth of 5.9% and net profit decrease of 33.3% - The primary business involves the provision of safety equipment (personal protective clothing, firefighting equipment, traffic products) and auxiliary industrial hardware tools[139][238] - Safety equipment contributed 70.0% of revenue in FY2025, up from 68.9% in FY2024 and 65.0% in FY2023[139][238] - The bulk of customers are in infrastructure development, building construction, marine, oil and gas industries, and general industrial markets in Singapore (95% of FY2025 revenue) and Southeast Asia[140][141][240] Revenue and Net Profit (S$) | Metric | FY2023 | FY2024 | FY2025 | | :--------- | :--------- | :--------- | | Revenue | 37,643,696 | 41,353,555 | 43,796,144 | | Net Profit | 3,926,821 | 3,355,409 | 2,237,865 | - Revenue grew by 5.9% in FY2025, while net profit decreased by 33.3%[143][243] - Top 3 product categories in FY2025 were personal protective clothing/fall arrest systems (S$23.6 million), portable fire extinguishers (S$4 million), and traffic products (S$3 million)[154] - Quality control involves a two-step process with independent product testing organizations (e.g., Singapore Test Lab, Bureau Veritas Australia) for certification and regular surveillance checks[166][167] - Competitive strengths include strong and stable relationships with suppliers and customers, an experienced management team, strategically located branches across Singapore, and a comprehensive range of safety products and industrial-grade hardware tools[173][174][176][177][178] - Business strategies include expanding through acquisitions, joint ventures, and strategic alliances; strengthening local presence by expanding the branch network; and widening the product range within established brands[179][180][181][182] 4.C. Organizational structure The company's organizational structure consists of Rectitude Holdings Ltd as the parent, with three wholly-owned Singaporean subsidiaries engaged in safety product supply Subsidiaries of Rectitude Holdings Ltd | Subsidiaries | Date of Incorporation | Jurisdiction of Formation | Percentage of direct/indirect Economic Ownership | Principal Activities | | :-------------------------- | :-------------------- | :------------------------ | :--------------------------------------------- | :-------------------------- | | Alturan Supplies Pte. Ltd ("ALS") | September 15, 2009 | Singapore | 100% | Supply of safety products | | P.T.H Pte. Ltd. ("PTH") | November 3, 2008 | Singapore | 100% | Supply of safety products | | Rectitude Pte Ltd ("RPL") | December 26, 1997 | Singapore | 100% | Wholesale of safety products | 4.D. Property, Plant and Equipment This section details the company's leased and owned properties in Singapore, used for operations, and lists its registered trademarks across multiple jurisdictions - The company operates multiple leased properties in Singapore for storage, warehouse, factory, office, and repair workshop purposes, with varying lease periods and monthly rents[217] - The company owns properties at 35 Tampines Industrial Avenue 5, 18 Kaki Bukit Road 3, 71 Woodlands Industrial Park E9, 9 Tuas South Avenue 10, and 2 Tampines North Drive 4[217] - The Group has registered trademarks, primarily under RPL, in Singapore, Brunei, Thailand, Cambodia, Vietnam, Malaysia, Australia, and PRC, covering various classes including safety footwear, hand tools, life-saving apparatus, and clothing[218][219][220][226] Item 4A. Unresolved Staff Comments This section states that there are no unresolved staff comments Item 5. Operating and Financial Review and Prospects This section provides a comprehensive discussion and analysis of the company's financial condition and results of operations, covering operating results, liquidity, R&D, industry trends, and critical accounting estimates for FY2023-2025 5.A. Operating Results This subsection analyzes the company's financial performance for FY2023-FY2025, covering revenue, costs, and net income, and key influencing factors - The company's core business is the provision of safety equipment (70.0% of FY2025 revenue) and auxiliary products, primarily in Singapore and Southeast Asia[238] - For FY2025, revenue increased by 5.9% to S$43.8 million, while net profit decreased by 33.3% to S$2.2 million[242][243] - Key factors affecting financial results include intense competition, dependence on stable product supply, exposure to product liability claims, and the ability to successfully implement business strategies[244][245][24