A. Overview of the Global Economy:
The global economy in the current fiscal year has continued to exhibit signs of resilience amid geopolitical tensions, fluctuating commodity prices, and tightening financial conditions in several major economies. While inflation has gradually eased in many regions due to policy interventions and stabilizing supply chains, persistent challenges such as climate change, food security, and input cost volatility have had notable impacts on the agricultural sector.
In the agribusiness and contract farming domain, the demand for sustainably sourced and traceable agricultural produce remains strong. There has been a global shift toward localized and climate-resilient farming practices, driving companies and governments to adopt more sustainable supply chain models. Contract farming has emerged as a strategic solution to address these evolving dynamics by bridging the gap between farmers and corporations through structured engagements and predictable returns.
Emerging markets, particularly in Asia and Africa, are witnessing a rise in contract farming adoption, fueled by technological interventions, favorable policies, and growing awareness about fair pricing and risk-sharing models. These regions have also been focal points for global investment in agriculture infrastructure and agritech solutions.
In contrast, challenges such as extreme weather events, fluctuating input costs (fertilizers, seeds, and water), and transportation disruptions have affected productivity and logistics. However, integrated models like those employed by Franklin Industries Limited ? involving leased cultivation, contract farming, and direct supply chain control ? have helped mitigate many of these risks, enabling more predictable operations and improved margins.
Looking ahead, the global contract farming sector is expected to grow steadily, driven by the need for food security, sustainability, and enhanced farmer incomes. This aligns with Franklin Industries Limiteds mission to foster profitable and environmentally responsible agricultural practices through mutually beneficial partnerships with farming communities.
B. Overview of the Indian Economy:
The agriculture sector, which remains a critical component of Indias economic framework, has shown moderate growth. Favorable monsoon conditions in most parts of the country and government initiatives promoting sustainable agricultural practices and Agri-infrastructure development have contributed to improving rural incomes and productivity. However, challenges such as uneven rainfall distribution, rising input costs, and supply chain disruptions due to geopolitical tensions and inflationary pressures have continued to impact overall agricultural performance.
Contract farming and agribusiness have gained increased traction in India, driven by policy support and the growing need for organized, scalable, and market-linked farming solutions. The governments focus on doubling farmers income, promoting Farmer Producer Organizations (FPOs), and digitalization in agriculture has encouraged companies like Franklin Industries Limited to play a pivotal role in integrating smallholder farmers into modern supply chains.
The emergence of Public-Private Partnerships (PPPs) in agriculture, coupled with increased awareness around traceability, food safety, and export potential, has further reinforced the importance of structured farming models. In this context, Franklin Industries Limiteds business model ? which includes leasing agricultural land and entering into production contracts with farmers ? positions it strongly to benefit from these evolving dynamics.
With Indias focus on achieving food security, reducing rural distress, and promoting climate-resilient farming, the contract farming sector is expected to grow significantly. Franklin Industries remains committed to contributing to this growth by fostering inclusive, transparent, and sustainable partnerships with Indian farming communities.
C. Indian Agriculture Industry:
The Indian agriculture industry, a cornerstone of the countrys economy, has continued to evolve during the current fiscal year, contributing approximately 18-19% to the national GDP and employing nearly 45% of the workforce. Despite ongoing global uncertainties and domestic challenges, the sector remained relatively resilient, supported by a favorable monsoon, targeted government interventions, and increased private sector participation.
In FY 2024-25, agricultural production was moderately impacted by regional variations in monsoon patterns and climate-related stress in certain states. However, key crop output remained stable, especially in horticulture, oilseeds, and pulses. Rising input costs (fertilizers, seeds, and energy), along with transportation disruptions and global commodity fluctuations, created margin pressures for small and marginal farmers.
Looking ahead, the Indian agriculture industry is poised for transformation driven by sustainability, digitalization, and value-added supply chains. Franklin Industries Limited, through its focus on contract cultivation of crops like Cucumber, Onion, and Castor, and farmer collaboration on leased land, is well- positioned to capitalize on these opportunities while contributing to rural prosperity and food security.
D. Industry structure and development:
India has the second-largest arable land resources in the world. With 20 agri-climatic regions, all the 15 major climates in the world exist in India. India is the largest producer of spices, pulses, milk, tea, cashew, and jute, and the second largest producer of wheat, rice, fruits and vegetables, sugarcane, cotton, and oilseeds. Further, India is second in the global production of fruits and vegetables. During 2019-20 crop year, food grain production reached a record of 296.65 million tons. For FY 2021-22, the government has set a target to increase production by 3.9%. Consumer spending in India will return to growth in 2022 post the pandemic- led contraction, expanding by as much as 7%. Private consumption expenditure (at constant prices) was estimated at Rs. 80.8 trillion (US$ 1.08 trillion) in FY22 against Rs. 75.6 trillion (US$ 1.01 trillion) in FY20.
The broader economic environment presents several challenges. India is currently navigating complex issues related to economic growth, asset quality, inflationary pressures, and fiscal discipline. Growth trends have shown signs of deceleration, and a sustained recovery will depend largely on transparent, timely, and decisive policy action?elements largely outside the control of private enterprises, including those in the food grains trading sector. India must be consistent in regaining its position as a leading emerging market investment destination. This can only be possible if consistency and clarity is in our policies.
E. Opportunities and Threats:
Opportunities:
With rising population, demand for food will continue to drive the need for better seeds.
Favourable government policies promoting agricultural modernization, infrastructure development, FPO support, and digital agriculture present a strong opportunity. Schemes such as the PM-KISAN, Agri Infra Fund, and promotion of public-private partnerships support the companys model.
Adoption of precision agriculture, real-time monitoring, and Al-driven advisory services can enhance productivity, reduce input costs, and improve decision-making, further strengthening the companys value proposition.
The companys ability to ensure consistent quality and supply opens up lucrative export opportunities, especially for crops like onion and castor, which are in demand globally.
The scalable model of leasing agricultural land and partnering with farmers opens doors to diversify into new geographies and high-value crops, reducing dependence on a narrow crop portfolio and improving risk management.
Threats:
As agriculture is highly dependent on weather patterns, irregular monsoons, droughts, or floods can severely impact yield and production timelines, posing a significant risk to operations.
Fluctuations in the cost of inputs like fertilizers, seeds, and fuel, as well as changes in market prices of output crops, can compress margins and affect profitability.
Any shift in agricultural or land-leasing laws, contract farming regulations, or restrictions on procurement practices could impact business operations and long-term agreements with farmers.
A large part of operations depends on timely cooperation from farmers and availability of agricultural labour. Any disruption due to migration, labour shortages, or local socio-political issues can delay cultivation and harvesting cycles.
Changes in consumer preferences or oversupply in the market can reduce demand for certain crops, affecting pricing power and leading to potential inventory losses.
F. Segment-wise or Product-wise performance:
The Company is operating in only one segment i.e. trading and distributing agricultural products. Therefore, there is no requirement of Segment wise reporting.
The Turnover of the Company for the financial year 2024-25 is Rs. 17,524.46 Lakhs.
G. Future Outlook:
The Company presents the analysis of the Company for the year 2024-25 & its outlook for the future. This outlook is based on assessment of the current business environment. It may vary due to future economic & other developments, both in India and abroad.
H. Risks and concerns:
Risk Management is an integral part of our Companys business strategy. A dedicated team is a part of the management processes governed by the senior management team. This team reviews compliance with risk policies, monitors risk tolerance limits, reviews and analyzes risk exposure related to specific issues and provides oversight of risk across the organization. The team nurtures a healthy and independent risk management function to avoid any kind of misappropriations in the Company. As part of the Risk Management framework, the management of Credit Risk, Market Risk, Operational Risk and Fraud Risk are placed under the Head - Risk. The Credit Risk management structure includes separate credit policies and procedures for various businesses.
I. Internal control systems and their adequacy:
The Company has taken adequate preventive and precautionary measures to overcome all negative factors responsible for low trend to ensure steady growth.
The company has implemented proper system for safeguarding the operations/business of the company, through which the assets are verified and frauds, errors are reduced and accounts, information connected to it are maintained such, so as to timely completion of the statements.
The Company has adequate systems of Internal Controls commensurate with its size and operations to ensure orderly and efficient conduct of business. These controls ensure safeguarding of assets, reduction and detection of fraud and error, adequacy and completeness of the accounting records and timely preparation of reliable financial information.
The requirement of having internal auditor compulsory by statue in case of listed and other classes of companies as prescribed shall further strengthen the internal control measures of company.
H. Discussion on financial performance with respect to operational performance:
The financial performance of the Company for the Financial Year 2024-25 is described in the Directors Report of the Company.
I. Material developments in Human Resources / Industrial Relations front including number of people employed:
The cordial employer - employee relationship also continued during the year under the review. The Company has continued to give special attention to human resources.
J. Material Financial and Commercial Transactions:
During the year there were no material financial or commercial transactions
K. Caution Statement:
Statements made in the Management Discussion and Analysis describing the various parts may be "forward looking statement within the meaning of applicable securities laws and regulations. The actual results may differ from those expectations depending upon the economic conditions, changes in Govt. Regulations and amendments in tax laws and other internal and external factors.
Registered Office: | By the Order of the Board of | |
A-207, Corporate Road, Prahlad Nagar, Satellite, Jodhpur Char Rasta, Ahmedabad, Gujarat, India, 380015. | Franklin Industries Limited | |
Sd/- | Sd/- | |
Ashishkumar Kapadiya | Maheshkumar Patel | |
Place: Ahmedabad | Director | Managing Director |
Date: 5th September, 2025 | DIN: 10212557 | DIN:10872459 |
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