AB Akola Group – Annual report – 30 June 2026
Industry: agriculture
27.20 Trade payables and supplier finance arrangements
Trade payables are non-interest bearing and are normally settled within 360-day term. Group trade payables consist of payable amounts for goods and services.
Supplier financing arrangements
The Group participates in supplier financing arrangements with external financial institutions. Under these arrangements, suppliers may obtain early payment from banks or other financiers, while the Group settles its obligations with the financiers in line with the agreed terms. Participation is at the discretion of the suppliers, and the Group does not provide additional guarantees or collateral to the financiers.
The purpose of these arrangements is to provide liquidity flexibility to suppliers and to ensure more stable settlement, while enabling the Group to manage its working capital more efficiently.
Terms and classification of the arrangements
Normal payment terms across the Group’s entities are not uniform and range from 5 to 180 days.
Accordingly, the Group classifies supplier financing arrangements as follows:
Arrangements classified as trade payables:
Most of the Group’s subsidiaries enter into supplier financing arrangements that are classified as trade payables. Under these arrangements, suppliers may choose to receive early payment from the financiers; however, this does not affect the Group’s payment schedule – the Group continues to settle its obligations under the same terms, which are consistent with its usual commercial practices within the 5 to 180 day range. Accordingly, these liabilities are presented as trade payables, as their economic substance does not differ from ordinary trade payables.
Arrangements classified as borrowings:
One of the Group’s subsidiaries enters into supplier finance arrangements that are classified as borrowings. The usual settlement term with this subsidiary’s suppliers is around 30 days; however, under these arrangements, the payment to the financier may be extended up to 180 days. As a result, the actual settlement period significantly deviates from the normal range, and additional interest is charged for the extension. In view of these terms, the obligations are, in substance, equivalent to borrowings and are therefore presented as borrowings, rather than as trade payables, in the consolidated financial statements.
During 2025/2026 and 2024/2025, there were no significant non-cash changes affecting the carrying amounts of these liabilities .
