Orano - Annual Activity Report 2025 330 6 FINANCIAL STATEMENTS Consolidated financial statements – financial year ended December 31, 2025 1.3.9.6 Other current financial assets Cash management financial assets include negotiable debt securities with a maturity of more than three months and securities in non-money market funds with a short-term management horizon that can be easily mobilized and do not strictly meet the criteria for classification as cash equivalents under IAS 7. Debt securities are measured using the amortized cost method, and mutual funds at fair value through profit or loss. 1.3.9.7 Cash and cash equivalents Cash includes bank balances and non-trade current accounts with unconsolidated entities. Cash equivalents include risk-free marketable securities with an initial maturity of three months or less, or which may be converted almost immediately into a known amount of cash, and which are subject to negligible risk of change in value as per the criteria set out in IAS 7. They include in particular negotiable debt securities and securities in money market funds in euros that comply with European Regulation (EU) 2017/1131 (known as “MMF”); debt securities are valued using the amortized cost method and mutual funds at fair value through profit or loss. 1.3.9.8 Financial liabilities Borrowings include: ● certain interest-bearing advances received from customers: interest-bearing advances received from customers are classified as borrowings when they are settled in cash, and as contract liabilities in other cases; ● bank borrowings; ● bonds issued by Orano; ● bank overdrafts; and ● liabilities under finance leases. Borrowings are measured at amortized cost based on the effective interest rate method. Bonds hedged with a rate swap (fixed-rate/floating-rate swap) qualified as a fair value hedge are revalued in the same amount as the hedging derivative. 1.3.9.9 Derivatives and hedge accounting The group has adopted the IFRS 9 general hedge accounting model. 1.3.9.9.1 Hedged risks and financial instruments Orano uses derivative instruments to hedge its foreign exchange and interest rate risks. The derivatives used are mainly forward currency contracts, currency and interest rate swaps, inflation swaps and currency options. The hedged risks relate to receivables, liabilities and firm or projected obligations in foreign currencies. 1.3.9.9.2 Recognition of derivatives Derivatives are measured at fair value on initial recognition and subsequently remeasured at the end of each accounting period until settled. Accounting methods for derivatives vary, depending on whether the derivatives are designated as fair value hedging items, cash flow hedges, hedges of net investments in foreign operations, or do not qualify as hedging items. Fair value hedges This designation concerns hedges of firm commitments in foreign currencies: purchases, sales, receivables and debt. The hedged item and the derivative are revalued simultaneously and any changes in value are recorded simultaneously in the statement of income. Cash flow hedges This designation refers to hedges of probable future cash flows: projected purchases and sales in foreign currencies. The highly probable hedged items are not valued in the statement of financial position. Only hedging derivatives are revalued at each reporting date; in return: ● the effective portion of changes in value and changes in the fair value of the time value of the option and the effects of premiums/discounts over the life of the hedge are recognized in “Other items of comprehensive income” and presented in the statement of financial position for the amount net of tax, as “Deferred unrealized gains and losses on financial instruments” under Equity; ● the ineffective portion of the change in fair value resulting from the effectiveness test is recognized in profit or loss. The amounts recognized under “Deferred unrealized gains and losses on financial instruments” are released to income when the hedged item impacts the statement of income, i.e. when the hedged transaction is recognized in the financial statements. Hedges of net investments in foreign operations This designation relates to borrowings in a foreign currency and to borrowings in euros when the euro has been swapped against a foreign currency, to finance the acquisition of a subsidiary using the same functional currency, for instance. Currency translation differences on these borrowings are recognized under “Other items of comprehensive income” and presented on the statement of financial position under “Currency translation reserves” in their net amount after tax; only the ineffective portion is recognized through profit and loss. The amount accumulated in currency translation reserves is released to profit and loss when the subsidiary in question is sold. Derivatives not qualifying as hedges When derivatives do not qualify as hedging instruments, fair value gains and losses are recognized immediately in the statement of income. 1.3.9.9.3 Presentation of derivatives recognized in the statement of financial position and statement of income Presentation in the statement of financial position Derivatives used to hedge risks related to commercial transactions are reported under operating receivables and liabilities in the statement of financial position. Derivatives used to hedge risks related to loans, borrowings and current accounts are reported under financial assets or borrowings.
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