Orano - Annual Activity Report 2024 331 STATEMENTS 6 Consolidated financial statements - financial year ended December 31, 2024 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. Presentation in the statement of income The revaluation of derivatives and hedged items relating to commercial transactions affecting the statement of income is recognized under “Other operating income and expense”, except for the component corresponding to the discount/premium, which is recognized in net financial income. For loans and borrowings denominated in foreign currencies, the revaluation of financial hedging instruments and hedged items affecting the statement of income is recognized in net financial income. 1.3.9.10. Derecognition of financial assets and liabilities The group derecognizes a financial asset when: ● the contractual rights to the cash flows generated by the asset expire; or ● the group has transferred the rights to receive the contractual cash flows related to the financial asset as a result of the transfer of substantially all the risks and rewards of ownership of said asset. The group derecognizes a financial liability when its contractual obligations are extinguished, when they are canceled or when they expire. 1.3.10.Employee benefits Pension, early retirement, severance pay, medical insurance, long-service awards, accident and disability insurance, and other related commitments, whether for active or retired personnel, are recognized pursuant to IAS 19 as amended. The benefits provided under post-employment benefits can be distinguished according to whether the level of benefits depends on (i) contributions made by the employee (“defined-contribution” plans) or (ii) a level of benefit defined by the Company (“definedbenefit” plans). In the case of defined-contribution plans, the group’s payments are recognized as expenses for the period to which they relate. For defined-benefit plans, benefit costs are estimated using the projected credit unit method: under this method, accrued pension benefits are allocated among service periods based on the plan vesting formula. For the calculation of retirement benefits, the capping of rights provided for in collective agreements is taken into account in the recognition of commitments. The amount of future benefit payments to employees is determined on the basis of actuarial assumptions (change in wages, retirement age, probability of payment, turnover rate and mortality rate). These future payments are reduced to their present value using a discount rate determined according to the rates of corporate bonds with a maturity equivalent to that of the Company’s corporate liabilities, issued by prime corporate borrowers. The group has built up financial assets with an insurer to cover the expenses of defined-benefit plans. The recognition of hedging assets is recorded as a counterpart to the sum paid to the insurer. The amount of employee benefits results from the valuation of the commitments less the fair value of the assets intended to be hedged.
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