Orano - Annual Activity Report 2024 397 FINANCIAL STATEMENTS 6 Company financial statements - financial year ended December 31, 2024 2.2 Financial investments Financial investments appear on the asset side of the statement of financial position at their transfer value or acquisition cost. The acquisition cost means the purchase price plus costs directly related to the purchase, in particular commissions paid to acquire the investment. At each year-end, equity interests are measured at their value in use. An impairment loss is recognized when their value in use, assessed individually for each interest, falls below their historical cost. The value in use is determined: ● based on the percentage share of the subsidiary’s net assets at the end of the financial year; ● the present value of the projected future cash flows, based on the strategic plan approved by the governance bodies and its underlying assumptions, plus its terminal value, which corresponds to the present value, discounted to infinity, of the cash flows for the “normative year” estimated at the end of the period covered by the future cash flow projections. However, certain activities have a finite useful life (for example due to the finite mineral resources in the mines or the limited duration of the operating permits in nuclear activities); in this case, the cash flows taken into account to measure their value in use are not discounted to infinity, but rather to the end of their expected useful life. The recoverable value of unexploited deposits in the Mining business is assessed either at the carrying amount or on the basis of multiples of land (i.e., by comparison with resources and reserves valued according to the market capitalization of juniors comparable to the group’s mineral deposits that have not been mined). Impairment is calculated based on the share of net assets held at the end of the financial year. Loans to associates are recorded at face value. Where applicable, they are written down through a provision to take into account the financial position of the subsidiary. 2.3 Receivables and borrowings Receivables and borrowings are valued at face value. Receivables may be written down by a provision to reflect potential collection difficulties based on information available at closing. Receivables and debt in foreign currencies are translated and recorded in euros based on exchange rates in effect at the end of the financial year. Unrealized gains and losses in relation to the amounts previously recognized are recorded on the statement of financial position as currency translation differences in the absence of foreign exchange risk hedging. Unrealized foreign exchange losses are recognized through a provision for foreign exchange risk. Receivables and debt in foreign currencies benefiting from specific currency hedging are also recorded in euros based on exchange rates in effect at the end of the financial year. The difference between the closing rates and those set by this hedge is recognized directly in foreign exchange gain (loss). The same applies to the revaluation of the hedging instrument. 2.4 Financial instruments Orano SA uses derivatives to hedge foreign exchange risks and interest rate risks both for its own transactions and those carried out by its subsidiaries. The derivatives used are mainly forward currency contracts: currency and interest rate swaps, inflation swaps and currency options. The Company has applied ANC Regulation No. 2015-05 since January 1, 2017. The risks hedged relate to receivables, borrowings and firm commitments in foreign currencies. The derivatives traded to hedge subsidiaries’ exposure are systematically backed by symmetrical instruments with banking counterparties to hedge the exposure of Orano SA. Accounting principles: ● Gains and losses on derivatives traded to hedge subsidiaries’ exposure are recognized through profit and loss at maturity, thus matching the gains and losses recognized on the derivatives negotiated by Orano SA with banks; ● Interest rate derivatives traded by Orano SA are classified as hedging instruments or included in an isolated open position in the separate financial statements. Accrued interest not yet due is recognized in the statement of financial position with an offsetting entry to the income statement. 2.5 Non-trade current accounts Non-trade current accounts are reported under “Other accounts receivable” when they appear on the asset side of the statement of financial position. Otherwise, they appear on the liability side under “Other debt”. 2.6 Marketable securities Marketable securities are valued at the lower of their acquisition cost and their net carrying amount. A provision for impairment is recorded when the valuation at the reporting date shows an overall capital loss by class of securities. The net carrying amount is equal to the average closing market rates of the securities for the last month of the financial year. 2.7 Bonds Bonds are recognized as borrowings, as provided in generally accepted accounting principles in the French GAAP (plan comptable général). Redemption premiums and deferred charges related to bonds are amortized in a straight line over the term of the issue.
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