Company: NCNA
Filing Date: 2025-03-20
Form Type: 20-F
Source: 0000950170-25-042709
Chunk: 264

Company: NuCana plc
Filing Date: 2025-03-20
Form: 20-F
Item: Item 11
Chunk 264
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 Item 11. Quantitative and Qualitative Disclosures About Market Risk
 Market risk arises from our exposure to fluctuation in interest rates and currency exchange rates. These risks are managed by maintaining an appropriate mix of cash deposits in the two main currencies we operate in, placed with a variety of financial institutions for varying periods according to expected liquidity requirements.
Interest Rate Risk
As of December 31, 2024, the Company had cash and cash equivalents of £6.7 million (2023: £17.2 million). Exposure to interest rate sensitivity is impacted primarily by changes in the underlying bank interest rates. The Company’s surplus cash and cash equivalents are invested in interest-bearing accounts and certificates of deposit from time to time which earn interest at fixed or variable rates based on the terms agreed for each account. The Company has not entered into investments for trading or speculative purposes. 
An increase in the bank interest rates by 0.5 percentage points would increase the net annual interest income applicable to the cash and cash equivalents held on variable and short-term fixed rate deposits by £14,000 (2023: £45,000).
 Currency Risk
The Company’s functional currency is U.K. pounds sterling, and our transactions are commonly denominated in that currency. However, a portion of expenses are incurred in other currencies, primarily U.S. dollars, and are exposed to the effects of this exchange rate.
Although the Company is based in the United Kingdom, it sources active pharmaceutical ingredient, raw materials, research and development, manufacturing, consulting and other services worldwide, including from the United States, the European Union and India. Any weakening of the pound sterling against the currencies of such other jurisdictions makes the purchase of such goods and services more expensive for the Company. The Company seeks to minimize this exposure by maintaining currency cash balances at levels appropriate to meet foreseeable short to mid-term expenses in these other currencies. The Company thus holds a significant portion of cash and cash equivalents in U.S. dollars and reports the impact of exchange rates movements on these balances. The Company does not use derivative instruments to manage exchange rate exposure. A 1% increase in the value of the pound sterling relative to the U.S. dollar would increase the carrying value of net financial assets and liabilities in foreign currencies at December 31, 2024 by £4,000 (2023: £74,000 decrease).
 For additional information about our quantitative and qualitative risks, see Note 17 to the consolidated financial statements included elsewhere in this Annual Report.