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TWST: Can we start with an introduction and overview of nCipher (London: NCH.L)?

Mr. van Someren: nCipher has been listed on the London Stock Exchange since October 2000 and is active in the encryption sub-sector of the IT security market. We have developed primarily hardware security products that deliver two important functions in enterprise security architectures. First, they protect the cryptographic “keys” which are used to control encryption, decryption and digital signature operations behind many software applications that make up a company’s IT security infrastructure. Secondly, these products increase the performance of encryption-based processes, so that more work can be done by fewer computers, reducing the overall deployment costs as well as speeding up transaction response times and improving the customer experience.

TWST: Can you talk further on the introduction of product into the online credit card transactions space and the attractive dynamics of this new market? I believe you mentioned this was a new space for you. Was this a natural evolution for the company?

Mr. van Someren: Yes, it was a new departure for us and it was clear that there was an opportunity to take our reputation and our technology in the encryption and digital signature space and translate some of that into helping to tackle the very high levels of fraud associated with the use of credits cards online. Visa and MasterCard developed new standards to enable a more secure method for the authentication of credit card holders online and it made sense to offer product dedicated to addressing that need. We have been very successful in establishing ourselves as the leader in that space and have captured a significant market share early on. The challenge now for us is to grow our payments product line further and expand it into other emerging sectors both in the online and off-line payments market. We see that as having considerable growth potential.

TWST: Is this a global protocol from Visa and MasterCard?

Mr. van Someren: Yes. Both have launched global initiatives, called ‘Verified by Visa’ and SecureCode in the case of MasterCard. There's actually been a pretty aggressive public awareness campaign by both involving TV advertising, and already today there are a large number of credit card issuers that are actually offering these services to their cardholders. Both initiatives simply add an extra step to the online buying process. Traditionally, you are only required to enter your 16-digit card number and expiry date, but that doesn’t do anything to prove that it is really you that's using the card. It only proves that you know the card number and expiry date, neither of which are very well kept secrets. Now, in addition, you will register a pin number or password. You basically choose with your card issuer how you are going to identify yourself, but then when you buy something, that extra piece of information will now be required and that will reduce the level of potential for fraud and the abuse of cards.

TWST: What are your main objectives for the next year or so and what achievements will make that a relatively successful time in your eyes?

Mr. van Someren: Over the course of 2003 we made a number of important steps in developing our future business. Just to recap quickly, we were named as a Microsoft Gold Certified partner, we are the first hardware vendor in the world to achieve that level within Microsoft's partnering program. That's a very important relationship step for us because Microsoft is the source of the operating system that supports a large part of our product revenues, but also it is a customer in its own right - the company buys our products for its own internal use. Also, of course, it's a vendor of application software that's very important to our customers to enable them to go about their business. We also announced a relationship with VeriSign which enabled us to develop a new kind of certificate with them for validating the security of individual web sites and ultimately leading to greater consumer confidence in online commerce. We have partnered with IBM during the year to deliver enhanced security for their web applications. Oracle partnered with us in September to enhance their grid computing platform, Oracle 10g. So, through relationships with these major vendors, we are really getting ourselves established in the hearts and minds of some of the leading software application vendors, and that puts us in a very strong position to then be able to grow our revenues across the IT enterprise space during 2004. With the launch of major new products such as the netHSM last October, we’ve already seen some exciting developments in our traditional markets and we certainly expect to see some respectable growth in the payments area. We also have a number of other growth applications in mind, pushing out into improving the manageability of cryptographic keys in enterprises, and also to expand further the use of time stamping technologies to prove that documents were produced at a particular time and that they haven't been tampered with since then. Our strategy of expanding into adjacent market opportunities is a very effective way of organically growing the revenues of the business and we believe holds a tremendous potential.