##### 



As filed with the Securities and Exchange Commission on December 20,
2002

---

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SECURITIES AND EXCHANGE COMMISSION

FORM 20-F

|     |  |                                                 
|---- |  | ------------------------------------------------
|[  ] |  | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b)
|     |  | OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934   

OR

|    |  |                                                                                     
|--- |  | ------------------------------------------------------------------------------------
|[X] |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|    |  | For the fiscal year ended June 30, 2002                                             

OR

|     |  |                                                                                         
|---- |  | ----------------------------------------------------------------------------------------
|[  ] |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______to ______

Commission file number 0-29962Novogen Limited
ACN 063 259 754
(Exact name of Registrant as specified in its charter)

Not Applicable
(Translation of Registrants name into English)

New South Wales, Australia
(Jurisdiction of incorporation or organization)

140 Wicks Road, North Ryde, New South Wales 2113, Australia
(Address of principal executive offices)

Securities registered or to be registered pursuant to Section 12(b) of the Act.None

Securities registered or to be registered pursuant to Section 12(g) of the Act.Ordinary Shares*
American Depositary Shares, each representing five Ordinary Shares

__________________________________

|  |  |                                                                                             
|- |  | --------------------------------------------------------------------------------------------
|* |  | Not for trading, but only in connection with the registration of American
Depositary Shares.

__________________________________

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.Not Applicable

The number of outstanding Ordinary Shares of the issuer as at September 1, 2002
was 95,412,714.

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

Yes     [X]          No     [  ]





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Indicate by check mark which financial statement item the registrant has
elected to follow.

Item 17  [  ]          Item 18  [X]



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2



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TABLE OF CONTENTS

|                           |  |                                                                                  |   |  |    |  |  | 
|-------------------------- |  | -------------------------------------------------------------------------------- | - |  | -- |  |  | 
|Forward Looking Statements |  |                                                                                  | 4 | 
|PART 1                     |  |                                                                                  |   |  |    |  |  | 
|ITEM 1.                    |  | Identity of Directors, Senior Management and Advisors                            |   |  | 5  | 
|ITEM 2.                    |  | Offer Statistics and Expected Timetable                                          |   |  | 5  | 
|ITEM 3.                    |  | Key Information                                                                  |   |  | 5  | 
|ITEM 4.                    |  | Information on the Company                                                       |   |  | 16 | 
|ITEM 5.                    |  | Operating and Financial Review and Prospects                                     |   |  | 32 | 
|ITEM 6.                    |  | Directors, Senior Management and Employees                                       |   |  | 38 | 
|ITEM 7.                    |  | Major Shareholders and Related Party Transactions                                |   |  | 47 | 
|ITEM 8.                    |  | Financial Information                                                            |   |  | 48 | 
|ITEM 9.                    |  | Offer and Listing Details                                                        |   |  | 49 | 
|ITEM 10.                   |  | Additional Information                                                           |   |  | 51 | 
|ITEM 11.                   |  | Quantitative and Qualitative Disclosures about Market Risk                       |   |  | 54 | 
|ITEM 12.                   |  | Description of Securities other than Equity Securities                           |   |  | 54 | 
|PART 2                     |  |                                                                                  |   |  |    |  |  | 
|ITEM 13.                   |  | Defaults, Dividend Arrearages and Delinquencies                                  |   |  | 55 | 
|ITEM 14.                   |  | Material Modifications to the Rights of Security Holders
and the Use of Proceeds |   |  | 55 | 
|ITEM 15.                   |  | Controls and Procedures                                                          |   |  | 55 | 
|ITEM 16.                   |  | Reserved                                                                         |   |  | 55 | 
|PART 3                     |  |                                                                                  |   |  |    |  |  | 
|ITEM 17.                   |  | Financial Statements  Not Applicable                                            |   |  | 56 | 
|ITEM 18.                   |  | Financial Statements                                                             |   |  | 56 | 
|ITEM 19.                   |  | Exhibits                                                                         |   |  | 56 | 

3



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FORWARD-LOOKING STATEMENTS

We have made forward-looking statements in this Annual Report that are based on
our beliefs and assumptions and on information currently available to us.
Forward-looking statements include the information concerning our possible or
assumed future results of operations, business strategies, financing plans,
competitive position, potential growth opportunities, potential operation
performance improvements, the effects of competition and the effects of future
legislation or regulation. Forward-looking statements include all statements
that are not historical facts and can be identified by the use of
forward-looking terminology such as the words believe, expect, plan,
intend, anticipate, estimate, predict, potential, continue, may,
will, should, could or the negative of these terms or similar
expressions. Examples of forward-looking statements include but are not limited
to:



| |  |  | operations and prospects,                  
| | - |  | -------------------------------------------
|
| |  |  | growth strategy,                           
|
| |  |  | funding needs and financing resources,     
|
| |  |  | general market and economic conditions, and
|
| |  |  | market risk.                               

Forward-looking statements involve risks, uncertainties and assumptions. For a
discussion of certain of these risks uncertainties and assumptions, see Risk
Factors. Actual results may differ materially from those expressed in these
forward-looking statements. You should not put undue reliance on any
forward-looking statements. Other than required by applicable law or the
applicable law of any exchange on which our securities are listed, we have no
intention or obligation to update forward-looking statements.

4



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PART 1

Item 1. Identity of Directors, Senior Management and Advisors

Item 1 details are not required to be disclosed as part of the Annual Report.

Item 2. Offer Statistics and Expected Timetable

Item 2 details are not required to be disclosed as part of the Annual Report.

Item 3. Key Information

Selected Financial Data

The selected financial data for the years ended June 30 2002, 2001, 2000, 1999,
and 1998 have been derived from the Consolidated Financial Statements of
Novogen Limited (Company or Group) included in this Annual Report and
should be read in conjunction with and are qualified in their entirety by
reference to those statements and the notes thereto. The Consolidated Financial
Statements in this Annual Report have been prepared in accordance with
accounting principles generally accepted in Australia (Australian GAAP) which
varies in certain respects from accounting principles generally accepted in the
United States (US GAAP). A reconciliation of the major differences between
Australian GAAP and US GAAP is included in Note 29 to the Consolidated
Financial Statements. The Consolidated Financial Statements have been audited
in accordance with generally accepted auditing standards in the United States
by the Companys independent public accountants.

The Companys fiscal year ends on June 30. As used throughout this Annual
Report, the word fiscal followed by a year refers to the 12 month period
ending on June 30 of that year. For example, the term fiscal 2002 refers to
the 12 months ended June 30, 2002. Except as otherwise indicated, all dollar
amounts referred to in this Annual Report are at the consolidated level and
exclude inter-company accounts.

5



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Summary of Consolidated Statement of Financial Performance
(Australian GAAP)

|                                                                            |  |          |            |          |  |          |            |          |  |          |            |           |  |  |            |   |  |  |            |   |  |  |        |  
|--------------------------------------------------------------------------- |  | -------- | ---------- | -------- |  | -------- | ---------- | -------- |  | -------- | ---------- | --------- |  |  | ---------- | - |  |  | ---------- | - |  |  | ------ | -
|                                                                            |  | 1998     |            | 1999     |  | 2000     |            | 2001     |  | 2002     |            | 2002     
|                                                                            |  | (A$'000) |            | (A$'000) |  | (A$'000) |            | (A$'000) |  | (A$'000) |            | (US$'000)
|                                                                            |  |          |            |          |  |          |            |          |  |          |            |          
|Sales Revenue                                                               |  |          | 5,084      |          |  |          | 19,690     |          |  |          | 23,407     |           |  |  | 26,663     |   |  |  | 19,582     |   |  |  | 11,021 |  
|Other Revenue                                                               |  |          | 1,055      |          |  |          | 1,241      |          |  |          | 3,337      |           |  |  | 3,569      |   |  |  | 4,706      |   |  |  | 2,649  |  
|                                                                            |  |          |            |          |  |          |            |          |  |          |            |           |  |  |            |   |  |  |            |   |  |  |        |  
|Total Revenue                                                               |  |          | 6,139      |          |  |          | 20,931     |          |  |          | 26,744     |           |  |  | 30,232     |   |  |  | 24,288     |   |  |  | 13,670 |  
|                                                                            |  |          |            |          |  |          |            |          |  |          |            |           |  |  |            |   |  |  |            |   |  |  |        |  
|Net Loss from Operations                                                    |  |          | (12,576    | )        |  |          | (17,406    | )        |  |          | (13,679    | )         |  |  | (21,764    | ) |  |  | (14,654    | ) |  |  | (8,247 | )
|                                                                            |  |          |            |          |  |          |            |          |  |          |            |           |  |  |            |   |  |  |            |   |  |  |        |  
|Net Loss                                                                    |  |          | (12,576    | )        |  |          | (17,406    | )        |  |          | (13,679    | )         |  |  | (21,764    | ) |  |  | (14,673    | ) |  |  | (8,258 | )
|                                                                            |  |          |            |          |  |          |            |          |  |          |            |           |  |  |            |   |  |  |            |   |  |  |        |  
|Net Loss from
Operations per share
(Cents per share)                        |  |          | (32.7      | )        |  |          | (30.4      | )        |  |          | (17.1      | )         |  |  | (25.4      | ) |  |  | (15.4      | ) |  |  | (8.7   | )
|Weighted average
number of Ordinary
Shares used to calculate
Loss per share |  |          | 38,421,297 |          |  |          | 57,205,124 |          |  |          | 79,769,553 |           |  |  | 85,646,585 |   |  |  | 95,187,449 |   |  |  |        |  
|Number of outstanding
Ordinary Shares at year
end                           |  |          | 40,445,329 |          |  |          | 79,685,518 |          |  |          | 84,836,262 |           |  |  | 95,069,775 |   |  |  | 95,412,714 |   |  |  |        |  
|Adjusted to accord with
US GAAP                                             |  |          |            |          |  |          |            |          |  |          |            |           |  |  |            |   |  |  |            |   |  |  |        |  
|Sales Revenue                                                               |  |          | 5,084      |          |  |          | 19,690     |          |  |          | 22,519     |           |  |  | 25,415     |   |  |  | 17,644     |   |  |  | 9,930  |  
|                                                                            |  |          |            |          |  |          |            |          |  |          |            |           |  |  |            |   |  |  |            |   |  |  |        |  
|Total Revenue                                                               |  |          | 6,363      |          |  |          | 20,940     |          |  |          | 25,856     |           |  |  | 28,984     |   |  |  | 22,350     |   |  |  | 12,579 |  
|                                                                            |  |          |            |          |  |          |            |          |  |          |            |           |  |  |            |   |  |  |            |   |  |  |        |  
|Net Income/(Loss)                                                           |  |          | 493        |          |  |          | (17,860    | )        |  |          | (13,672    | )         |  |  | (21,813    | ) |  |  | (15,149    | ) |  |  | (8,526 | )
|                                                                            |  |          |            |          |  |          |            |          |  |          |            |           |  |  |            |   |  |  |            |   |  |  |        |  
|Net Income/(loss) from
operations per share
(Cents per share)               |  |          | 1.0        |          |  |          | (31.0      | )        |  |          | (17.1      | )         |  |  | (25.4      | ) |  |  | (15.9      | ) |  |  | (8.9   | )

No dividends have been declared by the Company in the financial years included
in this Annual Report. Note sales revenue reported under US GAAP has been
adjusted to reflect the impact of certain promotional expenditures in accordance
with EITF Issue 00-14-Accounting for Certain Sales Incentives. Prior year
financial statements have been reclassified where appropriate.Certain trade
promotion expenditures are charged to marketing and selling expenses under
Australian GAAP. These expenses are for co-operative advertising whereby the
Company pays for the retailers promotion of the Companys products. This would
typically take the form of instore price promotions. The payment of co-operative
advertising is usually made in the form of an agreed amount taken off
invoice. Under US GAAP these amounts are treated as a discount to sales hence
reducing the reported sales figures. See Note 29 to the Consolidated Financial
Statements for the reconciliation to US GAAP.

6



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Summary of Consolidated Statement of Financial Position at June 30, 2002
(Australian GAAP)

|                                |  |          |        |          |  |          |        |          |  |          |         |           |  |  |         |  |  |  |         |  |  |  |        | 
|------------------------------- |  | -------- | ------ | -------- |  | -------- | ------ | -------- |  | -------- | ------- | --------- |  |  | ------- |  |  |  | ------- |  |  |  | ------ | 
|                                |  | 1998     |        | 1999     |  | 2000     |        | 2001     |  | 2002     |         | 2002     
|                                |  | (A$'000) |        | (A$'000) |  | (A$'000) |        | (A$'000) |  | (A$'000) |         | (US$'000)
|                                |  |          |        |          |  |          |        |          |  |          |         |          
|Cash and Cash
Equivalents       |  |          | 15,388 |          |  |          | 29,981 |          |  |          | 28,820  |           |  |  | 31,129  |  |  |  | 39,937  |  |  |  | 22,477 | 
|Total Assets                    |  |          | 28,584 |          |  |          | 56,796 |          |  |          | 65,081  |           |  |  | 61,206  |  |  |  | 61,900  |  |  |  | 34,837 | 
|Net Assets                      |  |          | 23,004 |          |  |          | 48,275 |          |  |          | 52,724  |           |  |  | 51,906  |  |  |  | 54,045  |  |  |  | 30,416 | 
|Capital Stock                   |  |          | 40,445 |          |  |          | 82,148 |          |  |          | 100,276 |           |  |  | 121,222 |  |  |  | 137,249 |  |  |  | 77,244 | 
|Adjusted to accord with
US GAAP |  |          |        |          |  |          |        |          |  |          |         |           |  |  |         |  |  |  |         |  |  |  |        | 
|Total Assets                    |  |          | 28,229 |          |  |          | 56,473 |          |  |          | 64,728  |           |  |  | 60,949  |  |  |  | 61,676  |  |  |  | 34,711 | 
|Shareholders Equity             |  |          | 22,507 |          |  |          | 47,952 |          |  |          | 52,408  |           |  |  | 50,974  |  |  |  | 51,852  |  |  |  | 29,182 | 

The Company publishes its Consolidated Financial Statements expressed in
Australian dollars. In this Annual Report, references to US dollars or US$
are to the currency of the United States of America (US) and references to
Australian dollars or A$ are to the currency of Australia. For the
convenience of the reader, this Annual Report contains translations of certain
Australian dollar amounts into US dollars at specified rates. These
translations should not be construed as representations that the Australian
dollar amounts actually represent such US dollar amounts or could be converted
into US dollars at the rate indicated. Unless otherwise stated, the
translations of Australian dollars into US dollars have been made at the rate
of US$0.5628 = A$1.00, the noon market buying rate in New York City for cable
transfers in Australian Dollars as certified for customs purposes by the
Federal Reserve Bank of New York (the noon buying rate) on June 30, 2002.

The noon buying rate on October 31, 2002 was
US$0.5548 = A$1.00.

7



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Exchange Rates for the six months to November 2002
A$ versus US$

|          |  |      |        |     |  |  |        | 
|--------- |  | ---- | ------ | --- |  |  | ------ | 
|Month     |  | High |        | Low
|June      |  |      | 0.5748 |     |  |  | 0.5583 | 
|July      |  |      | 0.5688 |     |  |  | 0.5370 | 
|August    |  |      | 0.5534 |     |  |  | 0.5280 | 
|September |  |      | 0.5518 |     |  |  | 0.5419 | 
|October   |  |      | 0.5550 |     |  |  | 0.5422 | 
|November  |  |      | 0.5660 |     |  |  | 0.5563 | 

Exchange Rates for the Last Five Years A$ versus US$

|              |  |         |        | 
|------------- |  | ------- | ------ | 
|Fiscal Year   |  | Average
|Ended June 30 |  | Rate   
|1998          |  | $       | 0.6805 | 
|1999          |  | $       | 0.6246 | 
|2000          |  | $       | 0.6237 | 
|2001          |  | $       | 0.5320 | 
|2002          |  | $       | 0.5236 | 

Risk factors

The following risk factors, in addition to the other information and financial
data contained in this Annual Report, should be considered carefully in
evaluating the Company and its business. The risks described below and
elsewhere in this Annual Report are not intended to be an exhaustive list of
the general or specific risks involved, but merely identify certain risks that
are now foreseen by the Company. It must be recognized that other risks, not
now foreseen, might become significant in the future and that the risks which
are now foreseen might affect the Company to a greater extent than is now
foreseen or in a manner not now contemplated.

Unproven Technologies

The Companys technologies are relatively new and evolving. The successful
development and market acceptance of the Companys proposed products are
subject to inherent developmental risks. These include ineffectiveness or lack
of safety, unreliability, failure to receive necessary regulatory clearances or
approvals, high commercial cost and preclusion or obsolescence resulting from
third parties proprietary rights or superior or equivalent products, as well
as general economic conditions affecting purchasing patterns.

There can be no assurance that the Company and its marketing partners will be
able to commercialize successfully or achieve market acceptance of any of the
Companys technologies or products, or that the Companys competitors will not
develop competing technologies that are less expensive or otherwise superior to
those of the Company. The failure to develop and market successfully new
products

8



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##### 



would have a material adverse effect on the Companys business, financial
condition and results of operations.

Failure of Phenolic Drug Development

Phenolic drug development is an entirely novel and unproven field of
pharmaceutical drug development and there is limited scientific understanding
of phenolic technology on which the Companys drug program is based. There can
be no assurance that any of the compounds under development by the Company will
prove to be sufficiently efficacious, or sufficiently safe, or sufficiently
cost-effective to be commercially viable. The commercialization process of the
products currently undergoing clinical trials including the anti cancer drug
candidate phenoxodiol (NV-06) being developed by Novogens listed subsidiary
company Marshall Edwards, Inc., NV-04, the Companys cardiovascular drug
candidate and NV-07α the Companys anti inflammatory drug candidate, may be
delayed if the US Food and Drug Administration (FDA) or another regulatory
authority requires the expansion in the size and scope of any clinical trial.
It may take many years to complete the testing and failure can occur at any
stage in the process. Negative or inconclusive results or adverse medical
events during a clinical trial could cause Novogen to delay of terminate
development efforts.

Clinical trials also have a high risk of failure. A number of companies have
suffered significant setbacks in advanced clinical trials even after achieving
promising results in earlier trials. If the Company experiences delays in the
testing or approval process or if further clinical trials or clinical trials
involving a larger number of patients are required the commercial prospects of
the drugs under development could be impaired.

Future Capital Needs and Uncertainty of Additional Financing

The Companys capital requirements have been and will continue to be
significant. The Company anticipates that its existing resources will be
adequate to fund the Companys capital and operating requirements through at
least the next 12 months based upon the Companys current business plan. The
Companys capital and operating requirements may vary materially from those now
planned due to a number of factors, including the level of expenditure required
to expand its production facilities and the Companys ability to produce its
products in a cost-effective manner, the rate at which the Company can
introduce its products into new markets, the market acceptance and competitive
position of the Companys products, the success of the Companys research and
development efforts and the ability of the Company to satisfy applicable
regulatory requirements. The Company may need to raise additional capital to
fund its future operations. There can be no assurance that additional
financing will be available when needed on terms acceptable to the Company, or
at all. If additional funds are raised by issuing equity securities, further
dilution to existing stockholders will result and future investors may be
granted rights superior to those of existing stockholders. Insufficient funds
may prevent the Company from implementing its business strategy or may require
the Company to limit its operations significantly.

Supply of Raw Material

An important risk concerns the supply of raw material (red clover) used to
produce Promensil, Trinovin and Rimostil. Numerous environmental factors
(drought, disease, storms, etc.) can affect crop quality and quantity.
Although the Company has attempted to address this risk by sourcing clover from
regions of geographic

9



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##### 



diversity within Australia, and from areas of historically reliable water
supply, there can be no assurance of a continual supply of sufficient quantity
and quality of red clover. Interruptions in supply or material increases in
the cost of supply could have a material adverse effect on the Companys
business, financial condition and results of operations.

The Company currently depends upon a number of sources within Australia to grow
and to harvest the raw materials required for the clover-based isoflavone
products it produces. While the Company has entered into supply contracts with
many of these sources and maintains a close supervision of the clover growing,
there can be no assurance that the Company will be able to obtain increased
quantities of this material, if and when the Company requires. There can also
be no assurance that the crops of clover required by the Company will grow at
all and not be subject to certain acts of nature or other problems associated
with farming a naturally produced plant. Such events would have a material
adverse effect on the Companys business, financial condition and results of
operations.

The current stocks of clover, however, are adequate to cover the requirements
of the Company for at least the next 12 months.

Dependence on Patents, Trade Secrets and Proprietary Rights

The Companys success is dependent to a significant degree on whether it can
obtain patents, maintain trade secret protection and operate without infringing
on the proprietary rights of third parties. If the Company were determined to
be infringing any third party patent, the Company could be required to pay
damages, alter its products or processes, obtain licenses or to cease certain
operations. If the Company is required to obtain any licenses, there can be no
assurance that the Company will be able to do so on commercially favorable
terms, if at all. The Companys failure to obtain a license for any technology
that it may require to commercialize its products could have a material adverse
effect on the Companys business, financial condition and results of
operations.

Litigation, which could result in substantial costs to and diversion of effort
by the Company, may also be necessary to enforce any patents issued or licensed
to the Company or to determine the scope and validity of third party
proprietary rights. A patent application of the Company relating to Promensil
is currently the subject of a Statement of Claim filed with the Federal Court
of Australia.

If competitors of the Company that claim technology also claimed by the Company
prepare and file patent applications in the US, the Company may have to
participate in interference proceedings declared by the US Patent and Trademark
office to determine priority of invention, which could result in substantial
cost to and diversion of effort by the Company, even if the eventual outcome is
favorable to the Company. Any such litigation or interference proceedings,
regardless of outcome, could be expensive and time consuming. Litigation could
subject the Company to significant liabilities to third parties, requiring
disputed rights to be licensed from third parties or require the Company to
cease using certain technologies and, consequently, could have a material
adverse effect on the Companys business, financial condition and results of
operations.

In addition to patent protection, the Company relies on un-patented trade
secrets and proprietary technological expertise. There can be no assurance
that others will not independently develop or otherwise acquire substantially
equivalent technologies, or otherwise gain access to the Companys trade
secrets or technological expertise or

10



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##### 



disclose such trade secrets, or that the Company can ultimately protect its
right to such un-patented trade secrets and technological expertise. The
Company relies, in part, on confidentiality agreements with its marketing
partners, employees, advisors, vendors and consultants to protect its trade
secrets and proprietary technological expertise. There can be no assurance
that these agreements will not be breached, that the Company will have adequate
remedies for any breach or that the Companys un-patented trade secrets and
proprietary technological expertise will not otherwise become known or
independently discovered by competitors.

Potential Adverse Effect of Competition and Technological Change

In developing its technology and products, the Company competes with many
domestic and foreign competitors in various rapidly evolving and
technologically advanced fields, including pharmaceutical, biotechnology and
biopharmaceutical companies.

Many of the Companys competitors and potential competitors have substantially
greater financial, technological, R&D, marketing and personnel resources than
the Company. There can be no assurance that the Companys competitors will not
succeed in developing alternate technologies and products that are more
effective, easier to use or more economical than those which have been
developed by the Company or that would render the Companys technologies and
products obsolete and non-competitive in these fields. These competitors may
also have greater experience in developing products, conducting clinical
trials, obtaining regulatory approvals or clearances, and manufacturing and
marketing such products or technologies. Certain of these competitors may
obtain patent protection, approval or clearance earlier than the Company, which
could adversely affect the Companys business, financial condition and results
of operations. Furthermore, the Company will also be competing with respect to
manufacturing efficiency and marketing capabilities, areas in which it
currently has limited experience.

The companys commercial opportunities will be reduced or eliminated if
competitors develop and market products that are more effective, have fewer
side effects or are less expensive.

Effects of International Sales

The Company and its marketing partners intend to market the Companys current
and future products in most major world pharmaceutical markets. A number of
risks are inherent in international transactions. In order for the Company to
market its products in the US, Europe, Australia, Canada, Japan and certain
other foreign jurisdictions, the Company must obtain required regulatory
approvals or clearances and otherwise comply with extensive regulations
regarding safety, manufacturing processes and quality. There can be no
assurance that the Company will be able to obtain or maintain regulatory
approvals or clearances in such countries or that it will not be required to
incur significant costs in obtaining or maintaining its foreign regulatory
approvals or clearances.

Fluctuations in currency exchange rates may adversely affect the demand for the
Companys products by increasing the price of the Companys products in the
currency of the countries in which the products are sold.

The Companys consolidated financial statements are presented in Australian
dollars. In fiscal 2002, the Companys revenue was generated approximately 54%
in US dollars, approximately 26% in Australian dollars and the balance of
revenue in

11



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##### 



Pounds Sterling, Euros and Canadian dollars. During that year, the Companys
expenses were generated approximately 38% in US dollars and 20% in Pounds
Sterling, Euros and Canadian dollars. Substantially all of the balance was in
Australian dollars. Fluctuations in the rates of exchange between US dollar
and other foreign currencies may negatively impact the Companys financial
condition and results of operations. In addition, to the extent revenues and
expenses are denominated in different currencies, the Company may suffer a loss
upon the conversion of the revenue-denominated currency to pay costs. As the
Company expands its presence into the US and other international markets, the
Company expects the percentage of both its revenues and costs denominated in
non-Australian dollars to increase, with particular emphasis on US dollars.
For the foreseeable future, the Company expects its expenditures to be
predominantly denominated in Australian dollars, resulting primarily from the
Companys R & D and manufacturing activities in Australia, and expects capital
expenditures to be denominated in Australian dollars.

Dependence Upon Key Personnel

The Company is highly dependent upon the principal members of its management
and scientific staff. In addition, the Company believes that its future
success in developing marketable products and achieving a competitive position
will depend to a significant extent on whether it can attract and retain
additional qualified management and scientific personnel. Competition for such
personnel is intense, and there can be no assurance that the Company will be
able to continue to attract and retain such personnel. The loss of the
services of one or more of the management or scientific staff, or the inability
to attract and retain additional personnel and develop expertise as needed,
could have a material adverse effect on the Companys results of operations and
financial condition. The Company maintains key person life insurance for Dr.
Kelly, Mr Naughton and Professor Husband, currently set at A$2,226,000 each.
The proceeds of such policies are payable to the Company.

Limited Manufacturing Experience

The Company currently relies on its own extraction facility to produce
commercial quantities of isoflavones used in the manufacture of Promensil,
Trinovin and Rimostil. The facility is expected to be sufficient to meet
anticipated increases in demand during fiscal 2003 and beyond. To the extent
the Company relies on others, the Company will lose a degree of control over
the manufacturing process and will be dependent on such third parties to
satisfy performance and quality standards and dedicate sufficient production
capacity to meet demand and delivery times. There can be no assurance that
third party manufacturers will devote the resources necessary to meet demand
for the Companys products. Failure or delay in supplying isoflavones would
adversely affect the Companys ability to deliver products on a timely and
competitive basis.

In addition, the manufacture of the Companys products will be subject to
periodic inspection by regulatory authorities and certain marketing partners,
and the Companys manufacture of its products for human use is subject to
regulation and inspection by regulatory authorities for compliance with Current
Good Manufacturing Practice (cGMP). There can be no assurance that these
authorities will not, during the course of an inspection of existing or future
facilities, identify what they consider to be deficiencies in cGMP or other
requirements and request, or seek, remedial action. Failure to comply with
such regulations or delay in attaining compliance may adversely affect the
Companys manufacturing activities and could result in, among

12



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other actions, warning letters, injunctions, civil penalties, refusal to grant
approvals or clearances of future or pending product submissions, fines,
recalls or seizure of products, total or partial suspensions of production and
criminal prosecution.

Limited Marketing Capacity; Dependence on Others

The Company intends to rely on its own marketing staff for the marketing and
sale of its current and proposed products in Australia, New Zealand, Canada,
the US and select European countries. The Company presently has limited
marketing and sales staff. Achieving market acceptance for the Companys
products will require extensive and substantial efforts by experienced
personnel as well as expenditure of significant funds. There can be no
assurance that the Company will be able to establish sufficient marketing,
distribution and sales capabilities necessary to achieve market penetration in
these geographical areas.

In other markets, the Company intends to appoint licensees and/or marketing
partners who will be responsible in large part for sales, marketing and
distribution. While the Company will endeavor to appoint licensees and/or
marketing partners with proven abilities in these areas, the amount and timing
of resources, which may be devoted to the performance of their contractual
responsibilities by these partners, are not within the control of the Company.
There can be no assurance that such marketing partners will perform their
obligations as expected, pay any additional option or license fees to the
Company or market any products under any agreement, or that the Company will
derive any revenue from such arrangements. Moreover, the other contracting
parties may have rights of termination under certain of the agreements.
Exercise of such termination rights by such other parties may have an adverse
effect on the Companys business, financial condition and results of
operations. There can be no assurance that the interests of the Company will
continue to coincide with those of its partners or that such partners will not
develop independently or with third parties products or technologies which
could compete with the Companys products, or that disagreements over rights or
technologies or other proprietary interests will not occur. To the extent that
the Company chooses not to or is unable to enter into future agreements, it
would experience increased capital requirements to undertake the marketing or
sale of its current or future products. There can be no assurance that the
Company will be able to market or sell its technology, current or future
products independently in the absence of such agreements.

Effect of Government Regulation

Pharmaceutical products, including pharmaceuticals such as the Companys
phenolic hormone drug candidates, are significantly regulated by a number of
governmental entities, especially by the FDA in the US and by comparable
authorities in other countries, including Australia. These agencies regulate,
among other things, research and development activities and the testing,
manufacture, safety, effectiveness, labeling, storage, record keeping,
approval, advertising, promotion, distribution and sale of such products.
Product development and approval within this regulatory framework takes a
number of years and involves the expenditure of substantial resources. Many
products that initially appear promising ultimately do not reach the market
because they are found to be unsafe or do not demonstrate efficacy during the
testing required by the regulatory process.

The Company currently has no products approved by the FDA. No assurance can be
made that the Company will be able to file any New Drug Application (NDA) or
that any such filings will result in FDA approval. Furthermore, the Company
cannot

13



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predict with any degree of certainty when it might be in a position to file any
NDA or the length of time involved between the filing of an NDA and obtaining
FDA approval, if at all. The cost to the Company of conducting human clinical
trials for any potential product can vary dramatically based on a number of
factors, including the order and timing of clinical indications pursued and the
extent of development and financial support, if any, from corporate partners.
The Company may have difficulty obtaining sufficient patient populations,
clinicians or support to conduct its clinical trials as planned and may have to
expend substantial additional funds to obtain access to such resources, or
delay or modify its plans significantly.

There can be no assurance that FDA or other regulatory authority approval for
any product developed by the Company will be granted on a timely basis or at
all. Any delay in obtaining or any failure to obtain such approvals would
materially and adversely affect the marketing of the Companys products and the
Companys business, financial condition and results of operations. In
addition, legislation may be enacted in the future, which might adversely
affect the Companys ability to develop, manufacture or market its products.

Any FDA approvals that may be granted will be subject to continual review, and
later discovery of previously unknown problems may result in withdrawal of
products from marketing. Moreover, if and when such approval is obtained, the
marketing and manufacture of the Companys products would remain subject to
extensive regulatory requirements administered by the FDA and other regulatory
bodies. Failure to comply with these regulatory requirements could, among
other things, result in fines, suspensions or withdrawal of regulatory
approvals, operating restrictions and criminal prosecution.

Product Failure

The Companys dietary supplement products are based on a hypothetical concept
of the biological importance of estrogenic isoflavones to human health.
However, there is no certainty that this hypothesis will prove to be the case
for any or all intended applications. Failure to provide any significant
health benefit could be expected to have a significant adverse effect on the
Companys ability to market these products.

The Company also has taken considerable care to ensure safety and lack of
adverse side effects. However, there is no assurance that extended use of the
products in the wider community will not result in the occurrence of
undesirable side-effects including intolerance reactions that could be expected
to impede the successful marketing of the products.

Product Liability Exposure and Potential Unavailability of Insurance

The testing, manufacturing, marketing and sale of the products being developed
by the Company involve inherent risk that product liability claims will be
asserted against the Company, its marketing partners or licensees. There can
be no assurance that the Companys current clinical trial and commercial
product liability insurance is adequate or will continue to be available. The
Company currently maintains worldwide product liability coverage of up to A$20
million.

Enforceability of Civil Liabilities under the Federal Securities Laws

The Company is a public company limited by shares and is registered and
operates under the Corporations Act 2001. All of the Companys directors and
officers named in this Annual Report reside outside the US. Substantially all
or a substantial portion

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of the assets of those persons are located outside the US. As a result, it may
not be possible to effect service on such persons in the US or to enforce, in
foreign courts, judgments against such persons obtained in US courts and
predicated on the civil liability provisions of the federal securities laws of
the US. Furthermore, substantially all of the directly owned assets of the
Company are outside the US, and, as such, any judgment obtained in the US
against the Company may not be collectible within the US. There is doubt as to
the enforceability in the Commonwealth of Australia, in original actions or in
actions for enforcement of judgments of US courts, of civil liabilities
predicated solely upon federal or state securities laws of the US, especially
in the case of enforcement of judgments of US courts where the defendant has
not been properly served in Australia.

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Item 4. Information on the Company

History and development of the Company.

Novogen Limited, a company limited by shares, was incorporated in March 1994
under the jurisdiction of the laws of New South Wales, Australia. Novogen has
its registered office at 140 Wicks Rd, North Ryde, New South Wales 2113. Its
telephone number and other contact details are: Phone 61-2-9878-0088; Fax
61-2-9878-0055; and web site, www.novogen.com (the information contained in the
web site does not form part of the Annual Report). The Companys Ordinary
Shares are listed on the Australian Stock Exchange (ASX) under the symbol
NRT and its American Depositary Receipts (ADRs) are listed on NASDAQ under
the symbol NVGN.

Nature of the Business

The Company is a pharmaceutical company involved in the discovery, development,
manufacture and marketing of products based on the emerging field of phenolic
technology. The Companys product development program embraces both a novel
range of pharmaceuticals based on a range of phenolic hormones in humans and
dietary supplements based on plant phenolic compounds known as isoflavones. A
key element of the Companys strategy is to leverage revenue generated from
sales of the Companys dietary supplements in an effort to develop novel
proprietary pharmaceuticals based on phenolic hormones.

Recent Financing Activities

Since its inception, the Company has been financed principally by equity
financing, license fees and product sales. The Company did not recognize any
significant revenue from the sale of product until fiscal 1998.

In June 2000, the Company raised A$17.9 million from the issue of 5.018 million
Ordinary Shares at A$3.5819. The proceeds are being used to finance clinical
trials for Novogens anti-cancer drug candidate phenoxodiol (NV-06) which is
currently in Phase I/II clinical trials in the US and Australia, and to augment
Novogens cash flow from the international sales of its over-the-counter
products.

During May 2001, 10.195 million Ordinary Shares with a value of A$20.9 million
were issued to a number of international institutions at the price of A$2.05
per share, the closing price on the ASX on May 23, 2001. The equity receipts
will be used to fund the ongoing clinical trials of phenoxodiol (NV-06) and to
augment the cash flow from the international sales of the over-the-counter
dietary supplement business.

Marshall Edwards, Inc.

During May 2002, Marshall Edwards, Inc. (MEI), a US subsidiary of Novogen
Limited, raised US$10.1 million in an initial private placement to European,
American and Australian investors and institutions at US$4.00 each with an
attaching option exercisable prior to November 30, 2003 at US$4.00 per share.
Shares of MEI are listed on the London Stock Exchanges Alternative Investment
Market (AIM). Novogen now owns 95.2% of MEI.

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It is a requirement of the AIM listing that Novogen Limited not sell any of its
holdings in MEI before May 2003.

MEI was established to provide a commercial vehicle for Novogens anti-cancer
drug candidates, the first of which is phenoxodiol (NV-06). Novogen has
licensed phenoxodiol to MEIs Australian subsidiary Marshall Edwards Pty
Limited (MEPL) which will be responsible for the continued development of
phenoxodiol (NV-06) and its ultimate commercialisation under the terms of the
license. Novogen will provide services, clinical trial management and drug
supplies to MEI and MEPL.

Capital expenditures

The Company made no major investments of a capital nature during fiscal 2002.
In fiscal 2001, the Company invested A$1.18 million in completing the
construction of its phenoxodiol (NV-06) pilot manufacturing plant. This plant
is located at its North Ryde, Sydney facility and is used for the production of
phenoxodiol (NV-06) for ongoing clinical trials. It will also be used to
manufacture clinical trial quantities of other NV drug candidates.

Future facilities will be developed as demand increases, however, current plant
capacity both at the isoflavones extraction plant at Wyong NSW and at the pilot
plant at North Ryde NSW are sufficient to meet demand for the short to medium
term.

Business overview

The Company launched its first product, Promensil (Promensil), in September
1997 in Australia. Subsequently, the product was launched in New Zealand in
February 1998, in the US in April 1998, in The Netherlands in April 1999, and
in Canada in January 2000. The Companys second product, Trinovin
(Trinovin) was launched in Australia in June 1998 and is currently sold in
Australia, New Zealand, the US and Canada. In June 2000, Novogen launched
Rimostil in Australia and Canada. Rimostil is a new product for
post-menopausal women. Rimostil is the first isoflavone supplement for the
maintenance of bone and cholesterol health in women after menopause. During the
fiscal year 2001 the Company launched Rimostil in the US and the Netherlands
and launched Trinovin in the UK and the Netherlands. The Company also entered
into agency agreements in Singapore and South Africa.

Promensil, Trinovin and Rimostil are dietary supplements that deliver
standardized levels of all four isoflavones  daidzein, genistein, formononetin
and biochanin. Promensil, Trinovin and Rimostil are listed with the
appropriate regulatory bodies in the countries in which they are sold.

In the year ended June 30, 2002 the Company earned total revenues of A$24.3
million, of which A$19.6 million was from sales of the consumer health
products. This represented a decrease in consumer healthcare sales of 27% over
the previous year. Following the slowdown in economic activity during the year
(especially in the US following the events of September 11) and the subsequent
uncertainty in the financial markets, Novogens strategy has been to conserve
cash resources. The reduction in advertising and promotional expenditure,
particularly in the US, together with increased competition had a consequent
effect on sales during the year. Sales have mainly been affected in the US and
Australia, which were 39% and 15% respectively below last year. Sales however
continued to increase in Europe and Canada, which were 12% and 15% respectively
above last year. During the year the Company entered into an agency agreement
in Austria.

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The following table is an analysis of revenue from sales and other sources
during the past three fiscal years by categories of activity and by
geographical market. Sales in fiscal 2000 include Promensil, Trinovin and one
month of Rimostil following the launch in Australia and Canada. Sales in 2001
and onwards reflect the further impact of Rimostil. Other revenue consists
principally of interest income, grants received, foreign exchange gains and
royalty receipts. See Note 2 to the Consolidated Financial Statements.

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Category of Activity

| |  |                   
| |  | ------------------
| |  | Year Ended June 30

Dietary Supplements

|              |  |          |        |          |  |          |        |  |  |  |        | 
|------------- |  | -------- | ------ | -------- |  | -------- | ------ |  |  |  | ------ | 
|              |  | 2000     |        | 2001     |  | 2002    
|              |  | (A$'000) |        | (A$'000) |  | (A$'000)
|Sales Revenue |  |          | 23,407 |          |  |          | 26,663 |  |  |  | 19,582 | 
|Other Revenue |  |          | 3,337  |          |  |          | 3,569  |  |  |  | 4,706  | 
|              |  |          |        |          |  |          |        |  |  |  |        | 
|Total Revenue |  |          | 26,744 |          |  |          | 30,232 |  |  |  | 24,288 | 
|              |  |          |        |          |  |          |        |  |  |  |        | 

|                     |  |                   
|-------------------- |  | ------------------
|Geographical Markets |  | Year Ended June 30

|              |  |          |        |          |  |          |        |  |  |  |        | 
|------------- |  | -------- | ------ | -------- |  | -------- | ------ |  |  |  | ------ | 
|              |  | 2000     |        | 2001     |  | 2002    
|              |  | (A$'000) |        | (A$'000) |  | (A$'000)
|Sales Revenue |  |          |        |          |  |          |        |  |  |  |        | 
|Australia     |  |          | 7,933  |          |  |          | 5,921  |  |  |  | 5,224  | 
|UK & Europe   |  |          | 1,603  |          |  |          | 2,039  |  |  |  | 2,274  | 
|US & Canada   |  |          | 13,871 |          |  |          | 18,703 |  |  |  | 12,084 | 
|              |  |          |        |          |  |          |        |  |  |  |        | 
|              |  |          | 23,407 |          |  |          | 26,663 |  |  |  | 19,582 | 
|              |  |          |        |          |  |          |        |  |  |  |        | 
|Other Revenue |  |          |        |          |  |          |        |  |  |  |        | 
|Australia     |  |          | 3,337  |          |  |          | 3,569  |  |  |  | 4,706  | 
|              |  |          |        |          |  |          |        |  |  |  |        | 
|Total Revenue |  |          | 26,744 |          |  |          | 30,232 |  |  |  | 24,288 | 
|              |  |          |        |          |  |          |        |  |  |  |        | 

Clinical Development

While the Company was originally conceived as a pharmaceutical R&D group of
companies, there has been a shift in product emphasis toward the development
and marketing of human therapeutics, with a particular focus on therapeutics
based on phenolic drug technology, and a progression from a strictly R&D group
of companies to a group with significant manufacturing and commercial
activities. While initial sales revenue has been generated from dietary
supplements, the Company has devoted, and expects to continue to devote,
significant R&D resources to the development of novel pharmaceuticals based on
phenolic hormones.

During fiscal 2000, Novogens anti-cancer drug candidate phenoxodiol (NV-06)
was approved for human clinical trailing, and in June 2000 Novogen completed a
Phase Ia Clinical Trial. This was a significant milestone for the Company,
moving the drug

19



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candidate from the clinic to into man studies. In fiscal year 2001, the
Company announced that phenoxodiol (NV-06) had entered into further Phase I/II
clinical trials with two trials commencing at major Australian hospitals. These
trials are currently underway and are testing primarily for safety (looking for
drug toxicity) and some efficacy data may also be gathered.

Additionally, the FDA has given its approval for phenoxodiol (NV-06) to be
tested in humans in the US. This trial commenced in June 2001 at the Cleveland
Clinic Taussig Cancer Center and is currently nearing completion. Interim
results were presented from the Cleveland Cancer Clinic study showing that
phenoxodiol (NV-06) had stabilised cancer progression without any significant
side effects in six out of the first ten patients recruited for the trial.

Two new human clinical trials began in the last fiscal year. The trials
include a Phase Ib/IIa trial at the Royal North Shore Hospital in Sydney in
patients with leukemia and a Phase Ib/IIa study at Monash Medical Centre in
Melbourne, an oral dose form trial in prostate cancer patients.

Phenoxodiol (NV-06) is now being tested in five human clinical trials. During
the year, interim results of two of the trials were announced including the
results of the Phase I study conducted at the Cancer Care Centre at the St
George Hospital which demonstrated that phenoxodiol was well tolerated in the
seventeen patients who were treated in the escalating dose study. Three of
those patients showed stabilisation of their cancers.

During fiscal 2002, Novogen announced that its skin repair drug candidate,
NV-07α, had commenced human clinical trials at the Queensland Institute for
Medical Research. NV-07α has been developed for the repair of sun damaged skin
and the clinical trial has been designed to determine its role in correcting
acute sun damage as well as preventing the induction of skin cancer. Also, in
June 2002 Novogen announced that a second human clinical trial of NV-07α will
be conducted at the Royal Prince Alfred Hospital in Sydney. The RPAH trial has
been designed to determine the extent to which NV-07α is able to reverse the
damaging effects of excessive sun exposure on the skin.

The third pharmaceutical program, NV-04, Novogens cardiovascular drug program,
also commenced a Phase I human clinical trial at the Baker Medical Research
Institute in Melbourne. The objective of the trial is to evaluate the safety
and tolerability of a selected program compound and determine its effect on
widening of blood vessels (dilation) which is a mechanism of enhancing blood
flow and reducing blood pressure. This trial on healthy subjects is designed
to confirm favourable results obtained in animals which improved dilation of
blood vessels.

The Company also announced a number of clinical advances in the dietary
supplement area including the results of trials which show that Promensil
significantly reduces womens blood cholesterol and that Promensil reduced the
amount of breast pain associated with menstruation. Also, a double blind
placebo-controlled study conducted at the Free University in Amsterdam showed a
statistically significant reduction in hot flushes in women with acute
menopausal symptoms.

Advances were made in the mens health area where clinical trial data presented
at the World Congress on the Aging Male in Berlin revealed that Trinovin caused
early stage prostate cancer cells to die in numbers that were five times
greated than the untreated control group.

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Source and Availability of Raw Materials

Isoflavones

Two major manufacturing considerations are supply of raw material (red clover)
and isoflavone extraction capacity.

Red clover is grown under contract by farmers experienced in red clover
growing. As part of a risk reduction strategy, red clover is grown in a number
of areas of geographical and climatic diversity in three Australian states (New
South Wales, Victoria, and South Australia). For cost reasons, red clover is
no longer grown in the South Island of New Zealand. The current growing
capacity is judged to exceed projected demand for the foreseeable future.

The existing isoflavone extraction facility at Wyong NSW is currently meeting
existing demand for product. The Company has moved its manufacturing facility
from New Zealand to the Wyong site. The Company anticipates being able to
increase output from the Wyong facility through continuing improvements in
yield efficiencies, refinements in the extraction process and the use of higher
isoflavone-yielding clover varieties. The Company currently uses contract
formulators and packers in both Australia and the US to tablet and to pack the
final product. All products sold in the US are produced by a contract
formulator and packer in the US who has represented to the Company that its
facilities are certified by the FDA as being in accordance with cGMP.

Phenolic hormones

The synthetic phenolic hormones used in the Companys pre-clinical and clinical
trials are currently being manufactured at the pilot facility located at North
Ryde. The facility manufactures phenoxodiol (NV-06), NV-04 program compounds
and NV-07α and will provide sufficient product for pre-clinical and initial
clinical trial purposes. If, in the future, clinical trials prove successful
and applicable regulatory approvals are obtained, the Company intends to
construct its own manufacturing facility necessary for commercial production of
these compounds.

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Marketing Channels

The Company is currently marketing the products  Promensil, Trinovin and
Rimostil. All three products are classified as dietary supplements for
people whose intake of isoflavones is inadequate.

Promensil is being marketed in Australia, New Zealand, The Netherlands, the US
and Canada. Trinovin is being marketed in Australia, New Zealand, the US,
Canada, the UK and The Netherlands. Rimostil is being marketed in Australia,
Canada, the US and The Netherlands. Novogen Red Clover Supplement is marketed
in the UK.

The marketing strategy is for the Company to continue to be responsible for the
direct marketing of its current and proposed dietary supplement products in
Australia, New Zealand, North America (US and Canada) and selected European
countries. The Company will rely on distributors and other third parties for
the sale of the Companys dietary supplements in other countries and regions.
The company has entered into agency distribution agreements in Singapore, South
Africa and Austria.

The Company has pursued a deliberate policy of not seeking strategic alliances
in the development of its line of pharmaceutical products. The Company
believes that it has the expertise and will have the resources necessary to
take its lead candidate pharmaceutical agents up to Phase II clinical trials.
In this way, the potential value of the assets will be maximized prior to any
alliance being sought.

Patent Protection

The first and most important area of the intellectual property (IP) of the
Company is the understanding that an important function of isoflavones in the
diet is to act as pro-hormones, leading to the formation of a previously
undiscovered class of hormones known as phenolic hormones. The Companys
discovery that these isoflavonoid-derived phenolic compounds have biological
activity is the basis of the Companys drug discovery and development program.
A number of these phenolic compounds have been identified by the Company as
offering significant commercial potential as new pharmaceuticals and these are
currently under development. The Company has PCT patent applications pending
relating to these compounds and a wide range of therapeutic applications.

The second area of IP is the proprietary technology that allows the method of
extraction of all four principal estrogenic isoflavones found in the human
diet. This technology has allowed the development of Promensil and Trinovin,
which are supplement products that deliver standardized levels of all four
isoflavones  daidzein, genistein, formononetin and biochanin.

The third important area of IP is an understanding of the distinctive
biological functions of each of the four estrogenic isoflavones. The Company
has found that while the four estrogenic isoflavones share functions in common,
each has a distinctive biological profile with some even having unique
functions. This is the basis of development of dietary supplements with
customized isoflavone ratios in order to meet specific health needs.

The Company pursues an aggressive patent prosecution strategy, based on PCT
patent applications in major global territories. All current patent
applications are filed

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in the name of either Novogen Inc., Novogens wholly-owned US subsidiary, or
Novogen Research Pty Ltd, one of Novogens wholly-owned Australian
subsidiaries. The following is a list of all patents and patent applications
held by the Company.

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PCT = Patent Cooperation Treaty
(1) = Novogen Research Pty Ltd
(2) = Novogen Inc

|   |  |                                                                                                                     |  |           |           |         |  |                                
|-- |  | ------------------------------------------------------------------------------------------------------------------- |  | --------- | --------- | ------- |  | -------------------------------
|   |  | Title                                                                                                               |  | Applicant |           | Country
|   |  |                                                                                                                     |  |           |           |        
|1  |  | HEALTH SUPPLEMENTS CONTAINING PHYTO-OESTROGENS,
ANALOGUES OR METABOLITES THEREOF                                    |  |           | (1)       |         |  | PCT (designating
all countries)
|2  |  | PROCESS FOR GLUCAN PREPARATION
THERAPEUTIC USES OF GLUCAN                                                           |  |           | (1)       |         |  | PCT (designating
all countries)
|3  |  | THERAPEUTIC METHODS AND COMPOSITIONS INVOLVING
ISOFLAVONES                                                          |  |           | (1) + (2) |         |  | PCT (designating
all countries)
|4  |  | PREPARATION OF ISOFLAVONES FROM LEGUMES                                                                             |  |           | (1) + (2) |         |  | PCT (designating
all countries)
|5  |  | TREATMENT OR PREVENTION OF MENOPAUSAL SYMPTOMS
AND OSTEOPOROSIS                                                     |  |           | (1) + (2) |         |  | PCT (designating
all countries)
|6  |  | COMPOSITIONS AND METHOD FOR PROTECTING SKIN FROM
UV INDUCED IMMUNOSUPPRESSION AND SKIN DAMAGE                       |  |           | (1)       |         |  | PCT (designating
all countries)
|7  |  | THERAPY OF ESTROGEN-ASSOCIATED DISORDERS                                                                            |  |           | (1)       |         |  | PCT (designating
all countries)
|8  |  | PRODUCTION OF ISOFLAVONE DERIVATIVES                                                                                |  |           | (1)       |         |  | PCT (designating
all countries)
|9  |  | CARDIOVASCULAR AND BONE TREATMENT USING
ISOFLAVONES                                                                 |  |           | (1)       |         |  | PCT (designating
all countries)
|10 |  | COMPOSITIONS AND THERAPEUTIC METHODS INVOLVING
ISOFLAVONES AND ANALOGUES THEREOF                                    |  |           | (1)       |         |  | PCT (designating
all countries)
|11 |  | FOOD PRODUCT AND PROCESS                                                                                            |  |           | (1)       |         |  | PCT (designating
all countries)
|12 |  | REGULATION OF LIPIDS AND/OR BONE DENSITY AND
COMPOSITIONS THEREFORE                                                 |  |           | (1)       |         |  | PCT (designating
all countries)
|13 |  | ISOFLAVONE DIMERS WITH ESTROGENIC PROPERTIES                                                                        |  |           | (1)       |         |  | PCT (designating
all countries)
|14 |  | TREATMENT OF RESTENOSIS                                                                                             |  |           | (1)       |         |  | PCT (designating
all countries)
|15 |  | 6-HYDROXY ISOFLAVONES, DERIVATIVES AND
MEDICAMENTS INVOLVING THE SAME                                               |  |           | (1)       |         |  | Australia                      
|16 |  | ISOFLAVONE CONJUGATES, DERIVATIVES THEREOF AND
THE THERAPEUTIC METHODS INVOLVING THE SAME                           |  |           | (1)       |         |  | Australia                      
|17 |  | BIOLOGICAL TARGETS AND THERAPEUTIC METHODS AND
COMPOSITIONS INVOLVING COMPOUNDS BASED ON AN
ISOFLAV-3-ENE STRUCTURE |  |           | (1)       |         |  | Australia                      
|18 |  | REPAIR OF DNA MUTAGENIC DAMAGE                                                                                      |  |           | (1)       |         |  | Australia                      
|19 |  | COMPOSITIONS AND THERAPEUTIC METHODS INVOLVING
PLATINUM COMPLEXES                                                   |  |           | (1)       |         |  | Australia                      
|20 |  | AMINATED ISOFLAVONOID DERIVATIVES AND USES THEREOF                                                                  |  |           | (1)       |         |  | Australia                      

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Licensing Arrangements

In 1997 the Company granted an exclusive license for the use of soy under three
Novogen patent applications to Protein Technologies, Inc. (PTI), a
wholly-owned subsidiary of Dupont Inc. Under the license agreement, PTI paid to
the Company a license fee of approximately A$9 million and agreed to pay the
Company royalties from the sales made by PTI of products derived under the
license. In fiscal year ended June 30, 2002, PTI paid A$1,879 million in
royalties to the Company. See Item 5. Operating and Financial Review and
Prospects  Operating Results  Fiscal 2002 v. Fiscal 2001. Contemporaneous
with the license agreement, PTIs then parent Ralston-Purina Inc. invested
A$6.7 million into the Companies Ordinary Shares which was followed in December
1998 by an additional investment of A$3.6 million.

Trademark Protection

The Company also seeks IP protection through trademark registration of product
names and corporate logos. The Company has an active program of registering
all product trademarks in significant markets.

Australian Government

The activities of the Company are subject to numerous Australian laws and
regulations, including those described below.

The Australian Corporations Law is the main body of law governing companies
incorporated in Australia, such as Novogen and its Australian subsidiaries.
The Australian Securities and Investments Commission (ASIC) is an Australian
Government organisation that administratively enforces legislation covering
matters such as directors duties and responsibilities, preparation of
accounts, auditor control, issue and transfer of shares, control of
shareholders meetings, rights of minority interests, amendments to capital
structure, preparation and filing of public documents such as annual reports,
changes in directors and changes to capital.

The Australian Stock Exchange (ASX) imposes listing rules on all listed
companies, such as Novogen. The rules cover issues such as continuous and
immediate disclosure to the market of relevant information, periodic financial
reporting and the prior approval of reports to shareholders.

The Company believes that it is in material compliance with the foregoing
Australian laws and regulations pertaining to public and private companies.

The Companys products and manufacturing facilities also are regulated by
various Australian federal and state instrumentalities. The Companys
manufacturing facilities hold the appropriate licenses concerning hazardous
chemical use and the manufacture of health products. Promensil, Trinovin and
Rimostil are listed with or notified to the appropriate approval bodies in
Australia and New Zealand as dietary supplements and are thereby eligible to
be marketed in those countries.

In Australia, pharmaceuticals are subject to review
and approval by the Therapeutic
Goods Administrations (TGA) Drug Evaluation Branch (DEB) in accordance with Section 25 of the Therapeutic
Goods Act 1989. The specific data requirements for the registration of drugs
have been

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closely aligned with the data requirements for applications for marketing
authorization of a medicinal product published by the European Commission.

All drug products must comply with the legislative requirements in force in
Australia. Statutory standards under the Therapeutic Goods Act 1989 include
Therapeutic Goods Orders (TGOs) and monographs of the British Pharmacopoeia
(BP). Where no standard is specified in a TGO or the BP, the TGA may require
that the product meet a standard specified in the US Pharmacopeia.

It is also a legislative requirement that data submitted for evaluation must
satisfactorily establish the quality, safety and efficacy of the product for
the purposes for which it is to be used, where relevant. The approval process
for new drugs requires the submission of comprehensive pre-clinical and
clinical data regarding safety and efficacy. The Australian Guidelines for the
Registration of Drugs (the Guidelines) describe the information to be
provided in an application for registration of new drugs. As Promensil,
Trinovin and Rimostil are currently classified as dietary supplements they
are not required to be in compliance with the Guidelines.

US Government Regulations

The Companys research, pre-clinical development, clinical trials, and
manufacturing and marketing of its products in the US are subject to extensive
regulation by numerous governmental authorities including, but not limited to,
the FDA. In the US, pharmaceutical products, including plant-derived
pharmaceuticals such as the Companys phenolic hormone drug candidates, are
subject to FDA review and approval as drugs under the Federal Food, Drug, and
Cosmetic Act (the FD&C Act).

In most cases, the steps required before a new pharmaceutical can be
commercially distributed in the US include: (a) preclinical studies and
adherence to good laboratory practice (GLP); (b) the filing of an
investigational new drug application (IND) with the FDA summarizing
preclinical development work; (c) controlled clinical trials in humans to
determine safety and efficacy; (d) filing a new drug application (NDA) with
the FDA; (e) FDA approval to market; (f) post-marketing approval requirements;
and (g) manufacturing regulations.

The Companys products, Promensil, Trinovin and Rimostil are classified as
dietary supplements. Dietary supplements, although subject to the FD&C
Act, are treated differently than pharmaceuticals and are the subject of recent
legislation known as the Dietary Supplement Health and Education Act 1994 (the
Dietary Supplement Act). The Dietary Supplement Act defines dietary
supplements, creates a safety system for dietary supplements and their
ingredients, regulates claims and labeling of dietary supplements and provides
for cGMP for dietary supplements. The Company believes that Promensil,
Trinovin and Rimostil, the products of the Company currently sold in the US,
comply with the claims, labeling and other rules relating to dietary
supplements, and are produced in accordance with applicable FDA cGMP. The
products are formulated and packed by a contract manufacturer in the US who has
informed the Company that it is cGMP-certified by the FDA. The active bulk
ingredients for Promensil,
Trinovin and Rimostil are produced by the Company at its
production facility which is certified by the TGA as adhering to cGMP for
Australia. The FDA does not require that the bulk ingredients used in dietary
supplements sold in the US be manufactured according to the FDAs cGMP
standards. The discussion below generally relates to pharmaceutical products
and not products characterized as dietary supplements.

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Pre-clinical Studies and Good Laboratory Practice

The initial testing of a pharmaceutical product before it may be marketed in
the US is called pre-clinical testing. Pre-clinical tests include formulation
development, laboratory evaluation of product, chemistry and other end points
and animal studies to assess the potential safety and efficacy of the product
as formulated. Many pre-clinical studies are regulated by the FDA under a
series of regulations called the GLP Regulations. Violations of GLP regulations
can, in some cases, lead to invalidation of the studies, requiring them to be
replicated. The results of pre-clinical trials are submitted to the FDA as
part of the IND and are reviewed by the FDA prior to authorizing the sponsor to
conduct clinical trials in human subjects.

Investigation of New Drug Application

FDA regulations provide that human clinical trials may begin 30 days following
the submissions and receipt of an IND, unless the FDA advises otherwise or
requests additional information, clarification or additional time to review the
IND submission. There is no assurance that the submission of an IND will
eventually allow a company to commence clinical trials. Once trials have
commenced, the FDA may stop the trials, or particular types of trials, by
placing a clinical hold on such trials because of concerns about, for
example, the safety of the product being tested or the adequacy of the trial
design. Such holds can cause substantial delay and in some cases may require
abandonment of a product. There can be no assurance that the FDAs
acquiescence to an IND constitutes any indication that the FDA will find the
protocol satisfactory for a clinical trial or that authorization of one phase
of clinical trials will result in authorization of other phases or that the FDA
will accept any data generated from a clinical trial.

Clinical Trials

Clinical trials involve the administration of the investigational drug product
to human subjects. Each protocol indicating how the clinical trial will be
conducted must be submitted for review to the FDA. The FDAs review of a study
protocol does not necessarily mean that, if the study is successful, it will
constitute proof of efficacy or safety. Further, each clinical trial must be
conducted under the auspices of an institutional review board (IRB), which
must be constituted and operated in conformance with FDA regulations. The IRB
considers, among other factors, ethical concerns and informed consent
requirements. The FDA or the IRB may require changes in a protocol both prior
to and after the commencement of a trial.

Clinical trials are typically conducted in three sequential phases, although in
certain cases, the phases may overlap. In Phase I trials (which constitute the
initial introduction of the pharmaceutical into human subjects) the
pharmaceutical is tested in healthy subjects, as opposed to patients, primarily
for safety (adverse effects), side effects, metabolism, clinical pharmacology
and optimal dosage. Phase II trials involve studies in a limited target
patient population to (a) further evaluate optimal dosage; (b) identify
possible adverse effects and safety risks; and (c) determine the efficacy of a
drug for a specific indication.

These can be further classified into Phase IIa trials, which study dose ranging
and schedule optimization from the perspective of efficacy, and Phase IIb
trials, which study (in parallel or individually) one dose and one schedule
(the frequency of dose administration) to determine length of therapy and
safety versus efficacy. When a product is found to have an acceptable safety
profile in Phase II evaluation, Phase III clinical trials are undertaken to
evaluate clinical efficacy and to further test for safety

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within an expanded target patient population at geographically dispersed
multiple clinical study sites. The FDA may order the temporary or permanent
discontinuation of a clinical trial at any time for any reason. There can be
no assurance that Phase I, Phase II or Phase III testing will be completed
successfully within any specified time period, if at all, with respect to any
of the Companys products.

New Drug Application and Approval

Upon completion of clinical trials, the results of the pre-clinical studies and
the human clinical trials are submitted to the FDA in an NDA, approval of which
must be obtained prior to commencement of commercial sales. The NDA also
includes information pertaining to the preparation of drug substances,
analytical methods, drug product formulation, details of the manufacture of
finished product and proposed product packaging and labeling. The interval
between the filing of the IND and the filing of an NDA application can be
lengthy. In general, the FDA requires at least two properly conducted and
well-controlled Phase III clinical trials demonstrating efficacy. The FDA may
deny an NDA if, among other reasons, clinical trial protocols are not adequate
or appropriate. The FDA also may deny an NDA or require additional testing or
information to assess the safety of the product if the FDA does not view the
NDA as containing adequate evidence of the products safety and efficacy.
Notwithstanding the submission of such data, the FDA may ultimately decide that
the application does not satisfy its regulatory criteria for approval, and,
even if the NDA is approved, the product may be required to undergo
post-licensure testing and surveillance to continue to monitor its safety and
effectiveness (Phase IV studies).

Post-Marketing Approval Requirements

Once an NDA has been approved, the NDA applicant remains subject to
post-marketing requirements. These include manufacturing, record keeping, and
reporting obligations. For instance, any adverse experiences relating to the
use of the product must be reported to the FDA. Failure to comply with the
FDAs post-marketing obligations can result in the FDAs withdrawal of
approval, civil seizures, injunctions, and/or civil or criminal penalties.

In the US, in addition to patent protection, drug products containing new
chemical entities (pioneer drugs) approved through the NDA process may be
subject to periods of marketing exclusivity. After the applicable patents and
periods of exclusivity expire, however, those pioneer drugs are subject to
competition from generic versions (duplicate or related versions) of
themselves. The FDA may approve an abbreviated NDA for the marketing of a
generic drug (i.e., a duplicated or related version of an approved pioneer
drug) that has been shown to be as safe and effective as a pioneer drug whose
patents have expired, without requiring the submission of full reports of
safety and effectiveness.

Manufacturing Regulations

The FDA mandates that drugs be manufactured in conformity with cGMP
regulations. In complying with cGMP regulations, manufacturers must continue
to expend time, money and effort in production, record keeping and quality
control to ensure that the product meets applicable specifications and other
requirements. The FDA periodically inspects manufacturing facilities to ensure
compliance with applicable cGMP requirements. Failure to comply subjects the
manufacturer to possible FDA action, such as suspension of manufacturing,
seizure of the product, voluntary recall of a product, fines, injunctions,
failure to approve a product, or withdrawal of approval of a product. All
products sold in the US are produced by a contract formulator and

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packer who has informed the Company that its facilities are certified by the
FDA as being in accordance with cGMP.

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Organizational Structure

Corporate Structure

Novogen Limited is a company limited by shares and is incorporated and
domiciled in Australia. Novogen Limited has prepared a consolidated financial
report incorporating the entities that it controlled during the financial year,
which included the following entities:

|                                 |  |               |  |           |      |  |  | 
|-------------------------------- |  | ------------- |  | --------- | ---- |  |  | 
|Name of Entity                   |  | Country of    |  | Ownership
|                                 |  | Incorporation |  | %        
|Novogen Laboratories Pty Ltd     |  | Australia     |  |           | 100  | 
|Novogen Research Pty Ltd         |  | Australia     |  |           | 100  | 
|Central Coast Properties Pty Ltd |  | Australia     |  |           | 100  | 
|Phytosearch Pty Ltd              |  | Australia     |  |           | 100  | 
|Phytogen Pty Ltd                 |  | Australia     |  |           | 100  | 
|Novogen Inc                      |  | US            |  |           | 100  | 
|Novogen Limited                  |  | UK            |  |           | 100  | 
|Novogen New Zealand Limited      |  | New Zealand   |  |           | 100  | 
|Novogen Canada Limited           |  | Canada        |  |           | 100  | 
|Novogen BV                       |  | Netherlands   |  |           | 100  | 
|Glycotex Inc                     |  | US            |  |           | 100  | 
|Marshall Edwards Inc             |  | US            |  |           | 95.2 | 
|Marshall Edwards Pty Limited     |  | Australia     |  |           | 95.2 | 

Property, Plants and Equipment

The Companys major isoflavone extraction manufacturing plants are located in
Wyong in NSW. This plant is used to manufacture the active raw material used in
the Companys three dietary supplement products, Promensil, Trinovin and
Rimostil.

The Company owns the land and buildings at Wyong and the site covers an area of
approximately 3.37 hectares. The equipment used in the extraction process is
under lease and has an amortized lease value of A$5,633 million. The
manufacturing capacity is adequate to produce the forecast isoflavone extract
requirements for at least the next two years.

The pilot plant used for the manufacture of the phenoxodiol clinical trial
material is located in leased premises at North Ryde in Sydney. These premises
are also used as Novogens corporate head office. The equipment used in the
pilot plant production is also leased.

The Company has provided mortgages over the freehold land and buildings as
security over the leasing facilities. The terms of the mortgages preclude the
assets being sold or being used as further security without the permission of
the mortgage holder.

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Assets under lease are also pledged as security for the lease liability. The
book value of assets pledged as security at June 30, 2002 was A$6.578 million.

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Item 5. Operating and Financial Review and Prospects

Critical Accounting Policies

Our summary of significant accounting policies are described in Note 1 to the
Consolidated Financial Statements under Item 18 of this Annual Report.

We believe that the most critical accounting policy relates to revenue
recognition. We recognize revenue from product sales when goods have been
dispatched to a customer pursuant to a sales order and invoice and the
associated risks have passed to the customer. We maintain an accounts
receivable allowance for an estimated amount of losses that may result from the
customers inability to pay for the product purchased. If the financial
condition of our customers were to deteriorate resulting in an impairment of
their ability to make payments, additional allowances may be required.

Operating Results  Fiscal 2002 v Fiscal 2001

Revenue

The Companys Total Revenue decreased by A$5.7 million or 24% to A$24.3 million
in fiscal 2002 from A$30.2 in fiscal 2001 primarily as a result of a decrease
in sales of the Companys consumer health products in the US and Australia. The
Companys sales of consumer health products decreased A$7.1 million or 27% to
19.6 million in fiscal 2002 from A$26.7 million in fiscal 2001, which
management believes is primarily attributable to the decrease in advertising
and promotional spending in the major markets, discussed below in Operating
Expenses, competition and the general slowdown in economic activity in the US.

Sales of consumer health products in the US in fiscal 2002 were down 39% from
fiscal 2001. Sales of consumer health products in Australia in fiscal 2002 were
down 15% from fiscal 2001. These decreases were partially offset by increases
in sales in consumer health products in Europe and Canada of 12% and 15%
respectively, which management believes is primarily attributable to
maintaining product promotional spending in these newer markets.

As sales revenues are denominated in Australian dollars, the Companys sales
revenue is affected by fluctuations in the value of the Australian dollar
relative to the currencies of other countries in which the Company sells its
products, primarily the US dollar and the UK pound. In fiscal 2002, the value
of the Australian dollar increased in value relative to the US dollar (see
Item 3. Key Information  Selected Financial Data  Exchange Rates). In
fiscal 2002, the value of the Australian dollar also decreased relative to the
UK pound. In 2002, the net effect of fluctuations in currency values on the
Companys reported sales revenue was less than 1%.

Other Revenue

Other Revenue includes revenue received from non-operating activities, such as
interest received on Company loans made to persons and corporations, research
grants received from the Australian government, royalties received under the

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Companys license agreement with PTI and proceeds from the sale of Company
assets. The Companys other revenue increased A$1.1 million or 32% from A$3.6
million in fiscal 2001 to A$4.7 million in fiscal 2002, primarily as a result
of A$1.9 million in royalties received from PTI pursuant to a license agreement
between the Company and PTI. See Item 4. Information on the Company- Business
Overview  License Agreements below. In fiscal 2002 the Companys Other
Revenue amounted to 19.4% of the Companys Total Revenue, which is an increase
from fiscal 2001 where Other Revenue amounted to 12.8% of the Companys Total
Revenue.

Costs and Expenses

The Companys Costs and Expenses is comprised of Cost of Goods Sold, Research
and Development, Selling and Promotions, and General and Administrative
Expenses. The Companys Total Costs and Expenses decreased A$13.0 million, or
33% in fiscal 2002 to A$38.6 million from A$51.7 million in fiscal 2001,
primarily due to the decrease in the Companys Selling and Promotions Expenses.
The Companys Selling and Promotions Expenses decreased A$9.4 million, or 38%
in fiscal 2002 to A$15.2 million from A$24.6 million in fiscal 2001, primarily
as a result of the Companys efforts to conserve cash resources. Of this A$9.4
million decrease in Selling and Promotions Expenses, A$8.2 million represents a
decrease in spending on advertising and promotions. Cost of goods sold
increased as a percentage to sales from 32% in fiscal 2001 to 39% in fiscal
2002 due to the smaller production volumes being produced inline with the
reduction in sales demand. The provision for the diminution in inventory value
increased in fiscal 2002 by A$0.8 million to A$1.7 million due to lower
isoflavone levels in some of the varieties of stored red clover raw materials
which may be uneconomic to process through the production plant.

During 2002, the Company closed its New Zealand production facilities and
transferred production to its Wyong plant. Although the majority of the New
Zealand property, plant and equipment has been transferred to the Wyong
facility A$0.486 million relating to property plant and equipment was written
off during the current year.

General and Administrative Expenses decreased by A$2.0 million or 22% in fiscal
2002 to A$7.4 million from A$9.4 million in fiscal 2001, primarily due to the
absence of the non-recurring expenses of A$2.1 million incurred in fiscal 2001
associated with the unsuccessful capital raising by MEI and the Clarkel Pty
Limited settlement costs.

Net Loss

The Companys Net Loss decreased by A$7.1 million, or 48%,in fiscal 2002 to
A$14.7 million from A$21.8 million in fiscal 2001, as a result of the Companys
strategy of conserving cash by cutting expenses, primarily advertising and
promotion expenses.

Operating Results  Fiscal 2001 v Fiscal 2000

Revenue

The Companys Total Revenue increased by A$3.5 million or 13% to $30.3 million
in fiscal 2001 from A$26.7 million in fiscal 2000. The increase was primarily
as a result of increased sales volumes of the Companys consumer health
products. The Companys sales of consumer health products increased by A$3.3
million or 14% to A$26.7 million in fiscal 2001 from A$23.4 million in fiscal
2000. Management believes

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that the increase was due primarily to continued marketing efforts particularly
in North America and Europe.

Sales of consumer health products in fiscal 2001 in the US were up 32% from
fiscal 2002. Sales of consumer health products in the UK and the Netherlands in
fiscal 2001 were up 22% and 40% respectively from fiscal 2000. Sales in
consumer health products in Australia decreased by 35% in fiscal 2001 from
fiscal 2000, due to adverse publicity regarding advertising claims and
increased market competition from new product entries.

As sales revenue is denominated in Australian dollars, the Companys sales
revenue is affected by fluctuations in the value of the Australian dollar
relative to the currencies of the countries in which the Company sells its
products, primarily the US dollar and the UK pound. In fiscal 2001 the value of
the Australian dollar decreased in value relative to the US dollar and UK
pound. In fiscal 2001 the net effect of fluctuations in currency values on the
Companys reported sales revenue was a decrease of 10%.

Costs and Expenses

The Companys Costs and Expenses is comprised of Cost of Sales, Research and
Development, Selling and Promotions, Shipping and Handling and General and
Administrative expenses.

The Companys Total Costs and Expenses increased by A$11.6 million or 29% in
fiscal 2001 to A$51.6 million from A$40.0 million in fiscal 2000, primarily due
to increases in Research and Development, Selling and Promotions and General
and Administrative expenses.

The Companys Research and Development expenses increases A$3.8 million or 80%
to A$8.4 million in fiscal 2001 from A$4.6 million in fiscal 2000. This
increase reflects the increased costs associated with the clinical trial
program for the Companys anti-cancer drug candidate phenoxodiol and increased
spending on the consumer heath products and the other drug candidate programs.

The Companys Selling and Promotions expenses increased by A$3.2 million or 15%
to A$24.6 million in fiscal 2001 from A$21.4 million in fiscal 2000, primarily
due the media advertising campaigns in Australia and the US.

General and Administrative costs increased by A$3.2 million or 50% to A$9.2
million in fiscal 2001 from A$6.3 million in fiscal 2000, primarily due to the
non-recurring costs associated with the unsuccessful capital raising for MEI of
A$1.3 million and the costs of A$0.8 million associated with the action by
Clarkel Holdings Pty Limited being dismissed by the court after a release
agreement settled the dispute.

Net Loss

The Companys Net Loss increased by A$8.1 million or 59% to A$21.8 million in
fiscal 2001 from A$13.7 million in fiscal 2000, as a result of the increased
expenses in Research and Development, Selling and Promotions and the
non-recurring General and Administrative expenses.

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Liquidity and cash resources

The Company has continued to finance its operations from equity capital and
cash flow from the over-the-counter dietary supplements business.

At the end of fiscal 2002 the Company had cash resources of A$39.9 million
versus A$31.1 million at the end of fiscal 2001.

During May 2002, MEI raised US$10.1 million in an initial private placement
from European, American and Australian investors and institutions and listed
its shares on AIM. Novogen now owns 95.2% of MEI.

The Company invests its cash and cash equivalents in interest bearing
facilities with various maturity dates. At the end of fiscal 2002, deposits
amounting to A$22.3 million had a weighted average interest rate of 4.79% and
cash deposits of A$17.7 million had a weighted average interest rate of 1.8%.

At the end of fiscal 2002, the Company had outstanding interest bearing
liabilities in the form of lease liabilities of A$3.1 million. These leases
have an average lease term of 4 years. The average interest rate implicit in
the leases is 8.39% (2001:8.22%).

The Company has arranged finance lease facilities of A$4.0 million of which,
A$0.3 million was unused at the end of fiscal 2002.

The Company does not hedge its foreign exchange exposures, however, the Company
continues to minimise foreign exchange risk by decentralising sales and
marketing expenses being denominated in local currencies. See
Item 11. Quantitative and Qualitative Disclosures About Market Risk  Foreign Currency
Risk.

During fiscal 2002 the Company had net cash outflows from operating activities
of A$6.7 million. Included in this amount are cash receipts of A$1.1 million
interest received from investing cash balances, A$1.2 million from the proceeds
of Government grants being primarily the START Grants for research and
development and A$1.9 million royalty received from PTI pursuant to a license
agreement between the Company and PTI. See Item 4. Information on the Company-
Business Overview  License Agreements.

It is the opinion of the Company that the current level of working capital is
sufficient to meet present requirements. However, working capital requirements
may change as phenoxodiol (NV-06) moves through the clinical trial program, and
the Company may need to raise additional funds in order to complete the
clinical program.

Research and Development

Major advances were made during the year on the Companys clinical development
program with phenoxodiol (NV-06), NV-07α and NV-04 all in human clinical
trials. Currently, eight human clinical trials are underway: five for
phenoxodiol (NV-06); two for NV-07α and one for NV-04.

The Companys lead anti-cancer drug candidate phenoxodiol (NV-06) continued its
clinical development program, commencing two new human clinical trials. The
trials include a Phase Ib/IIa trial at the Royal North Shore Hospital in Sydney
in patients

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with leukemia and a Phase Ib/IIa study at Monash Medical Centre in Melbourne,
an oral dose form trial in prostate cancer patients.

Phenoxodiol (NV-06) is now being tested in five human clinical trials. During
the year, interim results of two of the trials were announced including the
results of the Phase I study conducted at the Cancer Care Centre at the St
George Hospital which demonstrated that phenoxodiol (NV-06) was well tolerated
in the seventeen patients who were treated in the escalating dose study. Three
of those patients showed stabilisation of their cancers. Additionally, interim
results were presented from the Cleveland Cancer Clinic study showing that
phenoxodiol (NV-06) had stabilised cancer progression without any significant
side effects in six out of the first ten patients recruited for the trial.

During the year, Novogen announced that its skin repair drug candidate, NV-07α,
had commenced human clinical trials at the Queensland Institute for Medical
Research.

NV-07α is being developed for the repair of sun damaged skin and the clinical
trial has been designed to determine its role in correcting acute sun damage as
well as preventing the induction of skin cancer. Also, in June 2002 Novogen
announced that a second human clinical trial of NV-07α will be conducted at the
Royal Prince Alfred Hospital in Sydney. The RPAH trial has been designed to
determine the extent to which NV-07α is able to reverse the damaging effects of
excessive sun exposure on the skin.

The third pharmaceutical compound, NV-04, Novogens cardiovascular drug
candidate, also commenced a Phase I human clinical trial at the Baker Medical
Research Institute in Melbourne. The objective of the trial is to evaluate the
safety and tolerability of NV-04 and determine its effect on widening of blood
vessels (dilation) which is a mechanism of enhancing blood flow and reducing
blood pressure. This trial on healthy subjects is designed to confirm
favourable results obtained in animals which improved dilation of blood
vessels.

The Company also announced a number of clinical advances in the
over-the-counter dietary supplement area including the results of trials which
show that Promensil significantly reduces womens blood cholesterol and that
Promensil reduced the amount of breast pain associated with menstruation.
Also, a double blind placebo-controlled study conducted at the Free University
in Amsterdam showed a statistically significant reduction in hot flushes in
women with acute menopausal symptoms.

Advances were made in the mens health area where clinical trial data presented
at the World Congress on the Aging Male in Berlin revealed that Trinovin caused
early stage prostate cancer cells to die in numbers that were five times
greater than the untreated control group.

The Company decreased its gross R&D expenditure during fiscal 2002 to A$7.9
million from A$8.4 million in fiscal 2001.

Due to the nature and uncertainty of the R&D projects being undertaken by the
Company, it is not possible to reasonably estimate the cost and timing of
project completion. The R&D projects are not costed on a project by project
basis and to analyse costs between projects could only be performed on an
arbitrary and subjective basis.

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The progress on research and development projects and expenses is monitored and
controlled in a number of ways.

All third party research and development including the conduct of clinical
trials are carried out under contract. The contract details include project
milestones and expenditure budgets. Senior Novogen research and development
staff monitor the projects to ensure that milestones are achieved in a timely
manner.

In house research and development is managed by the Research and Development
Director and senior research and development staff. Budgets are prepared
annually and agreed by the Novogen Board. Expenses are monitored monthly,
actual versus budget by expense line and in total.

Trend Information

The Company has sufficient funds as a result of the May 2002 listing of its
subsidiary company MEI and the associated share placement. These funds will
enable the current business plan to be implemented. MEI however may need to
raise additional funds in the future to complete phenoxodiols (NV-06) clinical
development. The amount and timing of the funds is dependent on the outcome of
the trials that are currently underway. Management believes that future fund
raising through the equity markets may become more difficult as a result of the
recent economic conditions in the major markets including the US, Europe and
Australia which have been the traditional sources of equity finance for the
Company. See Item 3. Key Information  Risk Factors.

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Item 6. Directors, Senior Management and Employees.

The names of the Companys Directors during the fiscal year and up to the date
of this report are as follows:

Mr P A Johnston (Non-executive Chairman)
Mr C Naughton (Managing Director)
Dr G E Kelly (Executive Director)
Mr P B Simpson
Mr P C Bradfield (retired October 26, 2001)
Prof P J Nestel (appointed September 1, 2001)

All Directors were in office from the beginning of the financial year until the
date of this report, unless otherwise stated.

Information on Directors

Philip A JohnstonNon-Executive Chairman
Dip Eng (Production)

Non-Executive Director since 1997, Mr Johnston was elected chairman of the
Company with effect from January 1, 2001. Mr Johnston has extensive experience
in the pharmaceutical industry including 9 years as an Executive Director of
Wellcome Australia Limited. He was previously a Director of two subsidiary
Companies of GlaxoWellcome. He has had responsibility for production,
distribution, quality assurance and consumer product development and has been
directly involved in the establishment of strategic alliances and joint
ventures. He has completed a number of executive development programs
including the University of NSW and the London Business School.

Christopher NaughtonManaging Director
BEc, LLB

Managing Director since March 1997, Mr Naughton joined Novogen in 1996 as
Commercial Director. Mr Naughton has degrees in Economics from the Australian
National University and in Law from the University of New South Wales. He has
completed the Program for Management Development at the Harvard Business
School, and is an Attorney in New South Wales. After working in merchant
banking, he has spent the last 17 years in the pharmaceutical industry,
including appointments as a Director of Wellcome Australia Limited and in
worldwide business development with The Wellcome Foundation Limited in the UK.

Dr Graham E. KellyExecutive Director
BSc(Vet), BVSc, PhD

Executive Director since 1994, Dr Kelly is founder and was the first Managing
Director of Novogen Limited. Dr Kelly was Chairman of the Company until
December 31, 2000, a position he had held since March 1997. He is also Chairman
of subsidiary company Marshall Edwards Inc. Dr Kelly has spent nearly 30 years
in medical research involving drug development, immunology, surgery and cancer.
Dr Kelly was Senior Research Fellow in Experimental Surgery in the Faculty of
Medicine at the University of Sydney. He developed the ß-1, 3-Glucan and
Isoflavonoid compounds now owned by the Company.

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Peter B SimpsonNon-Executive Director
MPharm, PhC, MPS

Non-Executive Director since 1994, Mr Simpson has extensive experience in the
development of pharmaceutical products for international markets. He was
Research and Development Manager with David Bull Laboratories for 8 years prior
to being appointed Chief Executive Officer of Biota Holdings Limited in 1987.
At Biota he oversaw the research and development of a potential cure for
influenza and the licensing of that discovery to Glaxo Limited. He is also a
Director of Norwood Abby Ltd, and a Director of Australian Vaccine Technology.

Peter C BradfieldNon-Executive Director
FAPI, FREI

Non-Executive Director since 1994, Mr Bradfield is a Fellow of the Australian
Property Institute. He has had wide experience in administration and marketing
and was formerly co-founder and co-author of the Norths Property Trust Review.
Mr Bradfield was co-founder and Managing Director of Property Equities Limited.
He has had international experience in investment strategy and is presently
involved in investing capital and resources in developing new businesses. Peter
Bradfield retired from the Board in October 2001.

Professor Paul J NestelNon-Executive Director
AO MD, FTSE, FRACP, FAHA.

Professor Nestel is currently a non-executive Director of Novogen and Senior
Principal Research Fellow and Head of the Cardiovascular Nutrition Laboratory
at the Baker Medical Research Institute, Victoria. Professor Nestel is also a
Consultant Physician at the Alfred Hospital, Melbourne; and Chair, University
of Wollongong Advisory Board, Centre of Excellence. He was formally Clinical
Professor in Medicine, The Flinders University of South Australia. Professor
Nestel has been and remains a member of many national and international
committees research and policy on cardiovascular disease. He has published over
370 scientific and medical papers and he is a Fellow of the Australian Academy
of Technological Sciences and Engineering and Fellow of the American Heart
Association. Professor Nestel is an Officer of the Order of Australia.

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Executive Officers profiles

Alan James Husband  Research Director
BScAgr, PhD, DSc, FASM

Professor Husband is recognized internationally for his research in the areas
of immunology and pathology in veterinary and medical sciences. Professor
Husband has published several books and over 200 scientific articles and is a
member of the editorial boards of several international scientific journals.
Professor Husband has been with the Company since October 1996.

Warren Lancaster  Vice President North America
BSc, MBA

A graduate in physics as well as holding an MBA from the Australian Graduate
School of Management (Sydney), Mr. Lancaster worked as a business strategy and
management consultant with an Australian consulting firm before joining the
Company in March 1997, specifically to assume the role of Vice President- North
America.

Ronald Lea Erratt  Company Secretary
FNIA

Mr Erratt is a qualified accountant. Prior to joining the Company in September
1994, he was Director, Superannuation Fund Administration at Towers Perrin and
held various management positions at CSR Ltd.

David Ross Seaton  Chief Financial Officer
B Bus KCAE, M Com UNSW, CPA

Mr Seaton is a graduate in Business Studies as well as holding a Master of
Commerce degree from the University of NSW. He has completed Management
Development programs at Northwestern University in Chicago as well as at Duke
University and the London Business School. He has had 16 years experience in
the pharmaceutical industry and prior to joining Novogen in 1999 was the
Finance Director of GlaxoWellcome Australia Ltd. Mr Seaton was also Finance
Director of Wellcome Australia Limited prior to its merger with Glaxo in 1995.

Bryan Palmer  Operations General Manager

Mr Palmer joined Novogen in 1993. Since that time he has held a number of
senior management positions within the company. He completed the Program for
Management Development at the Harvard Business School in 2001.

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Compensation

The Remuneration & Corporate Governance Committee of the Board of Directors is
responsible for determining and reviewing compensation arrangements for the
Directors, the Managing Director and the executive team. The Remuneration
Committee assesses the appropriateness of the nature and amount of emoluments
of such officers on a periodic basis by reference to relevant employment market
conditions with the overall objective of ensuring maximum stakeholder benefit
from the retention of a high quality Board and executive team. Such officers
are given the opportunity to receive their base emolument in a variety of forms
including cash and fringe benefits such as the use of motor vehicles. It is
intended that the manner of payment chosen will be optimal for the recipient
without creating undue cost for the Company.

Details of the nature and amount of each element of the emolument of each
Director of Novogen Limited and the five Executive Officers included in the
Companys senior management are as follows:

Compensation of Directors of Novogen Limited July 1, 2001  June 30, 2002

|             |  |                   |         |                      |  |       |        |             |  |           |        |          |  |        |   |  |  |  |        |  |  |  |         |  |  |  |   | 
|------------ |  | ----------------- | ------- | -------------------- |  | ----- | ------ | ----------- |  | --------- | ------ | -------- |  | ------ | - |  |  |  | ------ |  |  |  | ------- |  |  |  | - | 
|             |  | Annual Emoluments |         | Long term Emoluments |  | Total |        | Options    
|             |  |                   |         |                      |  |       |        | Granted    
|             |  | Base Fee          |         | Committee            |  | Other |        | Termination |  | Super-    |        |          |  |        |   | 
|             |  |                   |         | Fee                  |  |       |        | & Similar   |  | annuation |        |          |  |        |   | 
|             |  |                   |         |                      |  |       |        |             |  |           |        | Payments |  |        |   |  |  |  |        | 
|             |  | $                 |         | $                    |  | $     |        | $           |  | $         |        | $        |  | Number
|             |  |                   |         |                      |  |       |        |             |  |           |        |          |  |       
|PA Johnston  |  |                   | 57,577  |                      |  |       | 16,000 |             |  |           |       |          |  |        |  |  |  |  | 5,630  |  |  |  | 79,207  |  |  |  |  | 
|C Naughton   |  |                   | 382,804 |                      |  |       |       |             |  |           | 39,983 |          |  |        |  |  |  |  | 28,794 |  |  |  | 451,581 |  |  |  |  | 
|GE Kelly     |  |                   | 270,409 |                      |  |       |       |             |  |           | 31,522 |          |  |        |  |  |  |  | 19,599 |  |  |  | 321,530 |  |  |  |  | 
|PB Simpson   |  |                   | 26,740  |                      |  |       | 14,000 |             |  |           |       |          |  |        |  |  |  |  | 3,260  |  |  |  | 44,000  |  |  |  |  | 
|PC Bradfield |  |                   | 8,963   |                      |  |       | 4,000  |             |  |           |       |          |  |        |  |  |  |  | 1,037  |  |  |  | 14,000  |  |  |  |  | 
|PJ Nestel    |  |                   | 26,205  |                      |  |       | 12,000 |             |  |           |       |          |  |        |  |  |  |  |       |  |  |  | 38,205  |  |  |  |  | 
|             |  |                   |         |                      |  |       |        |             |  |           |        |          |  |        |   |  |  |  |        |  |  |  |         |  |  |  |   | 
|             |  |                   | 772,698 |                      |  |       | 46,000 |             |  |           | 71,505 |          |  |        |  |  |  |  | 58,320 |  |  |  | 948,523 |  |  |  |  | 
|             |  |                   |         |                      |  |       |        |             |  |           |        |          |  |        |   |  |  |  |        |  |  |  |         |  |  |  |   | 

Novogens Constitution provides that the directors who are not executive
officers shall be paid an ordinary remuneration which may not exceed the
maximum amount fixed by the shareholders of the Company in general meetings
from time to time. Directors fees are higher for the role of Company Chairman.

No Director has received or become entitled to receive, during or since the end
of the fiscal year, a benefit because of a contract made by Novogen Limited, a
controlled entity, or a related body corporate with a Director, a firm of which
a Director is a member or an entity in which a Director has a substantial
financial interest.

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Compensation of the Executive Officers of the Company and the consolidated
entity July 1, 2001  June 30, 2002.

|                   |  |                   |         |                      |           |             |           |         |  |          |   |        |  |  |        |  |  |  |           |  |  |  |         | 
|------------------ |  | ----------------- | ------- | -------------------- | --------- | ----------- | --------- | ------- |  | -------- | - | ------ |  |  | ------ |  |  |  | --------- |  |  |  | ------- | 
|                   |  | Annual Emoluments |         | Long term Emoluments |           | Total       |           | Options
|                   |  |                   |         |                      |           |             |           | Granted
|                   |  | Base Fee          |         | Other                |           | Termination |           | Super-  |  |          |   |        |  | 
|                   |  |                   |         |                      | & Similar |             | annuation |         |  |          |   |        | 
|                   |  |                   |         |                      |           |             |           |         |  | Payments |   |        |  |  |        |  |  |  |           | 
|                   |  | $                 |         | $                    |           | $           |           | $       |  | $        |   | Number
|                   |  |                   |         |                      |           |             |           |         |  |          |   |       
|WJ Lancaster (USA) |  |                   | 248,818 |                      |           |             | 7,351     |         |  |          |  |        |  |  | 20,699 |  |  |  | 276,868   |  |  |  | 28,548  | 
|AJ Husband         |  |                   | 213,646 |                      |           |             | 28,111    |         |  |          |  |        |  |  | 15,276 |  |  |  | 257,033   |  |  |  | 41,772  | 
|DR Seaton          |  |                   | 212,545 |                      |           |             | 20,085    |         |  |          |  |        |  |  | 15,714 |  |  |  | 248,344   |  |  |  | 42,284  | 
|RL Erratt          |  |                   | 143,160 |                      |           |             | 16,617    |         |  |          |  |        |  |  | 10,384 |  |  |  | 170,161   |  |  |  | 30,012  | 
|BM Palmer          |  |                   | 139,053 |                      |           |             | 12,742    |         |  |          |  |        |  |  | 9,477  |  |  |  | 161,272   |  |  |  | 23,436  | 
|                   |  |                   |         |                      |           |             |           |         |  |          |   |        |  |  |        |  |  |  |           |  |  |  |         | 
|                   |  |                   | 957,222 |                      |           |             | 84,906    |         |  |          |  |        |  |  | 71,550 |  |  |  | 1,113,678 |  |  |  | 166,052 | 
|                   |  |                   |         |                      |           |             |           |         |  |          |   |        |  |  |        |  |  |  |           |  |  |  |         | 

The terms Director and Officer have been treated as mutually exclusive for
the purposes of this disclosure. Executive Officers are those directly
accountable and responsible for the operational management and strategic
direction of the Company.

Arrangements and Relationships

There are no arrangements (other than standard employment remuneration
arrangements) by which any Director or Executive Officer was appointed to his
position. There are no family relationships between any of the Directors or
Executive Officers.

Pension Benefits

The Company has paid A$325,000 during fiscal 2002 for employee superannuation
benefits and pension benefits.

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Board Practices

Novogen Board of Directors

|             |  |                    |  |            |      |              |  |             
|------------ |  | ------------------ |  | ---------- | ---- | ------------ |  | ------------
|Name         |  | Postion Held       |  | Year First |      | Current Term
|             |  |                    |  | Appointed  |      | Expires     
|             |  |                    |  |            |      |             
|P A Johnston |  | Chairman           |  |            | 1997 |              |  | October-2003
|C Naughton   |  | Managing Director  |  |            | 1997 |              |  |            
|G E Kelly    |  | Executive Director |  |            | 1994 |              |  | October-2005
|P B Simpson  |  | Director           |  |            | 1994 |              |  | October-2004
|P J Nestel   |  | Director           |  |            | 2001 |              |  | October-2003

Term of Directors

The Board has the power to appoint any person to be a director either to fill a
casual vacancy or as an additional director (up to a maximum of 10). Any
director so appointed may hold office only until the next annual general
meeting when he or she shall be eligible for election. The term for each
director (excluding the Managing Director) is three years at which time that
director retires from office and offers himself/herself for re-election at the
next annual general meeting. Under Australian law, directors who have reached
the age of 72 must stand for re-election annually. The term of office of the
directors of Novogen are staggered, such that in any given year at least
one-third (or the nearest lower whole number) of the directors (excluding the
Managing Director) must retire and stand for re-election at each years annual
general meeting.

The Managing Directors appointment as a director of the Company is not subject
to the rotation provisions of Novogens Constitution. In accordance with the
terms of his employment contract, Mr Naughtons term as Managing Director
continues until terminated upon six months prior notice. Mr Naughton would also
cease to be managing director if he ceased to be eligible to be a director of a
company under the relevant provisions of the Australian Corporations Law.

Board of Directors

The Novogen Limited Board of Directors is elected by and accountable to
shareholders. It monitors and directs the business and is responsible for the
corporate governance of the Company. Responsibility for managing the
development of the Company consistent with the objective of enhancing long term
shareholder value is with the Managing Director, who is accountable to the
Board.

The Board comprises five Directors of whom three are non-executive Directors.
The two executive Directors are the Managing Director, Mr Christopher Naughton
and Dr Graham Kelly. In addition the Board has established the following
Committees  Audit, Corporate Governance and Remuneration, and Capital Projects
Committees.

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There is also the International Scientific Advisory Board whose membership
includes the Executive Directors and which advises the Board on clinical and
scientific strategy and direction.

Audit Committee

It is the Boards responsibility to ensure that an effective internal control
framework exists within the Company. This includes internal controls to deal
with both the effectiveness and efficiency of significant business processes.
This includes the safeguarding of assets, the maintenance of proper accounting
records and the reliability of financial information. The Board has delegated
the responsibility for the establishment and maintenance of a framework of
internal control and ethical standards for the management of the Company to the
Audit Committee.

The Audit Committee discusses and reviews any issues arising from external
audits and reviews. It is charged with assessing the adequacy of the Companys
financial and operating controls. It also reviews compliance with legal
requirements affecting the Company and matters affecting corporate governance
practices. The committee comprises Philip Johnston (Chairman), Paul Nestel and
Peter Simpson.

Corporate Governance and Remuneration Committee

The Corporate Governance and Remuneration Committee has been formed in order to
review the controls at the business group level that safeguard the shareholders
and Companys interests and ensures its integrity. It also reviews the
remuneration of the Executive Directors by reference to independent data,
external professional advice and the requirements to retain high calibre
management. The committee comprises Peter Simpson (Chairman), Paul Nestel and
Philip Johnston.

Capital Projects Committee

The Capital Projects committee reviews capital investment proposals, assesses
the project tenders and reviews progress against timetables and cost estimates.
The committee comprises Philip Johnston (Chairman), Peter Simpson, Paul Nestel
and Christopher Naughton.

Executive Directors Employment Contracts

Each of Dr. Graham Kelly and Mr. Christopher Naughton have entered into
employment agreements with the Company.

The agreements, each dated April 26, 2000, are similar in terms, other than as
to the description of the position held (Executive Director in the case of Dr.
Graham Kelly and Managing Director in the case of Mr. Christopher Naughton),
the responsibilities attached to that position and remuneration.

Each agreement provides for an initial term of appointment of three years.
After the expiration of the term either party may give to the other not less
than six months notice of termination.

The agreements may be terminated by the Company immediately in the event of
matters such as serious breach of faith, serious neglect or default of duties,
fundamental breach of agreement, or commission of criminal offence or
dishonesty.

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The agreements are terminated automatically on the death or total or permanent
disability of the employee.

The employment agreements require that the employee must carry out his
employment in the manner and at the time that the Company reasonably
determines. He must comply with and carry out the proper and reasonable
directions, orders and instructions of, and is directly responsible to, the
Board.

There are provisions in each agreement as to annual leave, sick leave and long
service leave.

Provisions dealing with confidentiality and the obligation to assist the
Company in securing the Companys ownership of all intellectual property
developed by the employee are contained in the agreement. In addition, each
employee is restrained from competing with the Company during the term of the
agreement, with a non-solicitation limitation for a period of five years after
such term expires.

Under each agreement, the Company must indemnify the employee, within the
limits set in the Corporations Law and the Constitution of the Company, against
any liability: (a) incurred in connection with the performance of his position,
unless the liability arises out of conduct involving a lack of good faith; (b)
incurred in defending any proceedings in connection with the performance of his
duties, whether civil or criminal and in which judgment is given in his favor
or in which he is acquitted; or (c) in connection with any application in
relation to any proceedings in which relief under the Corporations Law is
granted.

The Company also agrees to pay insurance premiums for policies covering
liabilities incurred by the employee in connection with the performance of his
duties, excluding liabilities arising out of conduct involving a willful breach
of duty or a contravention of certain provisions of the Corporations Law
relating to an improper use of position or improper use of information acquired
by virtue of his position.

Employees

The Company employed 57 people at June 30, 2002 (June 30, 2001 : 58 people).

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Share Ownership

Directors holdings of shares and options in the Company

The table below shows the number of ordinary shares and options to purchase
ordinary shares held directly or indirectly by the Directors of the Company as
of November 1, 2002.

|             |  |              |           |   |  |         |     |             |  |        |  |             |  |  |         |  |  |  |      |  |  |              |   | 
|------------ |  | ------------ | --------- | - |  | ------- | --- | ----------- |  | ------ |  | ----------- |  |  | ------- |  |  |  | ---- |  |  | ------------ | - | 
|             |  | Ordinary     |           | % |  | Options
|             |  | Shares Fully |           |   |  |         |     |             |  | Number |  | Exercise    |  |  |         | 
|             |  | Paid         |           |   |  |         |     | Outstanding |  | Price  |  | Expiry Date
|G E Kelly    |  |              | 9,131,256 |   |  |         | 9.5 |             |  |        |  |             |  |  |        |  |  |  |     |  |  |              |  | 
|C Naughton   |  |              | 318,511   |   |  |         | 0.3 |             |  |        |  |             |  |  | 700,000 |  |  |  | 2.91 |  |  | Sep 24 2003 
|P A Johnston |  |              | 43,594    |   |  |         |    |             |  |        |  |             |  |  | 3,128   |  |  |  | 4.01 |  |  | Oct 27 2005 
|P B Simpson  |  |              | 500       |   |  |         |    |             |  |        |  |             |  |  | 3,128   |  |  |  | 4.01 |  |  | Oct 27 2005 
|P J Nestel   |  |              | 16,000    |   |  |         |    |             |  |        |  |             |  |  | 20,000  |  |  |  | 3.58 |  |  | July 20 2005

The named Executive Officers own shares in the Company, and have options issued
under the Novogen Limited Share Option Plan.

Employee Share Option Plan

The Employee Share Option Plan provides for the issue of options to eligible
employees being either an employee or Director of the Company or an associated
company. Each option entitles its holder to acquire one fully paid ordinary
share and is exercisable at a price equal to the average price of such shares
at the close of trading on the Australian Stock Exchange for the five days
prior to the date of issue. Options are not transferable. The option lapses
if the employee ceases to be an employee during the vesting period. There are
currently 42 employees eligible for this scheme.

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Item 7. Major Shareholders and Related Party Transactions

Major Shareholders

The names of the substantial shareholders disclosed to the Company are as
follows at June 30, 2002:

Bende Holdings Pty Ltd   holding 6,735,538 Ordinary Shares representing 7.06%
of the outstanding Ordinary Shares. Bende Holdings Pty Ltd is a company
controlled by G E Kelly.

Oppenheimer Funds Inc  holding 12,331,800 Ordinary Shares representing 12.9%
of the outstanding Ordinary Shares.

The substantial shareholders do not have any different voting rights than other
shareholders of the Company.

At November 1, 2002 there were 2,958,265 ADRs outstanding, representing
14,791,325 Ordinary Shares (or 15.5% of the then outstanding Ordinary Shares).
At November 1, 2002 there were 35 registered holders of Novogen ADRs.

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Item 8. Financial Information

Consolidated financial statements are included in Item 18  Financial
Statements on pages 58 through 108.

Export Sales

Export sales to third parties from Australia are not a significant portion of
total sales. The details of sales by geographic region are contained in Item 4.

Legal Proceedings

There are no pending legal proceedings which either individually or in the
aggregate, will have a significant effect on the Companys financial position
or profitability, nor have any such proceedings had any such effect in the
recent past.

Dividends

The Company has incurred losses since its inception and as a result has not
declared any dividends. Any dividends declared in the future will be paid in
Australian dollars.

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Item 9. Offer and Listing Details

Trading Markets

The principal listing of Novogen and quotation of its Ordinary Shares and
listed options to purchase Ordinary Shares is on the Australian Stock Exchange
(ASX). As of January 7, 1999, the Companys American Depositary Receipts
(ADRs) began trading on the NASDAQ Small Cap Market. On May 12, 2000 Novogen
achieved a NASDAQ national market listing for its ADRs. The trading symbol on
NASDAQ is NVGN. The trading symbol on ASX is NRT.

American Depositary Receipts

Novogens Ordinary Shares trade in the US in the form of ADRs. Novogen has
entered into a Deposit Agreement with the Bank of New York under which the Bank
of New York, acting as depositary, issues ADRs, each of which evidences an
American Depositary Share (ADS) which in turn represents five of the
Companys Ordinary Shares.

The following table sets forth, for the calendar periods indicated, the high
and low market quotations for Novogens Ordinary Shares, as quoted on the ASX,
and Novogens ADRs, as quoted on the NASDAQ.

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NOVOGEN LIMITED SHARE PRICE HISTORY

|               |  |                         |      |               |  |      |      |     |  |  |       |  |  |  |      | 
|-------------- |  | ----------------------- | ---- | ------------- |  | ---- | ---- | --- |  |  | ----- |  |  |  | ---- | 
|Period         |  | Per Ordinary Share (A$) |      | Per ADR (US$)
|Year Ended     |  | High                    |      | Low           |  | High |      | Low
|June 1998      |  |                         | 3.69 |               |  |      | 1.20 |     |  |  | 9.45  |  |  |  | 7.03 | 
|June 1999      |  |                         | 3.25 |               |  |      | 2.15 |     |  |  | 11.10 |  |  |  | 7.01 | 
|June 2000      |  |                         | 5.00 |               |  |      | 2.42 |     |  |  | 18.00 |  |  |  | 8.00 | 
|June 2001      |  |                         | 4.62 |               |  |      | 2.02 |     |  |  | 14.25 |  |  |  | 5.35 | 
|June 2002      |  |                         | 3.34 |               |  |      | 0.83 |     |  |  | 10.50 |  |  |  | 1.98 | 
|Quarter Ended  |  |                         |      |               |  |      |      |     |  |  |       |  |  |  |      | 
|September 2000 |  |                         | 4.62 |               |  |      | 3.57 |     |  |  | 14.25 |  |  |  | 9.65 | 
|December 2000  |  |                         | 4.19 |               |  |      | 2.86 |     |  |  | 11.63 |  |  |  | 7.75 | 
|March 2001     |  |                         | 3.90 |               |  |      | 2.65 |     |  |  | 12.00 |  |  |  | 6.88 | 
|June 2001      |  |                         | 2.97 |               |  |      | 2.02 |     |  |  | 10.50 |  |  |  | 5.35 | 
|September 2001 |  |                         | 2.31 |               |  |      | 0.83 |     |  |  | 4.95  |  |  |  | 3.35 | 
|December 2001  |  |                         | 3.21 |               |  |      | 1.03 |     |  |  | 8.42  |  |  |  | 2.50 | 
|March 2002     |  |                         | 3.16 |               |  |      | 2.42 |     |  |  | 8.45  |  |  |  | 6.50 | 
|June 2002      |  |                         | 3.34 |               |  |      | 1.80 |     |  |  | 9.37  |  |  |  | 4.25 | 
|September 2002 |  |                         | 2.18 |               |  |      | 1.18 |     |  |  | 6.34  |  |  |  | 4.25 | 
|Month Ended    |  |                         |      |               |  |      |      |     |  |  |       |  |  |  |      | 
|June 2002      |  |                         | 2.70 |               |  |      | 1.80 |     |  |  | 7.80  |  |  |  | 5.25 | 
|July 2002      |  |                         | 2.18 |               |  |      | 1.50 |     |  |  | 6.34  |  |  |  | 4.25 | 
|August 2002    |  |                         | 1.56 |               |  |      | 1.18 |     |  |  | 4.88  |  |  |  | 3.15 | 
|September 2002 |  |                         | 1.96 |               |  |      | 1.56 |     |  |  | 5.99  |  |  |  | 4.21 | 
|October 2002   |  |                         | 2.33 |               |  |      | 1.76 |     |  |  | 6.70  |  |  |  | 4.83 | 
|November 2002  |  |                         | 2.10 |               |  |      | 1.85 |     |  |  | 6.40  |  |  |  | 5.31 | 

50



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Item 10. Additional Information

Memorandum and Articles of Association

The Companys Memorandum and Articles of Association are incorporated by
reference to the Registration Statement on Form 20-F filed with the Securities
and Exchange Commission on December 24, 1998 (File No. 0-29962).

Material Contracts

There have been no material contracts entered into in the last two years by the
Company or any of its subsidiaries other than in the normal course of business.

Exchange Controls

Australia has largely abolished exchange controls on investment transactions.
The Australian dollar is freely convertible into US dollars. In addition,
there are currently no specific rules or limitations regarding the export from
Australia of profits, dividends, capital, or similar funds belonging to foreign
investors, except that certain payments to non-residents must be reported to
the Australian Cash Transaction Reports Agency, which monitors such
transactions.

Under Australian law, foreign persons are prohibited from acquiring more than a
limited percentage of the shares in an Australian company without approval from
the Australian Treasurer or in certain other limited circumstances. These
limitations are set forth in the Australian Foreign Acquisitions and Takeovers
Act (the Takeovers Act).

Under the Takeovers Act, as currently in effect, any foreign person, together
with associates, is prohibited from acquiring 15% or more of the outstanding
shares of Novogen (or else the Treasurer may make an order requiring the
acquirer to dispose of those shares within a specified period of time). In
addition, if a foreign person acquires shares in Novogen and as a result the
total holdings of all foreign persons and their associates exceeds 40% in
aggregate without the approval of the Australian Treasurer, then the Treasurer
may make an order requiring the acquirer to dispose of those shares within a
specified time. Under the current Australian foreign investment policy,
however, it is unlikely that the Treasurer would make such an order where the
level of foreign ownership exceeds 40% in the ordinary course of trading,
unless the Treasurer finds that the acquisition is contrary to the national
interest. The same rule applies if the total holdings of all foreign persons
and their associates already exceeds 40% and a foreign person (or its
associate) acquires any further shares, including in the course of trading in
the secondary market of the ADRs.

If the level of foreign ownership exceeds 40% at any time, Novogen would be
considered a foreign person under the Takeovers Act. In such event, Novogen
would be required to obtain the approval of the Treasurer for Novogen, together
with its associates, to acquire: (i) more than 15% of an Australian company or
business with assets totaling over A$5 million; or (ii) any direct or indirect
ownership interest in Australian residential real estate.

The percentage of foreign ownership of Novogen would also be included in
determining the foreign ownership of any Australian company or business in
which it may choose to invest. Since Novogen has no current plans for any such
acquisitions and the Company only owns commercial property, any such approvals
required to be

51



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##### 



obtained by Novogen as a foreign person under the Takeovers Act will not affect
Novogens current or future ownership or lease of property in Australia.

The Companys Constitution does not contain any additional limitations on a
non-residents right to hold or vote the Companys securities.

Australian law requires the transfer of shares in the Company to be made in
writing. No stamp duty will be payable in Australia on the transfer of ADRs
provided that any instrument by which the ADRs are transferred is executed
outside Australia.

Taxation

The following discussion is a summary of the Australian taxes generally
applicable to US holders of ADRs. For purposes of this discussion, US Holder
means a beneficial owner of ADRs who: (a) for US federal income tax purposes
is a US resident, a US citizen, a domestic corporation, a domestic partnership,
or a non-foreign estate or trust; and (b) does not own directly, indirectly or
constructively, 10% or more of the voting stock of the Company. Prospective
investors are urged to consult their own tax advisers regarding the US and
Australian tax consequences of owning and disposing of Ordinary Shares and
ADRs. Further, prospective investors who are residents of jurisdictions other
than the US should consult their tax advisers as to the tax consequences of
investing in the ADRs or shares under the laws of their jurisdictions of
residence.

The taxation discussion is intended only as a descriptive summary and does not
purport to be a complete technical analysis or listing of all potential tax
effects to US holders, and does not address the Australian taxes applicable to
special classes of US holders. Except as otherwise noted, the statements of
Australian tax laws set out below are based on the laws as of the date of this
Annual Report, including the bilateral taxation convention between Australia
and the US (the Treaty) and are subject to any changes in law occurring after
that date.

Distributions

Under Australian law non-residents may be subject to withholding tax in respect
of dividends received from shares in Australian companies depending on the
extent to which the dividends are franked. In accordance with the treaty,
dividends derived by a non-resident of Australia who is a resident of the US
may be taxed in Australia, but such withholding tax is limited to 15% of the
gross amount of dividends (unless the dividend is derived by a non-resident who
has or is deemed to have a permanent establishment of fixed base in Australia,
in which case, a 30% rate may apply) However in some instances withholding tax
may not apply.

The Australian Government introduced a dividend imputation system, effective
from July 1, 1987. Under this system, to the extent that dividends are paid
out of income on which Australian income tax has been levied, such dividends
are considered as franked dividends to that same extent. Where an Australian
resident shareholder receives a franked dividend, he or she receives a tax
rebate which can be offset against the Australian income tax payable by the
shareholder. The amount of the rebate is dependent upon the extent to which
the dividend paid is a franked dividend. Non-resident shareholders, rather
than receiving a rebate, are exempt from dividend withholding tax in respect of
the franked portions of the dividends received.

52



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Dispositions

Non-residents of Australia who do not hold and have not at any time in the five
years preceding the date of disposal held (for their own account or together or
together with associates) 10% or more of the issued share capital of a listed
public Australian company are not liable for Australian capital gains tax on
the disposal of shares or ADRs of such company. However, under Australian law
the disposal of shares or ADRs will be held to be a disposal of a taxable
Australian asset and subject to capital gains tax if they have at any time been
used by a taxpayer in carrying on a trade or business wholly or partly at or
through a permanent establishment in Australia. In such circumstances,
non-residents of Australia are subject to Australian capital gains tax on the
disposal of shares or ADRs where the disposal consideration exceeds the cost
base (indexed for inflation where the shares or ADRs are held for 12 months or
more). Non-residents of Australia who are subject to Australian tax on capital
gains made on the disposal of shares or ADRs are required to file an Australian
income tax return for the year in which the disposal occurs.

Non-residents who are securities dealers or in whose hands a profit on disposal
of ADRs or shares is regarded as ordinary income and not as a capital gain
(such ADRs and shares are referred to as revenue assets) will be subject to
Australian income tax on Australian source profits arising on the disposal of
the ADRs or shares, unless such profits are exempt from Australian tax under
the Treaty by reason of the profits not being attributable to the carrying on
of a trade or business through a permanent establishment of the non-resident in
Australia. Prospective investors should consult their own tax advisers as to
whether the ADRs or shares are revenue assets because such a conclusion depends
on the particular facts and circumstances of the individual investor concerned.

Non-residents with no taxable capital gains or income from sources in Australia
other than dividends with respect to the shares or ADRs are not required to
file an Australian income tax return.

Estate and Gift Tax

Australia does not impose any estate, inheritance or gift taxes. Therefore, no
Australian estate tax, inheritance tax or gift tax will be imposed on the death
of, or upon a lifetime gift by, a US shareholder. However, the transfer by a
US resident of ordinary shares or ADRs by way of gift or upon death may have
Australian income tax and stamp duty implications.

53



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##### 



Item 11. Quantitative and Qualitative Disclosures About Market Risk.

Interest Rate Risk

The Company has cash reserves and places funds on deposit with financial
institutions for periods not exceeding three months.

The Company does not use derivative financial instruments. The Company places
its deposits with high credit quality financial institutions, and, by policy,
limits the amount of credit exposure to any single counter party. The Company
is averse to principal loss and ensures the safety and preservation of its
invested funds by limiting default risk, market risk, and reinvestment risk.

The Company mitigates default risk by depositing funds with only the safest and
highest credit quality financial institutions and by constantly positioning its
portfolio to respond appropriately to a significant reduction in a credit
rating of any financial institution.

The Company has no interest rate exposure due to rate changes for long-term
debt obligations because all of the Companys long-term borrowings relate to
lease agreements that contain fixed rates of interest. The Company primarily
enters into debt obligations to support general corporate purposes including
capital expenditures and working capital needs.

The Company does not consider the effects of interest rate movements to be a
material risk to its financial condition.

Foreign Currency Risk

The Company conducts a portion of its business in various foreign currencies,
primarily in the US and the UK. As of June 30, 2002 the Company had not
established a foreign currency hedging program. The Company has mitigated and
will continue to mitigate a portion of its currency exposure through
decentralized sales, marketing and support operations in which all costs are
local currency based. Net foreign currency losses in fiscal year 2002 were
A$482,000 compared with net foreign currency gains of A$44,000 in fiscal year
2001.

The Company does not consider the effects of foreign currency movements to be a
material risk to its financial condition.

Item 12. Description of Securities Other than Equity Securities

Item 12 details are not required to be disclosed as part of the Annual Report.

54



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##### 



PART 2

Item 13. Defaults, Dividend Arrearages and Delinquencies

This item is not applicable.

Item 14. Material Modifications to the Rights of Security Holders and the
Use of Proceeds

This item is not applicable.

Item 15. Controls and Procedures



| | (a) |  | This item is not applicable                                                                                                                                                                                                                                                                                                       
| | --- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) |  | In the year ended June 30, 2002, there were no significant changes
in the Companys internal controls or in other factors that could
significantly affect those controls subsequent to the date of their
most recent evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.

Item 16. Reserved

55



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##### 



PART 3

Item 17. Not Applicable

Item 18. Financial Statements

The financial statements filed as part of this Annual Report are included on
pages F-1 through F-38 hereof.

Item 19. Exhibits



| | (a) |  | Exhibits
| | --- |  | --------

|            |  |                                                                                                                                                                                      
|----------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Exhibit Description                                                                                                                                                                  
|           
|1.1         |  | Constitution of Novogen Limited (formerly known as the
Memorandum of Association and Articles of Association). (1)                                                                   
|2.1         |  | Deposit Agreement, dated as of February 23, 1998, among
Novogen Limited, the Bank of New York, as Depositary, and
owners and holders from time to time of ADRs issued
thereunder. (2)
|4.1         |  | Employment contract between the Company and Mr C Naughton (3)                                                                                                                        
|4.2         |  | Employment Contract between the Company and Professor Alan
Husband (3)                                                                                                               
|4.3         |  | Employment Contract between the Company and Dr G E Kelly (3)                                                                                                                         
|4.4         |  | Lease between Kendall Glen Pty Limited (Lessor) and Novogen
Laboratories Pty Ltd for the Companys corporate headquarters
at 140 Wicks Road, North Ryde, New South Wales. (3)        
|8.1         |  | Company Subsidiaries                                                                                                                                                                 
|10.1        |  | Section 906 Certification by the Chief Executive Officer and
Chief Financial Officer (4)                                                                                             



| | (1) |  | Incorporated by reference to the
Registration Statement on Form 20-F filed with the
Securities and Exchange Commission on December 24,
1998 (File No. 0-29962).
| | --- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (2) |  | Incorporated by reference to the
Registration Statement on                                                                                                     

56



---



##### 





| |     |  | Form F-6 filed with the Securities and Exchange
Commission on February 12, 1998 (File No. 333-8346).                                                 
| | --- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (3) |  | Incorporated by reference
to the Annual Report on Form 20-F filed with the
Securities and Exchange Commission on November 27,
2000 (File No. 0-29962)
|
| | (4) |  | Attached as Exhibit 10.1                                                                                                                             

57



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##### 



Novogen Limited, Consolidated Financial Statements

|                                                    |  |       |   |        |  |              |         |        |  |         |         |   |  |  |         |   |  |  |         |  
|--------------------------------------------------- |  | ----- | - | ------ |  | ------------ | ------- | ------ |  | ------- | ------- | - |  |  | ------- | - |  |  | ------- | -
|STATEMENT OF FINANCIAL PERFORMANCE                  |  |       |   |        |  | Consolidated
|                                                    |  |       |   |        |  |             
|Years ended June 30 2002                            |  | Notes |   | 2000   |  | 2001         |         | 2002   |  | 2002   
|                                                    |  |       |   | A$'000 |  | A$'000       |         | A$'000 |  | US$'000
|Revenue                                             |  |       |   |        |  |              |         |        |  |         |         |   |  |  |         |   |  |  |         |  
|Sales Revenue                                       |  |       |   |        |  |              | 23,407  |        |  |         | 26,663  |   |  |  | 19,582  |   |  |  | 11,021  |  
|Other Revenue                                       |  |       | 2 |        |  |              | 3,337   |        |  |         | 3,569   |   |  |  | 4,706   |   |  |  | 2,649   |  
|                                                    |  |       |   |        |  |              |         |        |  |         |         |   |  |  |         |   |  |  |         |  
|Total Revenue                                       |  |       |   |        |  |              | 26,744  |        |  |         | 30,232  |   |  |  | 24,288  |   |  |  | 13,670  |  
|                                                    |  |       |   |        |  |              |         |        |  |         |         |   |  |  |         |   |  |  |         |  
|Costs and Expenses                                  |  |       |   |        |  |              |         |        |  |         |         |   |  |  |         |   |  |  |         |  
|Cost of Goods Sold                                  |  |       |   |        |  |              | (7,110  | )      |  |         | (8,653  | ) |  |  | (7,583  | ) |  |  | (4,268  | )
|Research & Development                              |  |       |   |        |  |              | (4,658  | )      |  |         | (8,419  | ) |  |  | (7,853  | ) |  |  | (4,420  | )
|Selling and Promotions                              |  |       |   |        |  |              | (21,444 | )      |  |         | (24,627 | ) |  |  | (15,207 | ) |  |  | (8,558  | )
|Shipping and Handling                               |  |       |   |        |  |              | (501    | )      |  |         | (533    | ) |  |  | (479    | ) |  |  | (270    | )
|General and Administrative                          |  |       |   |        |  |              | (6,291  | )      |  |         | (9,388  | ) |  |  | (7,449  | ) |  |  | (4,192  | )
|                                                    |  |       |   |        |  |              |         |        |  |         |         |   |  |  |         |   |  |  |         |  
|Total Costs and Expenses                            |  |       |   |        |  |              | (40,004 | )      |  |         | (51,620 | ) |  |  | (38,571 | ) |  |  | (21,708 | )
|                                                    |  |       |   |        |  |              |         |        |  |         |         |   |  |  |         |   |  |  |         |  
|Interest Expense                                    |  |       |   |        |  |              | (397    | )      |  |         | (346    | ) |  |  | (345    | ) |  |  | (194    | )
|                                                    |  |       |   |        |  |              |         |        |  |         |         |   |  |  |         |   |  |  |         |  
|Operating Loss Before Abnormal Items
and Income Tax |  |       | 2 |        |  |              | (13,657 | )      |  |         | (21,734 | ) |  |  | (14,628 | ) |  |  | (8,232  | )
|                                                    |  |       |   |        |  |              |         |        |  |         |         |   |  |  |         |   |  |  |         |  
|Income Tax Expense                                  |  |       | 3 |        |  |              | (22     | )      |  |         | (30     | ) |  |  | (45     | ) |  |  | (25     | )
|                                                    |  |       |   |        |  |              |         |        |  |         |         |   |  |  |         |   |  |  |         |  
|Net Loss                                            |  |       |   |        |  |              | (13,679 | )      |  |         | (21,764 | ) |  |  | (14,673 | ) |  |  | (8,257  | )
|                                                    |  |       |   |        |  |              |         |        |  |         |         |   |  |  |         |   |  |  |         |  
|Net Loss Attributable to Outside Equity Interests   |  |       |   |        |  |              |        |        |  |         |        |   |  |  | (19     | ) |  |  | (11     | )
|                                                    |  |       |   |        |  |              |         |        |  |         |         |   |  |  |         |   |  |  |         |  
|Net Loss Attributable to Members of Novogen         |  |       |   |        |  |              | (13,679 | )      |  |         | (21,764 | ) |  |  | (14,654 | ) |  |  | (8,246  | )
|                                                    |  |       |   |        |  |              |         |        |  |         |         |   |  |  |         |   |  |  |         |  
|Basic Loss per share (cents per share)              |  |       |   |        |  |              | (17.1   | )      |  |         | (25.4   | ) |  |  | (15.4   | ) |  |  | (8.7    | )

58



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##### 



STATEMENT OF FINANCIAL POSITION
As at 30 June 2002

|                                       |  |       |    |        |  |              |         |         |  |  |         |   |  |  |         |  
|-------------------------------------- |  | ----- | -- | ------ |  | ------------ | ------- | ------- |  |  | ------- | - |  |  | ------- | -
|                                       |  |       |    |        |  | Consolidated
|                                       |  |       |    |        |  |             
|                                       |  | Notes |    | 2001   |  | 2002         |         | 2002   
|                                       |  |       |    | A$'000 |  | A$'000       |         | US$'000
|CURRENT ASSETS                         |  |       |    |        |  |              |         |         |  |  |         |   |  |  |         |  
|Cash                                   |  |       | 4  |        |  |              | 31,129  |         |  |  | 39,937  |   |  |  | 22,477  |  
|Receivables                            |  |       | 5  |        |  |              | 5,118   |         |  |  | 4,505   |   |  |  | 2,535   |  
|Inventories                            |  |       | 6  |        |  |              | 7,516   |         |  |  | 6,907   |   |  |  | 3,887   |  
|Other                                  |  |       | 7  |        |  |              | 1,155   |         |  |  | 517     |   |  |  | 291     |  
|                                       |  |       |    |        |  |              |         |         |  |  |         |   |  |  |         |  
|Total Current Assets                   |  |       |    |        |  |              | 44,918  |         |  |  | 51,866  |   |  |  | 29,190  |  
|                                       |  |       |    |        |  |              |         |         |  |  |         |   |  |  |         |  
|NON-CURRENT ASSETS                     |  |       |    |        |  |              |         |         |  |  |         |   |  |  |         |  
|Inventories                            |  |       | 6  |        |  |              | 4,740   |         |  |  | 597     |   |  |  | 336     |  
|Property, plant and equipment          |  |       | 8  |        |  |              | 11,291  |         |  |  | 9,213   |   |  |  | 5,185   |  
|Intangibles                            |  |       | 9  |        |  |              | 257     |         |  |  | 224     |   |  |  | 126     |  
|                                       |  |       |    |        |  |              |         |         |  |  |         |   |  |  |         |  
|Total Non-Current Assets               |  |       |    |        |  |              | 16,288  |         |  |  | 10,034  |   |  |  | 5,647   |  
|                                       |  |       |    |        |  |              |         |         |  |  |         |   |  |  |         |  
|TOTAL ASSETS                           |  |       |    |        |  |              | 61,206  |         |  |  | 61,900  |   |  |  | 34,837  |  
|                                       |  |       |    |        |  |              |         |         |  |  |         |   |  |  |         |  
|CURRENT LIABILITIES                    |  |       |    |        |  |              |         |         |  |  |         |   |  |  |         |  
|Payables                               |  |       | 10 |        |  |              | 5,148   |         |  |  | 4,280   |   |  |  | 2,409   |  
|Interest bearing liabilities           |  |       | 11 |        |  |              | 1,364   |         |  |  | 845     |   |  |  | 476     |  
|Provisions                             |  |       | 12 |        |  |              | 292     |         |  |  | 279     |   |  |  | 157     |  
|                                       |  |       |    |        |  |              |         |         |  |  |         |   |  |  |         |  
|Total Current Liabilities              |  |       |    |        |  |              | 6,804   |         |  |  | 5,404   |   |  |  | 3,042   |  
|                                       |  |       |    |        |  |              |         |         |  |  |         |   |  |  |         |  
|NON-CURRENT LIABILITIES                |  |       |    |        |  |              |         |         |  |  |         |   |  |  |         |  
|Interest bearing liabilities           |  |       | 11 |        |  |              | 2,375   |         |  |  | 2,287   |   |  |  | 1,287   |  
|Provisions                             |  |       | 12 |        |  |              | 121     |         |  |  | 164     |   |  |  | 92      |  
|                                       |  |       |    |        |  |              |         |         |  |  |         |   |  |  |         |  
|Total Non-Current Liabilities          |  |       |    |        |  |              | 2,496   |         |  |  | 2,451   |   |  |  | 1,379   |  
|                                       |  |       |    |        |  |              |         |         |  |  |         |   |  |  |         |  
|TOTAL LIABILITIES                      |  |       |    |        |  |              | 9,300   |         |  |  | 7,855   |   |  |  | 4,421   |  
|                                       |  |       |    |        |  |              |         |         |  |  |         |   |  |  |         |  
|NET ASSETS                             |  |       |    |        |  |              | 51,906  |         |  |  | 54,045  |   |  |  | 30,416  |  
|                                       |  |       |    |        |  |              |         |         |  |  |         |   |  |  |         |  
|EQUITY                                 |  |       |    |        |  |              |         |         |  |  |         |   |  |  |         |  
|Parent Equity Interest                 |  |       |    |        |  |              |         |         |  |  |         |   |  |  |         |  
|Contributed equity                     |  |       | 14 |        |  |              | 121,222 |         |  |  | 137,249 |   |  |  | 77,244  |  
|Accumulated losses                     |  |       |    |        |  |              | (69,316 | )       |  |  | (83,970 | ) |  |  | (47,258 | )
|                                       |  |       |    |        |  |              |         |         |  |  |         |   |  |  |         |  
|Total parent equity interest in equity |  |       |    |        |  |              | 51,906  |         |  |  | 53,279  |   |  |  | 29,986  |  
|Total outside equity interest          |  |       | 15 |        |  |              |        |         |  |  | 766     |   |  |  | 430     |  
|                                       |  |       |    |        |  |              |         |         |  |  |         |   |  |  |         |  
|TOTAL EQUITY                           |  |       |    |        |  |              | 51,906  |         |  |  | 54,045  |   |  |  | 30,416  |  
|                                       |  |       |    |        |  |              |         |         |  |  |         |   |  |  |         |  

59



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##### 



ACCUMULATED LOSSES

|                                                    |  |              |         |        |  |        |         |   |  |  |         |  
|--------------------------------------------------- |  | ------------ | ------- | ------ |  | ------ | ------- | - |  |  | ------- | -
|                                                    |  | Consolidated
|                                                    |  |             
|                                                    |  | 2000         |         | 2001   |  | 2002  
|                                                    |  | A$'000       |         | A$'000 |  | A$'000
|Accumulated Losses                                  |  |              |         |        |  |        |         |   |  |  |         |  
|Balance at beginning of year                        |  |              | (33,873 | )      |  |        | (47,552 | ) |  |  | (69,316 | )
|Net loss attributable to members of Novogen Limited |  |              | (13,679 | )      |  |        | (21,764 | ) |  |  | (14,654 | )
|                                                    |  |              |         |        |  |        |         |   |  |  |         |  
|Balance at the end of year                          |  |              | (47,552 | )      |  |        | (69,316 | ) |  |  | (83,970 | )
|                                                    |  |              |         |        |  |        |         |   |  |  |         |  

STATEMENT OF CHANGES IN CONTRIBUTED EQUITY

|                                      |  |                      |            |        |  |  |         | 
|------------------------------------- |  | -------------------- | ---------- | ------ |  |  | ------- | 
|Issued Share Capital                  |  | Number of Fully      |            | Amount
|                                      |  | Paid Ordinary Shares |            | A$'000
|                                      |  |                      |            |       
|Balance June 30, 1999                 |  |                      | 79,685,518 |        |  |  | 82,148  | 
|                                      |  |                      |            |        |  |  |         | 
|Options converted into shares         |  |                      | 132,744    |        |  |  | 154     | 
|Share issue- June 30, 2000            |  |                      | 5,018,000  |        |  |  | 17,974  | 
|                                      |  |                      |            |        |  |  |         | 
|Balance June 30, 2000                 |  |                      | 84,836,262 |        |  |  | 100,276 | 
|                                      |  |                      |            |        |  |  |         | 
|Options converted into shares         |  |                      | 38,513     |        |  |  | 46      | 
|Share issue  May 23,2001             |  |                      | 10,195,000 |        |  |  | 20,900  | 
|                                      |  |                      |            |        |  |  |         | 
|Balance June 30, 2001                 |  |                      | 95,069,775 |        |  |  | 121,222 | 
|                                      |  |                      |            |        |  |  |         | 
|Options converted into shares         |  |                      | 342,939    |        |  |  | 617     | 
|Subsidiary Share issue  May 22, 2002 |  |                      | n/a        |        |  |  | 15,410  | 
|                                      |  |                      |            |        |  |  |         | 
|Balance June 30, 2002                 |  |                      | 95,412,714 |        |  |  | 137,249 | 
|                                      |  |                      |            |        |  |  |         | 

60



---



##### 



STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED JUNE 30, 2002

|                                                |  |       |    |        |  |              |         |        |  |         |         |   |  |  |         |   |  |  |         |  
|----------------------------------------------- |  | ----- | -- | ------ |  | ------------ | ------- | ------ |  | ------- | ------- | - |  |  | ------- | - |  |  | ------- | -
|                                                |  |       |    |        |  | Consolidated
|                                                |  |       |    |        |  |             
|                                                |  | Notes |    | 2000   |  | 2001         |         | 2002   |  | 2002   
|                                                |  |       |    | A$'000 |  | A$'000       |         | A$'000 |  | US$'000
|Cash flows from operating activities            |  |       |    |        |  |              |         |        |  |         |         |   |  |  |         |   |  |  |         |  
|Receipts from customers                         |  |       |    |        |  |              | 21,726  |        |  |         | 27,200  |   |  |  | 20,228  |   |  |  | 11,384  |  
|Payments to suppliers and employees             |  |       |    |        |  |              | (42,957 | )      |  |         | (46,947 | ) |  |  | (28,811 | ) |  |  | (16,215 | )
|Interest received                               |  |       |    |        |  |              | 1,043   |        |  |         | 987     |   |  |  | 1,114   |   |  |  | 627     |  
|Interest paid                                   |  |       |    |        |  |              | (397    | )      |  |         | (358    | ) |  |  | (345    | ) |  |  | (194    | )
|Grants received                                 |  |       |    |        |  |              | 1,855   |        |  |         | 1,746   |   |  |  | 1,295   |   |  |  | 729     |  
|Income tax paid                                 |  |       |    |        |  |              | (22     | )      |  |         | (30     | ) |  |  | (45     | ) |  |  | (25     | )
|Goods and services tax paid to the ATO          |  |       |    |        |  |              |        |        |  |         | (40     | ) |  |  | (115    | ) |  |  | (65     | )
|                                                |  |       |    |        |  |              |         |        |  |         |         |   |  |  |         |   |  |  |         |  
|Net cash flows used in operating activities     |  |       | 21 |        |  |              | (18,752 | )      |  |         | (17,442 | ) |  |  | (6,679  | ) |  |  | (3,759  | )
|                                                |  |       |    |        |  |              |         |        |  |         |         |   |  |  |         |   |  |  |         |  
|Cash flows from investing activities            |  |       |    |        |  |              |         |        |  |         |         |   |  |  |         |   |  |  |         |  
|Acquisition of property, plant and equipment    |  |       |    |        |  |              | (2,694  | )      |  |         | (956    | ) |  |  | (144    | ) |  |  | (81     | )
|Proceeds from sale of plant and equipment       |  |       |    |        |  |              | 114     |        |  |         | 169     |   |  |  | 40      |   |  |  | 23      |  
|                                                |  |       |    |        |  |              |         |        |  |         |         |   |  |  |         |   |  |  |         |  
|Net cash flows used in investing activities     |  |       |    |        |  |              | (2,580  | )      |  |         | (787    | ) |  |  | (104    | ) |  |  | (58     | )
|                                                |  |       |    |        |  |              |         |        |  |         |         |   |  |  |         |   |  |  |         |  
|Cash flows from financing activities            |  |       |    |        |  |              |         |        |  |         |         |   |  |  |         |   |  |  |         |  
|Proceeds from the issue of ordinary shares      |  |       |    |        |  |              | 18,129  |        |  |         | 20,946  |   |  |  | 617     |   |  |  | 347     |  
|Proceeds from the issue of subsidiary shares    |  |       |    |        |  |              |        |        |  |         |        |   |  |  | 18,127  |   |  |  | 10,202  |  
|Payment of share issue costs                    |  |       |    |        |  |              |        |        |  |         |        |   |  |  | (1,932  | ) |  |  | (1,087  | )
|Proceeds from borrowings                        |  |       |    |        |  |              | 3,042   |        |  |         | 846     |   |  |  | 2,418   |   |  |  | 1,361   |  
|Repayment of borrowings                         |  |       |    |        |  |              | (1,221  | )      |  |         | (1,298  | ) |  |  | (3,157  | ) |  |  | (1,777  | )
|                                                |  |       |    |        |  |              |         |        |  |         |         |   |  |  |         |   |  |  |         |  
|Net cash flows from financing activities        |  |       |    |        |  |              | 19,950  |        |  |         | 20,494  |   |  |  | 16,073  |   |  |  | 9,046   |  
|                                                |  |       |    |        |  |              |         |        |  |         |         |   |  |  |         |   |  |  |         |  
|Net increase/(decrease) in cash held            |  |       |    |        |  |              | (1,382  | )      |  |         | 2,265   |   |  |  | 9,290   |   |  |  | 5,228   |  
|Cash at the beginning of year                   |  |       |    |        |  |              | 29,981  |        |  |         | 28,820  |   |  |  | 31,129  |   |  |  | 17,519  |  
|Effect of exchange rate changes on opening cash |  |       |    |        |  |              | 221     |        |  |         | 44      |   |  |  | (482    | ) |  |  | (271    | )
|                                                |  |       |    |        |  |              |         |        |  |         |         |   |  |  |         |   |  |  |         |  
|Cash at end of year                             |  |       | 4  |        |  |              | 28,820  |        |  |         | 31,129  |   |  |  | 39,937  |   |  |  | 22,476  |  
|                                                |  |       |    |        |  |              |         |        |  |         |         |   |  |  |         |   |  |  |         |  

61



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##### 



NOVOGEN LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|
| | The consolidated financial statements have been prepared in accordance
with the historical cost convention. These general purpose consolidated
financial statements have been prepared in accordance with the
requirements of the Corporations Act 2001 which includes applicable
Accounting Standards. Other mandatory professional reporting requirements
(Urgent Issues Group Consensus Views) have also been complied with.
Comparative information is changed where appropriate to enhance
comparability.                                                                                                                                                                                                                                                                           
|
| | The preparation of the consolidated financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that effect amounts reported in the financial
statements and accompanying notes. Actual results could differ from these
estimates                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|
| | Changes in Accounting Policy                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|
| | The accounting policies adopted are consistent with those of the previous
year except for the accounting policy with respect to earnings per share.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|
| | The consolidated entity has adopted the revised Accounting Standard AASB
1027 Earnings Per Share and has for the first time, determined basic
and diluted earnings per share in accordance with the revised standard.
Basic earnings per share (EPS) was previously calculated by dividing the
profit from ordinary activities after tax and preference dividends, if
any, by the weighted average number of ordinary shares outstanding during
the financial year. In accordance with the revised AASB 1027 basic EPS
is now calculated as net profit attributable to members adjusted to
exclude costs of servicing equity (other than dividends ) and preference
share dividends, if any, divided by the weighted average number of
ordinary shares, adjusted for any bonus element.
|
| | Diluted EPS was previously determined by dividing the profit from
ordinary activities after tax and preference dividends, if any, adjusted
for the effect of earnings on potential ordinary shares, by the weighted
average number of ordinary shares (both issued and potentially dilutive)
outstanding during the financial year. In accordance with AASB 1027
diluted EPS is now calculated as net profit attributable to members,
adjusted for:                                                                                                                                                                                                                                                                                                                                      



| |  |  | costs of servicing equity (other than dividends) and
preference share dividends (if any);                                                   
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | the after tax effect of dividends and interest associated
with dilutive potential ordinary shares that have been recognised as
expenses; and
|
| |  |  | other non-discretionary changes in revenues or expenses
during the period that would result from the dilution af potential
ordinary shares, 



| |                                                                                                                                                                                                             
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | divided by the weighted average number of ordinary shares and dilutive
potential ordinary shares adjusted for any bonus element.                                                                            
|
| | The revised policy has had no effect in the current year on earnings per
share as potential ordinary shares do not result in diluted earnings per
share showing a different view of earnings of the Company.

62



---



##### 





| |                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Principles of Consolidation                                                                                                                                                                                                                                                                                                                                                                                                                   
|
| | The consolidated financial statements are those of the consolidated
entity, comprising of Novogen Limited and all entities controlled by
Novogen Limited from time to time during the year and at balance date.
Novogen Limited and its controlled entities together are referred to in
this financial report as the economic entity or Group. The effects of
all transactions between entities in the economic entity are eliminated
in full.
|
| | The financial statements of controlled entities are prepared for the same
reporting period as the parent entity, using consistent accounting
policies. Adjustments are made to bring into line any dissimilar
accounting policies which may exist.                                                                                                                                                                                            
|
| | Subsidiary acquisitions are accounted for using the purchase method of
accounting.                                                                                                                                                                                                                                                                                                                                                            
|
| | Inventories                                                                                                                                                                                                                                                                                                                                                                                                                                   
|
| | Inventories are measured at the lower of cost and net realisable value.
Amounts shown in the income statement reflects the actual cost of
production for the reporting period.                                                                                                                                                                                                                                                                
|
| | Costs incurred in bringing each product to its present location and
condition are accounted for as follows:                                                                                                                                                                                                                                                                                                                                   
|
| | Raw Materialpurchase cost on a first-in, first-out basis; and                                                                                                                                                                                                                                                                                                                                                                                
|
| | Finished Goods and Work-in-Progress cost of direct material, and a
proportion of manufacturing overheads.                                                                                                                                                                                                                                                                                                                                    

63



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##### 





| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Recoverable Amount of Non-Current Assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|
| | Non-current assets are valued at cost, provided that their carrying value
does not exceed their recoverable amount. Periodic reviews are
conducted to determine whether events or changes have occurred that
would suggest the carrying value of non current assets exceed their
recoverable amounts. An impairment would be recognised when expected
future operating cash flows are lower than the carrying amount. In
determining recoverable amounts on non-current assets, the expected
net cash flows have not been discounted to their present value.
|
| | Research and development                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|
| | Costs incurred on research and development projects are expensed as
incurred, unless future recoverability is assured beyond a reasonable
doubt. To date, due to the uncertainty of the development program all
research and development costs have been expensed.                                                                                                                                                                                                                                                                                          
|
| | Advertising expenses                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|
| | Costs incurred on Advertising expenditure is expensed as incurred. The
company incurred $14,404,000 in fiscal 2000, $16,351,000 in fiscal 2001
and $8,020,000 in fiscal 2002.                                                                                                                                                                                                                                                                                                                                                                               
|
| | Intangible Assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|
| | (i) Patents and Trademarks
Costs incurred in respect to registering and defending patents and
trademarks are expensed as incurred unless future recoverability is
assured beyond a reasonable doubt.                                                                                                                                                                                                                                                                                                                                                        
|
| | (ii) Goodwill
Goodwill is amortised on a straight line basis over fifteen years, being
the period during which the benefits are expected to be received.                                                                                                                                                                                                                                                                                                                                                                                                    

64



---



##### 





| |                                                                                                                                                                                                                                                                                                                                        
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Property, Plant & Equipment                                                                                                                                                                                                                                                                                                            
|
| | Cost and Valuation
All property, plant and equipment are brought to account at cost.                                                                                                                                                                                                                                                   
|
| | Depreciation                                                                                                                                                                                                                                                                                                                           
|
| | Depreciation is calculated on a straight-line basis to write off the
depreciable amount of each item of property, plant and equipment
(excluding land) over its expected useful life to the economic entity.
Estimates of remaining useful lives are made on a regular basis for all
assets, with annual reassessments for major items.
|
| | Major depreciation periods are:                                                                                                                                                                                                                                                                                                        

|                       |  |                |  |               
|---------------------- |  | -------------- |  | --------------
|                       |  | 2001           |  | 2002          
|                       |  |                |  |               
|Buildings              |  | 20 years       |  | 20 years      
|Plant and equipment    |  | 3-10 years     |  | 3-10 years    
|Leasehold Improvements |  | the lease term |  | the lease term



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Leases                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|
| | Leases are classified at their inception as either operating or finance
leases based on the economic substance of the agreement so as to reflect
the risks and benefits incidental to ownership.                                                                                                                                                                                                                                                                 
|
| | Operating Leases
The minimum lease payments of operating leases, where the lessor
effectively retains substantially all of the risks and benefits of
ownership of the leased item, are recognised as an expense on a straight
line basis.                                                                                                                                                                                                                        
|
| | Contingent rentals are recognised as an expense in the financial year in
which they are incurred.                                                                                                                                                                                                                                                                                                                                                                
|
| | Finance Leases
Leases which effectively transfer substantially all of the risks and
benefits incidental to ownership of the leased item to the Group are
capitalised at the present value of the minimum lease payments and
disclosed as property, plant and equipment under lease. A lease liability
of equal value is also recognised. Capitalised lease assets are
depreciated over the shorter of the estimated useful life of the assets
and the lease term.
|
| | Minimum lease payments are allocated between interest expense and
reduction of the lease liability with the interest expense calculated
using the interest rate implicit in the lease and charged directly to the
Statement of Financial Performance.                                                                                                                                                                                                            
|
| | The cost of improvements to or on leasehold property is capitalised,
disclosed as leasehold improvements, and amortised over the unexpired
period of the lease or the estimated useful lives of the improvements,
whichever is the shorter.                                                                                                                                                                                                                      

65



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##### 





| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Revenue Recognition                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|
| | Revenue is recognised to the extent that it is probable that the economic
benefits will flow to the Group and the revenue can be reliably measured.
The following specific recognition criteria must also be met:                                                                                                                                                                                                                                                                                                                                                 
|
| | Sale of Goods
Goods have been dispatched to a customer pursuant to a sales order and
invoice and the associated risks have passed to the carrier or customer.                                                                                                                                                                                                                                                                                                                                                                                                     
|
| | Interest
Control of a right to receive consideration for the investment in assets
has been attained.                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|
| | Grant Income
Control of a right to receive grant funds has been attained, evidenced by
confirmation from the relevant government or other body.                                                                                                                                                                                                                                                                                                                                                                                                                   
|
| | Payments received under the Australian Government START Grants are
recognised as revenue when received. The payments are made by the
Australian Government for expenses already incurred when agreed
milestones are achieved. The only circumstances where funds received by
Novogen are contingently returnable are if Novogen is in breach of the
START grant contract or if it fails to implement its agreed
commercialization plan included as part of the contract. The risk of this
happening is considered to be minimal as it is within Novogens control.
|
| | Trade and Other Receivables                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|
| | Trade receivables are recognised and carried at original invoice value
less a provision for any un-collectable debts. Debts, which are known to
be un-collectable, are written off. A provision for doubtful debts is
recognised when collection of the full nominal amount is no longer
probable.                                                                                                                                                                                                                                                                
|
| | Receivables from related parties are recognised and carried at the
nominal amount due.                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|
| | All trade debtors are recognised at the amount receivable as they are
predominantly due for settlement no more than 30 days from the date of
recognition.                                                                                                                                                                                                                                                                                                                                                                                                         
|
| | Foreign Currency Translation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|
| | Translation of Foreign Currency Transactions
Foreign currency transactions are converted into Australian currency at
the rate of exchange at the date of the transaction. At balance date
amounts payable and receivable in foreign currencies are translated to
Australian currency at rates of exchange current at balance date.
Resulting exchange differences are brought to account in determining the
profit or loss for the financial year.                                                                                                                
|
| | Translation of Financial Reports of Overseas Operations
All foreign controlled entities (with the exception of Marshall Edwards,
Inc.) are deemed to be fully integrated with the Company as they are not
financially or operationally independent of Novogen Limited. The
financial reports of overseas operations are, therefore, translated using
the temporal method, with resulting                                                                                                                                                                          

66



---



##### 





| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | losses or gains taken to the profit and loss account.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|
| | Marshall Edwards, Inc. is deemed to be self sustaining as it is
financially and operationally independent of Novogen Limited. The
financial reports of Marshall Edwards, Inc. are translated using the
current rate method, and any exchange differences are taken directly to
the foreign currency translation reserve.                                                                                                                                                                                                                                                                                                                                      
|
| | Trade and Other Payables                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|
| | Liabilities for trade creditors and other amounts are carried at cost
which is the fair value of the consideration to be paid in the future for
goods and services received, whether or not billed to the consolidated
entity.                                                                                                                                                                                                                                                                                                                                                                                                                                
|
| | Payables to related parties are carried at the principal amount.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|
| | Cash and Cash Equivalents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|
| | Cash on hand and in banks and short term deposits are stated at the lower
of cost and net realisable value. For the purposes of the statement of
cash flows, cash includes deposits at call readily convertible into cash
within two working days and which are used in the cash management
function on a day-to-day basis net of outstanding bank overdrafts.                                                                                                                                                                                                                                                                                                
|
| | Loans and Borrowings                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|
| | Finance lease liability is determined in accordance with the requirements
of AASB 1008  Leases.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|
| | Employee Entitlements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|
| | Wages and Salaries, Annual Leave
Liabilities for wages, salaries and annual leave are recognised, and are
measured as the amount unpaid at the reporting date at current pay rates
in respect of employees services up to that date. The value of the
employee share option scheme described in Note 14 is not being charged as
an expense.                                                                                                                                                                                                                                                                                                                  
|
| | Long Service Leave
The amounts expected to be paid to employees for their pro rata
entitlement to long service leave, including on-costs, are accrued
annually at current pay rates having regard to experience of employee
departures and period of service. These entitlements are measured at the
present value of the estimated future cash outflow to be made in respect
of services provided by employees up to the reporting date. In
determining the present value of future cash outflows, the interest rate
attaching to government guaranteed securities, which have terms to
maturity approximating the terms of the related liability are used.
|
| | Share Option Plans
The value of share option plans described in Note 14 is not charged as an
employee entitlement expense.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|
| | Earnings per Share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|
| | Basic EPS is calculated as net profit attributable to members adjusted to
exclude                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

67



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##### 





| |                                                                                                                                                                                    
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | costs of servicing equity (other than dividends) and preference share
dividends, if any, divided by the weighted average number of ordinary
shares, adjusted for any bonus element.
|
| | Diluted EPS is calculated as net profit attributable to members, adjusted
for:                                                                                                     



| |  |  | costs of servicing equity (other than dividends) and
preference share dividends (if any);                                                   
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | the after tax effect of dividends and interest associated
with dilutive potential ordinary shares that have been recognised as
expenses; and
|
| |  |  | other non-discretionary changes in revenues or expenses
during the period that would result from the dilution of potential
ordinary shares, 



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | divided by the weighted average number of ordinary shares and dilutive
potential ordinary shares adjusted for any bonus element.                                                                                                                                                                                                                                                                                                                                                                                                      
|
| | Contributed Equity                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|
| | Ordinary share capital is recognised at the fair value of consideration
received by the Company. Any transaction costs arising on the issue of
ordinary shares are recognised directly in equity as a reduction in the
share proceeds received.                                                                                                                                                                                                                                                                                       
|
| | Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|
| | Income tax                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|
| | Tax effect accounting is applied using the liability method whereby
income tax is regarded as an expense and is calculated on the accounting
profit after allowing for permanent differences. To the extent timing
differences occur between the time items are recognised in the financial
statements and when items are taken into account in determining taxable
income, the net related tax benefit or liability, calculated at current
rates, is disclosed as a future income tax benefit or a provision for
deferred income tax.
|
| | The future income tax benefit relating to tax losses and timing
differences is not carried forward as an asset unless the benefit is
virtually certain of being realised.                                                                                                                                                                                                                                                                                                                                                             
|
| | Goods and Services Tax (GST) and overseas equivalents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|
| | Revenues, expenses, and assets are recognised net of the amount of GST
except:                                                                                                                                                                                                                                                                                                                                                                                                                                                        



| |  |  | where the GST incurred on a purchase of goods and services is not
recoverable from the taxation authority, in which case the GST is
recognised as part of the expense item as applicable; and
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | Receivables and payables are stated with the amount of GST included.                                                                                                                         



| |                                                                                                                                                                                                                                                              
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The net amount of GST recoverable from, or payable to the taxation
authority is included as part of receivables or payables in the Statement
of Financial Position.                                                                                          
|
| | Cash flows are included in the Statement of Cash Flows on a gross basis
and the GST component of cash flows arising from investing and financing
activities which is recoverable or payable to the taxation authority are
classified as operating cash flows.

68



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##### 





| |                                                                                                                                                                                                                                                                                                          
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Commitments and contingencies are disclosed net of the amount of GST
recoverable from or payable to the taxation authority.                                                                                                                                                                              
|
| | Comparatives                                                                                                                                                                                                                                                                                             
|
| | Where necessary, comparatives have been reclassified and repositioned for
consistency with current year disclosures as a result of the first time
application of revised accounting standards AASB 1005 segment Reporting
and as a result of reporting the Statement of Financial Performance by
function

Note 2. Profit/(Loss) from Ordinary Activities

|                                           |  |              |        |        |  |        |        |  |  |  |        | 
|------------------------------------------ |  | ------------ | ------ | ------ |  | ------ | ------ |  |  |  | ------ | 
|                                           |  | Consolidated
|                                           |  |             
|                                           |  | 2000         |        | 2001   |  | 2002  
|                                           |  | A$'000       |        | A$'000 |  | A$'000
|(a) Revenues from operating activities     |  |              |        |        |  |        |        |  |  |  |        | 
|Revenue from the sale of goods             |  |              | 23,407 |        |  |        | 26,663 |  |  |  | 19,582 | 
|                                           |  |              |        |        |  |        |        |  |  |  |        | 
|                                           |  |              | 23,407 |        |  |        | 26,663 |  |  |  | 19,582 | 
|                                           |  |              |        |        |  |        |        |  |  |  |        | 
|(b) Revenues from non-operating activities |  |              |        |        |  |        |        |  |  |  |        | 
|Interest  other persons/corporations      |  |              | 1,077  |        |  |        | 1,057  |  |  |  | 1,203  | 
|Grants received                            |  |              | 1,855  |        |  |        | 1,746  |  |  |  | 1,295  | 
|Royalties received                         |  |              |       |        |  |        |       |  |  |  | 1,879  | 
|Revenue from sale of assets                |  |              |       |        |  |        | 169    |  |  |  | 40     | 
|Other revenue                              |  |              | 405    |        |  |        | 597    |  |  |  | 289    | 
|                                           |  |              |        |        |  |        |        |  |  |  |        | 
|                                           |  |              | 3,337  |        |  |        | 3,569  |  |  |  | 4,706  | 
|                                           |  |              |        |        |  |        |        |  |  |  |        | 
|                                           |  |              |        |        |  |        |        |  |  |  |        | 
|Total revenues from ordinary activities    |  |              | 26,744 |        |  |        | 30,232 |  |  |  | 24,288 | 
|                                           |  |              |        |        |  |        |        |  |  |  |        | 

69



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##### 



|                                                                                                                                                                                 |                                   |  |              |     |       |       |       |     |  |  |       |     | 
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------- |  | ------------ | --- | ----- | ----- | ----- | --- |  |  | ----- | --- | 
|                                                                                                                                                                                 |                                   |  | Consolidated
|                                                                                                                                                                                 |                                   |  | 2000         |     | 2001  | 2002 
|                                                                                                                                                                                 |                                   |  | $'000        |     | $'000 | $'000
|(c) Expenses                                                                                                                                                                     |                                   |  |              |     |       |       |       |     |  |  |       |    
|Depreciation of non-current assets                                                                                                                                               |                                   |  |              |     |       |       |       |     |  |  |       |    
|                                                                                                                                                                                 | Plant and equipment               |  |              | 584 |       |       |       | 951 |  |  |       | 659 | 
|                                                                                                                                                                                 | Buildings                         |  |              | 290 |       |       |       | 290 |  |  |       | 290 | 
|                                                                                                                                                                                 | Leasehold improvements            |  |              | 54  |       |       |       | 71  |  |  |       | 96  | 
|                                                                                                                                                                                 | Plant and equipment under lease   |  |              | 881 |       |       |       | 952 |  |  |       | 775 | 
|Amortisation of non-current assets                                                                                                                                               |                                   |  |              |     |       |       |       |     |  |  |       |    
|                                                                                                                                                                                 | Goodwill                          |  |              | 33  |       |       |       | 33  |  |  |       | 33  | 
|                                                                                                                                                                                 |                                   |  |              |     |       |       |       |     |  |  |       |    
|Total depreciation and amortisation expenses                                                                                                                                     |                                   |  | 1842         |     |       |       | 2,297 |     |  |  | 1,853 |    
|                                                                                                                                                                                 |                                   |  |              |     |       |       |       |     |  |  |       |    
|Bad and doubtful debts  trade                                                                                                                                                   |                                   |  | 27           |     |       |       | 146   |     |  |  | 661   |    
|Decrement in value of inventories                                                                                                                                                |                                   |  | 343          |     |       |       | 407   |     |  |  | 801   |    
|Provision for employee entitlements                                                                                                                                              |                                   |  | 110          |     |       |       | 39    |     |  |  | 26    |    
|Rental expense relating to operating leases                                                                                                                                      |                                   |  | 721          |     |       |       | 738   |     |  |  | 693   |    
|Borrowing costs expensed                                                                                                                                                         |                                   |  |              |     |       |       |       |     |  |  |       |    
|                                                                                                                                                                                 | Interest expense on finance lease |  |              | 397 |       |       |       | 346 |  |  |       | 345 | 
|                                                                                                                                                                                 |                                   |  |              |     |       |       |       |     |  |  |       |    
|Total borrowing costs expensed                                                                                                                                                   |                                   |  | 397          |     |       |       | 346   |     |  |  | 345   |    
|                                                                                                                                                                                 |                                   |  |              |     |       |       |       |     |  |  |       |    
|(d) Losses/(Gains)                                                                                                                                                               |                                   |  |              |     |       |       |       |     |  |  |       |    
|Net loss/(gain) on disposal of property, plant and
equipment                                                                                                                     |                                   |  | 25           |     |       |       | (112  | )   |  |  | 494   |    
|Net foreign currency (gains)/losses                                                                                                                                              |                                   |  | (221         | )   |       |       | (44   | )   |  |  | 482   |    
|(e) Significant Items                                                                                                                                                            |                                   |  |              |     |       |       |       |     |  |  |       |    
|Profit from ordinary activities before income tax
expense includes the following expenses disclosure
of which is relevant in explaining the financial
performance of the entity: |                                   |  |              |     |       |       |       |     |  |  |       |    
|Litigation Settlement                                                                                                                                                            |                                   |  |             |     |       |       | 750   |     |  |  |      |    
|Marshall Edwards, Inc. prospectus costs                                                                                                                                          |                                   |  |             |     |       |       | 1,358 |     |  |  |      |    
|                                                                                                                                                                                 |                                   |  |              |     |       |       |       |     |  |  |       |    
|                                                                                                                                                                                 |                                   |  |             |     |       |       | 2,108 |     |  |  |      |    
|                                                                                                                                                                                 |                                   |  |              |     |       |       |       |     |  |  |       |    

70



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##### 



Note 3. Income Tax

|                                                                                                                                                                                                |  |              |        |       |  |       |        |   |  |  |        |  
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------ | ------ | ----- |  | ----- | ------ | - |  |  | ------ | -
|                                                                                                                                                                                                |  | Consolidated
|                                                                                                                                                                                                |  |             
|                                                                                                                                                                                                |  | 2000         |        | 2001  |  | 2002 
|                                                                                                                                                                                                |  | $'000        |        | $'000 |  | $'000
|(a) The prima facie tax, using tax rates
applicable in the country of operation, on profit
and extraordinary items differs from the income tax
provided in the financial statements as follows: |  |              |        |       |  |       |        |   |  |  |        |  
|Prima facie tax on loss from ordinary activities                                                                                                                                                |  |              | (4,917 | )     |  |       | (7,390 | ) |  |  | (4,388 | )
|Tax effect of permanent differences:                                                                                                                                                            |  |              |        |       |  |       |        |   |  |  |        |  
|Non deductible depreciation and
amortisation                                                                                                                                                    |  |              | 12     |       |  |       | 11     |   |  |  | 10     |  
|Non deductible expenses                                                                                                                                                                         |  |              |       |       |  |       | 1,113  |   |  |  | 213    |  
|Research and development allowance                                                                                                                                                              |  |              | (55    | )     |  |       | (102   | ) |  |  | 207    |  
|Sundry items                                                                                                                                                                                    |  |              | 90     |       |  |       | (40    | ) |  |  | 62     |  
|                                                                                                                                                                                                |  |              |        |       |  |       |        |   |  |  |        |  
|Income Tax adjusted for permanent
differences                                                                                                                                                   |  |              | (4,870 | )     |  |       | (6,408 | ) |  |  | (3,896 | )
|Australian income taxes                                                                                                                                                                         |  |              |        |       |  |       |        |   |  |  | 1      |  
|United States state income taxes                                                                                                                                                                |  |              | 2      |       |  |       |       |   |  |  | 3      |  
|New Zealand income tax                                                                                                                                                                          |  |              | 20     |       |  |       | 27     |   |  |  | 41     |  
|Canadian Provincial taxes                                                                                                                                                                       |  |              |       |       |  |       | 3      |   |  |  |       |  
|Current year tax losses not brought to account                                                                                                                                                  |  |              | 4,870  |       |  |       | 6,408  |   |  |  | 3,896  |  
|                                                                                                                                                                                                |  |              |        |       |  |       |        |   |  |  |        |  
|Income tax expense attributable to operating loss                                                                                                                                               |  |              | 22     |       |  |       | 30     |   |  |  | 45     |  
|                                                                                                                                                                                                |  |              |        |       |  |       |        |   |  |  |        |  
|(b) Future income tax benefit
not brought to account at balance date as
realisation of the benefit is not regarded as
virtually certain arising from:                                           |  |              |        |       |  |       |        |   |  |  |        |  
|(i) tax losses carried forward                                                                                                                                                                  |  |              | 12,885 |       |  |       | 20,843 |   |  |  | 17,758 |  
|(ii) timing differences                                                                                                                                                                         |  |              | (1,137 | )     |  |       | (836   | ) |  |  | 7,153  |  
|                                                                                                                                                                                                |  |              |        |       |  |       |        |   |  |  |        |  
|                                                                                                                                                                                                |  |              | 11,748 |       |  |       | 20,007 |   |  |  | 24,911 |  
|                                                                                                                                                                                                |  |              |        |       |  |       |        |   |  |  |        |  

71



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This future income tax benefit will only be obtained if:



| |                                                                                                                                                                             
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (i) the relevant companies derives future assessable income of a nature
and of an amount sufficient to enable the benefit from the deductions
for the losses to be realised;
|
| | (ii) the relevant companies continue to comply with the conditions for
deductibility imposed by tax legislation; and                                                        
|
| | (iii) no changes in tax legislation adversely affect the relevant
companies in realising the benefit from the deductions for the losses.                                    

(c)  The balance of the franking account at the end of the financial year for the
economic entity and the parent entity is Nil (2001: Nil).

(d)  Pretax loss for the year ended June 30, 2002 was taxed in the following
jurisdictions:

|         |  |              |         |       |  |       |         |   |  |  |         |  
|-------- |  | ------------ | ------- | ----- |  | ----- | ------- | - |  |  | ------- | -
|         |  | Consolidated
|         |  |             
|         |  | 2000         |         | 2001  |  | 2002 
|         |  | $'000        |         | $'000 |  | $'000
|        
|Domestic |  |              | (583    | )     |  |       | (2,496  | ) |  |  | (9,477  | )
|Foreign  |  |              | (13,074 | )     |  |       | (19,238 | ) |  |  | (5,151  | )
|         |  |              |         |       |  |       |         |   |  |  |         |  
|         |  |              | (13,657 | )     |  |       | (21,734 | ) |  |  | (14,628 | )
|         |  |              |         |       |  |       |         |   |  |  |         |  

Tax effected carry forward losses amounting to $3,736 can be carried forward
indefinitely and tax losses of $14,022 expire over the period 2007 through 2022.

72



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##### 



Note 4. Cash

|                         |  |              |        |       |  |  |        | 
|------------------------ |  | ------------ | ------ | ----- |  |  | ------ | 
|                         |  | Consolidated
|                         |  |             
|                         |  | 2001         |        | 2002 
|                         |  | $'000        |        | $'000
|Cash at bank and on hand |  |              | 1,353  |       |  |  | 17,674 | 
|Deposits at call         |  |              | 29,776 |       |  |  | 22,263 | 
|                         |  |              |        |       |  |  |        | 
|                         |  |              | 31,129 |       |  |  | 39,937 | 
|                         |  |              |        |       |  |  |        | 

Short term deposits have an average maturity
of 30 days and have a fixed or floating interest rate for the
term of the deposit.

73



---



##### 



Note 5. Receivables

|                             |  |              |       |       |  |  |       |  
|---------------------------- |  | ------------ | ----- | ----- |  |  | ----- | -
|                             |  | Consolidated
|                             |  |             
|                             |  | 2001         |       | 2002 
|                             |  | $'000        |       | $'000
|Current                      |  |              |       |       |  |  |       |  
|Trade debtors                |  |              | 4,711 |       |  |  | 4,644 |  
|Provision for doubtful debts |  |              | (204  | )     |  |  | (783  | )
|                             |  |              |       |       |  |  |       |  
|                             |  |              | 4,507 |       |  |  | 3,861 |  
|Other debtors                |  |              | 611   |       |  |  | 644   |  
|                             |  |              |       |       |  |  |       |  
|                             |  |              |       |       |  |  |       |  
|                             |  |              | 5,118 |       |  |  | 4,505 |  
|                             |  |              |       |       |  |  |       |  

|                                 |  |              |      |       |  |       |      |   |  |  |      |  
|-------------------------------- |  | ------------ | ---- | ----- |  | ----- | ---- | - |  |  | ---- | -
|                                 |  | Consolidated
|                                 |  |             
|                                 |  | 2000         |      | 2001  |  | 2002 
|                                 |  | $'000        |      | $'000 |  | $'000
|Provision for doubtful Accounts: |  |              |      |       |  |       |      |   |  |  |      |  
|Beginning Balance                |  |              | (136 | )     |  |       | (67  | ) |  |  | (204 | )
|Provisions charged to income     |  |              | 27   |       |  |       | (146 | ) |  |  | (579 | )
|Amounts charged net of recovery  |  |              | 42   |       |  |       | 9    |   |  |  |     |  
|                                 |  |              |      |       |  |       |      |   |  |  |      |  
|Ending Balance                   |  |              | (67  | )     |  |       | (204 | ) |  |  | (783 | )
|                                 |  |              |      |       |  |       |      |   |  |  |      |  

(a)  Australian dollar equivalents

Australian dollar equivalent of amounts
receivable in foreign currencies not
effectively hedged:

|                      |  |  |       |  |  |  |       | 
|--------------------- |  |  | ----- |  |  |  | ----- | 
|United States dollars |  |  | 2,961 |  |  |  | 2,675 | 
|Great British pounds  |  |  | 385   |  |  |  | 373   | 
|Euros                 |  |  | 175   |  |  |  | 166   | 
|Canadian dollars      |  |  | 221   |  |  |  | 279   | 
|New Zealand dollars   |  |  | 59    |  |  |  |      | 

(b)  Terms and conditions

(i)  Trade debtors are non interest bearing and generally on 30 day terms

(ii)  details of the terms and conditons of the related party receivables are set out in Note 19.

(iii)  other debtors are non-interest bearing and have repayment terms between 7 and 30 days.

74



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##### 



Note 6. Inventories

|                                  |  |              |       |       |  |  |        |  
|--------------------------------- |  | ------------ | ----- | ----- |  |  | ------ | -
|                                  |  | Consolidated
|                                  |  |             
|                                  |  | 2001         |       | 2002 
|                                  |  | $'000        |       | $'000
|Current                           |  |              |       |       |  |  |        |  
|Raw materials  at cost           |  |              |      |       |  |  | 398    |  
|Work in progress  at cost        |  |              | 5,792 |       |  |  | 4,674  |  
|Finished goods  at cost          |  |              | 1,932 |       |  |  | 1,976  |  
|Provision for diminution in value |  |              | (208  | )     |  |  | (153   | )
|                                  |  |              |       |       |  |  |        |  
|                                  |  |              | 7,516 |       |  |  | 6,895  |  
|Other inventory  at cost         |  |              |      |       |  |  | 12     |  
|                                  |  |              |       |       |  |  |        |  
|                                  |  |              | 7,516 |       |  |  | 6,907  |  
|                                  |  |              |       |       |  |  |        |  
|Non  Current                     |  |              |       |       |  |  |        |  
|Other inventory  at cost         |  |              | 284   |       |  |  | 235    |  
|Raw materials  at cost           |  |              | 3,410 |       |  |  | 1,889  |  
|Work in progress  at cost        |  |              | 1,716 |       |  |  |       |  
|Provision for diminution in value |  |              | (670  | )     |  |  | (1,527 | )
|                                  |  |              |       |       |  |  |        |  
|                                  |  |              | 4,740 |       |  |  | 597    |  
|                                  |  |              |       |       |  |  |        |  

|                                  |  |              |      |       |  |       |      |   |  |  |        |  
|--------------------------------- |  | ------------ | ---- | ----- |  | ----- | ---- | - |  |  | ------ | -
|                                  |  | Consolidated
|                                  |  |             
|                                  |  | 2000         |      | 2001  |  | 2002 
|                                  |  | $'000        |      | $'000 |  | $'000
|Provision for diminution in value |  |              |      |       |  |       |      |   |  |  |        |  
|Beginning balance                 |  |              | (150 | )     |  |       | (471 | ) |  |  | (878   | )
|                                  |  |              |      |       |  |       |      |   |  |  |        |  
|Provisions charged to income      |  |              | (404 | )     |  |       | (943 | ) |  |  | (1,402 | )
|Amounts charged net of recovery   |  |              | 83   |       |  |       | 536  |   |  |  | 600    |  
|                                  |  |              |      |       |  |       |      |   |  |  |        |  
|Ending balance                    |  |              | (471 | )     |  |       | (878 | ) |  |  | (1,680 | )
|                                  |  |              |      |       |  |       |      |   |  |  |        |  

75



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##### 



Note 7. Other Current Assets

|            |  |              |       |       |  |  |     | 
|----------- |  | ------------ | ----- | ----- |  |  | --- | 
|            |  | Consolidated
|            |  |             
|            |  | 2001         |       | 2002 
|            |  | $'000        |       | $'000
|Prepayments |  |              | 1,155 |       |  |  | 517 | 
|            |  |              |       |       |  |  |     | 

76



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##### 



Note 8. Property Plant & Equipment

|                                                       |  |              |        |       |  |  |        |  
|------------------------------------------------------ |  | ------------ | ------ | ----- |  |  | ------ | -
|                                                       |  | Consolidated
|                                                       |  |             
|                                                       |  | 2001         |        | 2002 
|                                                       |  | $'000        |        | $'000
|Land
          at cost                                 |  |              | 1,545  |       |  |  | 1,545  |  
|                                                       |  |              |        |       |  |  |        |  
|Buildings
          at cost                            |  |              | 3,456  |       |  |  | 3,459  |  
|Accumulated
          depreciation                     |  |              | (1,134 | )     |  |  | (1,424 | )
|                                                       |  |              |        |       |  |  |        |  
|                                                       |  |              | 2,322  |       |  |  | 2,035  |  
|                                                       |  |              |        |       |  |  |        |  
|Total
          Land and Buildings                     |  |              | 3,867  |       |  |  | 3,580  |  
|                                                       |  |              |        |       |  |  |        |  
|Plant
          and equipment under lease  at cost    |  |              | 7,008  |       |  |  | 6,446  |  
|Accumulated
          amortisation                     |  |              | (2,882 | )     |  |  | (3,448 | )
|                                                       |  |              |        |       |  |  |        |  
|                                                       |  |              | 4,126  |       |  |  | 2,998  |  
|                                                       |  |              |        |       |  |  |        |  
|Plant
          and equipment  at cost                |  |              | 5,061  |       |  |  | 4,971  |  
|Accumulated
          depreciation                     |  |              | (1,956 | )     |  |  | (2,440 | )
|                                                       |  |              |        |       |  |  |        |  
|                                                       |  |              | 3,105  |       |  |  | 2,531  |  
|                                                       |  |              |        |       |  |  |        |  
|Leasehold
          improvements  at cost             |  |              | 321    |       |  |  | 329    |  
|Accumulated
          depreciation                     |  |              | (128   | )     |  |  | (225   | )
|                                                       |  |              |        |       |  |  |        |  
|                                                       |  |              | 193    |       |  |  | 104    |  
|                                                       |  |              |        |       |  |  |        |  
|Total
          Property Plant and Equipment  at cost |  |              | 17,391 |       |  |  | 16,750 |  
|Accumulated
          amortisation and depreciation    |  |              | (6,100 | )     |  |  | (7,537 | )
|                                                       |  |              |        |       |  |  |        |  
|Total
          Property Plant and Equipment           |  |              | 11,291 |       |  |  | 9,213  |  
|                                                       |  |              |        |       |  |  |        |  

a) Assets pledged as security
Included in the balances of freehold land and buildings are assets over which mortgages have been granted as
security over leasing facilities. The terms of the mortgages preclude the assets being sold or being used as
further security without the permission of the mortgage holder.
Assets under lease are pledged as security for the associated lease liabilities.

The book value of assets pledged as security are:

|                              |  |  |       |  |  |  |       | 
|----------------------------- |  |  | ----- |  |  |  | ----- | 
|Freehold Land                 |  |  | 1,545 |  |  |  | 1,545 | 
|                              |  |  |       |  |  |  |       | 
|Freehold Buildings            |  |  | 2,322 |  |  |  | 2,035 | 
|                              |  |  |       |  |  |  |       | 
|Plant & Equipment under Lease |  |  | 4,126 |  |  |  | 2,998 | 

77



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##### 



b) Reconciliations
Reconciliations of the carrying amounts of plant, property and equipment at the beginning
and end of the current and previous financial year.

|                                                        |  |              |       |  
|------------------------------------------------------- |  | ------------ | ----- | -
|                                                        |  | Consolidated
|                                                        |  | 2002        
|                                                        |  | $'000       
|Freehold Land                                           |  |              |       |  
|Carrying amount at beginning                            |  |              | 1,545 |  
|                                                        |  |              |       |  
|                                                        |  |              | 1,545 |  
|                                                        |  |              |       |  
|Buildings on Freehold Land
Carrying amount at beginning |  |              | 2,322 |  
|Additions                                               |  |              | 3     |  
|Depreciation Expense                                    |  |              | (290  | )
|                                                        |  |              |       |  
|                                                        |  |              | 2,035 |  
|                                                        |  |              |       |  
|Plant and Equipment under Lease                         |  |              |       |  
|Carrying amount at beginning                            |  |              | 4,126 |  
|Additions                                               |  |              | 133   |  
|Disposals                                               |  |              | (486  | )
|Depreciation Expense                                    |  |              | (775  | )
|                                                        |  |              |       |  
|                                                        |  |              | 2,998 |  
|                                                        |  |              |       |  
|Plant and Equipment                                     |  |              |       |  
|Carrying amount at beginning                            |  |              | 3,105 |  
|Additions                                               |  |              | 134   |  
|Disposals                                               |  |              | (49   | )
|Depreciation Expense                                    |  |              | (659  | )
|                                                        |  |              |       |  
|                                                        |  |              | 2,531 |  
|                                                        |  |              |       |  
|Leasehold Improvements                                  |  |              |       |  
|Carrying amount at beginning                            |  |              | 193   |  
|Additions                                               |  |              | 7     |  
|Depreciation Expense                                    |  |              | (96   | )
|                                                        |  |              |       |  
|                                                        |  |              | 104   |  
|                                                        |  |              |       |  

During 2002, the company closed its New Zealand production facility and
transferred production to its Wyong plant. Although the majority of the New
Zealand property, plant and equipment has been transferred to the Wyong plant,
A$0.486 million relating to abandoned property, plant and equipment was written
off during the current year.

78



---



##### 



Note 9. Intangibles

|                         |  |              |      |       |  |  |      |  
|------------------------ |  | ------------ | ---- | ----- |  |  | ---- | -
|                         |  | Consolidated
|                         |  |             
|                         |  | 2001         |      | 2002 
|                         |  | $'000        |      | $'000
|Goodwill                 |  |              | 492  |       |  |  | 492  |  
|Accumulated amortisation |  |              | (235 | )     |  |  | (268 | )
|                         |  |              |      |       |  |  |      |  
|                         |  |              | 257  |       |  |  | 224  |  
|                         |  |              |      |       |  |  |      |  

Note 10. Payables

|                                                                                               |                         |  |              |       |       |  |       |       | 
|---------------------------------------------------------------------------------------------- | ----------------------- |  | ------------ | ----- | ----- |  | ----- | ----- | 
|                                                                                               |                         |  | Consolidated
|                                                                                               |                         |  |             
|                                                                                               |                         |  | 2001         |       | 2002 
|                                                                                               |                         |  | $'000        |       | $'000
|Current                                                                                        |                         |  |              |       |       |  |       |      
|Trade creditors                                                                                |                         |  | 3,623        |       |       |  | 2,425 |      
|Accruals of Trade creditors                                                                    |                         |  | 1,525        |       |       |  | 1,855 |      
|                                                                                               |                         |  |              |       |       |  |       |      
|                                                                                               |                         |  | 5,148        |       |       |  | 4,280 |      
|                                                                                               |                         |  |              |       |       |  |       |      
|                                                                                               |                         |  |              |       |       |  |       |      
|Australian dollar equivalents of amounts payable
in foreign currencies not effectively hedged: |                         |  |              |       |       |  |       |      
|                                                                                               | - United States dollars |  |              | 2,031 |       |  |       | 1,467 | 
|                                                                                               | - Great British pounds  |  |              | 90    |       |  |       | 49    | 
|                                                                                               | - Euro                  |  |              | 250   |       |  |       | 194   | 
|                                                                                               | - Canadian dollars      |  |              | 76    |       |  |       | 177   | 
|                                                                                               | - New Zealand dollars   |  |              | 27    |       |  |       | 51    | 
|Terms and Conditions relating to the above creditors                                           |                         |  |              |       |       |  |       |      
|- Trade creditors are non-interest bearing and
normally settled on 30 day terms                |                         |  |              |       |       |  |       |      
|- Other creditors are non-interest bearing and
normally settled on 30 day terms                |                         |  |              |       |       |  |       |      

79



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##### 



Note 11. Interest Bearing Liabilities

|                                                   |  |              |       |       |  |  |  |      
|-------------------------------------------------- |  | ------------ | ----- | ----- |  |  |  | -----
|                                                   |  | Consolidated
|                                                   |  |             
|                                                   |  | 2001         |       | 2002 
|                                                   |  | $'000        |       | $'000
|Current                                            |  |              |       |       |  |  |  |      
|                                                   |  |              |       |       |  |  |  |      
|Lease
          Liabilities (secured) (Note 24b)   |  |              | 1,364 |       |  |  |  | 845  
|                                                   |  |              |       |       |  |  |  |      
|                                                   |  |              |       |       |  |  |  |      
|Non
           Current                            |  |              |       |       |  |  |  |      
|                                                   |  |              |       |       |  |  |  |      
|Lease
          Liabilities (secured) (Note 24b)   |  |              | 2,375 |       |  |  |  | 2,287
|                                                   |  |              |       |       |  |  |  |      
|                                                   |  |              |       |       |  |  |  |      
|Secured
          Lease Liability  Finance Leases |  |              | 3,739 |       |  |  |  | 3,132
|                                                   |  |              |       |       |  |  |  |      

Terms and Conditions relating to the above financial instruments.
- Finance leases have an average lease term of 4 years with the option to purchase the asset at the completion of the
lease term for the residual value. The average interest rate implicit in the leases is 8.39% (2001: 8.22%). Lease
liabilities are secured by a fixed and floating charge over the assets of the Group.

Note 12. Provisions

|                      |  |              |     |       |  |  |  |    
|--------------------- |  | ------------ | --- | ----- |  |  |  | ---
|                      |  | Consolidated
|                      |  |             
|                      |  | 2001         |     | 2002 
|                      |  | $'000        |     | $'000
|Current               |  |              |     |       |  |  |  |    
|                      |  |              |     |       |  |  |  |    
|Employee Entitlements |  |              | 292 |       |  |  |  | 279
|                      |  |              |     |       |  |  |  |    
|                      |  |              |     |       |  |  |  |    
|Non  Current         |  |              |     |       |  |  |  |    
|                      |  |              |     |       |  |  |  |    
|Employee Entitlements |  |              | 121 |       |  |  |  | 164
|                      |  |              |     |       |  |  |  |    
|                      |  |              | 413 |       |  |  |  | 443
|                      |  |              |     |       |  |  |  |    

80



---



##### 



Note 13. Financing Arrangements

|                                                                                   |  |              |       |       |  |  |       | 
|---------------------------------------------------------------------------------- |  | ------------ | ----- | ----- |  |  | ----- | 
|                                                                                   |  | Consolidated
|                                                                                   |  |             
|                                                                                   |  | 2001         |       | 2002 
|                                                                                   |  | $'000        |       | $'000
|(a) Financing arrangements                                                         |  |              |       |       |  |  |       | 
|                                                                                   |  |              |       |       |  |  |       | 
|Unrestricted access was available at balance date
to the following lines of credit |  |              |       |       |  |  |       | 
|                                                                                   |  |              |       |       |  |  |       | 
|Total facilities
Lease facilities                                                  |  |              | 4,000 |       |  |  | 4,000 | 
|                                                                                   |  |              |       |       |  |  |       | 
|                                                                                   |  |              | 4,000 |       |  |  | 4,000 | 
|                                                                                   |  |              |       |       |  |  |       | 
|                                                                                   |  |              |       |       |  |  |       | 
|Used at balance date
Lease facilities                                              |  |              | 2,181 |       |  |  | 3,722 | 
|                                                                                   |  |              |       |       |  |  |       | 
|                                                                                   |  |              | 2,181 |       |  |  | 3,722 | 
|                                                                                   |  |              |       |       |  |  |       | 
|                                                                                   |  |              |       |       |  |  |       | 
|Unused at balance date                                                             |  |              | 1,819 |       |  |  | 278   | 
|                                                                                   |  |              |       |       |  |  |       | 
|Lease facilities                                                                   |  |              | 1,819 |       |  |  | 278   | 
|                                                                                   |  |              |       |       |  |  |       | 

(b)  The finance lease facilities are primarily sale-lease-back finance leases and are secured
by a fixed and floating charge over all the assets of the group as well as a registered
mortgage over the land and buildings.

Note 14. Contributed Equity

|                                              |  |              |         |       |  |  |         | 
|--------------------------------------------- |  | ------------ | ------- | ----- |  |  | ------- | 
|                                              |  | Consolidated
|                                              |  |             
|                                              |  | 2001         |         | 2002 
|                                              |  | $'000        |         | $'000
|Novogen Limited                               |  |              |         |       |  |  |         | 
|95,412,714 (2001: 95,069,775) ordinary shares |  |              | 121,222 |       |  |  | 121,839 | 
|                                              |  |              |         |       |  |  |         | 
|Marshall Edwards Inc                          |  |              |         |       |  |  |         | 
|52,023,000 (2001: 49,500,000) ordinary shares |  |              |        |       |  |  | 15,410  | 
|                                              |  |              |         |       |  |  |         | 
|                                              |  |              | 121,222 |       |  |  | 137,249 | 
|                                              |  |              |         |       |  |  |         | 

Terms and conditions of contributed equity
Ordinary shares have the right to receive dividends as declared and, in the
event of winding up the company, to participate in the proceeds from the sale
of all surplus assets in proportion to the number of and amounts paid up on
shares held.

Ordinary shares entitle their holder to one vote, either in person or by
proxy, at a meeting of the company.

(a)  Marshall Edwards Inc a subsidiary of Novogen Limited issued 49,500,000
ordinary shares in April 2001 for a total issue price of US$1.00 and a
further 2,523,000 ordinary shares in May 2002 to parties outside the economic
entity.
These ordinary shares have the right to receive dividends from Marshall
Edwards Inc as declared and, in the event of winding up the company, to
participate in the proceeds

81



---



##### 



from the sale of all surplus assets in proportion
to the number of and amounts paid up on shares held.

(b)  Movements in issued and paid up ordinary share capital of Novogen Limited
are as follows:

|                            |  |           |            |       |  |       |      |  |  |  |         | 
|--------------------------- |  | --------- | ---------- | ----- |  | ----- | ---- |  |  |  | ------- | 
|                            |  | Number of |            | Issue |  | $'000
|                            |  | Shares    |            | Price |  |      
|                            |  |           |            | $     |  |       |      | 
|On issue 1 July 2001        |  |           | 95,069,775 |       |  |       |      |  |  |  | 121,222 | 
|Options converted to shares |  |           | 131,886    |       |  |       | 1.47 |  |  |  | 194     | 
|Options converted to shares |  |           | 138,100    |       |  |       | 1.98 |  |  |  | 273     | 
|Options converted to shares |  |           | 53,000     |       |  |       | 2.00 |  |  |  | 106     | 
|Options converted to shares |  |           | 19,953     |       |  |       | 2.23 |  |  |  | 44      | 
|                            |  |           |            |       |  |       |      |  |  |  |         | 
|On issue 30 June 2002       |  |           | 95,412,714 |       |  |       |      |  |  |  | 121,839 | 
|                            |  |           |            |       |  |       |      |  |  |  |         | 

(c)  Particulars of options issued by Novogen Limited are as follows:

|              |  |          |         |        |  |          |  |             |           |          |  |              |           |                  |  |          |  |  |         |  |  |         |  |          
|------------- |  | -------- | ------- | ------ |  | -------- |  | ----------- | --------- | -------- |  | ------------ | --------- | ---------------- |  | -------- |  |  | ------- |  |  | ------- |  | ---------
|Calendar Year |  | Exercise |         | Expiry |  | Original |  | On issue    |           | Issued   |  | Converted to |           | Options          |  | On issue
|Granted       |  | Price    |         | Date   |  | issue    |  | 1 July 2001 |           | During   |  | fully paid   |           | forfeited during |  | 30 June 
|              |  |          |         |        |  |          |  |             |           | The year |  | shares       |           | the year         |  | 2002    
|1997 (i)      |  |          | $1.47   |        |  | 01/6/02  |  |             | 60,000    |          |  |              | 50,000    |                  |  | -        |  |  | 50,000  |  |  | -       |  |         
|1997(i)       |  |          | $1.47   |        |  | 26/03/02 |  |             | 150,024   |          |  |              | 81,886    |                  |  | -        |  |  | 81,886  |  |  | -       |  |         
|1997 (i)      |  |          | $1.98   |        |  | 23/01/02 |  |             | 138,100   |          |  |              | 138,100   |                  |  | -        |  |  | 138,100 |  |  | -       |  |         
|1998 (i)      |  |          | $2.23   |        |  | 25/03/03 |  |             | 180,728   |          |  |              | 120,413   |                  |  | -        |  |  | 19,953  |  |  | 5,737   |  | 94,723   
|1998(ii)      |  |          | $2.23   |        |  | 25/03/03 |  |             | 15,684    |          |  |              | 15,684    |                  |  | -        |  |  | -       |  |  | -       |  | 15,684   
|1998(iii)     |  |          | $2.91   |        |  | 24/09/03 |  |             | 700,000   |          |  |              | 700,000   |                  |  | -        |  |  | -       |  |  | -       |  | 700,000  
|1999 (i)      |  |          | $2.84   |        |  | 26/03/04 |  |             | 217,000   |          |  |              | 155,259   |                  |  | -        |  |  | -       |  |  | 55,751  |  | 99,508   
|1999(ii)      |  |          | $2.84   |        |  | 26/03/04 |  |             | 38,572    |          |  |              | 38,572    |                  |  | -        |  |  | -       |  |  | -       |  | 38,572   
|1999(ii)      |  |          | $2.00   |        |  | 22/12/03 |  |             | 104,734   |          |  |              | 104,734   |                  |  | -        |  |  | 53,000  |  |  | -       |  | 51,734   
|1999(ii)      |  |          | $2.9460 |        |  | 23/06/04 |  |             | 20,000    |          |  |              | 20,000    |                  |  | -        |  |  | -       |  |  | -       |  | 20,000   
|1999(ii)      |  |          | $2.7725 |        |  | 23/06/04 |  |             | 85,000    |          |  |              | 85,000    |                  |  | -        |  |  | -       |  |  | -       |  | 85,000   
|2000(i)       |  |          | $4.00   |        |  | 13/03/05 |  |             | 221,028   |          |  |              | 183,036   |                  |  | -        |  |  | -       |  |  | 45,672  |  | 137,364  
|2000(ii)      |  |          | $4.00   |        |  | 13/03/05 |  |             | 27,360    |          |  |              | 27,360    |                  |  | -        |  |  | -       |  |  | -       |  | 27,360   
|2000(ii)      |  |          | $3.5819 |        |  | 20/07/05 |  |             | 50,180    |          |  |              | 50,180    |                  |  | -        |  |  | -       |  |  | -       |  | 50,180   
|2000(i)       |  |          | $4.00   |        |  | 30/11/05 |  |             | 238,220   |          |  |              | 238,220   |                  |  | -        |  |  | -       |  |  | 62,584  |  | 175,636  
|2000(ii)      |  |          | $4.00   |        |  | 30/11/05 |  |             | 7,248     |          |  |              | 7,248     |                  |  | -        |  |  | -       |  |  | -       |  | 7,248    
|2000(iv)      |  |          | $4.01   |        |  | 27/10/05 |  |             | 9,384     |          |  |              | 9,384     |                  |  | -        |  |  | -       |  |  | 3,128   |  | 6,256    
|2001(i)       |  |          | $1.53   |        |  | 10/08/06 |  |             | 695,528   |          |  |              | -         |                  |  | 695,528  |  |  | -       |  |  | 99,080  |  | 596,448  
|2001(ii)      |  |          | $2.05   |        |  | 13/07/06 |  |             | 101,950   |          |  |              | -         |                  |  | 101,950  |  |  | -       |  |  | -       |  | 101,950  
|              |  |          |         |        |  |          |  |             |           |          |  |              |           |                  |  |          |  |  |         |  |  |         |  |          
|Total         |  |          |         |        |  |          |  |             | 3,060,740 |          |  |              | 2,025,076 |                  |  | 797,478  |  |  | 342,939 |  |  | 271,952 |  | 2,207,663
|              |  |          |         |        |  |          |  |             |           |          |  |              |           |                  |  |          |  |  |         |  |  |         |  |          



|(i)   |  | Options issued under the Employee Share Option Plan                                       
|----- |  | ------------------------------------------------------------------------------------------
|     
|(ii)  |  | Options issued to consultants                                                             
|     
|(iii) |  | Options issued to the Managing Director by resolution of shareholders
on 24 September 1998
|     
|(iv)  |  | Option issued to non-executive Directors by resolution of shareholders
on 27 October 2000 

The last trade of Novogen Limited shares on the Australian Stock Exchange on
28 June 2002 was $2.05.

82



---



##### 



Share Option Plans
Employee Share Option Plan
The Employee Share Option Plan provides for the issue of options to eligible
employees being an employee or Director of the Company or related company.
Each option entitles its holder to acquire one fully paid ordinary share and
is exercisable at a price equal to the weighted average price of such shares
at the close of trading on the Australian Stock Exchange Limited for the five
days prior to the date of issue. Options are not transferable. The option
lapses if the employee ceases to be an employee during the vesting period.
There are currently 42 employees eligible for this scheme.

Typically employee options vest in equal amounts per year over four years.
Options are exercisable once vested.

Consultant Options
The Company has also granted options by way of compensation to consultants
that perform services for Novogen and its controlled entities.

Typically consultant options vest in equal amounts per year over four years or
at some other rate as determined by the Board of Directors. Options are
exercisable once vested.

ADR Program
Novogens common stock trades on NASDAQ under an ADR program. One ADR is equal
to five shares of common stock. All stock traded under the ADR program has the
same voting and attached rights as ordinary common stock.

Note 15. Outside Equity Interest

|                                                                 |  |              |   |       |  |  |     |  
|---------------------------------------------------------------- |  | ------------ | - | ----- |  |  | --- | -
|                                                                 |  | Consolidated
|                                                                 |  |             
|                                                                 |  | 2001         |   | 2002 
|                                                                 |  | $'000        |   | $'000
|Reconciliation of outside equity interest in controlled entities |  |              |   |       |  |  |     |  
|                                                                 |  |              |   |       |  |  |     |  
|Opening Balance                                                  |  |              |  |       |  |  |    |  
|                                                                 |  |              |   |       |  |  |     |  
|Additions to outside equity interest by way of share issue       |  |              |  |       |  |  | 785 |  
|                                                                 |  |              |   |       |  |  |     |  
|Add Share of operating losses of controlled entities             |  |              |  |       |  |  | (19 | )
|                                                                 |  |              |   |       |  |  |    
|                                                                 |  |              |   |       |  |  |     |  
|Closing Balance                                                  |  |              |  |       |  |  | 766 |  
|                                                                 |  |              |   |       |  |  |    

83



---



##### 



Note 16. Segment Information

Segment accounting policies

The group generally accounts for intercompany sales and transfers as if the
sales or transfers were to third parties at current market prices. Revenues
are attributed to geographic areas based on the location of the assets
producing the revenues.

Segment accounting policies are the same as the consolidated entitys
policies described in Note 1. During the financial year there were no
changes in the segment accounting policies that had a material effect on the
segment information.

84



---



##### 



SEGMENT INFORMATION  PRIMARY SEGMENT



|                                                                            |  | Australasia |         | North America |  | Europe
|--------------------------------------------------------------------------- |  | ----------- | ------- | ------------- |  | ------
|                                                                           
|                                                                           
|                                                                           
|                                                                            |  | 2002        |         | 2001          |  | 2000  
|                                                                           
|                                                                           
|                                                                           
|                                                                            |  | $'000       |         | $'000         |  | $'000 
|                                                                           
|                                                                           
|                                                                           
|Geographical
        Segments                                               |  |             |         |               |  |       
|                                                                            |  |             |         |               |  |       
|Revenue                                                                     |  |             |         |               |  |       
|                                                                            |  |             |         |               |  |       
|Sales
        to customers outside the consolidated entity                  |  |             | 5,224   |               |  |       
|                                                                            |  |             |         |               |  |       
|Other
        revenues from customers outside the consolidated entity       |  |             | 3,498   |               |  |       
|                                                                            |  |             |         |               |  |       
|Intersegment
        Revenues                                               |  |             | 4,571   |               |  |       
|                                                                            |  |             |         |               |  |       
|                                                                            |  |             |         |               |  |       
|Total
        segment revenue                                               |  |             | 13,293  |               |  |       
|                                                                            |  |             |         |               |  |       
|                                                                            |  |             |         |               |  |       
|Unallocated
        revenue                                                 |  |             |         |               |  |       
|                                                                            |  |             |         |               |  |       
|Total
        Consolidated Revenue                                          |  |             |         |               |  |       
|                                                                            |  |             |         |               |  |       
|Results                                                                     |  |             |         |               |  |       
|                                                                            |  |             |         |               |  |       
|Segment
        result                                                      |  |             | (11,946 | )             |  |       
|                                                                            |  |             |         |               |  |       
|                                                                            |  |             |         |               |  |       
|Unallocated
        expenses                                                |  |             |         |               |  |       
|Consolidated
        entity loss from ordinary activities before income tax |  |             |         |               |  |       
|                                                                            |  |             |         |               |  |       
|                                                                            |  |             |         |               |  |       
|Income
        tax expense                                                  |  |             |         |               |  |       
|                                                                            |  |             |         |               |  |       
|Net
        Loss                                                            |  |             |         |               |  |       
|                                                                            |  |             |         |               |  |       



|                                                                                  |  |  |  |  |  |  |  | Elimination |  | Consolidated
|--------------------------------------------------------------------------------- |  |  |  |  |  |  |  | ----------- |  | ------------
|                                                                                  |  |  |  |  |  |  |  |             |  |             
|                                                                                  |  |  |  |  |  |  |  |             |  |             
|Geographical
        Segments                                                     |  |  |  |  |  |  |  |             |  |             
|                                                                                  |  |  |  |  |  |  |  |             |  |             
|Revenue                                                                           |  |  |  |  |  |  |  |             |  |             
|                                                                                  |  |  |  |  |  |  |  |             |  |             
|Sales to customers outside 
      the consolidated entity                         |  |  |  |  |  |  |  |             |  |             
|                                                                                  |  |  |  |  |  |  |  |             |  |             
|Other revenues from 
      customers outside the 
      consolidated entity       |  |  |  |  |  |  |  |             |  |             
|                                                                                  |  |  |  |  |  |  |  |             |  |             
|Intersegment
        Revenues                                                     |  |  |  |  |  |  |  |             |  |             
|                                                                                  |  |  |  |  |  |  |  |             |  |             
|Total
        segment revenue                                                     |  |  |  |  |  |  |  |             |  |             
|                                                                                  |  |  |  |  |  |  |  |             |  |             
|                                                                                  |  |  |  |  |  |  |  |             |  |             
|Unallocated
        revenue                                                       |  |  |  |  |  |  |  |             |  |             
|                                                                                  |  |  |  |  |  |  |  |             |  |             
|Total
        Consolidated Revenue                                                |  |  |  |  |  |  |  |             |  |             
|                                                                                  |  |  |  |  |  |  |  |             |  |             
|Results                                                                           |  |  |  |  |  |  |  |             |  |             
|                                                                                  |  |  |  |  |  |  |  |             |  |             
|Segment
        result                                                            |  |  |  |  |  |  |  |             |  |             
|                                                                                  |  |  |  |  |  |  |  |             |  |             
|                                                                                  |  |  |  |  |  |  |  |             |  |             
|Unallocated
        expenses                                                      |  |  |  |  |  |  |  |             |  |             
|Consolidated entity loss from 
      ordinary activities before 
      income tax |  |  |  |  |  |  |  |             |  |             
|                                                                                  |  |  |  |  |  |  |  |             |  |             
|                                                                                  |  |  |  |  |  |  |  |             |  |             
|Income
        tax expense                                                        |  |  |  |  |  |  |  |             |  |             
|                                                                                  |  |  |  |  |  |  |  |             |  |             
|                                                                                  |  |  |  |  |  |  |  |             |  |             
|Net
        Loss                                                                  |  |  |  |  |  |  |  |             |  |             
|                                                                                  |  |  |  |  |  |  |  |             |  |             

85



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##### 



|                                                                                                               |  |              |        |               |  |       |         |       |             |       |              |       |  |       |        |       |  |       |       |       |  |  |       |  |  |  |         |   |  |  |         |   |  |  |        |  |  |  |        | 
|-------------------------------------------------------------------------------------------------------------- |  | ------------ | ------ | ------------- |  | ----- | ------- | ----- | ----------- | ----- | ------------ | ----- |  | ----- | ------ | ----- |  | ----- | ----- | ----- |  |  | ----- |  |  |  | ------- | - |  |  | ------- | - |  |  | ------ |  |  |  | ------ | 
|                                                                                                               |  | Australiasia |        | North America |  |       | Europe  |       | Elimination |       | Consolidated
|                                                                                                               |  | 2002         |        | 2001          |  | 2002  |         | 2001  |             | 2002  |              | 2001  |  | 2002  |        | 2001  |  | 2002  |       | 2001 
|                                                                                                               |  | $'000        |        | $'000         |  | $'000 |         | $'000 |             | $'000 |              | $'000 |  | $'000 |        | $'000 |  | $'000 |       | $'000
|Geographical
          Segments                                                                                |  |              |        |               |  |       |         |       |             |       |              |       |  |       |        |       |  |       |       |       |  |  |       |  |  |  |         |   |  |  |         |   |  |  |        |  |  |  |        | 
|                                                                                                               |  |              |        |               |  |       |         |       |             |       |              |       |  |       |        |       |  |       |       |       |  |  |       |  |  |  |         |   |  |  |         |   |  |  |        |  |  |  |        | 
|Assets                                                                                                         |  |              |        |               |  |       |         |       |             |       |              |       |  |       |        |       |  |       |       |       |  |  |       |  |  |  |         |   |  |  |         |   |  |  |        |  |  |  |        | 
|                                                                                                               |  |              |        |               |  |       |         |       |             |       |              |       |  |       |        |       |  |       |       |       |  |  |       |  |  |  |         |   |  |  |         |   |  |  |        |  |  |  |        | 
|Segment
          assets                                                                                       |  |              | 98,466 |               |  |       | 127,972 |       |             |       | 22,913       |       |  |       | 13,510 |       |  |       | 1,477 |       |  |  | 1,542 |  |  |  | (60,956 | ) |  |  | (81,818 | ) |  |  | 61,900 |  |  |  | 61,206 | 
|                                                                                                               |  |              |        |               |  |       |         |       |             |       |              |       |  |       |        |       |  |       |       |       |  |  |       |  |  |  |         |   |  |  |         |   |  |  |        |  |  |  |        | 
|                                                                                                               |  |              |        |               |  |       |         |       |             |       |              |       |  |       |        |       |  |       |       |       |  |  |       |  |  |  |         |   |  |  |         |   |  |  |        |  |  |  |        | 
|Liabilities                                                                                                    |  |              |        |               |  |       |         |       |             |       |              |       |  |       |        |       |  |       |       |       |  |  |       |  |  |  |         |   |  |  |         |   |  |  |        |  |  |  |        | 
|                                                                                                               |  |              |        |               |  |       |         |       |             |       |              |       |  |       |        |       |  |       |       |       |  |  |       |  |  |  |         |   |  |  |         |   |  |  |        |  |  |  |        | 
|Segment
          Liabilities                                                                                  |  |              | 11,082 |               |  |       | 12,994  |       |             |       | 52,699       |       |  |       | 56,058 |       |  |       | 9,221 |       |  |  | 8,017 |  |  |  | (65,147 | ) |  |  | (67,769 | ) |  |  | 7,855  |  |  |  | 9,300  | 
|                                                                                                               |  |              |        |               |  |       |         |       |             |       |              |       |  |       |        |       |  |       |       |       |  |  |       |  |  |  |         |   |  |  |         |   |  |  |        |  |  |  |        | 
|Other
          segment information                                                                            |  |              |        |               |  |       |         |       |             |       |              |       |  |       |        |       |  |       |       |       |  |  |       |  |  |  |         |   |  |  |         |   |  |  |        |  |  |  |        | 
|                                                                                                               |  |              |        |               |  |       |         |       |             |       |              |       |  |       |        |       |  |       |       |       |  |  |       |  |  |  |         |   |  |  |         |   |  |  |        |  |  |  |        | 
|Acquistion
          of property plant and equipment, intangible assets and other non current
          assets |  |              | 236    |               |  |       | 1,496   |       |             |       | 26           |       |  |       | 56     |       |  |       | 15    |       |  |  | 13    |  |  |  |        |   |  |  |        |   |  |  | 277    |  |  |  | 1,565  | 
|                                                                                                               |  |              |        |               |  |       |         |       |             |       |              |       |  |       |        |       |  |       |       |       |  |  |       |  |  |  |         |   |  |  |         |   |  |  |        |  |  |  |        | 
|Depreciation                                                                                                   |  |              | 907    |               |  |       | 1,187   |       |             |       | 125          |       |  |       | 116    |       |  |       | 13    |       |  |  | 9     |  |  |  |        |   |  |  |        |   |  |  | 1,045  |  |  |  | 1,312  | 
|                                                                                                               |  |              |        |               |  |       |         |       |             |       |              |       |  |       |        |       |  |       |       |       |  |  |       |  |  |  |         |   |  |  |         |   |  |  |        |  |  |  |        | 
|Amortisation                                                                                                   |  |              | 775    |               |  |       | 952     |       |             |       |             |       |  |       |       |       |  |       |      |       |  |  |      |  |  |  | 33      |   |  |  | 33      |   |  |  | 808    |  |  |  | 985    | 
|                                                                                                               |  |              |        |               |  |       |         |       |             |       |              |       |  |       |        |       |  |       |       |       |  |  |       |  |  |  |         |   |  |  |         |   |  |  |        |  |  |  |        | 
|Non
          cash expenses other than depreciation and amortisation                                           |  |              | 827    |               |  |       | 273     |       |             |       | 615          |       |  |       | 309    |       |  |       | 2     |       |  |  | 2     |  |  |  | 35      |   |  |  |        |   |  |  | 1,479  |  |  |  | 584    | 
|                                                                                                               |  |              |        |               |  |       |         |       |             |       |              |       |  |       |        |       |  |       |       |       |  |  |       |  |  |  |         |   |  |  |         |   |  |  |        |  |  |  |        | 
|Long
          Lived Assets                                                                                    |  |              | 9,624  |               |  |       | 11,605  |       |             |       | 65           |       |  |       | 164    |       |  |       | 18    |       |  |  | 17    |  |  |  | (495    | ) |  |  | (495    | ) |  |  | 9,213  |  |  |  | 11,291 | 

Note:
The Novogen Group operates subsidiary companies in 3 major geographical areas being Australiasia, North America including the USA and Canada and Europe including the UK and the Netherlands. The subsidiaries
are all involved in the selling and marketing of Novogens dietary supplements including Promensil, Trinovin and Rimostil. The US company is also responsible for manufacturing and packaging products for the
domestic US market. The other countries products are supplied from Australia in fully finished form.

All of the Groups sales revenues are sales of Novogens dietary supplements. The Novogen Group operates in one business segment being to manufacture, market and sell dietary supplements.

86



---



##### 



Note 17. Remuneration of Directors

|                                                                                                                                                                                                                                                  |  |              |         |      |  |  |         | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------ | ------- | ---- |  |  | ------- | 
|                                                                                                                                                                                                                                                  |  | Consolidated
|                                                                                                                                                                                                                                                  |  |             
|                                                                                                                                                                                                                                                  |  | 2001         |         | 2002
|                                                                                                                                                                                                                                                  |  | $            |         | $   
|Income paid or payable, or otherwise made
available in respect of the financial
year, to all Directors of each entity in
the consolidated entity and in connection
with the management of affairs of the
parent entity or its controlled entities |  |              | 832,741 |      |  |  | 951,728 | 
|                                                                                                                                                                                                                                                  |  |              |         |      |  |  |         | 

The number of Directors of Novogen Limited whose total income (including
superannuation contributions) falls within the specified bands is:

|         |  |  |   |  |  |   |         |  |  |                 |   |      |  |  |   | 
|-------- |  |  | - |  |  | - | ------- |  |  | --------------- | - | ---- |  |  | - | 
|         |  |  |   |  |  |   |         |  |  | Novogen Limited
|         |  |  |   |  |  |   |         |  |  |                
|         |  |  |   |  |  |   |         |  |  | 2001            |   | 2002
|$10,000  |  |  |  |  |  | $ | 19,999  |  |  |                 |  |      |  |  | 1 | 
|$30,000  |  |  |  |  |  | $ | 39,999  |  |  |                 |  |      |  |  | 1 | 
|$40,000  |  |  |  |  |  | $ | 49,999  |  |  |                 | 2 |      |  |  | 1 | 
|$60,000  |  |  |  |  |  | $ | 69,999  |  |  |                 | 1 |      |  |  |  | 
|$70,000  |  |  |  |  |  | $ | 79,999  |  |  |                 |  |      |  |  | 1 | 
|$310,000 |  |  |  |  |  | $ | 319,999 |  |  |                 | 1 |      |  |  |  | 
|$320,000 |  |  |  |  |  | $ | 329,999 |  |  |                 |  |      |  |  | 1 | 
|$370,000 |  |  |  |  |  | $ | 379,999 |  |  |                 | 1 |      |  |  |  | 
|$450,000 |  |  |  |  |  | $ | 459,999 |  |  |                 |  |      |  |  | 1 | 

87



---



##### 



Note 18. Remuneration of Executives

|                                                                                                                                                                                                                                                                                                                                              |  |              |           |      |  |  |           | 
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------ | --------- | ---- |  |  | --------- | 
|                                                                                                                                                                                                                                                                                                                                              |  | Consolidated
|                                                                                                                                                                                                                                                                                                                                              |  |             
|                                                                                                                                                                                                                                                                                                                                              |  | 2001         |           | 2002
|                                                                                                                                                                                                                                                                                                                                              |  | $            |           | $   
|Remuneration received, or due and
receivable, by executive officers of
the consolidated entity whose
remuneration is $100,000 or more from
entities in the consolidated entity
or a related parties, in connection
with the management of the affairs of
the entities in the consolidated
entity whether as an executive
officer or otherwise |  |              | 1,824,426 |      |  |  | 2,361,897 | 
|                                                                                                                                                                                                                                                                                                                                              |  |              |           |      |  |  |           | 

The number of executive officers (including Directors) of the consolidated
entity whose remuneration from entities in the economic entity and related
parties was within the specified bands is as follows:

|         |  |  |   |  |  |   |         |  |  |              |   |      |  |  |   | 
|-------- |  |  | - |  |  | - | ------- |  |  | ------------ | - | ---- |  |  | - | 
|         |  |  |   |  |  |   |         |  |  | Consolidated
|         |  |  |   |  |  |   |         |  |  |             
|         |  |  |   |  |  |   |         |  |  | 2001         |   | 2002
|         |  |  |   |  |  |   |         |  |  |              |   |     
|$100,000 |  |  |  |  |  | $ | 119,000 |  |  |              | 1 |      |  |  | 3 | 
|$130,000 |  |  |  |  |  | $ | 139,999 |  |  |              |  |      |  |  | 1 | 
|$140,000 |  |  |  |  |  | $ | 149,999 |  |  |              | 1 |      |  |  | 1 | 
|$150,000 |  |  |  |  |  | $ | 159,999 |  |  |              |  |      |  |  | 1 | 
|$160,000 |  |  |  |  |  | $ | 169,999 |  |  |              |  |      |  |  | 1 | 
|$170,000 |  |  |  |  |  | $ | 179,999 |  |  |              |  |      |  |  | 1 | 
|$200,000 |  |  |  |  |  | $ | 209,999 |  |  |              | 1 |      |  |  |  | 
|$210,000 |  |  |  |  |  | $ | 219,999 |  |  |              | 2 |      |  |  |  | 
|$240,000 |  |  |  |  |  | $ | 249,999 |  |  |              |  |      |  |  | 1 | 
|$250,000 |  |  |  |  |  | $ | 259,999 |  |  |              | 1 |      |  |  | 1 | 
|$310,000 |  |  |  |  |  | $ | 319,999 |  |  |              | 1 |      |  |  |  | 
|$320,000 |  |  |  |  |  | $ | 329,999 |  |  |              |  |      |  |  | 1 | 
|$370,000 |  |  |  |  |  | $ | 379,999 |  |  |              | 1 |      |  |  |  | 
|$450,000 |  |  |  |  |  | $ | 459,999 |  |  |              |  |      |  |  | 1 | 

88



---



##### 



Note 19. Related Party Disclosures

Directors

The Directors of Novogen Limited at any time during the financial year
are as follows:

Graham E Kelly
Peter B Simpson
Peter C Bradfield
Philip A Johnston
Christopher Naughton
Paul J Nestel

Equity Interests of Directors

Interests in the Equity of Novogen Limited held by current Directors and
their Director Related Entities

|             |  |                            |           |         |  |        |           |        |  |  |         |  |  |  |         | 
|------------ |  | -------------------------- | --------- | ------- |  | ------ | --------- | ------ |  |  | ------- |  |  |  | ------- | 
|             |  | Ordinary Shares Fully Paid |           | Options
|             |  |                            |           |        
|             |  | 2001                       |           | 2002    |  | 2001   |           | 2002  
|             |  | Number                     |           | Number  |  | Number |           | Number
|             |  |                            |           |         |  |        |           |       
|G E Kelly    |  |                            | 9,519,059 |         |  |        | 9,131,256 |        |  |  |        |  |  |  |        | 
|C Naughton   |  |                            | 156,545   |         |  |        | 318,511   |        |  |  | 838,100 |  |  |  | 700,000 | 
|P A Johnston |  |                            | 43,000    |         |  |        | 43,594    |        |  |  | 3,128   |  |  |  | 3,128   | 
|P B Simpson  |  |                            | 1,000     |         |  |        | 500       |        |  |  | 3,128   |  |  |  | 3,128   | 
|P J Nestel   |  |                            | 5,000     |         |  |        | 16,000    |        |  |  | 30,000  |  |  |  | 20,000  | 
|             |  |                            |           |         |  |        |           |        |  |  |         |  |  |  |         | 
|             |  |                            | 9,724,604 |         |  |        | 9,509,861 |        |  |  | 874,356 |  |  |  | 726,256 | 
|             |  |                            |           |         |  |        |           |        |  |  |         |  |  |  |         | 

Movements in Directors Equity Holdings

During the year Directors and Director-Related Entities purchased 104,563
ordinary shares and disposed of 454,000 shares. Mr C Naughton acquired
138,100 ordinary shares from the exercise of options at an average
exercise price of $1.98 and Prof. P Nestel acquired 10,000 ordinary
shares through the exercise of options at an average price of $1.47.

Other Transactions With Directors and Director-Related Entities

Sale of redundant hay stock was made to Mr P. Johnston totalling $6,341.
This was made under normal commercial terms and conditions.

Ultimate Parent

Novogen Limited, a company incorporated in Australia, is the ultimate
parent entity.

89Note 20. Remuneration of Auditors

|                                                                                                                                                                         |  |              |         |      |  |  |         | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ------------ | ------- | ---- |  |  | ------- | 
|                                                                                                                                                                         |  | Consolidated
|                                                                                                                                                                         |  |             
|                                                                                                                                                                         |  | 2001         |         | 2002
|                                                                                                                                                                         |  | $            |         | $   
|a) Amounts
          received or due and receivable by Ernst & Young Australia for:                                                                                      |  |              |         |      |  |  |         | 
|(a) an
          audit or review of the financial report of the entity and any other
          entity in the consolidated entity;                                        |  |              | 72,715  |      |  |  | 80,500  | 
|(b) other
          services in relation to the entity and any other entity in the consolidated
          entity                                                         |  |              | 369,917 |      |  |  | 65,677  | 
|                                                                                                                                                                         |  |              |         |      |  |  |         | 
|Amounts
          received or due and receivable by a                                                                                                                    |  |              | 442,632 |      |  |  | 146,177 | 
|related
          practice of Ernst & Young Australia for:                                                                                                               |  |              |         |      |  |  |         | 
|other
          services in relation to any entity in the economic group                                                                                                 |  |              |        |      |  |  | 225,819 | 
|Amounts
          received or due and receivable by auditors of other subsidiaries in
          the economic entity for an audit/review, which are not already disclosed |  |              | 52,874  |      |  |  | 42,942  | 
|                                                                                                                                                                         |  |              |         |      |  |  |         | 
|                                                                                                                                                                         |  |              | 495,506 |      |  |  | 414,938 | 
|                                                                                                                                                                         |  |              |         |      |  |  |         | 

90



---



##### 



21. Statement of Cash Flows

|                                                                                                |  |              |         |        |  |        |         |   |  |  |         |  
|----------------------------------------------------------------------------------------------- |  | ------------ | ------- | ------ |  | ------ | ------- | - |  |  | ------- | -
|                                                                                                |  | Consolidated
|                                                                                                |  |             
|                                                                                                |  | 2000         |         | 2001   |  | 2002  
|                                                                                                |  | A$'000       |         | A$'000 |  | A$'000
|RECONCILIATION OF OPERATING LOSS AFTER
INCOME TAX
TO NET CASHFLOWS FROM OPERATIONING ACTIVITIES |  |              |         |        |  |        |         |   |  |  |         |  
|Operating loss after income tax                                                                 |  |              | (13,679 | )      |  |        | (21,764 | ) |  |  | (14,673 | )
|Depreciation and amortisation                                                                   |  |              | 1,842   |        |  |        | 2,297   |   |  |  | 1,853   |  
|(Profit)/loss on sale of fixed assets                                                           |  |              | 25      |        |  |        | (112    | ) |  |  | 494     |  
|Changes in assets and liabilities:                                                              |  |              |         |        |  |        |         |   |  |  |         |  
|(increase)/decrease in trade debtors                                                            |  |              | (1,681  | )      |  |        | 400     |   |  |  | 67      |  
|(increase)/decrease in prepayments                                                              |  |              | (79     | )      |  |        | 127     |   |  |  | 638     |  
|(increase)/decrease in other debtors                                                            |  |              | (34     | )      |  |        | (173    | ) |  |  | (33     | )
|(increase)/decrease in inventories                                                              |  |              | (6,898  | )      |  |        | 4,231   |   |  |  | 4,752   |  
|increase/(decrease) in accounts payable                                                         |  |              | 1,843   |        |  |        | (2,583  | ) |  |  | (868    | )
|increase/(decrease) in provisions                                                               |  |              | 130     |        |  |        | 179     |   |  |  | 609     |  
|exchange rate change on opening cash                                                            |  |              | (221    | )      |  |        | (44     | ) |  |  | 482     |  
|                                                                                                |  |              |         |        |  |        |         |   |  |  |         |  
|Net cash (outflow) from operating
activities                                                    |  |              | (18,752 | )      |  |        | (17,442 | ) |  |  | (6,679  | )
|                                                                                                |  |              |         |        |  |        |         |   |  |  |         |  

b) Finance Leases

During the financial year the consolidated entity acquired plant and equipment
with an aggregate fair value of $133,000 (2001: $608,000), by means of finance
leases.

91Note 22. Earnings per Share

|                                                                                                          |  |              |         |       |  |  |         |  
|--------------------------------------------------------------------------------------------------------- |  | ------------ | ------- | ----- |  |  | ------- | -
|                                                                                                          |  | Consolidated
|                                                                                                          |  |             
|                                                                                                          |  | 2001         |         | 2002 
|                                                                                                          |  | $'000        |         | $'000
|The following reflects the income and share data used in
calculating basic and diluted earnings per share |  |              |         |       |  |  |         |  
|                                                                                                          |  |              |         |       |  |  |         |  
|Net loss                                                                                                  |  |              | (21,764 | )     |  |  | (14,673 | )
|                                                                                                          |  |              |         |       |  |  |         |  
|Adjustments:                                                                                              |  |              |         |       |  |  |         |  
|                                                                                                          |  |              |         |       |  |  |         |  
|Net loss attibutable to outside equity interests                                                          |  |              |        |       |  |  | (19     | )
|                                                                                                          |  |              |         |       |  |  |         |  
|Earnings used in calculating basic and diluted earnings per
share                                         |  |              | (21,764 | )     |  |  | (14,654 | )
|                                                                                                          |  |              |         |       |  |  |         |  

|                                                                                                    |  |                  |            |                  |  |  |            |  
|--------------------------------------------------------------------------------------------------- |  | ---------------- | ---------- | ---------------- |  |  | ---------- | -
|                                                                                                    |  | Number of Shares |            | Number of Shares
|Weighted average number of ordinary shares used in
calculating basic and diluted earnings per share |  |                  | 85,646,585 |                  |  |  | 95,187,449 |  
|                                                                                                    |  |                  |            |                  |  |  |            |  
|Basic and Diluted loss per share  (cents)                                                          |  |                  | (25.4      | )                |  |  | (15.4      | )

Diluted earnings per share:

The notional issue of potential ordinary shares resulting from the exercise of options detailed in Note
14(c) does not result in diluted earnings per share that shows a different view of the earnings
performance of the Company, therefore the information has not been disclosed.

Conversions, call subscriptions or issues after 30 June 2002

There have been no other conversions to, calls of, or subscriptions for ordinary shares or issues of
potential ordinary shares since the reporting date and before the completion of this financial report.

92



---



##### 



Note 23. Financial Instruments



| | (a) |  | Credit risk exposures
The credit risk on financial assets of the economic entity is the
carrying amount, net of any provisions for doubtful debts.                                                     
| | --- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) |  | Interest Rate Risk Exposures
The economic entitys exposure to interest rate risk and the
effective weighted average interest rate for each class of
financial assets and liabilities is set out below.

FINANCIAL INSTURMENTS

|                                           |  |      |    |       |  |               |       |                |  |                   |        |              |  |       |        |              |  |       |        |       |  |       |        |      |  |      |        |   |  |  |       |  |  |  |       |  |  |  |        |  |  |  |        |  |  |  |      |   |  |  |      |  
|------------------------------------------ |  | ---- | -- | ----- |  | ------------- | ----- | -------------- |  | ----------------- | ------ | ------------ |  | ----- | ------ | ------------ |  | ----- | ------ | ----- |  | ----- | ------ | ---- |  | ---- | ------ | - |  |  | ----- |  |  |  | ----- |  |  |  | ------ |  |  |  | ------ |  |  |  | ---- | - |  |  | ---- | -
|                                           |  |      |    |       |  | Floating      |       | Fixed          |  | Fixed             |        | Non-interest |  | Total |        | Weighted    
|                                           |  |      |    |       |  | Interest Rate |       | 1 year or less |  | Over 1 to 5 years |        | bearing      |  |       |        | Average Rate
|                                           |  |      |    |       |  |               |       |                |  |                   |        | of Interest  | 
|                                           |  |      |    |       |  |               |       |                |  |                   |        |              |  |       |        |              |  |       |        |       |  |       |        |      |  |      |        |   |  |  |       |  |  |  |       |  |  |  |        |  |  |  |        |  |  | 
|                                           |  | Note |    | 2001  |  | 2002          |       | 2001           |  | 2002              |        | 2001         |  | 2002  |        | 2001         |  | 2002  |        | 2001  |  | 2002  |        | 2001 |  | 2002
|                                           |  |      |    | $'000 |  | $'000         |       | $'000          |  | $'000             |        | $'000        |  | $'000 |        | $'000        |  | $'000 |        | $'000 |  | $'000 |        |      |  |     
|                                           |  |      |    |       |  |               |       |                |  |                   |        |              |  |       |        |              |  |       |        |       |  |       |        |      |  |      |        |  
|Financial
        assets                   |  |      |    |       |  |               |       |                |  |                   |        |              |  |       |        |              |  |       |        |       |  |       |        |      |  |      |        |   |  |  |       |  |  |  |       |  |  |  |        |  |  |  |        |  |  |  |      |   |  |  |      |  
|Cash                                       |  |      | 4  |       |  |               | 982   |                |  |                   | 17,500 |              |  |       |       |              |  |       |       |       |  |       |       |      |  |      |       |   |  |  | 371   |  |  |  | 176   |  |  |  | 1,353  |  |  |  | 17,676 |  |  |  | 3.76 | % |  |  | 1.80 | %
|Deposits                                   |  |      | 4  |       |  |               | 5,406 |                |  |                   | 1,718  |              |  |       | 24,370 |              |  |       | 20,543 |       |  |       |       |      |  |      |       |   |  |  |      |  |  |  |      |  |  |  | 29,776 |  |  |  | 22,261 |  |  |  | 4.86 | % |  |  | 4.79 | %
|Receivables                                |  |      | 5  |       |  |               |      |                |  |                   |       |              |  |       |       |              |  |       |       |       |  |       |       |      |  |      |       |   |  |  | 5,118 |  |  |  | 4,505 |  |  |  | 5,118  |  |  |  | 4,505  |  |  |  | N/A  |   |  |  | N/A  |  
|                                           |  |      |    |       |  |               |       |                |  |                   |        |              |  |       |        |              |  |       |        |       |  |       |        |      |  |      |        |   |  |  |       |  |  |  |       |  |  |  |        |  |  |  |        |  |  |  |      |   |  |  |      |  
|                                           |  |      |    |       |  |               | 6,388 |                |  |                   | 19,218 |              |  |       | 24,370 |              |  |       | 20,543 |       |  |       |       |      |  |      |       |   |  |  | 5,489 |  |  |  | 4,681 |  |  |  | 36,247 |  |  |  | 44,442 |  |  |  |      |   |  |  |      |  
|                                           |  |      |    |       |  |               |       |                |  |                   |        |              |  |       |        |              |  |       |        |       |  |       |        |      |  |      |        |   |  |  |       |  |  |  |       |  |  |  |        |  |  |  |        |  |  |  |      |   |  |  |      |  
|Financial
        liabilities              |  |      |    |       |  |               |       |                |  |                   |        |              |  |       |        |              |  |       |        |       |  |       |        |      |  |      |        |   |  |  |       |  |  |  |       |  |  |  |        |  |  |  |        |  |  |  |      |   |  |  |      |  
|Payables                                   |  |      | 10 |       |  |               |      |                |  |                   |       |              |  |       |       |              |  |       |       |       |  |       |       |      |  |      |       |   |  |  | 5,148 |  |  |  | 4,280 |  |  |  | 5,148  |  |  |  | 4,280  |  |  |  | N/A  |   |  |  | N/A  |  
|Interest
        bearing liabilities       |  |      | 11 |       |  |               |      |                |  |                   |       |              |  |       | 1,364  |              |  |       | 845    |       |  |       | 2,375  |      |  |      | 2,287  |   |  |  |      |  |  |  |      |  |  |  | 3,739  |  |  |  | 3,132  |  |  |  | 8.22 | % |  |  | 8.39 | %
|                                           |  |      |    |       |  |               |       |                |  |                   |        |              |  |       |        |              |  |       |        |       |  |       |        |      |  |      |        |   |  |  |       |  |  |  |       |  |  |  |        |  |  |  |        |  |  |  |      |   |  |  |      |  
|                                           |  |      |    |       |  |               |      |                |  |                   |       |              |  |       | 1,364  |              |  |       | 845    |       |  |       | 2,375  |      |  |      | 2,287  |   |  |  | 5,148 |  |  |  | 4,280 |  |  |  | 8,887  |  |  |  | 7,412  |  |  |  |      |   |  |  |      |  
|                                           |  |      |    |       |  |               |       |                |  |                   |        |              |  |       |        |              |  |       |        |       |  |       |        |      |  |      |        |   |  |  |       |  |  |  |       |  |  |  |        |  |  |  |        |  |  |  |      |   |  |  |      |  
|Net financial
        assets/(liabilities) |  |      |    |       |  |               | 6,388 |                |  |                   | 19,218 |              |  |       | 23,006 |              |  |       | 19,698 |       |  |       | (2,375 | )    |  |      | (2,287 | ) |  |  | 341   |  |  |  | 401   |  |  |  | 27,360 |  |  |  | 37,030 |  |  |  |      |   |  |  |      |  
|                                           |  |      |    |       |  |               |       |                |  |                   |        |              |  |       |        |              |  |       |        |       |  |       |        |      |  |      |        |   |  |  |       |  |  |  |       |  |  |  |        |  |  |  |        |  |  |  |      |   |  |  |      |  



| | (c) |  | Net fair value of financial assets and liabilities
The net fair value of financial assets and liabilities with the
exception of lease liabilities approximates their carrying value
in the balance sheet, because they are short term and at market
rates of interest.
| | --- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |     |  | The book value of lease liabilities approximates the fair value
because the weighted average interest rate implicit in discounting
these liabilities approximates the current market rate.                                                                            
|
| | (d) |  | Credit risk exposures
The consolidated entities maximum exposures to credit risk at
balance date in relation to each class or recognised assets is the
carrying amount of those assets as indicated in the balance sheet.                                             
|
| |     |  | Concentration of credit risk
The Company minimises concentration of credit risk in relation to
trade receivables by undertaking transactions with a large number of
customers.                                                                                        
|
| |     |  | Credit risk is managed in the following way:                                                                                                                                                                                                                          



| |  |  | (i) payment terms are 30 days except for some
customers who have 60 day terms; and
| |  |  | ----------------------------------------------------------------------------------
|
| |  |  | (ii) a risk assessment processes is used for
all customers.                       
|
| |  |  |                                                                                   

93



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##### 



Note 24. Expenditure Commitments

|                                                                                                                            |  |              |       |       |  |  |       |  
|--------------------------------------------------------------------------------------------------------------------------- |  | ------------ | ----- | ----- |  |  | ----- | -
|                                                                                                                            |  | Consolidated
|                                                                                                                            |  |             
|                                                                                                                            |  | 2001         |       | 2002 
|                                                                                                                            |  | $'000        |       | $'000
|                                                                                                                            |  |              |       |      
|(a) Lease Commitments *                                                                                                     |  |              |       |       |  |  |       |  
|                                                                                                                            |  |              |       |       |  |  |       |  
|Commitments in relation to operating leases
contracted for at the reporting date but not
recognised as liabilities payable: |  |              |       |       |  |  |       |  
|Not later than 1 year                                                                                                       |  |              | 316   |       |  |  | 444   |  
|Later than 1 year but not later than 2 years                                                                                |  |              | 184   |       |  |  | 443   |  
|Later than 2 year but not later than 3 years                                                                                |  |              | 184   |       |  |  | 352   |  
|Later than 3 year but not later than 4 years                                                                                |  |              | 184   |       |  |  | 17    |  
|Later than 4 year but not later than 5 years                                                                                |  |              | 15    |       |  |  |      |  
|                                                                                                                            |  |              |       |       |  |  |       |  
|                                                                                                                            |  |              | 883   |       |  |  | 1,256 |  
|                                                                                                                            |  |              |       |       |  |  |       |  
|                                                                                                                            |  |              |       |       |  |  |       |  
|(b) Finance leases **                                                                                                       |  |              |       |       |  |  |       |  
|                                                                                                                            |  |              |       |       |  |  |       |  
|Commitments in relation to finance leases
are payable as follows:                                                           |  |              |       |       |  |  |       |  
|Not later than 1 year                                                                                                       |  |              | 1,646 |       |  |  | 976   |  
|Later than 1 year but not later than 2 years                                                                                |  |              | 754   |       |  |  | 776   |  
|Later than 2 year but not later than 3 years                                                                                |  |              | 748   |       |  |  | 899   |  
|Later than 3 year but not later than 4 years                                                                                |  |              | 1,226 |       |  |  | 767   |  
|Later than 4 year but not later than 5 years                                                                                |  |              |      |       |  |  | 15    |  
|Minimum lease payments                                                                                                      |  |              | 4,374 |       |  |  | 3,433 |  
|Less: Future finance charges                                                                                                |  |              | (635  | )     |  |  | (301  | )
|                                                                                                                            |  |              |       |       |  |  |       |  
|                                                                                                                            |  |              | 3,739 |       |  |  | 3,132 |  
|                                                                                                                            |  |              |       |       |  |  |       |  
|                                                                                                                            |  |              |       |       |  |  |       |  
|Representing lease liabilities:                                                                                             |  |              |       |       |  |  |       |  
|                                                                                                                            |  |              |       |       |  |  |       |  
|Current  (note 11)                                                                                                         |  |              | 1,364 |       |  |  | 845   |  
|Non-current  (note 11)                                                                                                     |  |              | 2,375 |       |  |  | 2,287 |  
|                                                                                                                            |  |              |       |       |  |  |       |  
|                                                                                                                            |  |              | 3,739 |       |  |  | 3,132 |  
|                                                                                                                            |  |              |       |       |  |  |       |  
|                                                                                                                            |  |              |       |       |  |  |       |  
|(c) Other Expenditure Committments                                                                                          |  |              |       |       |  |  |       |  
|                                                                                                                            |  |              |       |       |  |  |       |  
|Research and development contracts for
service to be rendered:                                                              |  |              |       |       |  |  |       |  
|Not later than one year                                                                                                     |  |              | 1,351 |       |  |  | 1,441 |  
|Later than 1 year but not later than 2 years                                                                                |  |              | 208   |       |  |  | 43    |  
|                                                                                                                            |  |              |       |       |  |  |       |  
|                                                                                                                            |  |              | 1,559 |       |  |  | 1,484 |  
|                                                                                                                            |  |              |       |       |  |  |       |  

94



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##### 



*  Operating leases represent payments for property and equipment rental. Leases
for property include an annual review for CPI increases.

**  Finance lease commitments have an average term of 4 years with an average
interest rate of 8.39%. Assets which are subject to finance leases include
building, plant and equipment.

There are no commitments for capital expenditure outstanding at the end of the
financial year.

95



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##### 



Note 25 CONTINGENT LIABILITIES

Parent Entity Guarantees



| |                                                                                                                                                                                                                                        
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The parent company has unconditionally guaranteed Novogen BVs
obligations under an agreement with a sales broker dated 10 March
1999, for the performance of commercial services in the Netherlands.                                  
|
| | The parent company has guaranteed in a deed dated 16 May 2002 the
performance of the Novogen subsidiaries arising in connection with the
License Agreement and the Manufacturing and Supply Agreement with
Marshall Edward Pty Limited.

Note 26. SUBSEQUENT EVENTS

There have been no significant events occurring after balance date which have
had a material impact on the business.

96



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##### 



Note 27. PENSION PLANS

The company and employees contribute various percentages of gross income to
defined contribution pension plans nominated by employees for the provision of
benefits to employees on retirement, death or disability. Benefits provided
under the plans are based on contributions for each employee.

The pension plans comply with Australian regulatory provisions set by the
Insurance and Superannuation Commission. The company has complied with the
provisions of the Superannuation Guarantee Charge Act.

Contributions expensed by the company for each of the periods were as follows:

|                     |  |        |     |        |  |        |     |  |  |  |     | 
|-------------------- |  | ------ | --- | ------ |  | ------ | --- |  |  |  | --- | 
|                     |  | 2000   |     | 2001   |  | 2002  
|                     |  | A$'000 |     | A$'000 |  | A$'000
|                     |  |        |     |        |  |       
|Contribution expense |  |        | 275 |        |  |        | 330 |  |  |  | 325 | 

Note 28. DIVIDENDS

The company has incurred losses since its inception and, as a result, has not
declared any dividends. Any dividends in future periods will be declared in
Australian dollars.

97



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##### 



Note 29. DIFFERENCES BETWEEN AUSTRALIAN GAAP AND US GAAP
Australian GAAP varies in certain respects from accounting principles generally
accepted in the United States (US GAAP). The differences relate principally to
the following items and the adjustments necessary to reconcile the consolidated
net loss for the years ended June 30, 2000, 2001 and 2002 in accordance with US
GAAP are shown below.

|                                                                                                      |  |      |    |   |     |                    |            |        |     |        |            |   |     |   |            |  
|----------------------------------------------------------------------------------------------------- |  | ---- | -- | - | --- | ------------------ | ---------- | ------ | --- | ------ | ---------- | - | --- | - | ---------- | -
|                                                                                                      |  |      |    |   |     | Year ended 30 June
|                                                                                                      |  |      |    |   |     |                   
|                                                                                                      |  |      |    |   |     | 2000               |            | 2001   |     | 2002  
|                                                                                                      |  |      |    |   |     | A$'000             |            | A$'000 |     | A$'000
|Consolidated Net Loss                                                                                 |  |      |    |   |     |                    |            |        |     |        |            |   |     |   |            |  
|                                                                                                      |  |      |    |   |     |                    |            |        |     |        |            |   |     |   |            |  
|Net loss reported using Australian GAAP                                                               |  |      |    |   |     |                    | (13,679    | )      |     |        | (21,764    | ) |     |   | (14,673    | )
|                                                                                                      |  |      |    |   |     |                    |            |        |     |        |            |   |     |   |            |  
|Adjustments required to accord with US
GAAP:                                                          |  |      |    |   |     |                    |            |        |     |        |            |   |     |   |            |  
|                                                                                                      |  |      |    |   |     |                    |            |        |     |        |            |   |     |   |            |  
|Amortization of goodwill                                                                              |  |      | (i | ) |     |                    | 33         |        |     |        | 33         |   |     |   | 33         |  
|                                                                                                      |  |      |    |   |     |                    |            |        |     |        |            |   |     |   |            |  
|Stock based compensation cost                                                                         |  | (ii) |    |   | (26 | )                  |            |        | (82 | )      |            |   | (53 | )
|                                                                                                      |  |      |    |   |     |                    |            |        |     |        |            |   |     |   |            |  
|Minority interest in net income of
subsidiary                                                         |  | (vi) |    |   |    |                    |            |        |    |        |            |   | 19  |  
|                                                                                                      |  |      |    |   |     |                    |            |        |     |        |            |   |     |   |            |  
|Adjustment for sales returns                                                                          |  |      | (v | ) |     |                    |           |        |     |        |           |   |     |   | (475       | )
|                                                                                                      |  |      |    |   |     |                    |            |        |     |        |            |   |     |   |            |  
|Net loss according to US GAAP                                                                         |  |      |    |   |     |                    | (13,672    | )      |     |        | (21,813    | ) |     |   | (15,149    | )
|                                                                                                      |  |      |    |   |     |                    |            |        |     |        |            |   |     |   |            |  
|Basic and diluted (loss)/earnings per
share according to US GAAP (cents)                              |  |      |    |   |     |                    | (0.17      | )      |     |        | (0.25      | ) |     |   | (0.16      | )
|                                                                                                      |  |      |    |   |     |                    |            |        |     |        |            |   |     |   |            |  
|Weighted average number of ordinary                                                                   |  |      |    |   |     |                    | 79,769,553 |        |     |        | 85,646,585 |   |     |   | 95,187,449 |  
|shares outstanding during the year
used in calculation of basic and
diluted (loss)/earnings per share |  |      |    |   |     |                    |            |        |     |        |            |   |     |   |            |  

In 2000, 2001 and 2002, exercise of the options issued by the Company would
have been anti-dilutive and, therefore, was not considered in the computation
of diluted earnings per share. Details of options are set out in note 14.
Outstanding options at the end of the financial years are 1,828,817 in 2000,
2,025,076 in 2001, and 2,207,663 in 2002.

98



---



##### 



The following is a reconciliation of the adjustments necessary to reconcile
shareholders equity in accordance with Australian GAAP to the amounts
determined under US GAAP as at June 30, 2001 and 2002:

|                                                        |  |      |    |   |      |            |        |        |      |   |        |  
|------------------------------------------------------- |  | ---- | -- | - | ---- | ---------- | ------ | ------ | ---- | - | ------ | -
|                                                        |  |      |    |   |      | At 30 June
|                                                        |  |      |    |   |      |           
|                                                        |  |      |    |   |      | 2001       |        | 2002  
|                                                        |  |      |    |   |      | A$'000     |        | A$'000
|                                                        |  |      |    |   |      |            |        |       
|Shareholders Equity                                    |  |      |    |   |      |            |        |        |      |   |        |  
|                                                        |  |      |    |   |      |            |        |        |      |   |        |  
|Shareholders equity reported using
Australian GAAP     |  |      |    |   |      |            | 51,906 |        |      |   | 54,045 |  
|                                                        |  |      |    |   |      |            |        |        |      |   |        |  
|Cumulative adjustments required to accord
with US GAAP: |  |      |    |   |      |            |        |        |      |   |        |  
|                                                        |  |      |    |   |      |            |        |        |      |   |        |  
|Reversal of recognition of goodwill                     |  |      | (i | ) |      |            | (492   | )      |      |   | (492   | )
|                                                        |  |      |    |   |      |            |        |        |      |   |        |  
|Amortization of goodwill                                |  |      | (i | ) |      |            | 235    |        |      |   | 268    |  
|                                                        |  |      |    |   |      |            |        |        |      |   |        |  
|Stock based compensation cost                           |  | (ii) |    |   | (675 | )          |        |        | (728 | )
|                                                        |  |      |    |   |      |            |        |        |      |   |        |  
|Minority interest equity                                |  | (vi) |    |   |     |            |        |        | (766 | )
|                                                        |  |      |    |   |      |            |        |        |      |   |        |  
|Adjustment for sales returns                            |  |      | (v | ) |      |            |       |        |      |   | (475   | )
|                                                        |  |      |    |   |      |            |        |        |      |   |        |  
|Shareholders equity according to US GAAP               |  |      |    |   |      |            | 50,974 |        |      |   | 51,852 |  
|                                                        |  |      |    |   |      |            |        |        |      |   |        |  

A description of the differences between Australian GAAP, as followed by
Novogen, and US GAAP is provided below:

(i)  Goodwill, Patents and Trademarks
Novogen Limited (Novogen formerly Norvet Limited) was incorporated on
March 18, 1994. An Australian prospectus was issued in August 1994 for a
proposed public issue of 13 million shares and options by Novogen. At that
time, Novogen was a cash-less shell that had not carried on any business except
to enter into an underwriting agreement for the offering and agreements to
acquire Norvet Research Pty Ltd. (Research) and Norvet Laboratories Pty Ltd
(Laboratories). The agreements indicated that Novogen would purchase all of
the issued shares of Research in exchange for an issue of new Novogen equity
that was valued at A$7.0 million and that Novogen would acquire all of the
issued shares of Laboratories in exchange for a cash payment of A$400,000 from
the IPO proceeds. Novogen successfully completed the public offering and
listed on the Australian Stock Exchange on September 1, 1994. Concurrent with
the closing of the IPO, the transfers of Research and Laboratories into Novogen
were completed.

99



---



##### 



For the purposes of Australian GAAP, Novogen accounted for both acquisitions as
purchase transactions with the cost of acquisition being based on a valuation
performed before the acquisition of A$7 million for Research and A$400,000 for
Laboratories. For the purposes of U.S. GAAP, the transfer of Research into
Novogen (a shell with no assets) represents a re-capitalization of Research
and, accordingly, no revaluation of Researchs assets is appropriate under US
GAAP. The purchase fair values of Researchs assets, principally intangible
assets, have therefore been eliminated in the reconciliation to US GAAP. No US
GAAP adjustment was required, however, in relation to the acquisition of
Laboratories.

(ii) Stock Based Compensation

In accordance with Australian GAAP, no compensation expense has been recognised
in respect of options issued by the company. Particulars of options issued by
Novogen are summarised in Note 14.

(a)  For US GAAP purposes, in respect of the options issued to executive
officers and employees, as permitted by SFAS 123, Novogen follows the
provisions of Accounting Principles Board Opinion No. 25 (APB 25) Accounting
for Stock Issued to Employees and related interpretations in accounting for
compensation expense related to the issuance of stock options. Under APB 25,
compensation cost for stock options is measured as the excess, if any, of the
quoted market price of the Companys stock at the grant date over the exercise
price, multiplied by the number of options issued. The total compensation cost
is amortized over the service (vesting) period. Had compensation cost related
to issues of options to executive officers and other employees been recorded at
fair value on the date of grant in accordance with SFAS 123 Accounting for
Stock Based Compensation (SFAS 123), Novogens net loss and loss per share
amounts (calculated in accordance with US GAAP) would have been reduced to the
pro forma amounts indicated below:

100

|                                           |               |  |        |         |        |  |        |         |   |  |  |         |  
|------------------------------------------ | ------------- |  | ------ | ------- | ------ |  | ------ | ------- | - |  |  | ------- | -
|                                           |               |  | 2000   |         | 2001   |  | 2002  
|                                           |               |  | A$'000 |         | A$'000 |  | A$'000
|                                           |               |  |        |         |        |  |       
|Net loss after income tax (US GAAP)        |               |  |        |         |        |  |        |         |   |  |  |        
|                                           |               |  |        |         |        |  |        |         |   |  |  |        
|                                           | - As reported |  |        | (13,672 | )      |  |        | (21,813 | ) |  |  | (15,149 | )
|                                           |               |  |        |         |        |  |        |         |   |  |  |        
|                                           | - Pro forma   |  |        | (13,879 | )      |  |        | (22,030 | ) |  |  | (15,420 | )
|                                           |               |  |        |         |        |  |        |         |   |  |  |        
|Basic and diluted loss per share (US GAAP) |               |  |        |         |        |  |        |         |   |  |  |        
|                                           |               |  |        |         |        |  |        |         |   |  |  |        
|                                           | - As reported |  |        | (0.17   | )      |  |        | (0.25   | ) |  |  | (0.16   | )
|                                           |               |  |        |         |        |  |        |         |   |  |  |        
|                                           | - Pro forma   |  |        | (0.17   | )      |  |        | (0.26   | ) |  |  | (0.16   | )

(b)  The company has also granted options to consultants, who are not employees
of the company, for services to Novogen and its controlled entities. Under US
GAAP, compensation cost for the issue of these options has been determined
based on the methodology of SFAS 123. Under SFAS 123, compensation cost is
determined based upon the fair value at the measurement date of the
consideration received or the fair value of the option issued, whichever is
more reliably measurable.

The following table summarises non-employee stock options issued to consultants
who perform services for Novogen:

Consultant Options

|                                                                       |  |         |         |                  |  |          |        |                  |          |         |         |                  |  |  |        |  |  |          |         |  |  |  |        |  |  |  |  | 
|---------------------------------------------------------------------- |  | ------- | ------- | ---------------- |  | -------- | ------ | ---------------- | -------- | ------- | ------- | ---------------- |  |  | ------ |  |  | -------- | ------- |  |  |  | ------ |  |  |  |  | 
|                                                                       |  |         |         |                  |  | 2000     |        |                  |          |         |         | 2001             |  |  |        |  |  | 2002     |         |  |  | 
|                                                                       |  |         |         |                  |  |          |        |                  |          |         |         |                  |  |  |        |  |  |          |         |  |  | 
|                                                                       |  |         |         |                  |  | Weighted |        |                  |          |         |         | Weighted         |  |  |        |  |  | Weighted |         |  |  | 
|                                                                       |  | Options |         | average exercise |  | Options  |        | average exercise |          | Options |         | average exercise |  |  |        | 
|                                                                       |  |         |         | price A$         |  | price A$ |        |                  | price A$ |         |        
|Outstanding
        at the beginning of the year                       |  |         | 408,610 |                  |  |          | A$1.90 |                  |          |         | 326,350 |                  |  |  | A$2.28 |  |  |          | 348,778 |  |  |  | A$2.28 |  |  |  |  | 
|                                                                       |  |         |         |                  |  |          |        |                  |          |         |         |                  |  |  |        |  |  |          |         |  |  |  |        |  |  |  |  | 
|Granted                                                                |  |         | 27,360  |                  |  |          | A$4.00 |                  |          |         | 57,428  |                  |  |  | A$3.63 |  |  |          | 101,950 |  |  |  | A$2.05 |  |  |  |  | 
|Exercised                                                              |  |         | 109,620 |                  |  |          | A$1.00 |                  |          |         | 35,000  |                  |  |  | A$1.00 |  |  |          | 53,000  |  |  |  | A$2.00 |  |  |  |  | 
|                                                                       |  |         |         |                  |  |          |        |                  |          |         |         |                  |  |  |        |  |  |          |         |  |  |  |        |  |  |  |  | 
|Outstanding
        at the end of the year                             |  |         | 326,350 |                  |  |          | A$2.28 |                  |          |         | 348,778 |                  |  |  | A$2.28 |  |  |          | 397,728 |  |  |  | $2.69  |  |  |  |  | 
|                                                                       |  |         |         |                  |  |          |        |                  |          |         |         |                  |  |  |        |  |  |          |         |  |  |  |        |  |  |  |  | 
|Exercisable
        at the end of the year                             |  |         | 175,440 |                  |  |          | A$2.32 |                  |          |         | 58,860  |                  |  |  | A$2.90 |  |  |          | 265,207 |  |  |  | A$2.83 |  |  |  |  | 
|                                                                       |  |         |         |                  |  |          |        |                  |          |         |         |                  |  |  |        |  |  |          |         |  |  |  |        |  |  |  |  | 
|Weighted
        average fair value of options granted during the year |  |         | A$0.94  |                  |  |          |        |                  |          |         | A$1.43  |                  |  |  |        |  |  |          | A$0.52  |  |  |  |        |  |  |  |  | 
|                                                                       |  |         |         |                  |  |          |        |                  |          |         |         |                  |  |  |        |  |  |          |         |  |  |  |        |  |  |  |  | 

101



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Employee Options

|                                                                         |  |         |           |                  |  |          |          |                  |  |          |           |                  |  |  |        |  |  |          |           |  |  |  |        | 
|------------------------------------------------------------------------ |  | ------- | --------- | ---------------- |  | -------- | -------- | ---------------- |  | -------- | --------- | ---------------- |  |  | ------ |  |  | -------- | --------- |  |  |  | ------ | 
|                                                                         |  |         | 2000      |                  |  | 2001     |          | 2002            
|                                                                         |  |         |           |                  |  |          |          |                 
|                                                                         |  |         |           |                  |  | Weighted |          |                  |  |          |           | Weighted         |  |  |        |  |  | Weighted
|                                                                         |  | Options |           | average exercise |  | Options  |          | average exercise |  | Options  |           | average exercise
|                                                                         |  |         |           | price A$         |  |          | price A$ |                  |  | price A$
|Outstanding
          at the beginning of the year                       |  |         | 1,403,278 |                  |  |          | A$2.85   |                  |  |          | 1,502,467 |                  |  |  | A$3.02 |  |  |          | 1,676,298 |  |  |  | A$3.02 | 
|                                                                         |  |         |           |                  |  |          |          |                  |  |          |           |                  |  |  |        |  |  |          |           |  |  |  |        | 
|Granted                                                                  |  |         | 221,028   |                  |  |          | A$4.00   |                  |  |          | 247,604   |                  |  |  | A$4.00 |  |  |          | 695,528   |  |  |  | A$1.53 | 
|Exercised                                                                |  |         | 23,124    |                  |  |          | A$1.92   |                  |  |          | 3,513     |                  |  |  | A$1.93 |  |  |          | 289,939   |  |  |  | A$1.77 | 
|Expired                                                                  |  |         | 98,715    |                  |  |          | A$2.31   |                  |  |          | 70,260    |                  |  |  | A$3.32 |  |  |          | 271,952   |  |  |  | A$2.83 | 
|                                                                         |  |         |           |                  |  |          |          |                  |  |          |           |                  |  |  |        |  |  |          |           |  |  |  |        | 
|Outstanding
          at the end of the year                             |  |         | 1,502,467 |                  |  |          | A$3.02   |                  |  |          | 1,676,298 |                  |  |  | A$2.99 |  |  |          | 1,809,935 |  |  |  | A$2.61 | 
|                                                                         |  |         |           |                  |  |          |          |                  |  |          |           |                  |  |  |        |  |  |          |           |  |  |  |        | 
|Exercisable
          at the end of the year                             |  |         | 162,531   |                  |  |          | A$2.12   |                  |  |          | 732,917   |                  |  |  | A$2.27 |  |  |          | 585,321   |  |  |  | A$3.01 | 
|                                                                         |  |         |           |                  |  |          |          |                  |  |          |           |                  |  |  |        |  |  |          |           |  |  |  |        | 
|Weighted
          average fair value of options granted during the year |  |         | A$0.94    |                  |  |          |          |                  |  |          | A$0.92    |                  |  |  |        |  |  |          | A$0.39    |  |  |  |        | 
|                                                                         |  |         |           |                  |  |          |          |                  |  |          |           |                  |  |  |        |  |  |          |           |  |  |  |        | 

The fair value of these options was estimated at the date of the grant using
the Black-Scholes option pricing model with the following weighted average
assumptions for 2000, 2001 and 2002 respectively. Risk free interest rate 6.2%,
6.17% and 5.09%. Dividend yields of 0% in each of the three years, volatility
factors of 0.216 in 2000 and 2001 and 0.273 in 2002, and a weighted average
expected life of 3 years.

The Black-Scholes option valuation model was developed for use in estimating
the fair value of traded options which have no vesting restrictions and are
fully transferable. In addition, option valuation models require the input of
highly subjective assumptions including the expected stock price volatility.
Because the Companys employee stock options have characteristics significantly
different from those of traded options, and because changes in the subjective
input assumptions can materially affect the fair value estimate, in the
managements opinion, the existing models do not necessarily provide a reliable
single measure of fair value of its employee stock options.

(iii) Cash Flow Statement

The consolidated statement of cash flows discloses bank overdrafts as a
component of cash. This disclosure is consistent with the Australian GAAP cash
flow statement. SFAS 95 Statement of Cash Flows requires that the net
activity in bank overdrafts be

102



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##### 



disclosed as a component of cash flow from financing activities. Cash for the
purposes of the cash flow statement includes A$2,500,000 held as a minimum
deposit by the lessor (note 13). Under US GAAP this would be treated as
restricted cash and would be removed from cash and cash equivalents and
included in cash flows from investing activities.

|                                                |  |        |        |        |  |        |        |   |  |  |        |  
|----------------------------------------------- |  | ------ | ------ | ------ |  | ------ | ------ | - |  |  | ------ | -
|                                                |  | 2000   |        | 2001   |  | 2002  
|                                                |  | A$'000 |        | A$'000 |  | A$'000
|                                                |  |        |        |        |  |       
|Cash and cash equivalents under
Australian GAAP |  |        | 28,820 |        |  |        | 31,129 |   |  |  | 39,937 |  
|                                                |  |        |        |        |  |        |        |   |  |  |        |  
|Restricted cash (note 13)                       |  |        | (2,500 | )      |  |        | (2,500 | ) |  |  | (2,500 | )
|                                                |  |        |        |        |  |        |        |   |  |  |        |  
|Cash and cash equivalents under US GAAP         |  |        | 26,320 |        |  |        | 28,629 |   |  |  | 37,437 |  
|                                                |  |        |        |        |  |        |        |   |  |  |        |  

(iv) Income Tax

The Novogen Group has adopted SFAS 109 for US GAAP purposes. SFAS 109 requires
a liability approach to accounting for income taxes, which as it applies to
the company is very similar to that adopted under Australian GAAP.

Under Australian GAAP, the deferred tax asset in respect of income tax losses
carried forward disclosed in note 3 is not recognised unless the benefit is
virtually certain of realisation. Under US GAAP, the benefit is not recognised
unless realisation is more likely than not.

The components of the US GAAP net deferred tax asset at June 30, 2001 and 2002,
are as follows:

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|                                                                                                 |                                     |       |                 |        |        |        |         |        |     |        | 
|------------------------------------------------------------------------------------------------ | ----------------------------------- | ----- | --------------- | ------ | ------ | ------ | ------- | ------ | --- | ------ | 
|                                                                                                 |                                     |       |                 |        | 2001   |        | 2002   
|                                                                                                 |                                     |       |                 |        | A$'000 |        | A$'000 
|                                                                                                 |                                     |       |                 |        |        |        |        
|Deferred tax asset (at Australian statutory
        rate of 30%)
                   Depreciation |                                     |       | 458             |        |        |        | 649     |       
|                                                                                                 | Provisions Accruals                 |       |                 | 392    |        |        |         | 674    |    
|                                                                                                 | Exchange Losses                     |       |                 |       |        |        |         | 1,661  |    
|                                                                                                 |                                     | Other |                 |        | 1,907  |        |         |        | 731 |       
|                                                                                                 | Losses carried forward  Australian |       |                 | 3027   |        |        |         | 1,789  |    
|                                                                                                 |                                     |       |  United States |        |        | 11,484 |         |        |     | 13,154 | 
|                                                                                                 |                                     |       |  other         |        |        | 6332   |         |        |     | 2,815  | 
|                                                                                                 |                                     |       |                 |        |        |        |         |       
|                                                                                                 |                                     |       |                 |        |        |        |         |       
|Total deferred tax assets                                                                        |                                     |       | 23,600          |        |        |        | 21,473  |       
|Deferred tax liability                                                                           |                                     |       |                 |        |        |        |         |       
|                                                                                                 | Exchange Gains                      |       |                 | (2165  | )      |        |         |       |    
|                                                                                                 | Other                               |       |                 | (1,373 | )      |        |         | (1,934 | )  
|                                                                                                 | Prepayments                         |       |                 | (55    | )      |        |         | (6     | )  
|                                                                                                 |                                     |       |                 |        |        |        |         |       
|Total Deferred Tax Liability                                                                     |                                     |       | (3,593          | )      |        |        | (1,940  | )     
|                                                                                                 |                                     |       |                 |        |        |        |         |       
|Net deferred tax asset                                                                           |                                     |       | 20,007          |        |        |        | 19,533  |       
|                                                                                                 |                                     |       |                 |        |        |        |         |       
|Valuation Allowance                                                                              |                                     |       | (20,007         | )      |        |        | (19,533 | )     
|Net Recorded Deferred Taxes                                                                      |                                     |       |                |        |        |        |        |       
|                                                                                                 |                                     |       |                 |        |        |        |         |       

Deferred taxes have not been separated between current and non current. All
deferred taxes are expected to be non current since there is no current tax
liability and no current tax liability is anticipated for the next financial
year.

|                                 |  |        |        |        |  |        |        |   |  |  |      |  
|-------------------------------- |  | ------ | ------ | ------ |  | ------ | ------ | - |  |  | ---- | -
|                                 |  | 2000   |        | 2001   |  | 2002  
|                                 |  |        |        |        |  |       
|Components of Income Tax Expense |  | A$'000 |        | A$'000 |  | A$'000
|                                 |  |        |        |        |  |       
|Current Expense                  |  |        | 22     |        |  |        | 30     |   |  |  | 45   |  
|                                 |  |        |        |        |  |        |        |   |  |  |      |  
|Deferred Expense                 |  |        | 2,411  |        |  |        | 8,261  |   |  |  | (474 | )
|                                 |  |        |        |        |  |        |        |   |  |  |      |  
|Movement in Valuation Allowance  |  |        | (2,411 | )      |  |        | (8,261 | ) |  |  | 474  |  
|                                 |  |        |        |        |  |        |        |   |  |  |      |  
|Income Tax Expense               |  |        | 22     |        |  |        | 30     |   |  |  | 45   |  
|                                 |  |        |        |        |  |        |        |   |  |  |      |  

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##### 



(v) Revenue

|                                             |  |          |        |          |  |          |        |   |  |  |        |  
|-------------------------------------------- |  | -------- | ------ | -------- |  | -------- | ------ | - |  |  | ------ | -
|                                             |  | 2000     |        | 2001     |  | 2002    
|                                             |  | (A$'000) |        | (A$'000) |  | (A$'000)
|Sales Revenue reported
using Australian GAAP |  |          | 23,407 |          |  |          | 26,663 |   |  |  | 19,582 |  
|                                             |  |          |        |          |  |          |        |   |  |  |        |  
|Trade Promotions                             |  |          | (888   | )        |  |          | (1,248 | ) |  |  | (1,463 | )
|Adjustment for sales returns                 |  |          |       |          |  |          |       |   |  |  | (475   | )
|                                             |  |          |        |          |  |          |        |   |  |  |        |  
|Sales Revenue reported
using US GAAP         |  |          | 22,519 |          |  |          | 25,415 |   |  |  | 17,644 |  
|                                             |  |          |        |          |  |          |        |   |  |  |        |  

Trade Promotions
EITF Issue 00-14  Accounting for certain sales incentives required trade
promotion expenditure to be deducted from sales revenue. Prior period financial
presented for comparative purposes have been reclassified where appropriate.
Certain trade promotion expenditures are charged to selling and marketing
expenses under Australian GAAP. These expenses are for retail price discounts
price discounts whereby Novogen makes a contribution to the retailers
promotional costs of Novogens products. Under US GAAP, these amounts are
treated as a discount reducing the reported sales figures.

Sales Returns
Under Australian GAAP, the Company has not recorded an Allowance for Sales
Returns, because the Company follows a policy of allowing customers to return
products in rare circumstances and is not contractually required to accept any
returns.

The Company does not sell its products with rights of return, however during
2002 as a result of disapointing sales of one product the Company accepted
returns totaling A$2.1 million. Under US GAAP, SFAS 48, Revenue Recognition
When Right of Return Exists, requires that an allowance be recorded for an
implied right of return, regardless of whether that right exists on a
contractual basis. Accordingly, an adjustment has been included in the
reconciliations of the Consolidated Net Loss and Shareholders Equity between
Australian GAAP and US GAAP to recognise the estimate amount of sales returns
outstanding at year-end based on managements assessment of additional returns
expected in 2003.

(vi) Minority interests and Warrants

Under Australian GAAP, equity in consolidated subsidiaries issued outside the
economic entity is referred to as Outside Equity Interests and is included as
a component of equity. Under U.S. GAAP, Outside Equity Interests are referred to as Minority
Interests

105



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##### 



and are separately classified between the liabilities and equity
sections of the Statement of Financial Position.

(vii) Recent Accounting Pronouncements

In June 2001, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 141 (SFAS 141), Business
Combinationsand Statement of Financial Accounting Standards No. 142 (SFAS
142), Goodwill and Other Intangible Assets. SFAS 141 prohibits the use of
the pooling-of-interest method for business combinations initiated after 30
June 2001 and also applies to all business combinations accounted for by the
purchase method that are completed after 30 June 2001. There are also
transition provisions that apply to business combinations completed before 1
July 2001, that were accounted for by the purchase method. SFAS 142 is
effective for fiscal years beginning after 15 December 2001. Under SFAS 142,
goodwill will no longer be amortized but will be subject to a test for
impairment on at least an annual basis. The Company will adopt SFAS 142 on 1
July 2002. As of 30 June 2002, the Company had approximately $224,000 of
goodwill, which will be subject to the new accounting rules.

In October 2001, the FASB issued Statement of Financial Accounting Standards
No. 144 (SFAS 144), Accounting for the Impairment or Disposal of Long-Lived
Assetswhich is applicable to financial statements issued for fiscal years
beginning after 15 December 2001. SFAS 144 supersedes FASB Statement No. 121
(SFAS 121), Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of, and provides a single accounting model
for long-lived assets to be disposed of. Although many of the fundamental
recognition and measurement provisions of SFAS 121 have been retained, the new
rules change the criteria that would have to be met to classify an asset as
held-for-sale. The new rules also supersede the provisions of APB Opinion 30
with regard to reporting the effects of a disposal of a segment of a business
and will require expected future operating losses from discontinued operation
to be displayed in discontinued operations in the period(s) in which the losses
are incurred, rather than at the measurement date as presently required. The
Company will adopt SFAS 144 on 1 July 2002 and does not believe such adoption
will have a material impact on its results of operations, financial position,
or cash flows.

106



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##### 



SIGNATURES



| |                                                                                                                                                                                                
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The registrant hereby certifies that it meets all the requirements for filing
on Form 20-F and that it has duly caused and authorized the undersigned to sign
this Annual Report on its behalf.



| |                         
| | ------------------------
| | NOVOGEN LIMITED         
|
| | /s/ Christopher Naughton
| |                         
| |                         
| | Mr Christopher Naughton 
| | Managing Director       
|
| | Date: December 17, 2002 

107



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##### 



CERTIFICATIONS

I, Christopher Naughton, certify that:



|1. |  | I have reviewed this annual report on Form 20-F of Novogen Limited;                                                                                                                                                                                                                                                        
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. |  | Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this annual report and
|  
|3. |  | Based on my knowledge, the financial statements, and other information
included in this annual report, fairly present in all material respects
the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report.                                

|                       |  |                                                                                     
|---------------------- |  | ------------------------------------------------------------------------------------
|Date December 17, 2002 |  | /s/ Christopher Naughton
.........................................
Managing Director

I, David Ross Seaton, certify that:



|1. |  | I have reviewed this annual report on Form 20-F of Novogen Limited;                                                                                                                                                                                                                                                        
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. |  | Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this annual report and
|  
|3. |  | Based on my knowledge, the financial statements, and other information
included in this annual report, fairly present in all material respects
the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report.                                

|                       |  |                         |                                                            | 
|---------------------- |  | ----------------------- | ---------------------------------------------------------- | 
|Date December 17, 2002 |  |                         | /s/ David Seaton
......................................... | 
|                       |  | Chief Financial Officer

108



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##### 



[ERNST & YOUNG LETTERHEAD]

Report of Independent Auditors

To the Shareholders and Board of Directors of Novogen Limited

We have audited the accompanying consolidated statements of financial position of
Novogen Limited and its subsidiaries (the Group) as of 30 June 2002 and 2001 and
the related consolidated statements of financial performance, cash flows, accumulated
losses and changes in contributed equity for each of the three years in the period
ended 30 June 2002. These financial statements are the responsibility of the Groups
management. Our responsibility is to express an opinion on these financial statements
based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in
the United States. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly,
in all material respects, the financial position of Novogen Limited and its subsidiaries
at 30 June 2002 and 2001 and the consolidated results of their operations and their
cash flows for each of the three years in the period ended 30 June 2002, in conformity
with accounting principles generally accepted in the United States.

Accounting principles generally accepted in Australia vary in certain respects from
accounting principles generally accepted in the United States. The application of the
accounting principles generally accepted in the United States would have affected the
determination of consolidated net loss for each of the three years in the period ended
30 June 2002 and the determination of the consolidated shareholders equity at 30
June 2002 and 2001 to the extent summarised in note 29 to the consolidated financial
statements.

|                               
|-------------------------------
|/s/ Ernst & Young              
|                               
|Ernst & Young
Sydney, Australia
|                               
|December 16, 2002