##### 



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 20-F
 o
    
    REGISTRATION STATEMENT PURSUANT TO SECTION 12(b)
OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
 OR
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended June 30, 2006
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 OR
 o
    
    SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 Date
of event requiring this shell company report
 For
the transition period from  to
 Commission file number 0-29962
 Novogen Limited
   Not Applicable
  New South Wales, Australia
  140 Wicks Road, North Ryde, New South Wales 2113, Australia
   None
  Ordinary Shares*
 American Depositary Shares, each representing five Ordinary Shares
 
 *
    
    Not for trading, but only in connection with the registration of American Depositary Shares.
 
  Not Applicable
   o þ
  o þ
  þ o
  o þ o
  o þ
  o þ




---



##### 



TABLE OF CONTENTS
 Forward Looking Statements
    
    
    1PART IITEM 1. Identity of Directors, Senior Management and Advisors
    
    
    2ITEM 2. Offer Statistics and Expected Timetable
    
    
    2ITEM 3. Key Information
    
    
    2ITEM 4. Information on the Company
    
    
    18ITEM 4A Unresolved Staff Comments
    
    
    36ITEM 5. Operating and Financial Review and Prospects
    
    
    36ITEM 6. Directors, Senior Management and Employees
    
    
    44ITEM 7. Major Shareholders and Related Party Transactions
    
    
    61ITEM 8. Financial Information
    
    
    62ITEM 9. Offer and Listing Details
    
    
    63ITEM 10. Additional Information
    
    
    65ITEM 11. Quantitative and Qualitative Disclosures about Market Risk
    
    
    70ITEM 12. Description of Securities other than Equity Securities
    
    
    70PART IIITEM 13. Defaults, Dividend Arrearages and Delinquencies
    
    
    71ITEM 14. Material Modifications to the Rights of Security Holders
and the Use of Proceeds
    
    
    71ITEM 15. Controls and Procedures
    
    
    71ITEM 16. Reserved
    
    
    73ITEM 16A. Audit Committee Financial Expert
    
    
    73ITEM 16B Code of Ethics
    
    
    73ITEM 16C Principal Accountant Fees and Services
    
    
    73ITEM 16D Exemptions from the Listing Standards for Audit Committees
    
    
    75ITEM 16E Purchases of Equity Securities by the Issuer and Affiliated Purchases
    
    
    75
 ii




---



##### 



PART IIIITEM 17. Financial Statements  Not Applicable
    
    
    76ITEM 18. Financial Statements
    
    
    76ITEM 19. Exhibits
    
    
    76
 iii




---



##### 



FORWARD-LOOKING STATEMENTS
  
    
    our inability to obtain any additional required financing or financing available to
us on acceptable terms;
    
    the failure to locate, hire, assimilate and retain qualified personnel;
    
    our failure to successfully commercialize our products;
    
    costs and delays in the development and/or receipt of U.S. Food and Drug
Administration (FDA) or other required governmental approvals, or the failure to
obtain such approvals, for our products;
    
    uncertainties in clinical trial results;
    
    our inability to maintain or enter into, and the risks resulting from our dependence
upon, collaboration or contractual arrangements necessary for the development,
manufacture, commercialization, marketing, sales and distribution of any products;
    
    competition and competitive factors;
    
    our inability to enforce our patents or proprietary rights and obtain necessary
rights to third party patents and intellectual property to operate our business;
    
    our inability to operate our business without infringing the patents and proprietary
rights of others;
    
    the failure of any product candidate to gain market acceptance;
    
    general economic conditions;
    
    government regulation generally and the receipt of regulatory approvals;
    
    changes in industry practice; and
    
    one-time events.
   1




---



##### 



2




---



##### 



PART I
 Item 1. Identity of Directors, Senior Management and Advisors
  Item 2. Offer Statistics and Expected Timetable
  Item 3. Key Information
 Selected Financial Data
     3




---



##### 



Summary of Consolidated Income Statements
(AIFRS)
 2005
    
    2006
    
    2006(A$000)
    
    (A$000)
    
    (US$000)Continuing operationsRevenue
    
    
    13,404
    
    
    
    13,500
    
    
    
    10,021Other income
    
    
    4,274
    
    
    
    4,738
    
    
    
    3,517Total revenue
    
    
    17,678
    
    
    
    18,238
    
    
    
    13,538Net loss
    
    
    (12,682
    )
    
    
    (17,912
    )
    
    
    (13,296
    )Net loss attributable to members of Novogen
    
    
    (11,532
    )
    
    
    (16,220
    )
    
    
    (12,040
    )Basic and
diluted earnings/(loss) per share (cents per share)
    
    
    (11.9
    )
    
    
    (16.7
    )
    
    
    (12.4
    )Weighted average number of ordinary shares used to calculate earnings per share
    
    
    96,839,570
    
    
    
    97,207,053Number of outstanding ordinary shares at year end
    
    
    97,045,662
    
    
    
    97,294,054
 Adjusted to accord with
    
    2002
    
    2003
    
    2004
    
    2005
    
    2006
    
    2006US GAAP
    
    (A$000)
    
    (A$000)
    
    (A$000)
    
    (A$000)
    
    (A$000)
    
    (US$000)Sales revenue
    
    
    17,644
    
    
    
    18,977
    
    
    
    11,774
    
    
    
    12,928
    
    
    
    12,654
    
    
    
    9,393Other operating revenue
    
    
    3,463
    
    
    
    3,325
    
    
    
    2,414
    
    
    
    2,955
    
    
    
    3,278
    
    
    
    2,433Total revenue
    
    
    21,107
    
    
    
    22,302
    
    
    
    14,188
    
    
    
    15,883
    
    
    
    15,932
    
    
    
    11,826Net loss
    
    
    (15,420
    )
    
    
    (10,670
    )
    
    
    (11,760
    )
    
    
    (11,640
    )
    
    
    (16,228
    )
    
    
    (12,046
    )Net (loss) from
operations per share
(cents per share)
    
    
    (16.2
    )
    
    
    (11.2
    )
    
    
    (12.2
    )
    
    
    (12.0
    )
    
    
    (16.7
    )
    
    
    (12.4
    )
  4




---



##### 



Summary of Consolidated Balance Sheets
(AIFRS)
 2005
    
    2006
    
    2006(A$000)
    
    (A$000)
    
    (US$000)Cash and Cash
Equivalents
    
    
    47,260
    
    
    
    33,513
    
    
    
    24,877Total Assets
    
    
    67,485
    
    
    
    51,098
    
    
    
    37,930Net Assets
    
    
    60,492
    
    
    
    44,578
    
    
    
    33,090Capital Stock
    
    
    176,235
    
    
    
    176,989
    
    
    
    131,379
 Adjusted to accord with
    
    2002
    
    2003
    
    2004
    
    2005
    
    2006
    
    2006US GAAP
    
    (A$000)
    
    (A$000)
    
    (A$000)
    
    (A$000)
    
    (A$000)
    
    (US$000)Total Assets
    
    
    61,676
    
    
    
    50,812
    
    
    
    77,413
    
    
    
    67,485
    
    
    
    51,098
    
    
    
    37,930Shareholders Equity
    
    
    51,852
    
    
    
    41,069
    
    
    
    65,759
    
    
    
    57,725
    
    
    
    43,415
    
    
    
    32,227
    5




---



##### 



Exchange Rates for the six months to October 2006
A$ versus US$
 Month
    
    High
    
    LowMay
    
    $
    0.7781
    
    
    $
    0.7509June
    
    $
    0.7527
    
    
    $
    0.7284July
    
    $
    0.7664
    
    
    $
    0.7407August
    
    $
    0.7699
    
    
    $
    0.7568September
    
    $
    0.7704
    
    
    $
    0.7461October
    
    $
    0.7743
    
    
    $
    0.7434
 Exchange Rates for the Last Five Years A$ versus US$
 Fiscal Year
    
    AverageEnded June 30
    
    Rate2002
    
    $
    0.52362003
    
    $
    0.58362004
    
    $
    0.71092005
    
    $
    0.75292006
    
    $
    0.7472
 6




---



##### 



Risk Factors
  The Company has incurred operating losses since its inception, and is likely to incur operating
losses for the foreseeable future.
  The Companys isoflavonoid technology is relatively new and unproven. If the Company is unable
to develop its product candidates or successfully achieve market acceptance of its technology, the
Companys financial position could be seriously impaired.
   If the data from the Companys clinical trial program do not demonstrate the safety and
efficacy of the phenolic drug candidates to the FDAs and other regulatory authorities
satisfaction, the Company will not receive approval to market its drug candidates in the U.S. or
other jurisdictions.
 7




---



##### 



Trans
  Any failure in the clinical trial program could impair the commercial prospects of the Companys
phenolic drug program.
  If the Company does not receive marketing approval for its phenolic drug candidates, or regulatory
approval is withdrawn for the Companys dietary supplements, the Company will not be able to
commercialize its products and product candidates.
 8




---



##### 



The Company will need to raise additional funds in order to finance its future operations and
the clinical development program. The actual amount of funds that we will need will be determined
by a number of factors, some of which are beyond our control.
   9




---



##### 



The supply of the raw material for the Companys dietary supplement products is subject to a
number of environmental factors beyond the Companys control. If the Company cannot maintain a
reliable supply of red clover, it may not be able to continue to sell its dietary supplement
products and sales volumes could be significantly reduced.
     10




---



##### 



The Company has no direct control over the cost of formulation and packaging of its dietary
supplement products and will be relying on third parties to manufacture commercial quantities of
pharmaceutical drug candidates.
   The Companys success is largely dependent on its ability to obtain patent protection and
preserve trade secrets, which cannot be guaranteed.
   11




---



##### 



The Companys commercial opportunity will be reduced or eliminated if competitors develop and
market products that are more effective or less expensive than the Companys products.
   12




---



##### 



Revenue is affected by fluctuations in currency exchange rates.
   The Company depends on a number of key personnel to provide the strategic direction of its research
and development programs and other corporate activities. If the Company is unable to procure the
services of key personnel in the future, the Companys research and development programs could be
delayed.
  13




---



##### 



The
ongoing criminal investigations involving Professor Kelly, a Director of Marshall Edwards,
Inc., could have a material adverse effect on the Companys business or cause the stock price to
decline.
  The Company may not be able to establish or maintain the strategic partnerships necessary to
market and distribute its dietary supplement products.
   14




---



##### 



If the data from the Companys clinical trial program does not demonstrate the safety and
effectiveness of its pharmaceutical product candidates, the Company will not receive FDA approval
to market those product candidates in the United States.
    15




---



##### 



The Company faces the risk of product liability claims and may not be able to obtain adequate
insurance.
  Enforceability of civil liabilities under the federal securities laws against the Companys
officers and directors may be difficult.
  The trading price of the shares of the Companys common stock and Alternative Depository Receipts
(ADRs) could decline in value if the trading price of the shares of common stock of its listed
subsidiary company, Marshall Edwards, Inc., declines.
  The trading price of the shares of the Companys common stock and ADRs is highly volatile. Your
investment could decline in value and the Company may incur significant costs from class action
litigation.
 16




---



##### 




    
    Announcements of technological innovations by the Company and its competitors;
    
    New products introduced or announced by the Company or its competitors;
    
    Changes in financial estimates by securities analysts;
    
    Actual or anticipated variations in operating results;
    
    Expiration or termination of licenses, research contracts or other collaboration
agreements;
    
    Conditions or trends in the regulatory climate in the biotechnology, pharmaceutical and
genomics industries;
    
    Changes in the market values of similar companies;
    
    The liquidity of any market for the Companys securities;
    
    Additional sales by the Company of its shares.
  17




---



##### 



Item 4. Information on the Company
 History and development of the Company
 www.novogen.com
 Capital expenditures
  Business overview
 Nature of the Business
  Dietary supplements
   18




---



##### 



Category of Activity
 2005
    
    2006(A$000)
    
    (A$000)Dietary SupplementsRevenue
    
    
    13,404
    
    
    
    13,500Other income
    
    
    1,299
    
    
    
    873Pharmaceutical research and developmentOther income
    
    
    2,975
    
    
    
    3,865Total Revenue
    
    
    17,678
    
    
    
    18,238
 19




---



##### 



Geographical Markets
 2005
    
    2006(A$000)
    
    (A$000)RevenueAustralasia
    
    
    4,646
    
    
    
    5,166UK & Europe
    
    
    2,518
    
    
    
    2,614US & Canada
    
    
    6,240
    
    
    
    5,72013,404
    
    
    
    13,500Other incomeAustralasia
    
    
    3,877
    
    
    
    4,159UK & Europe
    
    
    80
    
    
    
    4US & Canada
    
    
    317
    
    
    
    5754,274
    
    
    
    4,738Total Revenue
    
    
    17,678
    
    
    
    18,238
 Revenue
  Consumer product sales
  20




---



##### 



Product Research and Development.
 Cardiovascular drug development
 trans Trans
 Anti-inflammatory drug development
  Cancer drug development
  21




---



##### 



Phenoxodiol
    
    
    In March 2006, MEI announced that Yale
researchers presented data at the Annual
Meeting on Womens Cancer. The data was
from the study conducted at Yale  New
Haven Hospital, Connecticut, U.S. as well
as the Royal Womens Hospital, Melbourne,
Australia, The Yale researchers reported
that 74 percent of patients with
late-stage, platinum-resistant tumors who
received the phenoxodiol and cisplatin
combination showed evidence of a change in
tumor growth by way of either tumor
shrinkage or no increase in tumor size.
    
    In November 2005, MEI announced plans for
a Phase Ib/IIa clinical study of the
investigational anti-cancer drug,
phenoxodiol in combination with docetaxel
for women with recurrent ovarian cancer.
The investigator-initiated clinical study
is taking place at the Yale University
School of Medicine and is supported
jointly by Sanofi-Aventis and MEI.
    
    In November 2005, MEI announced that
phenoxodiol delays tumor progression in
men suffering from late-stage hormone
refractory prostate cancer. This study is
being conducted at the Sir Charles
Gairdner Hospital in Perth, Australia and
was presented at the International
Conference on Molecular Targets and Cancer
Therapeutics in Philadelphia.
    
    Also in November 2005, MEI announced at
the International Conference on Molecular
Targets and Cancer Therapeutics in
Philadelphia, that Yale Universitys
School of Medicine reported a further
update on results from a clinical study
conducted with women with early-stage
cancer of the cervix and vagina. The data
presented by Yale researchers indicates
continuing confidence that the
 22




---



##### 



investigational drug phenoxodiol produces anti-cancer responses in women with cervical cancer.
    
    In October 2005, MEI announced updated results from two clinical studies, conducted at Yale
Universitys School of Medicine, involving women with late-stage ovarian cancer and women with
early-stage cancer of the cervix and vagina. Interim data, for women with late stage ovarian
cancer, presented by Dr Gil Mor at the 11th World Congress of the International
Menopause Society, meeting in Buenos Aires, Argentina, indicated that after combining
phenoxodiol with either paclitaxel or cisplatin, overall survival had been substantially
extended.
     Wound healing
   Source and Availability of Raw Materials
 Isoflavones
  23




---



##### 



Phenolic Compounds
   Marketing Channels
   24




---



##### 



Patent Protection
      Intellectual property development
  25




---



##### 



EuropePatent # 1049451
    
    Compositions and methods for protecting skin from UV induced immunosuppresion and
skin damageAustraliaPatent # 2002238278
    
    Dimeric IsoflavonesUSAPatent # 7033621
    
    Preparation of isoflavones from legumesPatent # 6987098
    
    Health supplements containing phyto-oestrogen, analogues or metabolites thereofCzechPatent # 295625
    
    Therapeutic methods and compositions involving isoflavonesSingaporePatent # 86589
    
    Compositions and therapeutic methods involving isoflavones and methods thereofPatent # 97715
    
    Regulation of lipids and/or bone density and compositions thereofSwedenPatent # 526737
    
    Compositions and methods for protecting skin from UV induced immunosuppresion and
skin damageSouth AfricaPatent # 2001/6502
    
    Production of isoflavone derivativesPatent # 2003/5091
    
    Regulation of lipids and/or bone density and compositions thereofChinaPatent # 222038
    
    Preparation of isoflavones from legumesPatent # ZL01804008.X
    
    Food product and processIsraelPatent # 138129
    
    Therapy of estrogen-associated disordersPatent # 136784
    
    Compositions and methods for protecting skin from UV induced immunosuppresion and
skin damageNew ZealandPatent # 528067
    
    Dimeric IsoflavonesPatent # 538323
    
    Production of isoflavone derivatives
 26




---



##### 



Trademark Protection
  Licensing Arrangements
  Australian Government
    27




---



##### 



Australian Regulatory Requirements
 Therapeutic Goods Act 1989,
     28




---



##### 



U.S. Regulatory Requirements
   
    
    pre-clinical laboratory evaluations, including formulation and stability testing, and
animal tests performed under the FDAs Good Laboratory Practices regulations to assess
potential safety and effectiveness;
    
    submission and approval of an Initial New Drug Application (IND), including results
of pre-clinical tests, manufacturing information and protocols for clinical tests, which
must become effective before clinical trials may begin in the United States;
 29




---



##### 




    
    obtaining approval of Institutional Review Boards to administer the products to human
subjects in clinical trials;
    
    adequate and well-controlled human clinical trials to establish the safety and efficacy
of the product for the products intended use;
    
    development of manufacturing processes which conform to FDA current Good Manufacturing
Practices, or cGMPs, as confirmed by FDA inspection;
    
    submission of pre-clinical and clinical test results, and chemistry, manufacturing and
controls information on the product to the FDA in a NDA; and
    
    FDA review and approval of an NDA, prior to any commercial sale or shipment of a
product.
     Phase I:
  Phase II:
 30




---



##### 



 Phase III:
     31




---



##### 



32




---



##### 



33




---



##### 



European Union Regulatory Requirements
   34




---



##### 



Dietary Supplements
  Organizational Structure
 Corporate Structure
  Name of Entity
    
    Country of Incorporation
    
    Ownership %Novogen Laboratories Pty Ltd
    
    Australia
    
    
    100Novogen Research Pty Ltd
    
    Australia
    
    
    100Central Coast Properties Pty Ltd
    
    Australia
    
    
    100Phytosearch Pty Ltd
    
    Australia
    
    
    100Phytogen Pty Ltd
    
    Australia
    
    
    100Glycotex Pty Ltd
    
    Australia
    
    
    100Norvogen Pty Ltd
    
    Australia
    
    
    100
 35




---



##### 



Name of Entity
    
    Country of Incorporation
    
    Ownership %Novogen Inc
    
    USA
    
    
    100Glycotex Inc
    
    USA
    
    
    84.3Novogen Limited (U.K.)
    
    U.K.
    
    
    100Promensil Limited
    
    U.K.
    
    
    100Novogen BV
    
    Netherlands
    
    
    100Novogen Canada Limited
    
    Canada
    
    
    100Marshall Edwards Inc
    
    USA
    
    
    86.9Marshall Edwards Pty Limited*
    
    Australia
    
    
    86.9
 
 *
    
    Indirect ownership through Marshall Edwards, Inc. Property, Plants and Equipment
   Item 4A. Unresolved Staff Comments
  Item 5. Operating and Financial Review and Prospects
  36




---



##### 



Application of Critical Accounting Policies
  Revenue Recognition
   Inventory Adjustments
  Research and development expenses
  Share-based payment transactions
  37




---



##### 



Impairments
  Results of Operations
  INCOME STATEMENTS
for the year ended June 30, 2006
 Notes
    
    2006
    
    2005
    
    2006A$000
    
    A$000
    
    US$000Continuing OperationsRevenue
    
    
    2
    
    
    
    13,500
    
    
    
    13,404
    
    
    
    10,021Cost of sales
    
    
    
    
    
    
    (5,445
    )
    
    
    (4,666
    )
    
    
    (4,042
    )Gross profit
    
    
    
    
    
    
    8,055
    
    
    
    8,738
    
    
    
    5,979Other income
    
    
    2
    
    
    
    4,738
    
    
    
    4,274
    
    
    
    3,517Research & development expenses
    
    
    
    
    
    
    (12,014
    )
    
    
    (10,217
    )
    
    
    (8,918
    )Selling & promotional expenses
    
    
    
    
    
    
    (9,013
    )
    
    
    (8,411
    )
    
    
    (6,690
    )Shipping and handling expenses
    
    
    
    
    
    
    (556
    )
    
    
    (444
    )
    
    
    (413
    )General and administrative expenses
    
    
    
    
    
    
    (8,769
    )
    
    
    (6,566
    )
    
    
    (6,509
    )Other Expenses
    
    
    
    
    
    
    (301
    )
    
    
    
    
    
    
    (223
    )Finance costs
    
    
    
    
    
    
    (52
    )
    
    
    (56
    )
    
    
    (39
    )Loss before income tax
    
    
    2
    
    
    
    (17,912
    )
    
    
    (12,682
    )
    
    
    (13,296
    )Income tax expense
    
    
    3
    
    
    
    (1
    )
    
    
    (2
    )
    
    
    (1
    )Loss for the period
    
    
    
    
    
    
    (17,913
    )
    
    
    (12,684
    )
    
    
    (13,297
    )Loss attributable to minority interest
    
    
    
    
    
    
    1,693
    
    
    
    1,152
    
    
    
    1,257Loss attributable to members of Novogen Limited
    
    
    
    
    
    
    (16,220
    )
    
    
    (11,532
    )
    
    
    (12,040
    )
 38




---



##### 



Operating Results  Fiscal 2006 v Fiscal 2005
 Revenue
   Consumer product sales
    39




---



##### 



Costs and Expenses
  Net loss
   Liquidity and capital resources
   40




---



##### 



Marshall Edwards, Inc. post balance date capital raising
        41




---



##### 



Research and Development
 Research and development policy
      
    
    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.
 42




---



##### 



Trend Information
   Off-Balance Sheet Arrangements
  Table of Contractual Obligations
  Payments due by periodIn $000s
    
    Total
    
    Less than 1 year
    
    1-3 years
    
    4-5 years
    
    After 5 yearsOperating Leases
    
    
    1,858
    
    
    
    427
    
    
    
    1,367
    
    
    
    64
    
    
    
    Finance Leases
    
    
    15
    
    
    
    15
    
    
    
    
    
    
    
    
    
    
    
    Other Expenditure Commitments *
    
    
    3,575
    
    
    
    3,506
    
    
    
    69
    
    
    
    
    
    
    
    Total Contractual Cash Obligations
    
    
    5,448
    
    
    
    3,948
    
    
    
    1,436
    
    
    
    64
    
    
    
    
 
 *
    
    represents research and development contracts for services to be rendered. 43




---



##### 



Item 6. Directors, Senior Management and Employees.
 DIRECTORS
  
 Names, qualifications, experience and special responsibilities
 Philip A Johnston Non-Executive Chairman
   Christopher Naughton Managing Director
  44




---



##### 



Professor Paul J Nestel Non-Executive Director
   Peter B Simpson Non-Executive Director
  Dr Leanna C Read Non-Executive Director
  45




---



##### 



Mr Geoffrey M Leppinus Non-Executive Director
  Professor Alan Husband Executive Director
  Executive Officers profiles
 David R. Seaton  Chief Financial Officer
 46




---



##### 



Warren Lancaster  Vice President Commercial and Corporate Development
  Bryan Palmer  Operations General Manager
  Craig Kearney  General Manager Consumer Business
  Ronald L Erratt
  47




---



##### 



Compensation
 Remuneration Philosophy
  Employee share option plan.
     48




---



##### 



Remuneration committee
   Remuneration structure
  Non-Executive director remuneration
     Executive and senior manager remuneration
  49




---



##### 



Employment contracts
   50




---



##### 



Director remuneration from Novogen Limited for the year ended June 30, 2006
 PostShort term emoluments

    
    
    Termination
    
    
    Share based payments
    
    
    EmploymentSalary
    
    
    Committee
    
    
    
    
    
    
    & similar
    
    
    Options granted
    
    
    Super-and Fees
    
    
    fee
    
    
    Other
    
    
    payments
    
    
    
    
    
    
    Amortised cost
    
    
    Remuneration
    
    
    annuation
    
    
    TotalA$
    
    
    A$
    
    
    A$
    
    
    A$
    
    
    Number ***
    
    
    A$
    
    
    %
    
    
    A$
    
    
    A$PA Johnston
    
    
    63,064
    
    
    
    14,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,936
    
    
    
    84,000C Naughton
    
    
    518,835
    
    
    
    
    
    
    
    46,827
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    100,587
    
    
    
    666,249AJ Husband *
    
    
    290,766
    
    
    
    
    
    
    
    41,785
    
    
    
    
    
    
    
    30,436
    
    
    
    51,281
    
    
    
    11.9
    %
    
    
    47,618
    
    
    
    431,450GE Kelly **
    
    
    362,388
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    31,792
    
    
    
    7,145
    
    
    
    1.8
    %
    
    
    32,615
    
    
    
    402,148PJ Nestel AO
    
    
    40,000
    
    
    
    12,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    52,000PB Simpson
    
    
    35,540
    
    
    
    14,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,460
    
    
    
    54,000LC Read
    
    
    36,368
    
    
    
    4,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,632
    
    
    
    44,000GM Leppinus
    
    
    25,650
    
    
    
    6,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,350
    
    
    
    46,0001,372,611
    
    
    
    50,000
    
    
    
    88,612
    
    
    
    
    
    
    
    62,228
    
    
    
    58,426
    
    
    
    3.3
    %
    
    
    210,198
    
    
    
    1,779,847
 
 *
    
    appointed May 23, 2006**
    
    resigned September 2, 2005***
    
    options were granted while acting in capacity as Executive Director remuneration from Marshall Edwards for the year ended June 30, 2006
 PostShort term emoluments
    
    
    Termination
    
    
    Share based payments
    
    
    EmploymentCommittee
    
    
    
    
    
    
    & similar
    
    
    Options granted
    
    
    Super-Base fee
    
    
    fee
    
    
    Other
    
    
    payments
    
    
    
    
    
    
    Amortised cost
    
    
    Remuneration
    
    
    annuation
    
    
    TotalA$
    
    
    A$
    
    
    A$
    
    
    A$
    
    
    Number
    
    
    A$
    
    
    %
    
    
    A$
    
    
    A$PA Johnston
    
    
    27,524
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,476
    
    
    
    30,000PJ Nestel AO
    
    
    30,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    30,00057,524
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,476
    
    
    
    60,000
 Director remuneration from Glycotex for the year ended June 30, 2006
 PostShort term emoluments
    
    
    Termination
    
    
    Share based payments
    
    
    EmploymentCommittee
    
    
    
    
    
    
    & similar
    
    
    Options granted
    
    
    Super-Base fee
    
    
    fee
    
    
    Other
    
    
    payments
    
    
    
    
    
    
    Amortised cost
    
    
    Remuneration
    
    
    annuation
    
    
    TotalA$
    
    
    A$
    
    
    A$
    
    
    A$
    
    
    Number
    
    
    A$
    
    
    %
    
    
    A$
    
    
    A$PA Johnston
    
    
    39,024
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    39,02439,024
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    39,024
 51




---



##### 



Total Directors remuneration for the year ended June 30, 2006
 PostShort term emoluments
    
    
    Termination
    
    
    Share based payments
    
    
    EmploymentSalary and
    
    
    Committee
    
    
    
    
    
    
    & similar
    
    
    Options granted
    
    
    Super-Fees
    
    
    fee
    
    
    Other
    
    
    payments
    
    
    
    
    
    
    Amortised cost
    
    
    Remuneration
    
    
    annuation
    
    
    TotalA$
    
    
    A$
    
    
    A$
    
    
    A$
    
    
    Number ***
    
    
    A$
    
    
    %
    
    
    A$
    
    
    A$PA Johnston
    
    
    129,612
    
    
    
    14,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,412
    
    
    
    153,024C Naughton
    
    
    518,835
    
    
    
    
    
    
    
    46,827
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    100,587
    
    
    
    666,249AJ Husband *
    
    
    290,766
    
    
    
    
    
    
    
    41,785
    
    
    
    
    
    
    
    30,436
    
    
    
    51,281
    
    
    
    11.9
    %
    
    
    47,618
    
    
    
    431,450GE Kelly **
    
    
    362,388
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    31,792
    
    
    
    7,145
    
    
    
    1.8
    %
    
    
    32,615
    
    
    
    402,148PJ Nestel AO
    
    
    70,000
    
    
    
    12,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    82,000PB Simpson
    
    
    35,540
    
    
    
    14,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,460
    
    
    
    54,000LC Read
    
    
    36,368
    
    
    
    4,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,632
    
    
    
    44,000GM Leppinus
    
    
    25,650
    
    
    
    6,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,350
    
    
    
    46,0001,469,159
    
    
    
    50,000
    
    
    
    88,612
    
    
    
    
    
    
    
    62,228
    
    
    
    58,426
    
    
    
    3.1
    %
    
    
    212,674
    
    
    
    1,878,871
 
 *
    
    appointed May 23, 2006**
    
    resigned September 2, 2005***
    
    options were granted while acting in capacity as Executive Compensation of the Executive Officers of the Company and the consolidated entity for the year
ended June 30, 2006
 PostTermination
    
    
    Share based payments
    
    
    EmploymentShort term emoluments
    
    
    & similar
    
    
    Options granted
    
    
    Super-Salary
    
    
    Other
    
    
    payments
    
    
    
    
    
    
    Amortised cost
    
    
    Remuneration
    
    
    annuation
    
    
    TotalA$
    
    
    A$
    
    
    A$
    
    
    Number
    
    
    A$
    
    
    %
    
    
    A$
    
    
    A$DR Seaton
    
    
    284,916
    
    
    
    28,976
    
    
    
    
    
    
    
    30,436
    
    
    
    51,310
    
    
    
    12.18
    %
    
    
    56,162
    
    
    
    421,364WJ Lancaster (USA)
    
    
    195,843
    
    
    
    6,243
    
    
    
    
    
    
    
    12,232
    
    
    
    24,137
    
    
    
    9.73
    %
    
    
    21,956
    
    
    
    248,179BM Palmer
    
    
    153,085
    
    
    
    33,239
    
    
    
    
    
    
    
    16,692
    
    
    
    28,562
    
    
    
    12.49
    %
    
    
    13,778
    
    
    
    228,664CD Kearney
    
    
    181,405
    
    
    
    22,952
    
    
    
    
    
    
    
    17,752
    
    
    
    28,209
    
    
    
    11.33
    %
    
    
    16,326
    
    
    
    248,892RL Erratt
    
    
    149,939
    
    
    
    26,203
    
    
    
    
    
    
    
    16,520
    
    
    
    28,381
    
    
    
    12.11
    %
    
    
    29,845
    
    
    
    234,368965,188
    
    
    
    117,613
    
    
    
    
    
    
    
    93,632
    
    
    
    160,599
    
    
    
    11.6
    %
    
    
    138,067
    
    
    
    1,381,467
     52




---



##### 



Fair values of options:
  April 21,
    
    
    March 16,
    
    
    February 27,
    
    
    November 29,2006
    
    
    2005
    
    
    2004
    
    
    2002Dividend yield
    
    
    0
    %
    
    
    0
    %
    
    
    0
    %
    
    
    0
    %Expected volatility
    
    
    66
    %
    
    
    69
    %
    
    
    69
    %
    
    
    68
    %Historical volatility
    
    
    66
    %
    
    
    69
    %
    
    
    69
    %
    
    
    68
    %Risk-free interest rate
    
    
    5.62
    %
    
    
    5.67
    %
    
    
    5.52
    %
    
    
    5.27
    %Expected life of option
    
    5 years

    
    5 years

    
    5 years

    
    5 yearsOption fair value
    
    
    2.10

    
    
    2.96

    
    
2.82

    
    
    1.26
   53




---



##### 



Arrangements and Relationships
  Pension Benefits
  Board Practices
 Novogen Board of Directors
 Year First
    
    Current TermName
    
    Postion Held
    
    Appointed
    
    ExpiresP A Johnston
    
    Chairman
    
    1997
    
    October-2009C Naughton
    
    Managing Director
    
    1997
    
    *G E Kelly
    
    Executive Director
    
    1994
    
    P B Simpson
    
    Director
    
    1994
    
    October-2009P J Nestel
    
    Director
    
    2001
    
    October-2009L C Read
    
    Director
    
    2003
    
    October-2008G M Leppinus
    
    Director
    
    2005
    
    October-2008**A J Husband
    
    Executive Director
    
    2006
    
    October-2009
 
 *
    
    Professor Kelly resigned from the board of Novogen Limited on September 2, 2005.**
    
    Professor Husband was appointed to the board on May 23, 2006 Term of Directors
   Board of Directors
  54




---



##### 



Structure of the Board of Directors
    Name
    
    PositionP A Johnston
    
    Non-Executive ChairmanProfessor P J Nestel AO
    
    Non-Executive DirectorP B Simpson
    
    Non-Executive DirectorDr L C Read
    
    Non-Executive DirectorG M Leppinus
    
    Non-Executive Director
  55




---



##### 



Audit Committee
   Performance
  Remuneration Committee
   56




---



##### 



Capital Works Committee
   Nomination Committee
  Employees
  Category of Activity
    
    Number of People2006
    
    2005
    
    2004Research and development
    
    
    29
    
    
    
    23
    
    
    
    19Production
    
    
    13
    
    
    
    21
    
    
    
    21Sales and marketing
    
    
    13
    
    
    
    18
    
    
    
    12Finance and administration
    
    
    12
    
    
    
    12
    
    
    
    14Total
    
    
    67
    
    
    
    74
    
    
    
    66
 Geographic Location
    
    Number of People2006
    
    2005
    
    2004Australasia
    
    
    63
    
    
    
    65
    
    
    
    54North America
    
    
    3
    
    
    
    8
    
    
    
    11Europe
    
    
    1
    
    
    
    1
    
    
    
    1Total
    
    
    67
    
    
    
    74
    
    
    
    66
 57




---



##### 



Share Ownership
 Directors holdings of shares and options in the Company
  Ordinary
    
    
    %
    
    
    
    
    
    
    OptionsShares Fully
    
    
    Total Shares
    
    
    Number
    
    
    Exercise
    
    
    ExpiryPaid
    
    
    on Issue
    
    
    Outstanding
    
    
    Price
    
    
    DateP A Johnston
    
    
    48,594
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    C Naughton
    
    
    633,511
    
    
    
    0.6
    
    
    
    
    
    
    
    
    
    
    
    A J Husband
    
    
    102,920
    
    
    
    0.1
    
    
    
    38,256
    
    
    
    2.10
    
    
    
    30/11/200714,892
    
    
    
    6.76
    
    
    
    27/02/200922,592
    
    
    
    4.90
    
    
    
    16/03/201030,436
    
    
    
    3.64
    
    
    
    21/04/2011P J Nestel
    
    
    32,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    P B Simpson
    
    
    500
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    L C Read
    
    
    2,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
 58




---



##### 



Shares held
 Ordinary
    
    
    %shares fully
    
    
    Total sharespaid
    
    
    on issueGE Kelly
    
    
    7,810,152
    
    
    
    8.0DR Seaton
    
    
    37,378
    
    
    
    WJ Lancaster (USA)
    
    
    
    
    
    
    BM Palmer
    
    
    205,636
    
    
    
    0.2CD Kearney
    
    
    8,850
    
    
    
    RL Erratt
    
    
    232,368
    
    
    
    0.2
 Options granted to and held by named Executives
 EligibleTotal
    
    
    executives
    
    Exerciseoptions
    
    
    participating
    
    price
    
    
    Grant date
    
    
    Expiry date(A$)116,286
    
    
    5
    
    
    2.10
    
    
    
    30/11/2002
    
    
    
    30/11/200747,332
    
    
    5
    
    
    6.76
    
    
    
    27/02/2004
    
    
    
    27/02/200969,560
    
    
    5
    
    
    4.90
    
    
    
    16/03/2005
    
    
    
    16/03/2010125,424
    
    
    6
    
    
    3.64
    
    
    
    21/04/2006
    
    
    
    21/04/2011
  Exemptions from Certain Nasdaq Corporate Governance Rules
  59




---



##### 




    
    Novogen is exempt from Nasdaqs quorum requirements applicable to meetings of ordinary
shareholders. In keeping with the law of Australia and generally accepted business practices
in Australia, Novogens Constitution (formerly known
as the Memorandum of Association and Articles of Association) requires a quorum
of three shareholders for a shareholders meeting.
    
    Novogen is exempt from Nasdaqs requirement that each
Nasdaq issuer shall require shareholder approval of a
plan or arrangement in connection with the
acquisition of the stock or assets of another company
if any director, officer or substantial shareholder
of the issuer has a 5 percent or greater interest (or
such persons collectively have a 10 percent or
greater interest), directly or indirectly, in the
Company or assets to be acquired or in the
consideration to be paid in the transaction or series
of related transactions and the present or potential
issuance of common stock, or securities convertible
into or exercisable for common stock, could result in
an increase in outstanding common shares or voting
power of 5 percent or more.
  60




---



##### 



Item 7. Major Shareholders and Related Party Transactions
 Major Shareholders
       61




---



##### 



Item 8. Financial Information
  Export Sales
  Legal Proceedings
  Dividends
  Significant Changes
  62




---



##### 



Item 9. Offer and Listing Details
 Trading Markets
  American Depositary Receipts
   63




---



##### 



NOVOGEN LIMITED SHARE PRICE HISTORY
 Period
    
    Per Ordinary Share (A$)
    
    
    Per ADR (US$)High
    
    
    Low
    
    
    High
    
    
    LowYear EndedJune 2002
    
    
    3.34
    
    
    
    0.83
    
    
    
    10.50
    
    
    
    1.98June 2003
    
    
    5.59
    
    
    
    1.18
    
    
    
    19.59
    
    
    
    3.15June 2004
    
    
    8.80
    
    
    
    4.00
    
    
    
    31.90
    
    
    
    12.30June 2005
    
    
    6.25
    
    
    
    4.15
    
    
    
    24.35
    
    
    
    14.85June 2006
    
    
    6.00
    
    
    
    2.14
    
    
    
    22.08
    
    
    
    8.03Quarter EndedDecember 2004
    
    
    6.25
    
    
    
    4.54
    
    
    
    24.35
    
    
    
    17.44March 2005
    
    
    5.76
    
    
    
    4.65
    
    
    
    22.94
    
    
    
    18.15June 2005
    
    
    5.98
    
    
    
    4.35
    
    
    
    23.55
    
    
    
    17.01September 2005
    
    
    5.22
    
    
    
    4.46
    
    
    
    20.18
    
    
    
    17.68December 2005
    
    
    6.00
    
    
    
    4.66
    
    
    
    22.08
    
    
    
    17.20March 2006
    
    
    5.05
    
    
    
    3.30
    
    
    
    18.41
    
    
    
    11.62June 2006
    
    
    4.04
    
    
    
    2.14
    
    
    
    14.49
    
    
    
    8.03September 2006
    
    
    3.80
    
    
    
    2.40
    
    
    
    13.25
    
    
    
    9.10Month EndedMay 2006
    
    
    3.66
    
    
    
    2.53
    
    
    
    13.91
    
    
    
    9.50June 2006
    
    
    2.90
    
    
    
    2.14
    
    
    
    11.08
    
    
    
    8.03July 2006
    
    
    3.80
    
    
    
    2.48
    
    
    
    13.25
    
    
    
    9.46August 2006
    
    
    3.03
    
    
    
    2.44
    
    
    
    11.60
    
    
    
    9.51September 2006
    
    
    3.20
    
    
    
    2.40
    
    
    
    11.95
    
    
    
    9.10October 2006
    
    
    3.01
    
    
    
    2.61
    
    
    
    11.58
    
    
    
    9.92
 64




---



##### 



Item 10. Additional Information
 Memorandum and Articles of Association
  Material Contracts
    Exchange Controls
    65




---



##### 



Taxation
     66




---



##### 



Distributions
     Dispositions
    67




---



##### 



68




---



##### 



Estate and Gift Tax
  Documents on Display
  69




---



##### 



Item 11. Quantitative and Qualitative Disclosures about Market Risk.
 Interest Rate Risk
      Foreign Currency Risk
   Item 12. Description of Securities Other than Equity Securities
  70




---



##### 



PART II
 Item 13. Defaults, Dividend Arrearages and Delinquencies
  Item 14. Material Modifications to the Rights of Security Holders
and the Use of Proceeds
  Item 15. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
   Changes in Internal Controls
   71




---



##### 



1)
    
    the employment of additional accounting staff which will enable senior finance staff
responsible for the preparation of U.S. GAAP financial reports to spend more time dealing
with U.S. GAAP reporting issues;2)
    
    increasing the level of attendance at targeted U.S. GAAP and SEC reporting courses
by senior finance staff responsible for the preparation of U.S. GAAP financial reports and
SEC disclosure; and3)
    
    subscribing to additional information networks that provide publications and updates
of SEC and U.S. GAAP releases and rule changes and of information about the requirements
of the Public Company Accounting Oversight Board.
 Progress on the implementation of the Companys plan to address the material weakness
    72




---



##### 



Item 16. Reserved
 Item 16A. Audit Committee Financial Expert
  Item 16B. Code of Ethics
 http://www.novogen.com
 Item 16C. Principal Accounting Fees and Services
   73




---



##### 



BDO
    
    2005
    
    2006A$000
    
    A$000Audit fees
    
    
    245.0
    
    
    
    257.0Audit related fees
    
    
    
    
    
    
    114.0Tax fees
    
    
    10.0
    
    
    
    39.0Other Fees
    
    
    5.0
    
    
    
    21.0Total fees
    
    
    260.00
    
    
    
    431.0
 Ernst & Young
    
    2005
    
    2006A$000
    
    A$000Audit fees
    
    
    35.0
    
    
    
    83.0Audit related fees
    
    
    3.0
    
    
    
    Tax fees
    
    
    
    
    
    
    Other Fees
    
    
    5.0
    
    
    
    Total fees
    
    
    43.0
    
    
    
    83.0
 Audit fees
  Audit Related Services
  Tax Fees
  All Other Fees
  74




---



##### 



Pre-approval Policies and Procedures
  Item 16D. Exemptions from the Listing Standards for Audit Committees.
  Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers.
  75




---



##### 



PART III
 Item 17. Financial Statements
  Item 18. Financial Statements
  Item 19. Exhibits
  Exhibit No.
    
    Exhibit Description1.1
    
    Constitution of Novogen Limited (formerly known as the
Memorandum of Association and Articles of Association). (1)2.1
    
    Deposit Agreement as further amended and restated, dated as of
September 29, 2005, 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
dated June 21, 2006.4.2
    
    Employment Contract between the Company and Professor Alan
Husband dated June 21, 2006.4.3
    
    Employment Contract between the Company and Dr G. E. Kelly
dated June 21, 2006.4.4
    
    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)4.5
    
    Employment Contract between the Company and Bryan Palmer dated
June 21, 2006.
 76




---



##### 



Exhibit No.
    
    Exhibit Description4.6
    
    Employment Contract between the Company and Craig Kearney
dated June 21, 2006.4.7
    
    Employment Contract between the Company and David Seaton dated
June 21, 2006.4.8
    
    Employment Contract between the Company and Ronald Erratt
dated June 21 30, 2006.8.1
    
    Company Subsidiaries.12.1
    
    Certification of Chief Executive Officer pursuant to Rule 13a
- 14(a) of the Securities Exchange Act of 1934, as amended.12.2
    
    Certification of Chief Financial Officer a pursuant to Rule
13a  14(a) of the Securities Exchange Act of 1934, as
amended.13.1
    
    Certification by the Chief Executive Officer and Chief
Financial Officer pursuant to 18 U.S.C. Section 1350 as added
by Section 906 of the Sarbanes  Oxley Act of 2002.
 
 (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 Form F-6 filed with the Securities
and Exchange Commission on September 29, 2005 (File No. 333- 128681)(3)
    
    Incorporated by reference to the Annual Report on Form20-F filed with the Securities and
Exchange Commission on November 27, 2000 (File No. 0-29962) 77




---



##### 



Report of Independent Registered Public Accounting Firm
 
     BDO
 78




---



##### 



Directors Declaration
  1.
    
    In the opinion of the Directors:
 a)
    
    the financial statements and notes of the Company are in accordance with the
Corporations Act 2001, including:
 i)
    
    giving a true and fair view of the Companys financial position as at June
30, 2006 and of their performance for the year ended on that date; andii)
    
    complying with Accounting Standards and Corporations Regulations 2001; and
 b)
    
    there are reasonable grounds to believe that the Company will be able to pay its
debts as and when they become due and payable.
 2.
    
    This declaration has been made after receiving the declarations required to be made to the
directors in accordance with section 295A of the Corporations Act 2001 for the financial
period ending June 30, 2006.
 3.
    
    In the opinion of the Directors, as at the date of this declaration, there are reasonable
grounds to believe that the members of the Closed Group identified in Note 18, will be able to
meet any obligations or liabilities to which they are or may become subject to, by virtue of
the Deed of Cross Guarantee.
  
  79




---



##### 



Novogen Limited, Consolidated Financial Statements
   INCOME STATEMENTS
for the year ended June 30, 2006
 Notes
    
    
    2006
    
    
    2005
    
    
    2006A$000
    
    
    A$000
    
    
    US$000Continuing OperationsRevenue
    
    
    2
    
    
    
    13,500
    
    
    
    13,404
    
    
    
    10,021Cost of sales
    
    
    
    
    
    
    (5,445
    )
    
    
    (4,666
    )
    
    
    (4,042
    )Gross profit
    
    
    
    
    
    
    8,055
    
    
    
    8,738
    
    
    
    5,979Other income
    
    
    2
    
    
    
    4,738
    
    
    
    4,274
    
    
    
    3,517Research & development expenses
    
    
    
    
    
    
    (12,014
    )
    
    
    (10,217
    )
    
    
    (8,918
    )Selling & promotional expenses
    
    
    
    
    
    
    (9,013
    )
    
    
    (8,411
    )
    
    
    (6,690
    )Shipping and handling expenses
    
    
    
    
    
    
    (556
    )
    
    
    (444
    )
    
    
    (413
    )General and administrative expenses
    
    
    
    
    
    
    (8,769
    )
    
    
    (6,566
    )
    
    
    (6,509
    )Other Expenses
    
    
    
    
    
    
    (301
    )
    
    
    
    
    
    
    (223
    )Finance costs
    
    
    
    
    
    
    (52
    )
    
    
    (56
    )
    
    
    (39
    )Loss before income tax
    
    
    2
    
    
    
    (17,912
    )
    
    
    (12,682
    )
    
    
    (13,296
    )Income tax expense
    
    
    3
    
    
    
    (1
    )
    
    
    (2
    )
    
    
    (1
    )Loss for the period
    
    
    
    
    
    
    (17,913
    )
    
    
    (12,684
    )
    
    
    (13,297
    )Loss attributable to minority interest
    
    
    
    
    
    
    1,693
    
    
    
    1,152
    
    
    
    1,257Loss attributable to members of Novogen Limited
    
    
    
    
    
    
    (16,220
    )
    
    
    (11,532
    )
    
    
    (12,040
    )Basic and Diluted Earnings/(loss) per share (cents)
    
    
    4
    
    
    
    (16.7
    )
    
    
    (11.9
    )
    
    
    (12.4
    )
 80




---



##### 



BALANCE SHEETS
As at June 30, 2006
 Notes
    
    
    2006
    
    
    2005
    
    
    2006A$000
    
    
    A$000
    
    
    US$000CURRENT ASSETSCash and cash equivalents
    
    
    5
    
    
    
    33,513
    
    
    
    47,260
    
    
    
    24,877Trade and other receivables
    
    
    6
    
    
    
    4,030
    
    
    
    3,477
    
    
    
    2,991Inventories
    
    
    7
    
    
    
    5,522
    
    
    
    5,488
    
    
    
    4,099Other current assets
    
    
    8
    
    
    
    685
    
    
    
    821
    
    
    
    507Total current assets
    
    
    
    
    
    
    43,750
    
    
    
    57,046
    
    
    
    32,474NON-CURRENT ASSETSInventories
    
    
    7
    
    
    
    2,864
    
    
    
    4,580
    
    
    
    2,126Property, plant and equipment
    
    
    9
    
    
    
    4,484
    
    
    
    5,859
    
    
    
    3,328Total non-current assets
    
    
    
    
    
    
    7,348
    
    
    
    10,439
    
    
    
    5,454TOTAL ASSETS
    
    
    
    
    
    
    51,098
    
    
    
    67,485
    
    
    
    37,928CURRENT LIABILITIESTrade and other payables
    
    
    11
    
    
    
    5,646
    
    
    
    5,501
    
    
    
    4,191Interest-bearing loans and borrowings
    
    
    12
    
    
    
    15
    
    
    
    750
    
    
    
    11Provisions
    
    
    13
    
    
    
    520
    
    
    
    474
    
    
    
    386Total current liabilities
    
    
    
    
    
    
    6,181
    
    
    
    6,725
    
    
    
    4,588NON-CURRENT LIABILITIESInterest-bearing loans and borrowings
    
    
    12
    
    
    
    
    
    
    
    15
    
    
    
    Provisions
    
    
    13
    
    
    
    339
    
    
    
    253
    
    
    
    252Total non-current liabilities
    
    
    
    
    
    
    339
    
    
    
    268
    
    
    
    252TOTAL LIABILITIES
    
    
    
    
    
    
    6,520
    
    
    
    6,993
    
    
    
    4,840NET ASSETS
    
    
    
    
    
    
    44,578
    
    
    
    60,492
    
    
    
    33,088EQUITYContributed equity
    
    
    14
    
    
    
    176,989
    
    
    
    176,235
    
    
    
    131,379Reserves
    
    
    14
    
    
    
    (2,847
    )
    
    
    (3,413
    )
    
    
    (2,113
    )Accumulated losses
    
    
    14
    
    
    
    (131,700
    )
    
    
    (116,069
    )
    
    
    (97,761
    )Parent interest
    
    
    
    
    
    
    42,442
    
    
    
    56,753
    
    
    
    31,505Minority Interest
    
    
    14
    
    
    
    2,136
    
    
    
    3,739
    
    
    
    1,586TOTAL EQUITY
    
    
    
    
    
    
    44,578
    
    
    
    60,492
    
    
    
    33,091
 81




---



##### 



STATEMENTS OF RECOGNISED INCOME AND EXPENSE
for the year ended June 30, 2006
 Notes
    
    
    2006
    
    
    2005
    
    
    2006A$000
    
    
    A$000
    
    
    US$000Gain from Subsidiary capital raising
    
    
    14
    (a)
    
    
    
    
    
    
    6,029
    
    
    
    Foreign currency translation  Members share
    
    
    14
    (b)
    
    
    566
    
    
    
    (2,964
    )
    
    
    420Foreign currency translation  Minority Interest share
    
    
    14
    (d)
    
    
    90
    
    
    
    (445
    )
    
    
    67Net income recognised directly in equity
    
    
    
    
    
    
    656
    
    
    
    2,620
    
    
    
    487Loss for the period
    
    
    
    
    
    
    (17,913
    )
    
    
    (12,684
    )
    
    
    (13,297
    )Total recognised income and expense for the period
    
    
    
    
    
    
    (17,257
    )
    
    
    (10,064
    )
    
    
    (12,810
    )Attributable to:Equity holders of Novogen Limited
    
    
    
    
    
    
    (15,654
    )
    
    
    (8,436
    )
    
    
    (11,620
    )Minority interest
    
    
    
    
    
    
    (1,603
    )
    
    
    (1,628
    )
    
    
    (1,190
    )(17,257
    )
    
    
    (10,064
    )
    
    
    (12,810
    )
 82




---



##### 



STATEMENTS OF CASH FLOWS
for the year ended June 30, 2006
 Notes
    
    
    2006
    
    
    2005
    
    
    2006A$000
    
    
    A$000
    
    
    US$000Cash flows from operating activitiesReceipts from customers
    
    
    
    
    
    
    13,676
    
    
    
    13,254
    
    
    
    10,152Payments to suppliers and employees
    
    
    
    
    
    
    (32,628
    )
    
    
    (29,085
    )
    
    
    (24,220
    )Interest received
    
    
    
    
    
    
    1,543
    
    
    
    1,263
    
    
    
    1,145Interest paid
    
    
    
    
    
    
    (53
    )
    
    
    (55
    )
    
    
    (39
    )Grants received
    
    
    
    
    
    
    1,341
    
    
    
    289
    
    
    
    995Income tax paid
    
    
    
    
    
    
    (1
    )
    
    
    (2
    )
    
    
    (1
    )Royalty received
    
    
    
    
    
    
    1,609
    
    
    
    1,434
    
    
    
    1,194Goods and services tax refunded by tax authorities
    
    
    
    
    
    
    76
    
    
    
    94
    
    
    
    56Net cash flows used in operating activities
    
    
    5
    
    
    
    (14,437
    )
    
    
    (12,808
    )
    
    
    (10,718
    )Cash flows from investing activitiesAcquisition of property, plant and equipment
    
    
    
    
    
    
    (319
    )
    
    
    (757
    )
    
    
    (237
    )Proceeds from sale of plant and equipment
    
    
    
    
    
    
    10
    
    
    
    
    
    
    
    7Net cash flows used in investing activities
    
    
    
    
    
    
    (309
    )
    
    
    (757
    )
    
    
    (230
    )Cash flows from financing activitiesProceeds from the issue of ordinary shares
    
    
    
    
    
    
    754
    
    
    
    888
    
    
    
    560Proceeds from the issue of shares by subsidiary
    
    
    
    
    
    
    
    
    
    
    6,083
    
    
    
    Repayment of borrowings
    
    
    
    
    
    
    (750
    )
    
    
    (843
    )
    
    
    (557
    )Net cash flows from financing activities
    
    
    
    
    
    
    4
    
    
    
    6,128
    
    
    
    3Net (decrease) in cash and cash equivalents
    
    
    
    
    
    
    (14,742
    )
    
    
    (7,437
    )
    
    
    (10,945
    )Cash and cash equivalents at beginning of period
    
    
    
    
    
    
    44,110
    
    
    
    55,431
    
    
    
    32,743Effect of exchange rates on cash holdings in
foreign currencies
    
    
    
    
    
    
    995
    
    
    
    (3,734
    )
    
    
    739Movements in secured facility
    
    
    
    
    
    
    150
    
    
    
    (150
    )
    
    
    111Cash and cash equivalents at end of period
    
    
    5
    
    
    
    30,513
    
    
    
    44,110
    
    
    
    22,648
 83




---



##### 



NOTES TO THE FINANCIAL STATEMENTS
  Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
  Basis of preparation
   Statement of compliance
   Basis of consolidation
      84




---



##### 



Significant accounting judgements, estimates and assumptions
 (i) Significant accounting judgements
  Research and development expenses
  (ii) Significant accounting estimates and assumptions
  Share-based payment transactions
  Impairments
  Revenue recognition
  Sale of goods
  Interest
  85




---



##### 



Government Grants
  Royalties
  Borrowing costs
  Leases
      Cash and cash equivalents
   86




---



##### 



Trade and other receivables
   Inventories
   
    
    Raw materials  purchase cost on a first-in, first-out basis; and
 
    
    Finished goods and work-in-progress  cost of direct material,
direct labour and a proportion of manufacturing overheads based on
normal operating capacity but excluding borrowing costs.
  Foreign currency translation
 Functional Currency
  Translation of foreign currency transactions
   Translation of financial reports of overseas operations
   87




---



##### 



Taxes
 Income tax
       Other taxes
  
    
    when the GST incurred on a purchase of goods or services is not recoverable from the taxation authority, in which case
the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and
 
    
    receivables and payables, which are stated with the amounts of GST included.
    88




---



##### 



Property, plant & equipment
 Cost and valuation
  Depreciation
   Buildings
    
    8  20 yearsPlant and equipment
    
    2.5-10 yearsLeasehold improvements
    
    the lease term
 Impairment of assets
    Derecognition and disposal
   Research and development
  89




---



##### 



Trade and other payables
  Interest bearing loans and borrowings
   Provisions
  Employee benefits
 Wages, salaries, annual leave
  Long service leave
  Defined contribution plan
  Share-based payment transactions
  90




---



##### 



Contributed equity
  Subsidiary Equity Issues
  Earnings per share (EPS)
   
    
    costs of servicing equity (other than dividends) and preference share dividends;
    
    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,
  Deferred Offering Costs
  91




---



##### 



Financial Instruments
 Recognition
  Loans and Receivables
  Financial liabilities
  Comparatives
  92




---



##### 



Note 2. (LOSS) BEFORE INCOME TAX
 Consolidated2006
    
    2005$000
    
    $000Revenue and expenses from continuing operations(a) RevenueSale of goods
    
    
    13,500
    
    
    
    13,40413,500
    
    
    
    13,404(b) Other incomeBank interest
    
    
    1,460
    
    
    
    1,319Government grants  research and development
    
    
    783
    
    
    
    289Royalties
    
    
    1,753
    
    
    
    1,711Licence fees
    
    
    
    
    
    
    207Net gains on disposal of property, plant and equipment
    
    
    10
    
    
    
    Litigation settlements
    
    
    613
    
    
    
    160Other
    
    
    119
    
    
    
    5884,738
    
    
    
    4,274
 93




---



##### 



Consolidated2006
    
    2005$000
    
    $000(c) Other expensesWrite-down of plant and equipment
    
    
    301
    
    
    
    301
    
    
    
    (d) Finance costsFinance charges payable under finance leases
    
    
    52
    
    
    
    5652
    
    
    
    56(e) Depreciation, amortisation and cost of inventories
included in the income statementIncluded in cost of sales:Depreciation
    
    
    499
    
    
    
    454Amortisation of leased assets
    
    
    197
    
    
    
    236Costs of inventories recognised as an expense
    
    
    1,022
    
    
    
    276(f) Lease payments and other expenses included in the income
statementIncluded in administrative expenses:Depreciation
    
    
    669
    
    
    
    842Amortisation
    
    
    24
    
    
    
    94Minimum lease payments  operating leases
    
    
    669
    
    
    
    668Net foreign exchange differences
    
    
    (112
    )
    
    
    325(g) Employee benefit expenseWages and salaries
    
    
    6,975
    
    
    
    6,501Workerscompensation costs
    
    
    66
    
    
    
    68Defined contribution plan expense
    
    
    735
    
    
    
    597Employee entitlement provision
    
    
    146
    
    
    
    98Share-based payments expense
    
    
    562
    
    
    
    3898,484
    
    
    
    7,653
 94




---



##### 



Note 3. INCOME TAX
 Consolidated2006
    
    2005$000
    
    $000A reconciliation between tax expense and the product of
accounting loss before income tax multiplied by the
Groups applicable tax rate is as follows:Accounting loss before tax from operations
    
    
    (17,912
    )
    
    
    (12,682
    )At the Groups statutory income tax rate of 30% (2005: 30%)
    
    
    (5,374
    )
    
    
    (3,805
    )Foreign tax rate differentials
    
    
    (132
    )
    
    
    126Non deductible expenses
    
    
    598
    
    
    
    165Research and development allowance
    
    
    (466
    )
    
    
    (411
    )Sub-total
    
    
    (5,374
    )
    
    
    (3,925
    )Under/over provision
    
    
    370
    
    
    
    751Change in Valuation Allowance
    
    
    5,005
    
    
    
    3,176Tax expense
    
    
    1
    
    
    
    2Components of Income Tax Expense/(Benefit)Current Expense/(Benefit)
    
    
    1
    
    
    
    2Under/over provision
    
    
    370
    
    
    
    751Deferred Expense/(Benefit)
    
    
    (5,375
    )
    
    
    (3,927
    )Movement in valuation allowance
    
    
    5,005
    
    
    
    3,176Income Tax Expense/(Benefit)
    
    
    1
    
    
    
    2
 95




---



##### 



Deferred Income Tax
    
    Consolidated2006
    
    
    2005$000
    
    
    $000Deferred income tax at 30 June relates to the following:Deferred tax assetsDepreciation
    
    
    806
    
    
    
    975Provisions accruals
    
    
    1,536
    
    
    
    1,323Exchange gains
    
    
    
    
    
    
    Other
    
    
    102
    
    
    
    67Losses carried forward- Australia
    
    
    19,319
    
    
    
    14,469- USA
    
    
    12,904
    
    
    
    12,894- Other
    
    
    4,200
    
    
    
    4,098Total deferred tax assets
    
    
    38,867
    
    
    
    33,826Deferred tax liabilityExchange losses
    
    
    (165
    )
    
    
    (146
    )Other
    
    
    (117
    )
    
    
    (100
    )Total deferred tax liability
    
    
    (282
    )
    
    
    (246
    )Net deferred tax asset
    
    
    38,585
    
    
    
    33,580Valuation allowance for deferred tax assets
    
    
    (38,585
    )
    
    
    (33,580
    )Net recorded deferred taxes
    
    
    
    
    
    
    
    96




---



##### 



Note 4. EARNINGS PER SHARE
      Consolidated2006
    
    2005$000
    
    $000Net loss attributable to ordinary equity holders of the parent
    
    
    (16,220
    )
    
    
    (11,532
    )
 2006
    
    2005Thousands
    
    ThousandsWeighted average number of ordinary shares used in
calculating basic and diluted earnings per share
    
    
    97,207
    
    
    
    96,840Basic and diluted loss per share  (cents)
    
    
    (16.7
    )
    
    
    (11.9
    )
 97




---



##### 



Note 5. CASH AND CASH EQUIVALENTS
 Consolidated2006
    
    2005$000
    
    $000Cash at bank and in hand
    
    
    21,384
    
    
    
    19,421Short-term deposits
    
    
    9,129
    
    
    
    24,68930,513
    
    
    
    44,110Secured cash (Refer Note 12)
    
    
    3,000
    
    
    
    3,15033,513
    
    
    
    47,260
   Reconciliation of net loss after tax to net cash from operations
 Consolidated2006
    
    2005$000
    
    $000Net loss
    
    
    (17,913
    )
    
    
    (12,684
    )Adjustments for:Depreciation and amortisation
    
    
    1,389
    
    
    
    1,626Net loss on disposal of property, plant and equipment
    
    
    291
    
    
    
    Share-based payments
    
    
    589
    
    
    
    403Changes in assets and liabilities:(increase)/decrease in trade debtors
    
    
    574
    
    
    
    (17
    )(increase)/decrease in prepayments
    
    
    136
    
    
    
    44(increase)/decrease in other debtors
    
    
    (829
    )
    
    
    (391
    )(increase)/decrease in inventories
    
    
    1,682
    
    
    
    (1,615
    )increase/(decrease) in accounts payable
    
    
    145
    
    
    
    (462
    )increase/(decrease) in provisions
    
    
    (166
    )
    
    
    (37
    )exchange rate change on opening cash
    
    
    (335
    )
    
    
    325Net cash outflow from operating activities
    
    
    (14,437
    )
    
    
    (12,808
    )
 98




---



##### 



Note 6. TRADE AND OTHER RECEIVABLES
 Consolidated2006
    
    2005$000
    
    $000CurrentTrade receivables (i)
    
    
    2,717
    
    
    
    3,291Allowance for doubtful debts
    
    
    (7
    )
    
    
    (305
    )2,710
    
    
    
    2,986Deposits held
    
    
    462
    
    
    
    Deferred offering costs
    
    
    128
    
    
    
    Other debtors (ii)
    
    
    730
    
    
    
    4914,030
    
    
    
    3,477
 
 (i)
    
    Trade receivables are non-interest bearing and are generally on 30-60 day terms.(ii)
    
    Other debtors are non-interest bearing and have repayment terms between 7 and 30 days.
 Note 7. INVENTORIES
 Consolidated2006
    
    2005$000
    
    $000CurrentWork in progress (at cost)
    
    
    3,965
    
    
    
    2,722Finished goods (at cost)
    
    
    1,557
    
    
    
    2,7665,522
    
    
    
    5,488Non-currentRaw materials (at cost)
    
    
    912
    
    
    
    1,056Work in progress (at cost)
    
    
    1,952
    
    
    
    3,380Other inventory (at NRV)
    
    
    
    
    
    
    1442,864
    
    
    
    4,580
 Note 8. OTHER CURRENT ASSETS
 Consolidated2006
    
    2005$000
    
    $000Prepayments
    
    
    685
    
    
    
    821685
    
    
    
    821
 99




---



##### 



Note 9. PROPERTY, PLANT AND EQUIPMENT
 Consolidated2006
    
    2005$000
    
    $000Land at cost
    
    
    1,572
    
    
    
    1,572Buildings at cost
    
    
    3,459
    
    
    
    3,459Accumulated depreciation
    
    
    (2,587
    )
    
    
    (2,296
    )872
    
    
    
    1,163Total land and buildings (property)
    
    
    2,444
    
    
    
    2,735Plant and equipment under lease  at cost
    
    
    52
    
    
    
    2,591Accumulated amortisation
    
    
    (52
    )
    
    
    (1,624
    )
    
    
    
    967Plant and equipment  at cost
    
    
    9,575
    
    
    
    8,721Accumulated depreciation
    
    
    (7,625
    )
    
    
    (6,564
    )1,950
    
    
    
    2,157Leasehold improvements  at cost
    
    
    100
    
    
    
    Accumulated depreciation
    
    
    (10
    )
    
    
    90
    
    
    
    Total property, plant and equipment  at cost
    
    
    14,758
    
    
    
    16,343Accumulated amortisation and depreciation
    
    
    (10,274
    )
    
    
    (10,484
    )Total property, plant and equipment
    
    
    4,484
    
    
    
    5,859
 a) Assets pledged as security
   Consolidated2006
    
    2005$000
    
    $000Plant and equipment under lease
    
    
    
    
    
    
    967
 100




---



##### 



b) Reconciliations
  Consolidated2006
    
    2005$000
    
    $000Freehold landCarrying amount at beginning of financial year
    
    
    1,572
    
    
    
    1,572Carrying amount at end of financial year
    
    
    1,572
    
    
    
    1,572Buildings on freehold landCarrying amount at beginning of financial year
    
    
    1,163
    
    
    
    1,454Depreciation expense
    
    
    (291
    )
    
    
    (291
    )Carrying amount at end of financial year
    
    
    872
    
    
    
    1,163Plant and equipment under leaseCarrying amount at beginning of financial year
    
    
    967
    
    
    
    1,297Transfers to plant and equipment
    
    
    (746
    )
    
    
    Amortisation expense
    
    
    (221
    )
    
    
    (330
    )Carrying amount at end of financial year
    
    
    
    
    
    
    967Plant and equipmentCarrying amount at beginning of financial year
    
    
    2,157
    
    
    
    2,366Additions
    
    
    219
    
    
    
    757Transfers from plant and equipment under lease
    
    
    746
    
    
    
    Impairment loss *
    
    
    (301
    )
    
    
    Disposals
    
    
    (4
    )
    
    
    Depreciation expense
    
    
    (867
    )
    
    
    (966
    )Carrying amount at end of financial year
    
    
    1,950
    
    
    
    2,157Leasehold improvementsCarrying amount at beginning of financial year
    
    
    
    
    
    
    39Additions
    
    
    100
    
    
    
    Depreciation expense
    
    
    (10
    )
    
    
    (39
    )Carrying amount at end of financial year
    
    
    90
    
    
    
    
 
 *
    
    The $301,000 impairment loss represents the write-down of certain plant and equipment to nil
value as its future use and expected cash inflows are not certain. 101




---



##### 



Note 10. SHARE BASED PAYMENT PLANS
   Consultant options
     2006
    
    2005No.
    
    WAEP
    
    No.
    
    WAEPOutstanding at the beginning of the year (i)
    
    
    1,139,892
    
    
    $
    3.49
    
    
    
    1,189,167
    
    
    $
    3.00Granted
    
    
    438,948
    
    
    $
    3.64
    
    
    
    276,844
    
    
    $
    4.90Forfeited
    
    
    81,546
    
    
    $
    4.72
    
    
    
    37,652
    
    
    $
    3.96Exercised (ii)
    
    
    196,400
    
    
    $
    2.89
    
    
    
    288,467
    
    
    $
    2.75Expired
    
    
    6,256
    
    
    $
    4.01
    
    
    
    
    
    
    
    Outstanding at the end of the year (i)
    
    
    1,294,638
    
    
    $
    3.55
    
    
    
    1,139,892
    
    
    $
    3.49Exercisable at the end of the year
    
    
    527,691
    
    
    $
    2.85
    
    
    
    430,996
    
    
    $
    2.81
 
 (i)
    
    Included within these balances are options over 316,834 shares (2005: 499,982) that have
not been recognised in accordance with AASB 2 as the options were granted on or before November 7,
2002 or vested prior to January 1, 2005. These options have not 102




---



##### 



been subsequently modified and
therefore do not need to be accounted for in
accordance with AASB 2.(ii)
    
    The exercise of the options occurred on a regular basis throughout the year. The weighted
average share price for the year ended June 30, 2006 was $4.22 (2005: $5.18).  Exercise
    
    Expiry
    
    No. outstanding 30
    
    No. outstanding 30Price
    
    Date
    
    June, 2006
    
    June, 2005$4.00
    
    
    30/11/05
    
    
    
    
    
    
    
    96,689$4.01
    
    
    27/10/05
    
    
    
    
    
    
    
    6,256$1.53
    
    
    10/08/06
    
    
    
    196,304
    
    
    
    247,341$2.10
    
    
    30/11/07
    
    
    
    292,298
    
    
    
    350,478$6.76
    
    
    27/02/09
    
    
    
    147,648
    
    
    
    162,284$4.90
    
    
    16/03/10
    
    
    
    231,304
    
    
    
    276,844$3.64
    
    
    16/04/11
    
    
    
    427,084
    
    
    
    1,294,638
    
    
    
    1,139,892


2006
    
    2005No.
    
    WAEP
    
    No.
    
    WAEPOutstanding at the beginning of the year
    
    
    212,046
    
    
    $
    2.78
    
    
    
    221,454
    
    
    $
    2.77Granted
    
    
    27,456
    
    
    $
    3.64
    
    
    
    14,244
    
    
    $
    4.90Exercised
    
    
    51,992
    
    
    $
    3.60
    
    
    
    23,652
    
    
    $
    4.00Outstanding at the end of the year
    
    
    187,510
    
    
    $
    2.68
    
    
    
    212,046
    
    
    $
    2.78Exercisable at the end of the year
    
    
    136,741
    
    
    $
    2.25
    
    
    
    174,207
    
    
    $
    2.56
  103




---



##### 



Exercise
    
    Expiry
    
    No. outstanding 30
    
    No. outstanding 30Price
    
    Date
    
    June, 2006
    
    June, 2005$3.5819
    
    
    20/07/05
    
    
    
    
    
    
    
    50,180$4.00
    
    
    30/11/05
    
    
    
    
    
    
    
    1,812$2.05
    
    
    13/07/06
    
    
    
    101,950
    
    
    
    101,950$2.10
    
    
    30/11/07
    
    
    
    37,200
    
    
    
    37,200$6.76
    
    
    27/02/09
    
    
    
    6,660
    
    
    
    6,660$4.90
    
    
    16/03/10
    
    
    
    14,244
    
    
    
    14,244$3.64
    
    
    16/04/11
    
    
    
    27,456
    
    
    
    187,510
    
    
    
    212,046
     April 21,
    
    March 16,
    
    February 27,
    
    November 29,2006
    
    2005
    
    2004
    
    2002Dividend yield
    
    
    0
    %
    
    
    0
    %
    
    
    0
    %
    
    
    0
    %Expected volatility
    
    
    66
    %
    
    
    69
    %
    
    
    69
    %
    
    
    68
    %Historical volatility
    
    
    66
    %
    
    
    69
    %
    
    
    69
    %
    
    
    68
    %Risk-free interest rate
    
    
    5.62
    %
    
    
    5.67
    %
    
    
    5.52
    %
    
    
    5.27
    %Expected life of option
    
    5 years
    
    5 years
    
    5 years
    
    5 yearsOption fair value
    
    
    2.10

    
    
2.96

    
    
    2.82

    
    
    1.26
  104




---



##### 



Note 11. TRADE AND OTHER PAYABLES
 Consolidated2006
    
    2005$000
    
    $000CurrentTrade payables
    
    
    2,312
    
    
    
    3,078Accrued trade payables
    
    
    2,654
    
    
    
    1,689Accrued clinical trial payments
    
    
    680
    
    
    
    7345,646
    
    
    
    5,501
  
    
    trade creditors are non interest bearing and normally settled on 30 day terms; and
    
    clinical trial creditors are non-interest bearing and normally settled on 30 day terms.
 Note 12. INTEREST BEARING LOANS AND LIABILITIES
 Consolidated2006
    
    2005$000
    
    $000CurrentObligations under finance leases (secured) (Note 17)
    
    
    15
    
    
    
    75015
    
    
    
    750Non-currentObligations under finance leases (secured) (Note 17)
    
    
    
    
    
    
    15
    
    
    
    15
 105




---



##### 



Financing facilities available
  Consolidated2006
    
    2005$000
    
    $000Total facilitiesLease facilities
    
    
    4,000
    
    
    
    4,0004,000
    
    
    
    4,000Used at balance date
    
    
    572
    
    
    
    1,454Unused at balance date
    
    
    3,428
    
    
    
    2,5464,000
    
    
    
    4,000
   Note 13. PROVISIONS
 Consolidated2006
    
    2005$000
    
    $000Employee Benefit ProvisionOpening balance at beginning of the year
    
    
    727
    
    
    
    631Additional provision made in the period
    
    
    86
    
    
    
    96Closing balance at the end of the year
    
    
    813
    
    
    
    727Current
    
    
    520
    
    
    
    474Non-current
    
    
    293
    
    
    
    253813
    
    
    
    727
 106




---



##### 



Consolidated2006
    
    2005$000
    
    $000Make Good ProvisionOpening balance at beginning of the year
    
    
    
    
    
    
    Additional provision made in the period
    
    
    46
    
    
    
    Closing balance at the end of the year
    
    
    46
    
    
    
    Current
    
    
    
    
    
    
    Non-current
    
    
    46
    
    
    
    46
    
    
    
    
  107




---



##### 



Note 14. CONTRIBUTED EQUITY AND RESERVES
 (a) Contributed equity
 Consolidated2006
    
    2005$000
    
    $000(a) Fully paid ordinary sharesNovogen Limited97,294,054 (2005: 97,045,662) ordinary shares
    
    
    127,060
    
    
    
    126,306127,060
    
    
    
    126,306(b) OtherGain arising on issue of shares by subsidiaries to
outside shareholders :Marshall Edwards, Inc.
    
    
    44,424
    
    
    
    44,424Glycotex, Inc
    
    
    5,505
    
    
    
    5,50549,929
    
    
    
    49,929Contributed Equity
    
    
    176,989
    
    
    
    176,235
    IssueNumber of
    
    priceshares
    
    $
    
    $000On issue July 1, 2005
    
    
    97,045,662
    
    
    
    
    
    
    
    126,306Options converted to shares
    
    
    50,180
    
    
    
    3.58
    
    
    
    180Options converted to shares
    
    
    98,501
    
    
    
    4.00
    
    
    
    394Options converted to shares
    
    
    51,037
    
    
    
    1.53
    
    
    
    78Options converted to shares
    
    
    48,674
    
    
    
    2.10
    
    
    
    102Total options exercised during the period
    
    
    248,392
    
    
    
    
    
    
    
    754On issue June 30, 2006
    
    
    97,294,054
    
    
    
    
    
    
    
    127,060
 Share options
  108




---



##### 



(b) Reserves
   Consolidated2006
    
    2005$000
    
    $000Balance at the beginning of the year
    
    
    (3,413
    )
    
    
    (449
    )Gain/(loss) on translation of overseas controlled entities
    
    
    566
    
    
    
    (2,964
    )Balance at the end of the year
    
    
    (2,847
    )
    
    
    (3,413
    )
 (c) Accumulated losses
  Consolidated2006
    
    2005$000
    
    $000Balance at the beginning of the year
    
    
    (116,069
    )
    
    
    (104,972
    )Adjustment to opening retained earnings
attributed to outside equity interest holders
    
    
    
    
    
    
    32Equity attributable to share based payments
    
    
    589
    
    
    
    403Current year losses
    
    
    (16,220
    )
    
    
    (11,532
    )Balance at the end of the year
    
    
    (131,700
    )
    
    
    (116,069
    )
 (d) Minority interests
  Consolidated2006
    
    2005$000
    
    $000Ordinary shares
    
    
    7,699
    
    
    
    7,699Foreign currency translation reserve
    
    
    (423
    )
    
    
    (513
    )Accumulated losses
    
    
    (5,140
    )
    
    
    (3,447
    )2,136
    
    
    
    3,739
 109




---



##### 



Note 15. SEGMENT INFORMATION
    Geographic
Segments
  Australia/NZ
    
    North America
    
    Europe
    
    Elimination
    
    Consolidated2006
    
    2005
    
    2006
    
    2005
    
    2006
    
    2005
    
    2006
    
    2005
    
    2006
    
    2005$000
    
    $000
    
    $000
    
    $000
    
    $000
    
    $000
    
    $000
    
    $000
    
    $000
    
    $000RevenueSales to external customers
    
    
    5,166
    
    
    
    4,646
    
    
    
    5,720
    
    
    
    6,240
    
    
    
    2,614
    
    
    
    2,518
    
    
    
    
    
    
    
    
    
    
    
    13,500
    
    
    
    13,404Other revenues from
external customers
    
    
    3,496
    
    
    
    2,879
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    76
    
    
    
    (218
    )
    
    
    
    
    
    
    3,278
    
    
    
    2,955Inter-segment revenues
    
    
    2,021
    
    
    
    3,144
    
    
    
    
    
    
    
    29
    
    
    
    
    
    
    
    
    
    
    
    (2,021
    )
    
    
    (3,173
    )
    
    
    
    
    
    
    Total segment revenue
    
    
    10,683
    
    
    
    10,669
    
    
    
    5,720
    
    
    
    6,269
    
    
    
    2,614
    
    
    
    2,594
    
    
    
    (2,239
    )
    
    
    (3,173
    )
    
    
    16,778
    
    
    
    16,359Unallocated revenue
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,460
    
    
    
    1,319Total consolidated revenue
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    18,238
    
    
    
    17,678Result (from continuing
operations)Segment result (loss)
    
    
    (11,883
    )
    
    
    (26,176
    )
    
    
    (6,798
    )
    
    
    942
    
    
    
    (985
    )
    
    
    644
    
    
    
    1,807
    
    
    
    11,964
    
    
    
    (17,859
    )
    
    
    (12,626
    )Unallocated expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (53
    )
    
    
    (56
    )Consolidated entity (loss)
before income tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (17,912
    )
    
    
    (12,682
    )Income tax expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1
    )
    
    
    (2
    )Net (loss) from continuing
operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (17,913
    )
    
    
    (12,684
    )Assets and liabilitiesSegment assets
    
    
    79,051
    
    
    
    81,249
    
    
    
    53,237
    
    
    
    56,983
    
    
    
    1,379
    
    
    
    1,615
    
    
    
    (82,569
    )
    
    
    (72,362
    )
    
    
    51,098
    
    
    
    67,485Segment liabilities
    
    
    5,555
    
    
    
    8,484
    
    
    
    49,051
    
    
    
    46,599
    
    
    
    11,092
    
    
    
    10,343
    
    
    
    (59,178
    )
    
    
    (58,433
    )
    
    
    6,520
    
    
    
    6,993Other segment informationCapital expenditure
    
    
    260
    
    
    
    686
    
    
    
    53
    
    
    
    47
    
    
    
    6
    
    
    
    24
    
    
    
    
    
    
    
    
    
    
    
    319
    
    
    
    757Depreciation
    
    
    1,106
    
    
    
    1,255
    
    
    
    53
    
    
    
    34
    
    
    
    9
    
    
    
    7
    
    
    
    
    
    
    
    
    
    
    
    1,168
    
    
    
    1,296Amortisation
    
    
    221
    
    
    
    330
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    221
    
    
    
    330Impairment loss recognised
in loss
    
    
    301
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    301
    
    
    
    Other non-cash expenses
    
    
    2,884
    
    
    
    4,317
    
    
    
    (63
    )
    
    
    151
    
    
    
    (8
    )
    
    
    30
    
    
    
    (1,677
    )
    
    
    (4,202
    )
    
    
    1,136
    
    
    
    296Segment net gain/(loss) on
foreign currency
    
    
    2,747
    
    
    
    (5,380
    )
    
    
    (2,013
    )
    
    
    4,079
    
    
    
    (522
    )
    
    
    975
    
    
    
    (101
    )
    
    
    
    
    
    
    111
    
    
    
    (326
    )
 110




---



##### 



Business Segments
  PharmaceuticalDietary
    
    research andsupplements
    
    development
    
    Elimination
    
    Consolidated2006
    
    2005
    
    2006
    
    2005
    
    2006
    
    2005
    
    2006
    
    2005$000
    
    $000
    
    $000
    
    $000
    
    $000
    
    $000
    
    $000
    
    $000Segment revenue
    
    
    14,373
    
    
    
    14,703
    
    
    
    3,865
    
    
    
    2,975
    
    
    
    
    
    
    
    
    
    
    
    18,238
    
    
    
    17,678Segment assets
    
    
    32,611
    
    
    
    35,183
    
    
    
    19,042
    
    
    
    35,117
    
    
    
    (555
    )
    
    
    (2,815
    )
    
    
    51,098
    
    
    
    67,485
 Note 16. FINANCIAL INSTRUMENTS
  (a) Interest rate risk
     111




---



##### 



WeightedFloating
    
    Fixed
    
    Fixed
    
    Non-interest
    
    
    
    
    
    
    
    
    
    Average RateInterest Rate
    
    1 year or less
    
    Over 1 to 5 years
    
    bearing
    
    Total
    
    of InterestNote
    
    2006
    
    2005
    
    2006
    
    2005
    
    2006
    
    2005
    
    2006
    
    2005
    
    2006
    
    2005
    
    2006
    
    2005$000
    
    $000
    
    $000
    
    $000
    
    $000
    
    $000
    
    $000
    
    $000
    
    $000
    
    $000Financial assetsCash
    
    
    5
    
    
    
    20,671
    
    
    
    12,777
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    713
    
    
    
    6,644
    
    
    
    21,384
    
    
    
    19,421
    
    
    
    3.65
    %
    
    
    1.34
    %Deposits
    
    
    5
    
    
    
    2,138
    
    
    
    2,621
    
    
    
    9,991
    
    
    
    25,218
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12,129
    
    
    
    27,839
    
    
    
    5.78
    %
    
    
    4.26
    %Trade and other receivables
    
    
    6
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,030
    
    
    
    3,477
    
    
    
    4,030
    
    
    
    3,477
    
    
    
    N/A
    
    
    
    N/A22,809
    
    
    
    15,398
    
    
    
    9,991
    
    
    
    25,218
    
    
    
    
    
    
    
    
    
    
    
    4,743
    
    
    
    10,121
    
    
    
    37,543
    
    
    
    50,737Financial liabilitiesTrade and other payables
    
    
    11
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,646
    
    
    
    5,501
    
    
    
    5,646
    
    
    
    5,501
    
    
    
    N/A
    
    
    
    N/AInterest bearing loans and borrowings
    
    
    12
    
    
    
    
    
    
    
    
    
    
    
    15
    
    
    
    750
    
    
    
    
    
    
    
    15
    
    
    
    
    
    
    
    
    
    
    
    15
    
    
    
    765
    
    
    
    7.75
    %
    
    
    8.33
    %
    
    
    
    
    
    
    
    15
    
    
    
    750
    
    
    
    
    
    
    
    15
    
    
    
    5,646
    
    
    
    5,501
    
    
    
    5,661
    
    
    
    6,266Net financial assets/(liabilities)
    
    
    
    
    
    
    22,809
    
    
    
    15,398
    
    
    
    9,976
    
    
    
    24,468
    
    
    
    
    
    
    
    (15
    )
    
    
    (903
    )
    
    
    4,620
    
    
    
    31,882
    
    
    
    44,471
 (b) Foreign currency risk
  (c) Credit risk
    Concentration of credit risk
   (i)
    
    payment terms are 30 days except for some customers who have 60 day terms; and(ii)
    
    a risk assessment process is used for all customers.
 (d) Net fair value of financial assets and liabilities
  112




---



##### 



Note 17. COMMITMENTS AND CONTINGENCIES
 Consolidated2006
    
    2005$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
    
    
    427
    
    
    
    199Later than 1 year but not later than 2 years
    
    
    463
    
    
    
    218Later than 2 years but not later than 3 years
    
    
    471
    
    
    
    247Later than 3 years but not later than 4 years
    
    
    433
    
    
    
    248Later than 4 years but not later than 5 years
    
    
    64
    
    
    
    1921,858
    
    
    
    1,104(b) Finance leases **Commitments in relation to finance leases
are payable as follows:Not later than 1 year
    
    
    15
    
    
    
    767Later than 1 year but not later than 2 years
    
    
    
    
    
    
    15Minimum lease payments
    
    
    15
    
    
    
    782Less: Future finance charges
    
    
    
    
    
    
    (17
    )15
    
    
    
    765Representing lease liabilities:Current  (Note 12)
    
    
    15
    
    
    
    750Non-current  (Note 12)
    
    
    
    
    
    
    1515
    
    
    
    765(c) Other expenditure commitmentsResearch and development contracts for
service to be rendered:Not later than 1 year
    
    
    3,506
    
    
    
    3,556Later than 1 year but not later than 2 years
    
    
    69
    
    
    
    6073,575
    
    
    
    4,163
 
 *
    
    Operating leases represent payments for property and equipment rental. Leases for property
include an annual review for CPI increases.**
    
    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 7.75% (2005: 8.33%). Assets under lease are pledged as security for the associated lease
liability. 113




---



##### 



(d) Parent entity guarantees
 (a)
    
    The parent company has unconditionally guaranteed financial support for Novogen Limited
(U.K.) should it be unable to meet its financial obligations.(b)
    
    The parent company has guaranteed in a deed dated May 16, 2002 the performance of the Novogen
subsidiaries arising in connection with the License Agreement and the Manufacturing and Supply
Agreement with Marshall Edwards Pty Limited.(c)
    
    As a condition of the Class Order, Novogen Limited and the controlled entities subject to the
Class Order, entered into a Deed of Cross Guarantee on May 28, 1999. The effect of the deed is
that Novogen Limited has guaranteed to pay any deficiency in the event of winding up of the
controlled entities. The controlled entities have also given a similar guarantee in the event
that Novogen Limited is wound up.(d)
    
    The Company is continuing to prosecute its IP rights and in June we announced that the Vienna
Commercial Court had upheld a provisional injunction against an Austrian company, APOtrend.
The Company has provided a guarantee to the value of 250,000 Euros with the court to confirm
its commitment to the ongoing enforcement process.
 114




---



##### 



Note 18. RELATED PARTY DISCLOSURES
 Interests in controlled entities
  Country of
    
    % Equity interest
    
    Investment ($'000)Name of Entity
    
    Incorporation
    
    2006
    
    2005
    
    2006
    
    2005Novogen Laboratories Pty Ltd ^
    
    Australia
    
    100
    
    
    100
    
    
    
    400
    
    
    
    400Novogen Research Pty Ltd ^
    
    Australia
    
    100
    
    
    100
    
    
    
    7,000
    
    
    
    7,000Phytosearch Pty Ltd
    
    Australia
    
    100
    
    
    100
    
    
    
    
    
    
    
    Phytogen Pty Ltd
    
    Australia
    
    100
    
    
    100
    
    
    
    20
    
    
    
    20Glycotex Pty Ltd
    
    Australia
    
    100
    
    
    100
    
    
    
    
    
    
    
    Norvogen Pty Ltd
    
    Australia
    
    100
    
    
    100
    
    
    
    
    
    
    
    Central Coast Properties Pty Ltd ^
    
    Australia
    
    100
    
    
    100
    
    
    
    
    
    
    
    Novogen Inc
    
    USA
    
    100
    
    
    100
    
    
    
    
    
    
    
    Glycotex, Inc.
    
    USA
    
    84.3
    
    
    84.3
    
    
    
    54
    
    
    
    54Novogen Limited (UK)
    
    UK
    
    100
    
    
    100
    
    
    
    
    
    
    
    Promensil Limited
    
    UK
    
    100
    
    
    100
    
    
    
    
    
    
    
    Novogen BV
    
    Netherlands
    
    100
    
    
    100
    
    
    
    
    
    
    
    Novogen Canada Limited
    
    Canada
    
    100
    
    
    100
    
    
    
    
    
    
    
    Marshall Edwards, Inc.
    
    USA
    
    86.9
    
    
    86.9
    
    
    
    
    
    
    
    Marshall Edwards Pty Limited
    
    Australia
    
    86.9
    
    
    86.9
    
    
    
    
    
    
    
    (Note 10)
    
    
    7,474
    
    
    
    7,474
  ^ Entities subject to class order relief
    115




---



##### 



Consolidated Income Statement
 CLOSED GROUP2006
    
    2005$000
    
    $000Loss from continuing operations before income tax
    
    
    (1,069
    )
    
    
    (5,479
    )Income tax expense
    
    
    
    
    
    
    Loss after tax from continuing operations
    
    
    (1,069
    )
    
    
    (5,479
    )Accumulated losses at the beginning of the period
    
    
    (55,524
    )
    
    
    (50,448
    )Net income recognised directly in equity
    
    
    589
    
    
    
    403Accumulated losses at the end of the financial year
    
    
    (56,004
    )
    
    
    (55,524
    )
 Consolidated Balance Sheet
 CLOSED GROUP2006
    
    2005$000
    
    $000CURRENT ASSETSCash and cash equivalents
    
    
    15,541
    
    
    
    15,655Trade and other receivables
    
    
    2,971
    
    
    
    5,050Inventories
    
    
    4,520
    
    
    
    3,249Other current assetsTotal current assets
    
    
    23,032
    
    
    
    23,954NON-CURRENT ASSETSReceivables
    
    
    44,811
    
    
    
    41,873Inventories
    
    
    2,864
    
    
    
    4,016Property, plant and equipment
    
    
    4,395
    
    
    
    5,767Other financial assets
    
    
    54
    
    
    
    54Total non-current assets
    
    
    52,124
    
    
    
    51,710TOTAL ASSETS
    
    
    75,156
    
    
    
    75,664CURRENT LIABILITIESTrade and other payables
    
    
    3,295
    
    
    
    3,419Interest bearing loans and borrowings
    
    
    15
    
    
    
    750Provisions
    
    
    497
    
    
    
    445Total current liabilities
    
    
    3,807
    
    
    
    4,614NON-CURRENT LIABILITIESInterest bearing loans and borrowings
    
    
    
    
    
    
    15Provisions
    
    
    293
    
    
    
    253Total non-current liabilities
    
    
    293
    
    
    
    268TOTAL LIABILITIES
    
    
    4,100
    
    
    
    4,882NET ASSETS
    
    
    71,056
    
    
    
    70,782EQUITYContributed equity
    
    
    127,060
    
    
    
    126,306Accumulated losses
    
    
    (56,004
    )
    
    
    (55,524
    )TOTAL EQUITY
    
    
    71,056
    
    
    
    70,782
 116




---



##### 



Note 19. REMUNERATION OF AUDITORS
 Consolidated2006
    
    2005$
    
    $Amounts received or due and receivable by BDO Australia for(a) an audit or review of the financial report of the
entity and any other entity in the consolidated entity;
    
    
    257,460
    
    
    
    245,067(b) other services in relation to the entity and any other
entity in the consolidated entity- Tax compliance services
    
    
    39,476
    
    
    
    9,500- Glycotex S1 audit and review services
    
    
    109,394
    
    
    
    - Sarbanes-Oxley Section 404 services
    
    
    1,944
    
    
    
    5,000- Review of accounting papers
    
    
    13,810
    
    
    
    - Review of government grants
    
    
    4,900
    
    
    
    - Other
    
    
    3,661
    
    
    
    430,645
    
    
    
    259,567Amounts 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;
    
    
    82,764
    
    
    
    34,407(b) other services in relation to the entity and any other
entity in the consolidated entity- Tax Services
    
    
    
    
    
    
    650- Review of government grants
    
    
    
    
    
    
    3,045- Other
    
    
    
    
    
    
    4,50082,764
    
    
    
    42,602Amounts received or due and receivable by related practice
of Ernst & Young Australia for other services in relation
to any entity in the consolidated entity- Tax Services
    
    
    
    
    
    
    11,616Amounts received or due and receivable by auditors of other
subsidiaries in the consolidated entity for an
audit/review, which are not already disclosed
    
    
    23,264
    
    
    
    30,313536,673
    
    
    
    332,482
 117




---



##### 



Note 20. DIRECTOR AND EXECUTIVE DISCLOSURES
 a) Details of Key Management Personnel
 (i) Directors
 PA Johnston
    
    Chairman (Non-executive)C Naughton
    
    CEOAJ Husband
    
    Executive Director appointed 25 May, 2006GE Kelly
    
    Executive Director resigned September 2, 2005PJ Nestel AO
    
    Director (Non-executive)PB Simpson
    
    Director (Non-executive)LC Read
    
    Director (Non-executive)GM Leppinus
    
    Director (Non-executive)(ii) ExecutivesDR Seaton
    
    Chief Financial OfficerWJ Lancaster
    
    VP Commercial and Corporate DevelopmentBM Palmer
    
    General Manager OperationsCD Kearney
    
    General Manager Consumer BusinessRL Erratt
    
    Company Secretary
 b) Compensation of Key Management Personnel
     118




---



##### 



119




---



##### 



Post
    
    Share basedShort term benefits
    
    employment
    
    payments
    
    Other
    
    TotalNon-monetary
    
    Superan-Salary & fees
    
    benefits
    
    nuation
    
    Options
    
    BonusesSpecified DirectorsPA Johnston2006
    
    
    
    143,612
    
    
    
    
    
    
    
    9,412
    
    
    
    
    
    
    
    
    
    
    
    153,0242005
    
    
    
    104,588
    
    
    
    
    
    
    
    9,412
    
    
    
    136
    
    
    
    
    
    
    
    114,136C Naughton2006
    
    
    
    518,835
    
    
    
    46,827
    
    
    
    100,587
    
    
    
    
    
    
    
    
    
    
    
    666,2492005
    
    
    
    507,724
    
    
    
    53,643
    
    
    
    45,696
    
    
    
    
    
    
    
    
    
    
    
    607,063AJ Husband *2006
    
    
    
    290,766
    
    
    
    41,785
    
    
    
    47,618
    
    
    
    51,281
    
    
    
    
    
    
    
    431,4502005
    
    
    
    286,818
    
    
    
    51,155
    
    
    
    25,814
    
    
    
    40,940
    
    
    
    
    
    
    
    404,727GE Kelly **2006
    
    
    
    362,388
    
    
    
    
    
    
    
    32,615
    
    
    
    7,145
    
    
    
    
    
    
    
    402,1482005
    
    
    
    334,314
    
    
    
    29,981
    
    
    
    30,088
    
    
    
    
    
    
    
    
    
    
    
    394,383PJ Nestel AO2006
    
    
    
    82,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    82,0002005
    
    
    
    82,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    82,000PB Simpson2006
    
    
    
    49,540
    
    
    
    
    
    
    
    4,460
    
    
    
    
    
    
    
    
    
    
    
    54,0002005
    
    
    
    51,376
    
    
    
    
    
    
    
    4,624
    
    
    
    136
    
    
    
    
    
    
    
    56,136LC Read2006
    
    
    
    40,368
    
    
    
    
    
    
    
    3,632
    
    
    
    
    
    
    
    
    
    
    
    44,0002005
    
    
    
    40,368
    
    
    
    
    
    
    
    3,632
    
    
    
    
    
    
    
    
    
    
    
    44,000GM Leppinus2006
    
    
    
    31,650
    
    
    
    
    
    
    
    14,350
    
    
    
    
    
    
    
    
    
    
    
    46,0002005
    
    
    
    16,820
    
    
    
    
    
    
    
    1,513
    
    
    
    
    
    
    
    
    
    
    
    18,333Total Remuneration:
Specified Directors2006
    
    
    
    1,519,159
    
    
    
    88,612
    
    
    
    212,674
    
    
    
    58,426
    
    
    
    
    
    
    
    1,878,8712005
    
    
    
    1,424,008
    
    
    
    134,779
    
    
    
    120,779
    
    
    
    41,212
    
    
    
    
    
    
    
    1,720,778
 
 *
    
    appointed May 23, 2006  remuneration while a director of Novogen Limited includes salary of
$24,131, other benefits of $3,482 and superannuation benefits of $3,968. Options were granted while
in capacity of Executive prior to joining the Board..**
    
    resigned September 2, 2005  remuneration while a director of Novogen Limited includes salary of
$56,576 and superannuation benefits of $5,092. Options were granted while acting in capacity of
Executive following resignation from the Board. 120




---



##### 



Post
    
    Share basedShort term benefits
    
    employment
    
    payments
    
    Other
    
    TotalNon-monetary
    
    Superan-Salary & fees
    
    benefits
    
    nuation
    
    Options
    
    BonusesExecutivesDR Seaton2006
    
    
    
    284,916
    
    
    
    28,976
    
    
    
    56,162
    
    
    
    51,310
    
    
    
    
    
    
    
    421,3642005
    
    
    
    298,526
    
    
    
    20,085
    
    
    
    26,867
    
    
    
    41,031
    
    
    
    
    
    
    
    386,509WJ Lancaster (USA)2006
    
    
    
    195,843
    
    
    
    6,243
    
    
    
    21,956
    
    
    
    24,137
    
    
    
    
    
    
    
    248,1792005
    
    
    
    186,822
    
    
    
    6,197
    
    
    
    19,915
    
    
    
    21,595
    
    
    
    
    
    
    
    234,529BM Palmer2006
    
    
    
    153,085
    
    
    
    33,239
    
    
    
    13,778
    
    
    
    28,562
    
    
    
    
    
    
    
    228,6642005
    
    
    
    142,942
    
    
    
    33,594
    
    
    
    12,865
    
    
    
    23,366
    
    
    
    
    
    
    
    212,767CD Kearney2006
    
    
    
    181,405
    
    
    
    22,952
    
    
    
    16,326
    
    
    
    28,209
    
    
    
    
    
    
    
    248,8922005
    
    
    
    164,376
    
    
    
    22,951
    
    
    
    14,794
    
    
    
    21,417
    
    
    
    
    
    
    
    223,538RL Erratt2006
    
    
    
    149,939
    
    
    
    26,203
    
    
    
    29,845
    
    
    
    28,381
    
    
    
    
    
    
    
    234,3682005
    
    
    
    152,026
    
    
    
    20,157
    
    
    
    13,682
    
    
    
    23,774
    
    
    
    
    
    
    
    209,639Total remuneration: Executives2006
    
    
    
    965,188
    
    
    
    117,613
    
    
    
    138,067
    
    
    
    160,599
    
    
    
    
    
    
    
    1,381,4672005
    
    
    
    944,692
    
    
    
    102,984
    
    
    
    88,123
    
    
    
    131,183
    
    
    
    
    
    
    
    1,266,982
 c) Remuneration options: Granted and vested during the year
  121




---



##### 



Terms and conditions for each grantOptions
    
    
    
    
    
    
    
    
    
    Value per
    
    Exercise
    
    First
    
    Lastvesting in
    
    Granted
    
    
    
    
    
    option at
    
    price per
    
    exercise
    
    exerciseyear number
    
    number
    
    Grant date
    
    grant date
    
    share
    
    date
    
    date($)
    
    ($)Specified DirectorsAJ Husband
    
    
    29,378
    
    
    
    30,436
    
    
    
    21/04/2006
    
    
    
    2.10
    
    
    
    3.64
    
    
    
    21/04/2007
    
    
    
    21/04/2011GE Kelly
    
    
    
    
    
    
    31,792
    
    
    
    21/04/2006
    
    
    
    2.10
    
    
    
    3.64
    
    
    
    21/04/2007
    
    
    
    21/04/2011ExecutivesDR Seaton
    
    
    29,559
    
    
    
    30,436
    
    
    
    21/04/2006
    
    
    
    2.10
    
    
    
    3.64
    
    
    
    21/04/2007
    
    
    
    21/04/2011WJ Lancaster (USA)
    
    
    17,029
    
    
    
    12,232
    
    
    
    21/04/2006
    
    
    
    2.10
    
    
    
    3.64
    
    
    
    21/04/2007
    
    
    
    21/04/2011BM Palmer
    
    
    17,045
    
    
    
    16,692
    
    
    
    21/04/2006
    
    
    
    2.10
    
    
    
    3.64
    
    
    
    21/04/2007
    
    
    
    21/04/2011CD Kearney
    
    
    11,023
    
    
    
    17,752
    
    
    
    21/04/2006
    
    
    
    2.10
    
    
    
    3.64
    
    
    
    21/04/2007
    
    
    
    21/04/2011RL Erratt
    
    
    18,739
    
    
    
    16,520
    
    
    
    21/04/2006
    
    
    
    2.10
    
    
    
    3.64
    
    
    
    21/04/2007
    
    
    
    21/04/2011Total
    
    
    122,773
    
    
    
    155,860
 d) Shares issued on exercise of remuneration options
 Sharesissued
    
    Paid
    
    Unpaidnumber
    
    $ per share
    
    $ per shareSpecified DirectorsAJ Husband
    
    
    16,000
    
    
    
    4.00
    
    
    
    PJ Nestel
    
    
    20,000
    
    
    
    3.58
    
    
    
    ExecutivesDR Seaton
    
    
    16,236
    
    
    
    4.00
    
    
    
    WJ Lancaster (USA)
    
    
    12,511
    
    
    
    1.77
    
    
    
    BM Palmer
    
    
    8,976
    
    
    
    4.00
    
    
    
    RL Erratt
    
    
    11,496
    
    
    
    4.00
    
    
    
    Total
    
    
    85,219
 122




---



##### 



e) Option holding of specified Directors and Executives
 Balance at
    
    
    
    
    
    Net
    
    
    
    Vested atbeginning of
    
    Granted as
    
    Options
    
    change
    
    Balance at
    
    June 30,period
    
    remuneration
    
    exercised
    
    other
    
    end of period
    
    2006NotJuly 1, 2005
    
    
    
    
    
    
    
    
    
    
    
    
    
    June 30, 2006
    
    Total
    
    exercisable
    
    
    ExercisableNumber
    
    Number
    
    Number
    
    Number
    
    Number
    
    Number
    
    Number
    
    
    NumberSpecified DirectorsPA Johnston
    
    
    3,128
    
    
    
    
    
    
    
    
    
    
    
    (3,128
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    C Naughton
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    AJ Husband
    
    
    133,512
    
    
    
    30,436
    
    
    
    (16,000
    )
    
    
    
    
    
    
    147,948
    
    
    
    83,558
    
    
    
    
    
    
    
    83,558GE Kelly
    
    
    
    
    
    
    31,792
    
    
    
    
    
    
    
    
    
    
    
    31,792
    
    
    
    
    
    
    
    
    
    
    
    PJ Nestel AO
    
    
    20,000
    
    
    
    
    
    
    
    (20,000
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    PB Simpson
    
    
    3,128
    
    
    
    
    
    
    
    
    
    
    
    (3,128
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    ExecutivesDR Seaton
    
    
    113,330
    
    
    
    30,436
    
    
    
    (16,236
    )
    
    
    
    
    
    
    127,530
    
    
    
    63,087
    
    
    
    
    
    
    
    63,087WJ Lancaster (USA)
    
    
    35,957
    
    
    
    12,232
    
    
    
    (12,511
    )
    
    
    
    
    
    
    35,678
    
    
    
    6,480
    
    
    
    
    
    
    
    6,480BM Palmer
    
    
    77,156
    
    
    
    16,692
    
    
    
    (8,976
    )
    
    
    
    
    
    
    84,872
    
    
    
    48,737
    
    
    
    
    
    
    
    48,737CD Kearney
    
    
    44,092
    
    
    
    17,752
    
    
    
    
    
    
    
    
    
    
    
    61,844
    
    
    
    24,977
    
    
    
    
    
    
    
    24,977RL Erratt
    
    
    86,452
    
    
    
    16,520
    
    
    
    (11,496
    )
    
    
    
    
    
    
    91,476
    
    
    
    55,549
    
    
    
    
    
    
    
    55,549Total
    
    
    516,755
    
    
    
    155,860
    
    
    
    (85,219
    )
    
    
    (6,256
    )
    
    
    581,140
    
    
    
    282,388
    
    
    
    
    
    
    
    282,388
 123




---



##### 



f) Shareholdings of specified Directors and their related parties and Executives and their
related parties
 Balance
    
    Granted as
    
    On exercise
    
    Net change
    
    BalanceJuly 1, 2005
    
    remuneration
    
    of options
    
    other
    
    June 30, 2006Number Ord
    
    Number Ord
    
    Number Ord
    
    Number Ord
    
    Number OrdSpecified DirectorsPA Johnston
    
    
    48,594
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    48,594C Naughton
    
    
    633,511
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    633,511AJ Husband
    
    
    60,148
    
    
    
    
    
    
    16,000
    
    
    
    (15,000
    )
    
    
    61,148GE Kelly
    
    
    8,359,152
    
    
    
    
    
    
    
    
    
    
    (379,200
    )
    
    
    7,979,952PJ Nestel AO
    
    
    12,000
    
    
    
    
    
    
    20,000
    
    
    
    
    
    
    
    32,000PB Simpson
    
    
    500
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    500LC Read
    
    
    2,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,000ExecutivesDR Seaton
    
    
    
    
    
    
    
    
    
    16,236
    
    
    
    
    
    
    
    16,236WJ Lancaster (USA)
    
    
    40,000
    
    
    
    
    
    
    12,511
    
    
    
    (52,511
    )
    
    
    BM Palmer
    
    
    154,726
    
    
    
    
    
    
    8,976
    
    
    
    (35,000
    )
    
    
    128,702CD Kearney
    
    
    8,850
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,850RL Erratt
    
    
    103,860
    
    
    
    
    
    
    11,496
    
    
    
    87,000
    
    
    
    202,356Total
    
    
    9,423,341
    
    
    
    
    
    
    85,219
    
    
    
    (394,711
    )
    
    
    9,113,849
  Note 21. EVENTS AFTER THE BALANCE SHEET DATE
   124




---



##### 



Note 22. TRANSITION TO IFRS
  First-time
adoption of AIFRS.
    125




---



##### 




    
    AASB 2 Share-based Payment: has not been applied to any entity instrument that was
granted on or before November 7, 2002, nor has it been applied to equity instruments that
were granted after November 7, 2002 that vested before January 1, 2005.
 INCOME STATEMENT reflecting reconciliation of adjustments to AIFRS
for the year ended June 30, 2005
 ConsolidatedA-IFRSAGAAP
    
    impact
    
    A-IFRSNotes
    
    $000
    
    $000
    
    $000Continuing OperationsRevenue
    
    
    
    
    
    
    13,404
    
    
    
    
    
    
    
    13,404Cost of sales
    
    
    
    
    
    
    (4,666
    )
    
    
    
    
    
    
    (4,666
    )Gross profit
    
    
    
    
    
    
    8,738
    
    
    
    
    
    
    
    8,738Other income
    
    
    
    
    
    
    4,274
    
    
    
    
    
    
    
    4,274Research & development expenses
    
    
    
    
    
    
    (10,217
    )
    
    
    
    
    
    
    (10,217
    )Selling & promotional expenses
    
    
    
    
    
    
    (8,411
    )
    
    
    
    
    
    
    (8,411
    )Shipping and handling expenses
    
    
    
    
    
    
    (444
    )
    
    
    
    
    
    
    (444
    )General and administrative expenses
    
    
    (i
    )
    
    
    (6,163
    )
    
    
    (403
    )
    
    
    (6,566
    )Finance costs
    
    
    
    
    
    
    (56
    )
    
    
    
    
    
    
    (56
    )Loss before income tax
    
    
    
    
    
    
    (12,279
    )
    
    
    (403
    )
    
    
    (12,682
    )Income tax expense
    
    
    
    
    
    
    (2
    )
    
    
    
    
    
    
    (2
    )Loss for the period
    
    
    
    
    
    
    (12,281
    )
    
    
    (403
    )
    
    
    (12,684
    )Loss attributable to minority interest
    
    
    
    
    
    
    1,152
    
    
    
    
    
    
    
    1,152Loss attributable to members of Novogen Limited
    
    
    
    
    
    
    (11,129
    )
    
    
    
    
    
    
    (11,532
    )
 
 (i)
    
    Under AASB 2 Share-based Payment, the Company has recognised the fair value of options
issued as an expense on a pro-rata basis in the income statement. Share-based payment costs were
not recognised under AGAAP. This has resulted in a decrease in profit from AGAAP to AIFRS. 126




---



##### 



BALANCE SHEET reflecting reconciliation of adjustments to AIFRS
As at July 1, 2004
 ConsolidatedA-IFRSAGAAP
    
    impact
    
    A-IFRSNotes
    
    $000
    
    $000
    
    $000CURRENT ASSETSCash and cash equivalents
    
    
    
    
    
    
    58,431
    
    
    
    
    
    
    
    58,431Trade and other receivables
    
    
    
    
    
    
    2,936
    
    
    
    
    
    
    
    2,936Inventories
    
    
    
    
    
    
    5,589
    
    
    
    
    
    
    
    5,589Other current assets
    
    
    
    
    
    
    865
    
    
    
    
    
    
    
    865Total current assets
    
    
    
    
    
    
    67,821
    
    
    
    
    
    
    
    67,821NON-CURRENT ASSETSInventories
    
    
    
    
    
    
    2,864
    
    
    
    
    
    
    
    2,864Property, plant and equipment
    
    
    
    
    
    
    6,728
    
    
    
    
    
    
    
    6,728Other financial assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total non-current assets
    
    
    
    
    
    
    9,592
    
    
    
    
    
    
    
    9,592TOTAL ASSETS
    
    
    
    
    
    
    77,413
    
    
    
    
    
    
    
    77,413CURRENT LIABILITIESTrade and other payables
    
    
    
    
    
    
    5,963
    
    
    
    
    
    
    
    5,963Interest-bearing loans and borrowings
    
    
    
    
    
    
    843
    
    
    
    
    
    
    
    843Provisions
    
    
    
    
    
    
    361
    
    
    
    
    
    
    
    361Total current liabilities
    
    
    
    
    
    
    7,167
    
    
    
    
    
    
    
    7,167NON-CURRENT LIABILITIESInterest-bearing loans and borrowings
    
    
    
    
    
    
    765
    
    
    
    
    
    
    
    765Provisions
    
    
    
    
    
    
    270
    
    
    
    
    
    
    
    270Total non-current liabilities
    
    
    
    
    
    
    1,035
    
    
    
    
    
    
    
    1,035TOTAL LIABILITIES
    
    
    
    
    
    
    8,202
    
    
    
    
    
    
    
    8,202NET ASSETS
    
    
    
    
    
    
    69,211
    
    
    
    
    
    
    
    69,211EQUITYContributed equity
    
    
    
    
    
    
    170,276
    
    
    
    
    
    
    
    170,276Reserves
    
    
    
    
    
    
    (449
    )
    
    
    
    
    
    
    (449
    )Accumulated losses
    
    
    (i
    )
    
    
    (104,972
    )
    
    
    
    
    
    
    (104,972
    )Parent interest
    
    
    
    
    
    
    64,855
    
    
    
    
    
    
    
    64,855Minority Interest
    
    
    
    
    
    
    4,356
    
    
    
    
    
    
    
    4,356TOTAL EQUITY
    
    
    
    
    
    
    69,211
    
    
    
    
    
    
    
    69,211
 127




---



##### 



BALANCE SHEET reflecting reconciliation of adjustments to AIFRS
As at June 30, 2005
 ConsolidatedA-IFRSAGAAP
    
    impact
    
    A-IFRSNotes
    
    $000
    
    $000
    
    $000CURRENT ASSETSCash and cash equivalents
    
    
    
    
    
    
    47,260
    
    
    
    
    
    
    
    47,260Trade and other receivables
    
    
    
    
    
    
    3,477
    
    
    
    
    
    
    
    3,477Inventories
    
    
    
    
    
    
    5,488
    
    
    
    
    
    
    
    5,488Other current assets
    
    
    
    
    
    
    821
    
    
    
    
    
    
    
    821Total current assets
    
    
    
    
    
    
    57,046
    
    
    
    
    
    
    
    57,046NON-CURRENT ASSETSInventories
    
    
    
    
    
    
    4,580
    
    
    
    
    
    
    
    4,580Property, plant and equipment
    
    
    
    
    
    
    5,859
    
    
    
    
    
    
    
    5,859Other financial assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total non-current assets
    
    
    
    
    
    
    10,439
    
    
    
    
    
    
    
    10,439TOTAL ASSETS
    
    
    
    
    
    
    67,485
    
    
    
    
    
    
    
    67,485CURRENT LIABILITIESTrade and other payables
    
    
    
    
    
    
    5,501
    
    
    
    
    
    
    
    5,501Interest-bearing loans and borrowings
    
    
    
    
    
    
    750
    
    
    
    
    
    
    
    750Provisions
    
    
    
    
    
    
    474
    
    
    
    
    
    
    
    474Total current liabilities
    
    
    
    
    
    
    6,725
    
    
    
    
    
    
    
    6,725NON-CURRENT LIABILITIESInterest-bearing loans and borrowings
    
    
    
    
    
    
    15
    
    
    
    
    
    
    
    15Provisions
    
    
    
    
    
    
    253
    
    
    
    
    
    
    
    253Total non-current liabilities
    
    
    
    
    
    
    268
    
    
    
    
    
    
    
    268TOTAL LIABILITIES
    
    
    
    
    
    
    6,993
    
    
    
    
    
    
    
    6,993NET ASSETS
    
    
    
    
    
    
    60,492
    
    
    
    
    
    
    
    60,492EQUITYContributed equity
    
    
    
    
    
    
    176,235
    
    
    
    
    
    
    
    176,235Reserves
    
    
    
    
    
    
    (3,413
    )
    
    
    
    
    
    
    (3,413
    )Accumulated losses
    
    
    (i
    )
    
    
    (116,069
    )
    
    
    
    
    
    
    (116,069
    )Parent interest
    
    
    
    
    
    
    56,753
    
    
    
    
    
    
    
    56,753Minority Interest
    
    
    
    
    
    
    3,739
    
    
    
    
    
    
    
    3,739TOTAL EQUITY
    
    
    
    
    
    
    60,492
    
    
    
    
    
    
    
    60,492
 
 (i)
    
    Under AASB 2 Share-based Payment, the Company has recognise the fair value of options
issued as an expense on a pro-rata basis over the vesting period in the income statement with a
corresponding adjustment in equity (retained earnings). The reduced profit amount is also carried
through to equity (retained earnings) as an offsetting amount. Share-based payment costs were not
recognised under AGAAP. The total amount adjusted is $630,000, which represents $403,000 for the
year ended June 30. 128




---



##### 



2005 and $215,000 from prior financial periods, for options that were granted
on or after November 7, 2002 that vest after January 1, 2005. The Company has applied the
transition provisions under AASB 1. Restated AIFRS Statement of Cash Flows for the year ended June 30, 2005.
  Note 23. DIVIDENDS
  129




---



##### 



Note 24. DIFFERENCES BETWEEN AIFRS AND U.S. GAAP
   US GAAP2005
    
    2006
    
    2006A$000
    
    A$000
    
    US$000Operating RevenueSales Revenue
    
    
    12,928
    
    
    
    12,654
    
    
    
    9,393Other Operating Revenue
    
    
    2,955
    
    
    
    3,278
    
    
    
    2,433Total Operating Revenue
    
    
    15,883
    
    
    
    15,932
    
    
    
    11,826Costs and ExpensesCost of Goods Sold
    
    
    (4,666
    )
    
    
    (5,445
    )
    
    
    (4,042
    )Research & Development
    
    
    (10,217
    )
    
    
    (12,014
    )
    
    
    (8,918
    )Selling and Promotions
    
    
    (7,935
    )
    
    
    (8,167
    )
    
    
    (6,062
    )Shipping and Handling
    
    
    (444
    )
    
    
    (556
    )
    
    
    (413
    )General and Administrative
    
    
    (6,306
    )
    
    
    (8,889
    )
    
    
    (6,598
    )Other Expense
    
    
    
    
    
    
    (301
    )
    
    
    (223
    )Total Costs and Expenses
    
    
    (29,568
    )
    
    
    (35,372
    )
    
    
    (26,256
    )Loss from operations
    
    
    (13,685
    )
    
    
    (19,440
    )
    
    
    (14,430
    )Other Income (Expense)Interest Expense
    
    
    (56
    )
    
    
    (52
    )
    
    
    (39
    )Exchange Gains/(Losses)
    
    
    (325
    )
    
    
    112
    
    
    
    83Other
    
    
    1,319
    
    
    
    1,460
    
    
    
    1,084Total Other Income (Expense)
    
    
    938
    
    
    
    1,520
    
    
    
    1,128Loss Before Income Tax
    
    
    (12,747
    )
    
    
    (17,920
    )
    
    
    (13,302
    )Income Tax Expense/(Benefit)
    
    
    (2
    )
    
    
    (1
    )
    
    
    (1
    )Minority Interest
    
    
    1,109
    
    
    
    1,693
    
    
    
    1,257Net loss
    
    
    (11,640
    )
    
    
    (16,228
    )
    
    
    (12,046
    )Loss per share  basic and diluted (cents)
    
    
    (12.0
    )
    
    
    (16.7
    )
    
    
    (12.4
    )
 130




---



##### 



Year ended 30 June2005
    
    2006A$000
    
    A$000Consolidated Net LossNet loss reported under AIFRS
    
    
    
    
    
    
    (12,684
    )
    
    
    (17,913
    )Adjustments required to accord with U.S. GAAP:Stock based compensation cost
    
    
    (i
    )
    
    
    (65
    )
    
    
    (8
    )Minority interest in net losses of subsidiaries
    
    
    (v
    )
    
    
    1,109
    
    
    
    1,693Net loss under U.S. GAAP
    
    
    
    
    
    
    (11,640
    )
    
    
    (16,228
    )Basic and diluted (loss) per share according to
U.S. GAAP (cents)
    
    
    
    
    
    
    (12.0
    )
    
    
    (16.7
    )Weighted average number of ordinary shares
outstanding during the year used in calculation
of basic and diluted (loss) per share
    
    
    
    
    
    
    96,839,570
    
    
    
    97,207,053Comprehensive IncomeNet loss according to U.S. GAAP
    
    
    
    
    
    
    (11,640
    )
    
    
    (16,228
    )Other comprehensive income resulting from
foreign currency translation
    
    
    
    
    
    
    (2,964
    )
    
    
    567Total comprehensive income
    
    
    
    
    
    
    (14,604
    )
    
    
    (15,661
    )Other Comprehensive Income Movement2005
    
    
    2006A$000
    
    
    A$000Balance at beginning of year
    
    
    
    
    
    
    (556
    )
    
    
    (3,520
    )Foreign currency translation adjustment
    
    
    
    
    
    
    (2,964
    )
    
    
    567Closing Other Comprehensive Income
    
    
    
    
    
    
    (3,520
    )
    
    
    (2,953
    )
 131




---



##### 



At June 30,2005
    
    2006A$000
    
    A$000Shareholders EquityShareholders equity reported using AIFRS
    
    
    
    
    
    
    60,492
    
    
    
    44,578Cumulative adjustments required to accord with U.S. GAAP:Minority interest equity
    
    
    (v
    )
    
    
    (2,767
    )
    
    
    (1,163
    )Shareholders equity according to U.S. GAAP
    
    
    
    
    
    
    57,725
    
    
    
    43,415
  2005
    
    2006A$000
    
    A$000Opening Shareholders equity according to U.S. GAAP
    
    
    65,759
    
    
    
    57,725Less: Net loss according to U.S. GAAP
    
    
    (11,640
    )
    
    
    (16,228
    )Add: New Equity
    
    
    7,439
    
    
    
    1,351less: Minority interest in new equity
    
    
    (869
    )
    
    
    0Add: movement in other comprehensive income
    
    
    (2,964
    )
    
    
    567Closing Shareholders equity according to U.S. GAAP
    
    
    57,725
    
    
    
    43,415
 132




---



##### 



(i) Stock Based Compensation
      (ii) Cash Flow Statement
  133




---



##### 



2005
    
    2006A$000
    
    A$000Cash and cash equivalents under AIFRS
    
    
    47,260
    
    
    
    33,513Restricted cash (Note 5)
    
    
    (3,150
    )
    
    
    (3,000
    )Cash and cash equivalents under U.S. GAAP
    
    
    44,110
    
    
    
    30,513
 (iii) Income Tax
   2005
    
    2006$000
    
    $000Domestic
    
    
    (13,865
    )
    
    
    (10,128
    )Foreign
    
    
    1,586
    
    
    
    (7,784
    )(12,279
    )
    
    
    (17,912
    )
 134




---



##### 



2005
    
    2006$000
    
    $000Deferred tax assetsDepreciation
    
    
    975
    
    
    
    807Provisions accruals
    
    
    1,323
    
    
    
    1,535Exchange gains
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    14Losses carried forward  Australia
    
    
    14,469
    
    
    
    19,320 USA
    
    
    12,894
    
    
    
    12,904 Other
    
    
    4,098
    
    
    
    4,202Total deferred tax assets
    
    
    33,759
    
    
    
    38,781Deferred tax liabilityExchange losses
    
    
    (146
    )
    
    
    (165
    )Other
    
    
    (160
    )
    
    
    (117
    )Total deferred tax liability
    
    
    (306
    )
    
    
    (282
    )Net deferred tax asset
    
    
    33,453
    
    
    
    38,499Valuation allowance for deferred tax assets
    
    
    (33,453
    )
    
    
    (38,499
    )Net recorded deferred taxes
    
    
    
    
    
    
    
 2005
    
    2006$000
    
    %
    
    $000
    
    %Tax at Australian statutory rates
    
    
    (3,492
    )
    
    
    30
    %
    
    
    (4,868
    )
    
    
    30
    %Foreign Rate Differentials
    
    
    126
    
    
    
    (1
    %)
    
    
    (132
    )
    
    
    1
    %Non deductible expenses
    
    
    44
    
    
    
    (0
    %)
    
    
    597
    
    
    
    (5
    %)Research and development allowance
    
    
    (411
    )
    
    
    4
    %
    
    
    (466
    )
    
    
    4
    %Other
    
    
    (194
    )
    
    
    2
    %
    
    
    (506
    )
    
    
    4
    %Reversal of intercompany profit
in inventory
elimination
    
    
    (105
    )
    
    
    1
    %
    
    
    (39
    )
    
    
    0
    %Tax expense/(benefit)
    
    
    (4,032
    )
    
    
    
    
    
    
    (5,414
    )Filing Differences
    
    
    748
    
    
    
    (6
    %)
    
    
    367
    
    
    
    (3
    %)Change in valuation allowance
    
    
    3,282
    
    
    
    (28
    %)
    
    
    5,046
    
    
    
    (31
    %)Income Tax Expense
    
    
    (2
    )
    
    
    
    
    
    
    (1
    )
 135




---



##### 



2005
    
    2006$000
    
    $000Current Expense/(Benefit)
    
    
    (2
    )
    
    
    (1
    )Under/over provision prior year
    
    
    748
    
    
    
    367Deferred Expense/(Benefit)
    
    
    (4,030
    )
    
    
    (5,412
    )Movement in Valuation Allowance
    
    
    3,282
    
    
    
    5,046Income Tax Expense
    
    
    (2
    )
    
    
    (0
    )
  (iv) Revenue
 2005
    
    2006A$000
    
    A$000Sales Revenue reported using AIFRS
    
    
    13,404
    
    
    
    13,500Trade Promotions
    
    
    (476
    )
    
    
    (846
    )Sales Revenue reported using US GAAP
    
    
    12,928
    
    
    
    12,654
   (v) Minority interests
  136




---



##### 



(vi) Other Comprehensive Income
   2005
    
    2006$000
    
    $000Opening balance
    
    
    3,452
    
    
    
    2,767Additions to outside equity interest by way of share
issue:Marshall Edwards, Inc.
    
    
    
    
    
    
    Glycotex, Inc.
    
    
    869
    
    
    
    Add shares of operating losses of controlled entitiesMarshall Edwards, Inc.
    
    
    (1,078
    )
    
    
    (1,287
    )Glycotex, Inc.
    
    
    (31
    )
    
    
    (406
    )Add shares of other comprehensive incomeMarshall Edwards, Inc.
    
    
    (446
    )
    
    
    66Glycotex, Inc.
    
    
    1
    
    
    
    232,767
    
    
    
    1,163
 (vii) Summary of Significant Accounting Policies
 Use of Estimates
  137




---



##### 



Advertising Expenses
  (viii) Payables
  2005
    
    2006A$000
    
    A$000Insurance Premiums
    
    
    405
    
    
    
    288Mayne Pharmaceuticals (Contract Drug Manufacturer)
    
    
    
    
    
    
    454Provision for Sales Returns
    
    
    307
    
    
    
    Provision for Grant Rebate
    
    
    
    
    
    
    558
 (ix) Segment Information
  (x) Recent Accounting Pronouncements
  138




---



##### 



SIGNATURES
  NOVOGEN LIMITED
 
 
  139




---



##### 



Exhibit Index
 Exhibit No.
    
    Exhibit Description1.1
    
    Constitution of Novogen Limited (formerly known as the
Memorandum of Association and Articles of Association). (1)2.1
    
    Deposit Agreement as further amended and restated, dated as of
September 29, 2005, 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
dated June 21, 2006.4.2
    
    Employment Contract between the Company and Professor Alan
Husband dated June 21, 2006.4.3
    
    Employment Contract between the Company and Dr G. E. Kelly
dated June 21, 2006.4.4
    
    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)4.5
    
    Employment Contract between the Company and Bryan Palmer dated
June 21, 2006.4.6
    
    Employment Contract between the Company and Craig Kearney
dated June 21, 2006.4.7
    
    Employment Contract between the Company and David Seaton dated
June 21, 2006.4.8
    
    Employment Contract between the Company and Ronald Erratt
dated June 21 30, 2006.
 140




---



##### 



Exhibit No.
    
    Exhibit Description8.1
    
    Company Subsidiaries.12.1
    
    Certification of Chief Executive Officer pursuant to Rule 13a
 14(a) of the Securities Exchange Act of 1934, as amended.12.2
    
    Certification of Chief Financial Officer a pursuant to Rule
13a  14(a) of the Securities Exchange Act of 1934, as
amended.13.1
    
    Certification by the Chief Executive Officer and Chief
Financial Officer pursuant to 18 U.S.C. Section 1350 as added
by Section 906 of the Sarbanes  Oxley Act of 2002.
 
 (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 Form F-6 filed with the Securities and
Exchange Commission on September 29, 2005 (File No. 333-128681)(3)
    
    Incorporated by reference to the Annual
Report on Form20-F filed with the Securities and Exchange
Commission on November 27, 2000 (File No. 0-29962) 141