##### 



SECURITIES AND EXCHANGE COMMISSION
 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, 2005
 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.
 
 Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.
 Not Applicable
  o þ
  o þ
   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
    
    
    16ITEM 5.
    
    Operating and Financial Review and Prospects
    
    
    33ITEM 6.
    
    Directors, Senior Management and Employees
    
    
    41ITEM 7.
    
    Major Shareholders and Related Party Transactions
    
    
    52ITEM 8.
    
    Financial Information
    
    
    53ITEM 9.
    
    Offer and Listing Details
    
    
    54ITEM 10.
    
    Additional Information
    
    
    56ITEM 11.
    
    Quantitative and Qualitative Disclosures about Market Risk
    
    
    60ITEM 12.
    
    Description of Securities other than Equity Securities
    
    
    61PART IIITEM 13.
    
    Defaults, Dividend Arrearages and Delinquencies
    
    
    62ITEM 14.
    
    Material Modifications to the
Rights of Security Holders and the Use of Proceeds
    
    
    62ITEM 15.
    
    Controls and Procedures
    
    
    62ITEM 16.
    
    Reserved
    
    
    64ITEM 16A.
    
    Audit Committee Financial Expert
    
    
    64ITEM 16B
    
    Code of Ethics
    
    
    64ITEM 16C
    
    Principal Accountant Fees and Services
    
    
    64ITEM 16D
    
    Exemptions from the Listing Standards for Audit Committees
    
    
    66ITEM 16E
    
    Purchases of Equity Securities by the Issuer and Affiliated Purchases
    
    
    66




---



##### 



PART IIIITEM 17.
    
    Financial Statements  Not Applicable
    
    
    67ITEM 18.
    
    Financial Statements
    
    
    67ITEM 19.
    
    Exhibits
    
    
    67




---



##### 



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 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 protect 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




---



##### 



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
   2




---



##### 



Summary of Consolidated Statement of Financial Performance
(Australian GAAP)
 2001
    
    2002
    
    2003
    
    2004
    
    2005
    
    2005(A$000)
    
    (A$000)
    
    (A$000)
    
    (A$000)
    
    (A$000)
    

(US$000)Sales Revenue
    
    
    26,663
    
    
    
    19,582
    
    
    
    19,630
    
    
    
    12,720
    
    
    
    13,404
    
    
    
    10,211Other Revenue from
ordinary
activities
    
    
    3,569
    
    
    
    4,706
    
    
    
    4,626
    
    
    
    3,726
    
    
    
    4,274
    
    
    
    3,256Total Revenue from
ordinary
activities
    
    
    30,232
    
    
    
    24,288
    
    
    
    24,256
    
    
    
    16,446
    
    
    
    17,678
    
    
    
    13,467Net Loss
    
    
    (21,764
    )
    
    
    (14,673
    )
    
    
    (10,666
    )
    
    
    (12,579
    )
    
    
    (12,281
    )
    
    
    (9,356
    )Net Loss Attributable
to Members of
Novogen
    
    
    (21,764
    )
    
    
    (14,654
    )
    
    
    (10,454
    )
    
    
    (10,935
    )
    
    
    (11,129
    )
    
    
    (8,478
    )Basic and diluted
earnings per share
(cents per share)
    
    
    (25.4
    )
    
    
    (15.4
    )
    
    
    (10.9
    )
    
    
    (11.4
    )
    
    
    (11.5
    )
    
    
    (8.8
    )Weighted average
number of Ordinary
shares used to calculate
earnings per share
    
    
    85,646,585
    
    
    
    95,187,449
    
    
    
    95,472,984
    
    
    
    96,306,286
    
    
    
    96,839,570Number of outstanding
Ordinary Shares at year
end
    
    
    95,069,775
    
    
    
    95,412,714
    
    
    
    95,611,785
    
    
    
    96,723,543
    
    
    
    97,045,662Adjusted to accord with
US GAAPSales Revenue
    
    
    25,415
    
    
    
    17,644
    
    
    
    18,977
    
    
    
    11,774
    
    
    
    12,928
    
    
    
    9,848Total Revenue
    
    
    28,984
    
    
    
    21,107
    
    
    
    22,302
    
    
    
    14,188
    
    
    
    15,883
    
    
    
    12,099Net (loss)
    
    
    (21,813
    )
    
    
    (15,149
    )
    
    
    (10,259
    )
    
    
    (11,410
    )
    
    
    (11,214
    )
    
    
    (8,543
    )Net (loss) from
operations per share
(Cents per share)
    
    
    (25.4
    )
    
    
    (15.9
    )
    
    
    (10.7
    )
    
    
    (11.8
    )
    
    
    (11.6
    )
    
    
    (8.8
    )
  3




---



##### 



Summary of Consolidated Statement of Financial Position at June 30, 2005
(Australian GAAP)
 2001
    
    2002
    
    2003
    
    2004
    
    2005
    
    2005(A$000)
    
    (A$000)
    
    (A$000)
    
    (A$000)
    
    (A$000)
    

(US$000)Cash and Cash
Equivalents
    
    
    31,129
    
    
    
    39,937
    
    
    
    31,026
    
    
    
    58,431
    
    
    
    47,260
    
    
    
    36,003Total Assets
    
    
    61,206
    
    
    
    61,900
    
    
    
    50,812
    
    
    
    77,413
    
    
    
    67,485
    
    
    
    51,410Net Assets
    
    
    51,906
    
    
    
    54,045
    
    
    
    42,397
    
    
    
    69,211
    
    
    
    60,492
    
    
    
    46,083Capital Stock
    
    
    121,222
    
    
    
    137,249
    
    
    
    138,206
    
    
    
    170,276
    
    
    
    176,235
    
    
    
    134,256Adjusted to accord with
US GAAPTotal Assets
    
    
    60,949
    
    
    
    61,676
    
    
    
    50,812
    
    
    
    77,413
    
    
    
    67,485
    
    
    
    51,410Shareholders Equity
    
    
    50,974
    
    
    
    51,852
    
    
    
    41,069
    
    
    
    65,759
    
    
    
    57,725
    
    
    
    43,975
    4




---



##### 



Exchange Rates for the six months to October 2005
A$ versus US$
 Month
    
    High
    
    LowJune
    
    $
    0.7792
    
    
    $
    0.7498July
    
    $
    0.7661
    
    
    $
    0.7403August
    
    $
    0.7739
    
    
    $
    0.7469September
    
    $
    0.7731
    
    
    $
    0.7537October
    
    $
    0.7630
    
    
    $
    0.7468November
    
    $
    0.7451
    
    
    $
    0.7267
 Exchange Rates for the Last Five Years A$ versus US$
 Fiscal Year
    
    AverageEnded June 30
    
    Rate2001
    
    
    $0.53202002
    
    
    $0.52362003
    
    
    $0.58362004
    
    
    $0.71092005
    
    
    $0.7529
 5




---



##### 



Risk factors
  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 does 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.
  6




---



##### 



Any failure in the clinical trial program could impair the commercial prospects of the Companys
phenolic drug program.
  We have a limited operating history, and we are likely to incur operating losses for the
foreseeable future.
  If the Company does not receive marketing approval for its phenolic drug candidates or regulatory
approval is withdrawn for the dietary supplements the Company will not be able to commercialize its
products and product candidates.
    7




---



##### 



The Company will need to raise additional funds in order to finance future operations,
clinical development program and possible capital expenditures.
  The supply of the raw material for the Companys dietary supplement products are subject to a
number of environmental factors beyond its 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 or
sales volumes could be significantly reduced.
    The Companys success is largely dependent on its ability to obtain and maintain patent
protection and preserve trade secrets, which cannot be guaranteed.
  8




---



##### 



The Companys commercial opportunity will be reduced or eliminated if competitors develop and
market products that are more effective or less expensive than our products.
   9




---



##### 



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 research and development programs could be delayed.
  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.
  10




---



##### 



The Company may not be able to establish or maintain the strategic partnerships necessary to
market and distribute its dietary supplement products.
   11




---



##### 



If the data from the Companys clinical trial program does not demonstrate the safety and
effectiveness of its pharmaceutical product candidates it will not receive FDA approval to market
those product candidates in the United States.
    The Company faces the risk of product liability claims and may not be able to obtain adequate
insurance.
  12




---



##### 



Enforceability of Civil Liabilities under the Federal Securities Laws against the Companys
officers and directors may be difficult.
  The ongoing criminal investigations involving Professor Kelly, the Companys Oncology Program
Director, could have a material adverse effect on its business or cause the stock price to decline.
  The Company is in the process of strengthening its internal control over financial reporting.
  13




---



##### 



The trading price of the shares of the Companys common stock and 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.
  
    
    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.
  14




---



##### 



15




---



##### 



Item 4
 Information on the Company
 History and development of the Company
  Nature of the Business
  Recent Financing Activities
       16




---



##### 



Capital expenditures
  Business overview
      17




---



##### 



Category of Activity
 Dietary Supplements
 Year Ended June 302003
    
    
    2004
    
    
    2005(A$000)
    
    
    (A$000)
    
    
    (A$000)Sales Revenue
    
    
    19,630
    
    
    
    12,720
    
    
    
    13,404Other Revenue
    
    
    4,626
    
    
    
    3,726
    
    
    
    4,274Total Revenue
    
    
    24,256
    
    
    
    16,446
    
    
    
    17,678
 Geographical Markets
 2003
    
    
    2004
    
    
    2005(A$000)
    
    
    (A$000)
    
    
    (A$000)Sales RevenueAustralasia
    
    
    6,228
    
    
    
    4,022
    
    
    
    4,646UK
& Europe
    
    
    2,744
    
    
    
    2,341
    
    
    
    2,518US & Canada
    
    
    10,658
    
    
    
    6,357
    
    
    
    6,24019,630
    
    
    
    12,720
    
    
    
    13,404Other RevenueAustralasia
    
    
    4,436
    
    
    
    3,321
    
    
    
    3,877UK & Europe
    
    
    1
    
    
    
    4
    
    
    
    80US & Canada
    
    
    189
    
    
    
    401
    
    
    
    3174,626
    
    
    
    3,726
    
    
    
    4,274Total Revenue
    
    
    24,256
    
    
    
    16,446
    
    
    
    17,678
  18




---



##### 



Clinical Development
   Phenoxodiol
   
    
    In May 2005, Marshall Edwards, Inc. announced preliminary results
from the combination therapy trial for patients with late stage
refractory ovarian cancer being conducted at Yale New Haven
Hospital in the United States and the Royal Womens
 19




---



##### 



Hospital in
Australia. These preliminary results revealed that 33% (12/36) of
patients who were on combination therapy that included phenoxodiol
experienced a complete or partial response.
    
    In January 2005, Marshall Edwards, Inc. announced that it we had
appointed a global research organization to manage its planned
pivotal Phase III multinational ovarian cancer study. The trial
will be known as the Ovature trial. Marshall Edwards, Inc. is
discussing trial design with the U.S. Food and Drug Administration
(FDA) to develop a trial protocol that is intended to support
marketing approval of phenoxodiol, including the number of
treatment arms to be included and the number of patients required
to be tested in each arm of the trial.
    
    In November 2004, Marshall Edwards, Inc. announced that the FDA
granted phenoxodiol Fast Track status for its intended use as a
chemo-sensitizing agent in patients with recurrent late stage
ovarian cancer. In January 2005, Marshall Edwards, Inc. announced
that the FDA granted phenoxodiol Fast Track status for its intended use in patients with
hormone-refractory prostate cancer. Under the FDA Modernization Act of 1997, designation as a
Fast Track product means that phenoxodiol is eligible for certain programs for accelerated
marketing approval.
 Source and Availability of Raw Materials
 Isoflavones
    Phenolic Compounds
  20




---



##### 



Marketing Channels
    Patent Protection
     Intellectual Property Development
  21




---



##### 



EuropePatent # 0656786
    
    Use of isoflavone phyto-oestrogen extracts of soy or clover
 AustraliaPatent # 776131
    
    Food product and processPatent # 776894
    
    Therapeutic methods and compositions involving isoflavonesPatent # 777632
    
    Health supplements containing isoflavonesPatent # 777561
    
    Health supplements containing phyto-oestrogen, analogues or metabolites thereofPatent # 777653
    
    Health supplements containing phyto-oestrogen, analogues or metabolites thereofPatent # 779210
    
    Treatment or prevention of menopausal symptoms and osteoporosis
 SingaporePatent # 90371
    
    Food product and processPatent # 81773
    
    Production of isoflavone derivatives
 New ZealandPatent # 506063
    
    Therapeutic methods and compositions involving isoflavones
  
  22




---



##### 



Title
    
    Applicant
    
    Country1
    
    HEALTH SUPPLEMENTS CONTAINING
PHYTO-OESTROGENS, ANALOGUES OR METABOLITES
THEREOF
    
    
    (1
    )
    
    All PCT countries
including the USA2
    
    PROCESS FOR GLUCAN PREPARATION
THERAPEUTIC USES OF GLUCAN
    
    
    (1
    )
    
    All PCT countries
including the USA3
    
    THERAPEUTIC METHODS AND COMPOSITIONS INVOLVING
ISOFLAVONES
    
    
    (1) +
    (2)
    
    All PCT countries
including the USA4
    
    PREPARATION OF ISOFLAVONES FROM LEGUMES
    
    
    (1) +
    (2)
    
    All PCT countries
including the USA5
    
    TREATMENT OR PREVENTION OF MENOPAUSAL SYMPTOMS
AND OSTEOPOROSIS
    
    
    (1) +
    (2)
    
    All PCT countries
including the USA6
    
    COMPOSITIONS AND METHOD FOR PROTECTING SKIN FROM
UV INDUCED IMMUNOSUPPRESSION AND SKIN DAMAGE
    
    
    (1
    )
    
    All PCT countries
including the USA7
    
    THERAPY OF ESTROGEN-ASSOCIATED DISORDERS
    
    
    (1
    )
    
    All PCT countries
including the USA8
    
    PRODUCTION OF ISOFLAVONE DERIVATIVES
    
    
    (1
    )
    
    All PCT countries
including the USA9
    
    CARDIOVASCULAR AND BONE TREATMENT USING
ISOFLAVONES
    
    
    (1
    )
    
    All PCT countries
including the USA10
    
    COMPOSITIONS AND THERAPEUTIC METHODS
INVOLVING ISOFLAVONES AND ANALOGUES THEREOF
    
    
    (1
    )
    
    All PCT countries
including the USA11
    
    FOOD PRODUCT AND PROCESS
    
    
    (1
    )
    
    All PCT countries
including the USA12
    
    REGULATION OF LIPIDS AND/OR BONE DENSITY AND
COMPOSITIONS THEREFORE
    
    
    (1
    )
    
    All PCT countries
including the USA13
    
    DIMERIC ISOFLAVONES
    
    
    (1
    )
    
    All PCT countries
including the USA14
    
    TREATMENT OF RESTENOSIS
    
    
    (1
    )
    
    All PCT countries
including the USA15
    
    6-HYDROXY ISOFLAVONES, DERIVATIVES AND
MEDICAMENTS INVOLVING THE SAME
    
    
    (1
    )
    
    All PCT countries
including the USA16
    
    THERAPEUTIC METHODS AND COMPOSITIONS INVOLVING
COMPOUNDS BASED ON AN ISOFLAV-3-ENE AND ISOFLAVAN
STRUCTURE
    
    
    (1
    )
    
    All PCT countries
including the USA17
    
    REPAIR OF DNA MUTAGENIC DAMAGE
    
    
    (1
    )
    
    All PCT countries
including the USA18
    
    SKIN PHOTOAGEING AND ACTINIC DAMAGE TREATMENT
    
    
    (1
    )
    
    All PCT countries
including the USA19
    
    COMBINATION CHEMOTHERAPY COMPOSITIONS AND METHODS
    
    
    (1
    )
    
    All PCT countries
including the USA20
    
    AMINATED ISOFLAVONOID DERIVATIVES AND USES THEREOF
    
    
    (1
    )
    
    All PCT countries
including the USA
 23




---



##### 



Trademark Protection
  Licensing Arrangements
  Australian Government
      Australian Regulatory Requirements
 24




---



##### 



Therapeutic Goods Act 1989,
       U.S. Regulatory Requirements
  25




---



##### 




    
    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 IND, including results of pre-clinical tests and protocols
for clinical tests, which must become effective before clinical trials may begin in the
United States;
    
    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, manufacture and
control information on the product to the FDA in a New Drug Approval Application, or NDA;
and
    
    FDA review and approval of an NDA, prior to any commercial sale or shipment of a
product.
    26




---



##### 



 Phase I:
  Phase II:
  Phase III:
     27




---



##### 



28




---



##### 



European Union Regulatory Requirements
  29




---



##### 



Dietary Supplements
  30




---



##### 



Manufacturing Regulations
  31




---



##### 



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
    
    
    100Novogen Inc
    
    USA
    
    
    100Glycotex Inc
    
    USA
    
    
    84.3Novogen Limited (UK)
    
    UK
    
    
    100Promensil Limited
    
    UK
    
    
    100Novogen BV
    
    Netherlands
    
    
    100Novogen New Zealand Limited
    
    New Zealand
    
    
    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
    32




---



##### 



Item 5. Operating and Financial Review and Prospects
  Application of Critical Accounting Policies
         33




---



##### 



Results of Operations
  STATEMENT OF FINANCIAL PERFORMANCE
Year ended June 30, 2005
 Notes
    
    
    2005
    
    
    2004
    
    
    2003
    
    
    2005A$000
    
    
    A$000
    
    
    A$000
    
    
    US$000RevenueSales Revenue
    
    
    
    
    
    
    13,404
    
    
    
    12,720
    
    
    
    19,630
    
    
    
    10,211Other Revenue
    
    
    2
    
    
    
    4,274
    
    
    
    3,726
    
    
    
    4,626
    
    
    
    3,256Total Revenue
    
    
    
    
    
    
    17,678
    
    
    
    16,446
    
    
    
    24,256
    
    
    
    13,467Costs and ExpensesCost of Goods Sold
    
    
    
    
    
    
    (4,666
    )
    
    
    (4,753
    )
    
    
    (7,191
    )
    
    
    (3,555
    )Research & Development
    
    
    
    
    
    
    (10,217
    )
    
    
    (8,261
    )
    
    
    (8,274
    )
    
    
    (7,783
    )Selling and Promotions
    
    
    
    
    
    
    (8,411
    )
    
    
    (9,762
    )
    
    
    (12,713
    )
    
    
    (6,407
    )Shipping and Handling
    
    
    
    
    
    
    (444
    )
    
    
    (382
    )
    
    
    (468
    )
    
    
    (338
    )General and Administrative
    
    
    
    
    
    
    (6,163
    )
    
    
    (5,747
    )
    
    
    (6,151
    )
    
    
    (4,695
    )Total Costs and Expenses
    
    
    
    
    
    
    (29,901
    )
    
    
    (28,905
    )
    
    
    (34,797
    )
    
    
    (22,778
    )Interest Expense
    
    
    
    
    
    
    (56
    )
    
    
    (120
    )
    
    
    (132
    )
    
    
    (43
    )Operating Loss Before Abnormal Items
and Income Tax
    
    
    2
    
    
    
    (12,279
    )
    
    
    (12,579
    )
    
    
    (10,673
    )
    
    
    (9,354
    )Income Tax Expense
    
    
    3
    
    
    
    (2
    )
    
    
    
    
    
    
    7
    
    
    
    (2
    )Net Loss
    
    
    
    
    
    
    (12,281
    )
    
    
    (12,579
    )
    
    
    (10,666
    )
    
    
    (9,356
    )Net Loss Attributable to Outside Equity Interests
    
    
    
    
    
    
    1,152
    
    
    
    1,644
    
    
    
    212
    
    
    
    878Net Loss Attributable to Members of Novogen
    
    
    
    
    
    
    (11,129
    )
    
    
    (10,935
    )
    
    
    (10,454
    )
    
    
    (8,478
    )
 Operating
Results  Fiscal 2005 v Fiscal 2004
 Revenue
   34




---



##### 



Other Revenue
   Costs and Expenses
  35




---



##### 



Net Loss
  Operating
Results  Fiscal 2004 v Fiscal 2003
 Revenue
    Other Revenue
 36




---



##### 



Costs and Expenses
  Net Loss
  Liquidity and capital resources
    37




---



##### 



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
    
    
    1,104
    
    
    
    199
    
    
    
    713
    
    
    
    192
    
    
    
    Finance Leases
    
    
    782
    
    
    
    767
    
    
    
    15
    
    
    
    
    
    
    
    Other Expenditure
Commitments
    
    
    4,163
    
    
    
    3,556
    
    
    
    607
    
    
    
    
    
    
    
    Total Contractual
Cash Obligations
    
    
    6,049
    
    
    
    4,522
    
    
    
    1,335
    
    
    
    192
    
    
    
    
 38




---



##### 



Off-Balance Sheet Arrangements
  Research and Development
  Phenoxodiol
   
    
    In May 2005, Marshall Edwards, Inc. announced preliminary results
from an open label combination therapy trial for patients with
late stage refractory ovarian cancer being conducted at Yale New
Haven Hospital in the United States and the Royal Womens Hospital
in Australia. These preliminary results revealed that 33% (12/36)
of patients who were on combination therapy that included
phenoxodiol experienced a complete or partial response.
    
    In January 2005, Marshall Edwards, Inc. announced that it had
appointed a global research organization to manage our planned
pivotal Phase III multinational ovarian cancer study. The trial
will be known as the Ovature trial. Marshall Edwards, Inc. is
discussing trial design with the U.S. Food and Drug Administration
(FDA) to develop a trial protocol that is intended to support
marketing approval of phenoxodiol, including the number of
treatment arms to be included and the number of patients required
to be tested in each arm of the trial.
    
    In November 2004, Marshall Edwards, Inc. announced that the FDA
granted phenoxodiol Fast Track status for its intended use as a
chemo-sensitizing agent in patients with recurrent late stage
ovarian cancer. In January 2005, Marshall Edwards, Inc. announced
that the FDA granted phenoxodiol Fast Track status for its
intended use in patients with hormone-refractory prostate cancer.
Under the FDA Modernization Act of 1997, designation as a Fast
Track product means that phenoxodiol is eligible for certain
programs, including accelerated approval for marketing.
   39




---



##### 




    
    All third party research and development including the conduct of
clinical trials are carried out under contract. The contract
details include project milestones and expenditure budgets. Senior
Novogen research and development staff monitor the projects to
ensure that milestones are achieved in a timely manner.
    
    In-house research and development is managed by the Research and
Development Director and senior research and development staff.
Budgets are prepared annually and agreed by the Novogen Board.
Expenses are monitored monthly, actual versus budget by expense
line and in total.
 Trend Information
   40




---



##### 



Item 6. Directors, Senior Management and Employees.
 The names of the Companys Directors during the fiscal year and up to the date of this report are
as follows:
 
  Information on Directors
 Philip A. Johnston Non-Executive Chairman
 
  Christopher Naughton Managing Director
   41




---



##### 



Professor Graham E. Kelly Executive Director
   Professor Paul J. Nestel Non-Executive Director
   Peter B. Simpson Non-Executive Director
   42




---



##### 



Dr. Leanna C. Read Non-Executive Director
  Geoffrey M. Leppinus Non-Executive Director
  Executive Officers profiles
 Professor
Alan J. Husband  Research Director
  David
R. Seaton  Chief Financial Officer
  43




---



##### 



Warren
Lancaster  Vice President Commercial and Corporate Development
  Bryan
Palmer  Operations General Manager
  Craig
Kearney  General Manager Consumer Business
  Ronald
L. Erratt  Company Secretary
  44




---



##### 



Compensation
   Compensation
of Directors of Novogen Limited July 1, 2004  June 30, 2005
 Annual emoluments
    
    Long term emoluments
    
    TotalTerminationCommittee
    
    
    
    
    
    & similar
    
    Options granted
    
    
    Super-Base fee
    
    fee
    
    Other
    
    payments
    
    
    
    Amortised cost
    
    Remuneration
    
    annuation$
    
    $
    
    $
    
    $
    
    Number
    
    $
    
    %
    
    $
    
    $PA Johnston
    
    
    90,588
    
    
    
    14,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    136
    
    
    
    0.12
    %
    
    
    9,412
    
    
    
    114,136C Naughton
    
    
    507,724
    
    
    
    
    
    
    
    53,643
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    45,696
    
    
    
    607,063GE Kelly
    
    
    334,314
    
    
    
    
    
    
    
    29,981
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    30,088
    
    
    
    394,383PJ Nestel AO
    
    
    70,000
    
    
    
    12,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    82,000LC Read
    
    
    36,368
    
    
    
    4,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,632
    
    
    
    44,000PB Simpson
    
    
    35,376
    
    
    
    16,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    136
    
    
    
    0.24
    %
    
    
    4,624
    
    
    
    56,136G Leppinus *
    
    
    15,160
    
    
    
    1,660
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,513
    
    
    
    18,3331,089,530
    
    
    
    47,660
    
    
    
    83,624
    
    
    
    
    
    
    
    
    
    
    
    272
    
    
    
    
    
    
    
    94,965
    
    
    
    1,316,051
 
 *
    
    appointed February 24, 2005    45




---



##### 



Compensation
of the Executive Officers of the Company and the consolidated entity July 1, 2004 
June 30, 2005.
 Annual emoluments
    
    Long term emolumentsTermination& similar
    
    Options granted
    
    Super-Base fee
    
    Other
    
    payments
    
    
    
    
    
    Amortised cost
    
    Remuneration
    
    annuation
    
    Total$
    
    $
    
    $
    
    Number
    
    $
    
    %
    
    $
    
    $AJ Husband
    
    
    286,818
    
    
    
    51,155
    
    
    
    
    
    
    
    22,592
    
    
    
    40,940
    
    
    
    10.12
    %
    
    
    25,814
    
    
    
    404,727DR Seaton
    
    
    298,526
    
    
    
    20,085
    
    
    
    
    
    
    
    22,592
    
    
    
    41,031
    
    
    
    10.62
    %
    
    
    26,867
    
    
    
    386,509WJ Lancaster (USA)
    
    
    186,822
    
    
    
    6,197
    
    
    
    
    
    
    
    10,224
    
    
    
    21,595
    
    
    
    9.21
    %
    
    
    19,915
    
    
    
    234,529BM Palmer
    
    
    142,942
    
    
    
    33,594
    
    
    
    
    
    
    
    12,392
    
    
    
    23,366
    
    
    
    10.98
    %
    
    
    12,865
    
    
    
    212,767CD Kearney
    
    
    164,376
    
    
    
    22,951
    
    
    
    
    
    
    
    12,088
    
    
    
    21,417
    
    
    
    9.58
    %
    
    
    14,794
    
    
    
    223,538RL Erratt
    
    
    152,026
    
    
    
    20,157
    
    
    
    
    
    
    
    12,264
    
    
    
    23,774
    
    
    
    11.34
    %
    
    
    13,682
    
    
    
    209,6391,231,510
    
    
    
    154,139
    
    
    
    
    
    
    
    92,152
    
    
    
    172,123
    
    
    
    
    
    
    
    113,937
    
    
    
    1,671,709
  Arrangements and Relationships
  Pension Benefits
  46




---



##### 



Board Practices
 Novogen Board of DirectorsYear First
    
    Current TermName
    
    Postion Held
    
    Appointed
    
    ExpiresP A Johnston
    
    Chairman
    
    
    1997
    
    
    October-2006C Naughton
    
    Managing Director
    
    
    1997
    
    
    
    *G E Kelly
    
    Executive Director
    
    
    1994
    
    
    October-2005P B Simpson
    
    Director
    
    
    1994
    
    
    October-2006P J Nestel
    
    Director
    
    
    2001
    
    
    October-2006L C Read
    
    Director
    
    
    2003
    
    
    October-2008G M Leppinus
    
    Director
    
    
    2005
    
    
    October-2008
 
 *
    
    Professor Kelly resigned from the board of Novogen Limited on September 2, 2005. Term of Directors
    Board of Directors
    47




---



##### 



Audit Committee
   Remuneration Committee
   Capital Works Committee
  Executive Directors Employment Contracts
  48




---



##### 



Employees
  Category of Activity
 Number of People2005
    
    2004
    
    2003Research and Development
    
    
    23
    
    
    
    19
    
    
    
    18Production
    
    
    21
    
    
    
    21
    
    
    
    14Sales and Marketing
    
    
    18
    
    
    
    12
    
    
    
    17Finance and Administration
    
    
    12
    
    
    
    14
    
    
    
    12Total
    
    
    74
    
    
    
    66
    
    
    
    61
 Geographic Location
 Number of People2005
    
    2004
    
    2003Australasia
    
    
    65
    
    
    
    54
    
    
    
    47North America
    
    
    8
    
    
    
    11
    
    
    
    13Europe
    
    
    1
    
    
    
    1
    
    
    
    1Total
    
    
    74
    
    
    
    66
    
    
    
    61
 Share Ownership
 Directors holdings of shares and options in the Company
  Ordinary
    
    %
    
    
    
    
    
    OptionsShares Fully
    
    Total Shares
    
    Number
    
    Exercise
    
    ExpiryPaid
    
    on Issue
    
    Outstanding
    
    Price
    
    DateG.E Kelly
    
    
    8,209,152
    
    
    
    8.5
    
    
    
    
    
    
    
    
    
    
    
    C Naughton
    
    
    633,511
    
    
    
    0.7
    
    
    
    
    
    
    
    
    
    
    
    P A Johnston
    
    
    48,594
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    P B Simpson
    
    
    500
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    P J Nestel
    
    
    32,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    L C Read
    
    
    2,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
 49




---



##### 



Shares Held
 Ordinary Shares
    
    %Fully
    
    Total SharesPaid
    
    on IssueAJ Husband
    
    
    61,148
    
    
    
    0.1DR Seaton
    
    
    
    
    
    
    WJ Lancaster (USA)
    
    
    40,000
    
    
    
    BM Palmer
    
    
    133,702
    
    
    
    0.1CD Kearney
    
    
    8,850
    
    
    
    RL Erratt
    
    
    115,356
    
    
    
    0.1
 Options Granted and held by named Executives
 Eligibleexecutives
    
    Exercise priceTotal Options
    
    participating
    
    (A$)
    
    Grant date
    
    Expiry date123,499
    
    5
    
    
    1.53
    
    
    
    10/08/2001
    
    
    
    10/08/2006159,916
    
    6
    
    
    2.10
    
    
    
    30/11/2002
    
    
    
    30/11/200762,224
    
    6
    
    
    6.76
    
    
    
    27/02/2004
    
    
    
    27/02/200992,152
    
    6
    
    
    4.90
    
    
    
    16/03/2005
    
    
    
    16/03/2010
 Employee Share Option Plan
  Exemptions from Certain Nasdaq Corporate Governance Rules
  50




---



##### 




    
    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.
  51




---



##### 



Item 7. Major Shareholders and Related Party Transactions
 Major Shareholders
       52




---



##### 



Item 8. Financial Information
  Export Sales
  Legal Proceedings
  Dividends
  Significant Changes
  53




---



##### 



Item 9. Offer and Listing Details
 Trading Markets
  American Depositary Receipts
   54




---



##### 



NOVOGEN LIMITED SHARE PRICE HISTORY
 Per Ordinary Share (A$)
    
    
    Per ADR (US$)Period
    
    High
    
    
    Low
    
    
    High
    
    
    LowYear EndedJune 2001
    
    
    4.62
    
    
    
    2.02
    
    
    
    14.25
    
    
    
    5.35June 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
    
    
    
    14.85Quarter EndedDecember 2003
    
    
    8.80
    
    
    
    5.33
    
    
    
    31.90
    
    
    
    17.63March 2004
    
    
    7.65
    
    
    
    4.58
    
    
    
    29.49
    
    
    
    17.40June 2004
    
    
    6.80
    
    
    
    4.93
    
    
    
    26.00
    
    
    
    17.25September 2004
    
    
    5.60
    
    
    
    4.15
    
    
    
    20.00
    
    
    
    14.85December 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
    
    
    
    17.68Month EndedJune 2005
    
    
    5.98
    
    
    
    4.65
    
    
    
    23.55
    
    
    
    18.05July 2005
    
    
    5.22
    
    
    
    4.70
    
    
    
    19.90
    
    
    
    18.00August 2005
    
    
    5.20
    
    
    
    4.71
    
    
    
    20.18
    
    
    
    17.85September 2005
    
    
    5.07
    
    
    
    4.46
    
    
    
    19.59
    
    
    
    17.68October 2005
    
    
    5.02
    
    
    
    4.66
    
    
    
    19.10
    
    
    
    17.20November 2005
    
    
    6.00
    
    
    
    4.85
    
    
    
    22.08
    
    
    
    17.76
 55




---



##### 



Item 10. Additional Information praveen
 Memorandum and Articles of Association
  Material Contracts
  Exchange Controls
     56




---



##### 



Taxation
      Distributions
   57




---



##### 



Dispositions
  CGT
     58




---



##### 



Estate and Gift Tax
  Documents on Display
  59




---



##### 



Item 11. Quantitative and Qualitative Disclosures About Market Risk.
 Interest Rate Risk
      Foreign Currency Risk
   60




---



##### 



Item 12. Description of Securities Other than Equity Securities
  61




---



##### 



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
   62




---



##### 



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 Novogens plan to address the material weakness
     63




---



##### 



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
   64




---



##### 



BDO
    
    2004
    
    2005A$000
    
    A$000Audit fees
    
    
    
    
    
    
    245.0Audit related fees
    
    
    
    
    
    
    Tax fees
    
    
    
    
    
    
    10.0Other Fees
    
    
    
    
    
    
    5.0Total fees
    
    
    
    
    
    
    260.0
 Ernst & Young
    
    2004
    
    2005A$000
    
    A$000Audit fees
    
    
    431.2
    
    
    
    35.0Audit related fees
    
    
    106.6
    
    
    
    3.0Tax fees
    
    
    33.3
    
    
    
    Other Fees
    
    
    
    
    
    
    5.0Total fees
    
    
    571.1
    
    
    
    43.0
 Audit fees
  Audit Related Services
  Tax Fees
  All Other Fees
  Pre-approval Policies and Procedures
 65




---



##### 



Item 16D. Exemptions from the Listing Standards for Audit Committees.
  Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers.
  66




---



##### 



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, dated as of February 23, 1998, among
Novogen Limited, the Bank of New York, as Depositary, and
owners and holders from time to time of ADRs issued
thereunder. (2)4.1
    
    Employment Contract between the Company and Mr. C. Naughton
dated June 25, 2003. (4)4.2
    
    Employment Contract between the Company and Professor Alan
Husband dated April 30, 2003. (4)4.3
    
    Employment Contract between the Company and Dr G. E. Kelly
dated June 25, 2003. (4)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
April 24, 2003. (4)4.6
    
    Employment Contract between the
 67




---



##### 



Exhibit No.
    
    Exhibit DescriptionCompany and Craig Kearney dated April 30, 2003. (4)4.7
    
    Employment Contract between the Company and David Seaton dated
April 30, 2003. (4)4.8
    
    Employment Contract between the Company and Ronald Erratt
dated April 30, 2003. (4)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 February 12, 1998 (File No. 333-8346)(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)(4)
    
    Incorporated by reference to the Annual Report
on Form 20-F filed with the Securities and Exchange Commission on
January 13, 2005 (File No. 0-29962) 68




---



##### 



(BDO logo)
    
    Chartered Accountants
& Advisers
    
    Level 19. 2 Market Street Sydney NSW 2000
GPO Box 2551 Sydney NSW 2001
Tel. +61 2 9286 5555 Fax. +61 2 9286 5599
Email: bdosyd@bdosyd.com.auwww.bdo.com.au
 Report of Independent Registered Public Accounting Firm
 
      
 
 69




---



##### 



Report of Independent Registered Public Accounting Firm
 The Board of Directors and Shareholders of Novogen Limited
        
 70




---



##### 



Directors Declaration
  1.
    
    In the opinion of the Directors:
 a)
    
    the financial statements and notes of the Company and of the consolidated entity are in
accordance with the Corporations Act 2001, including:
 i)
    
    giving a true and fair view of the Companys and consolidated entitys
financial position as at June 30, 2005 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 2005.
 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 9, 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.
  
  71




---



##### 



Novogen Limited, Consolidated Financial Statements
 STATEMENT
OF FINANCIAL PERFORMANCE
Year ended June 30, 2005
 Notes
    
    2005
    
    2004
    
    2003
    
    2005A$000
    
    A$000
    
    A$000
    
    US$000RevenueSales Revenue
    
    
    
    
    
    
    13,404
    
    
    
    12,720
    
    
    
    19,630
    
    
    
    10,211Other Revenue
    
    
    2
    
    
    
    4,274
    
    
    
    3,726
    
    
    
    4,626
    
    
    
    3,256Total Revenue
    
    
    
    
    
    
    17,678
    
    
    
    16,446
    
    
    
    24,256
    
    
    
    13,467Costs and ExpensesCost of Goods Sold
    
    
    
    
    
    
    (4,666
    )
    
    
    (4,753
    )
    
    
    (7,191
    )
    
    
    (3,555
    )Research & Development
    
    
    
    
    
    
    (10,217
    )
    
    
    (8,261
    )
    
    
    (8,274
    )
    
    
    (7,783
    )Selling and Promotions
    
    
    
    
    
    
    (8,411
    )
    
    
    (9,762
    )
    
    
    (12,713
    )
    
    
    (6,407
    )Shipping and Handling
    
    
    
    
    
    
    (444
    )
    
    
    (382
    )
    
    
    (468
    )
    
    
    (338
    )General and Administrative
    
    
    
    
    
    
    (6,163
    )
    
    
    (5,747
    )
    
    
    (6,151
    )
    
    
    (4,695
    )Total Costs and Expenses
    
    
    
    
    
    
    (29,901
    )
    
    
    (28,905
    )
    
    
    (34,797
    )
    
    
    (22,778
    )Interest Expense
    
    
    
    
    
    
    (56
    )
    
    
    (120
    )
    
    
    (132
    )
    
    
    (43
    )Operating Loss Before Abnormal Items
and Income Tax
    
    
    2
    
    
    
    (12,279
    )
    
    
    (12,579
    )
    
    
    (10,673
    )
    
    
    (9,354
    )Income Tax Expense
    
    
    3
    
    
    
    (2
    )
    
    
    
    
    
    
    7
    
    
    
    (2
    )Net Loss
    
    
    
    
    
    
    (12,281
    )
    
    
    (12,579
    )
    
    
    (10,666
    )
    
    
    (9,356
    )Net Loss Attributable to Outside
Equity Interests
    
    
    
    
    
    
    1,152
    
    
    
    1,644
    
    
    
    212
    
    
    
    878Net Loss Attributable to Members of
Novogen
    
    
    
    
    
    
    (11,129
    )
    
    
    (10,935
    )
    
    
    (10,454
    )
    
    
    (8,478
    )Net exchange difference on
translation of financial statements
of foreign controlled entity
    
    
    15
    (b)
    
    
    (2,964
    )
    
    
    1,507
    
    
    
    (1,956
    )
    
    
    (2,258
    )TOTAL REVENUES, EXPENSES AND
VALUATION ADJUSTMENTS ATTRIBUTABLE TO
MEMBERS OF NOVOGEN LIMITED AND
RECOGNISED DIRECTLY IN EQUITY
    
    
    
    
    
    
    (2,964
    )
    
    
    1,507
    
    
    
    (1,956
    )
    
    
    (2,258
    )TOTAL CHANGES IN EQUITY OTHER THAN
THOSE RESULTING FROM TRANSACTIONS
WITH OWNERS AS OWNERS ATTRIBUTABLE TO
MEMBERS OF NOVOGEN LIMITED
    
    
    
    
    
    
    (14,093
    )
    
    
    (9,428
    )
    
    
    (12,410
    )
    
    
    (10,736
    )Basic Loss per share (cents per share)
    
    
    
    
    
    
    (11.5
    )
    
    
    (11.4
    )
    
    
    (10.9
    )
    
    
    (8.8
    )
 72




---



##### 



STATEMENT OF FINANCIAL POSITION
As at 30 June, 2005
 Notes
    
    2005
    
    2004
    
    2005A$000
    

A$000
    

US$000RestatedCURRENT ASSETSCash
    
    
    4
    
    
    
    47,260
    
    
    
    58,431
    
    
    
    36,003Receivables
    
    
    5
    
    
    
    3,477
    
    
    
    2,936
    
    
    
    2,649Inventories
    
    
    6
    
    
    
    5,488
    
    
    
    5,589
    
    
    
    4,181Other
    
    
    7
    
    
    
    821
    
    
    
    865
    
    
    
    625Total current assets
    
    
    
    
    
    
    57,046
    
    
    
    67,821
    
    
    
    43,458NON-CURRENT ASSETSInventories
    
    
    6
    
    
    
    4,580
    
    
    
    2,864
    
    
    
    3,489Property, plant and equipment
    
    
    8
    
    
    
    5,859
    
    
    
    6,728
    
    
    
    4,463Total non-current assets
    
    
    
    
    
    
    10,439
    
    
    
    9,592
    
    
    
    7,952TOTAL ASSETS
    
    
    
    
    
    
    67,485
    
    
    
    77,413
    
    
    
    51,410CURRENT LIABILITIESPayables
    
    
    10
    
    
    
    5,501
    
    
    
    5,963
    
    
    
    4,191Interest bearing liabilities
    
    
    11
    
    
    
    750
    
    
    
    843
    
    
    
    571Provisions
    
    
    12
    
    
    
    474
    
    
    
    361
    
    
    
    361Total current liabilities
    
    
    
    
    
    
    6,725
    
    
    
    7,167
    
    
    
    5,123NON-CURRENT
LIABILITIESInterest bearing liabilities
    
    
    11
    
    
    
    15
    
    
    
    765
    
    
    
    11Provisions
    
    
    12
    
    
    
    253
    
    
    
    270
    
    
    
    193Total non-current liabilities
    
    
    
    
    
    
    268
    
    
    
    1,035
    
    
    
    204TOTAL LIABILITIES
    
    
    
    
    
    
    6,993
    
    
    
    8,202
    
    
    
    5,327NET ASSETS
    
    
    
    
    
    
    60,492
    
    
    
    69,211
    
    
    
    46,083EQUITYParent equity interestContributed equity
    
    
    14
    
    
    
    176,235
    
    
    
    170,276
    
    
    
    134,256Reserves
    
    
    15
    
    
    
    (3,413
    )
    
    
    (449
    )
    
    
    (2,600
    )Retained profits/(accumulated losses)
    
    
    15
    
    
    
    (116,069
    )
    
    
    (104,972
    )
    
    
    (88,421
    )Total parent equity interest in equity
    
    
    
    
    
    
    56,753
    
    
    
    64,855
    
    
    
    43,235Total outside equity interest
    
    
    16
    
    
    
    3,739
    
    
    
    4,356
    
    
    
    2,848TOTAL EQUITY
    
    
    
    
    
    
    60,492
    
    
    
    69,211
    
    
    
    46,083
 73




---



##### 



STATEMENT OF CHANGES IN CONTRIBUTED EQUITY
 Issued Share Capital
    
    Number of Fully
    
    AmountPaid Ordinary Shares
    
    A$000Balance June 30, 2000
    
    
    84,836,262
    
    
    
    100,276Options converted into shares
    
    
    38,513
    
    
    
    46Share issue  May 23,2001
    
    
    10,195,000
    
    
    
    20,900Balance June 30, 2001
    
    
    95,069,775
    
    
    
    121,222Options converted into shares
    
    
    342,939
    
    
    
    617Subsidiary share issue  May 22, 2002
    
    
    n/a
    
    
    
    16,195less outside equity interest
    
    
    
    
    
    
    (785
    )Balance June 30, 2002
    
    
    95,412,714
    
    
    
    137,249Options converted into shares
    
    
    199,071
    
    
    
    421Subsidiary share issue  May 5, 2003
    
    
    n/a
    
    
    
    553less outside equity interest
    
    
    
    
    
    
    (17
    )Balance June 30, 2003
    
    
    95,611,785
    
    
    
    138,206Options converted into shares
    
    
    1,111,758
    
    
    
    3,104Subsidiary share issue November 30, 2003
    
    
    n/a
    
    
    
    14,035Subsidiary share issue December 18, 2003
    
    
    n/a
    
    
    
    20,815less outside equity interest
    
    
    
    
    
    
    (5,884
    )Balance June 30, 2004
    
    
    96,723,543
    
    
    
    170,276Options converted into shares
    
    
    312,119
    
    
    
    888Share Issue  exercise of convertible security
    
    
    10,000
    
    
    
    54Subsidiary share issue  options converted to shares
    
    
    n/a
    
    
    
    900Subsidiary share issue April 11, 2005
    
    
    n/a
    
    
    
    5,183less outside equity interest
    
    
    n/a
    
    
    
    (1,012
    )Elimination of share capital owned by parent company
following exercise of convertible security
    
    
    n/a
    
    
    
    (54
    )Balance June 30, 2005
    
    
    97,045,662
    
    
    
    176,235
 74




---



##### 



STATEMENT OF CASH FLOWS
for the year ended 30 June, 2005
 Notes
    
    2005
    
    2004
    
    2003
    
    2005A$000
    
    A$000
    
    A$000
    
    US$000Cash flows from operating activitiesReceipts from customers
    
    
    
    
    
    
    13,254
    
    
    
    14,051
    
    
    
    19,324
    
    
    
    10,097Payments to suppliers and employees
    
    
    
    
    
    
    (29,085
    )
    
    
    (27,566
    )
    
    
    (29,313
    )
    
    
    (22,157
    )Interest received
    
    
    
    
    
    
    1,263
    
    
    
    1,186
    
    
    
    1,177
    
    
    
    962Interest paid
    
    
    
    
    
    
    (55
    )
    
    
    (120
    )
    
    
    (132
    )
    
    
    (42
    )Grants received
    
    
    
    
    
    
    289
    
    
    
    1,011
    
    
    
    632
    
    
    
    220Income tax paid
    
    
    
    
    
    
    (2
    )
    
    
    
    
    
    
    7
    
    
    
    (2
    )Royalty received
    
    
    
    
    
    
    1,434
    
    
    
    978
    
    
    
    2,362
    
    
    
    1,092Goods and services tax refunded/(paid) by/(to)
tax authorities
    
    
    
    
    
    
    94
    
    
    
    (79
    )
    
    
    96
    
    
    
    72Net cash flows used in operating activities
    
    
    20
    
    
    
    (12,808
    )
    
    
    (10,539
    )
    
    
    (5,847
    )
    
    
    (9,758
    )Cash flows from investing activitiesAcquisition of property, plant and equipment
    
    
    
    
    
    
    (757
    )
    
    
    (714
    )
    
    
    (758
    )
    
    
    (577
    )Proceeds from sale of plant and equipment
    
    
    
    
    
    
    
    
    
    
    80
    
    
    
    35
    
    
    
    Net cash flows used in investing activities
    
    
    
    
    
    
    (757
    )
    
    
    (634
    )
    
    
    (723
    )
    
    
    (577
    )Cash flows from financing activitiesProceeds from the issue of ordinary shares
    
    
    
    
    
    
    888
    
    
    
    3,104
    
    
    
    421
    
    
    
    676Proceeds from the issue of subsidiary shares
    
    
    
    
    
    
    6,083
    
    
    
    38,197
    
    
    
    554
    
    
    
    4,634Payment of share issue costs
    
    
    
    
    
    
    
    
    
    
    (3,347
    )
    
    
    
    
    
    
    Repayment of borrowings
    
    
    
    
    
    
    (843
    )
    
    
    (679
    )
    
    
    (845
    )
    
    
    (642
    )Net cash flows from financing activities
    
    
    
    
    
    
    6,128
    
    
    
    37,275
    
    
    
    130
    
    
    
    4,668Net (decrease)/increase in cash held
    
    
    
    
    
    
    (7,437
    )
    
    
    26,102
    
    
    
    (6,440
    )
    
    
    (5,667
    )Add opening cash brought forward
    
    
    
    
    
    
    55,431
    
    
    
    28,526
    
    
    
    37,437
    
    
    
    42,227Effect of exchange rate changes on opening cash
    
    
    
    
    
    
    (3,734
    )
    
    
    1,303
    
    
    
    (2,471
    )
    
    
    (2,845
    )Movements in secured facility
    
    
    
    
    
    
    (150
    )
    
    
    (500
    )
    
    
    
    
    
    
    (114
    )Closing cash carried forward
    
    
    4
    
    
    
    44,110
    
    
    
    55,431
    
    
    
    28,526
    
    
    
    33,601
 75




---



##### 



NOVOGEN LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
  Basis of accounting
  Changes in accounting policy
  Principles of consolidation
     Foreign currency
 Foreign currency transactions
  Translation of financial reports of overseas operations
  76




---



##### 



Cash and cash equivalents
  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.
  Recoverable amount of non-current assets
  Property, plant & equipment
 Cost and valuation
 Depreciation
  77




---



##### 



Major depreciation periods are:Buildings
    
    8-20 years (2004: 20 years)Plant and equipment
    
    2.5-10 yearsLeasehold improvements
    
    the lease term
 Leases
  Operating leases
   Finance leases
     Intangible assets
 Patents and Trademarks
  Research and development
  78




---



##### 



Payables
   Borrowings
  Provisions
  Contributed equity
  Revenue recognition
  Sale of goods
  Interest
  Grant income
  Royalties
  Taxes
 79




---



##### 



Income Tax
   Goods and Services Tax (GST) and overseas equivalents
  -
    
    where the GST incurred on a purchase of goods and services is not recoverable from
the taxation authority, in which case the GST is recognised as part of the cost of
acquisition of the asset or as part of the expense item as applicable; and-
    
    receivables and payables are stated with the amount of GST included.
    Employee benefits
 Wages and salaries, annual leave
  Long service leave
  Share option plans
  Earnings per share (EPS)
 80




---



##### 



-
    
    costs of servicing equity (other than dividends) and preference share dividends (if
any);-
    
    the after tax effect of dividends and interest associated with dilutive potential
ordinary shares that have been recognised as expenses; and-
    
    other non-discretionary changes in revenues or expenses during the period that would
result from the dilution of potential ordinary shares,
  Comparatives
  Adoption of Australian equivalents to International Financial Reporting Standards
   Research and development expenditure
  Income tax
  81




---



##### 



Share-based payments
  Government grants
  Effect of changes in foreign exchange rates
   82




---



##### 



2. (LOSS)/PROFIT FROM ORDINARY ACTIVITIES
 Consolidated2005
    
    2004
    
    2003$000
    
    $000
    
    $000(a) Revenues from operating activitiesRevenue from the sale of goods
    
    
    13,404
    
    
    
    12,720
    
    
    
    19,63013,404
    
    
    
    12,720
    
    
    
    19,630(b) Revenues from non-operating activitiesInterest  other persons/corporations
    
    
    1,319
    
    
    
    1,232
    
    
    
    1,266Grants received
    
    
    289
    
    
    
    1,011
    
    
    
    632Royalties received
    
    
    1,711
    
    
    
    978
    
    
    
    2,362Licence Fees
    
    
    207
    
    
    
    
    
    
    
    Revenue from the sale of assets
    
    
    
    
    
    
    80
    
    
    
    35Revenue from the sale of raw materials
    
    
    76
    
    
    
    73
    
    
    
    215Import duty refund
    
    
    
    
    
    
    160
    
    
    
    Other revenue
    
    
    672
    
    
    
    192
    
    
    
    1164,274
    
    
    
    3,726
    
    
    
    4,626Total revenues from ordinary activities
    
    
    17,678
    
    
    
    16,446
    
    
    
    24,256(c) ExpensesDepreciation of non-current assetsPlant and equipment
    
    
    966
    
    
    
    965
    
    
    
    861Buildings
    
    
    291
    
    
    
    291
    
    
    
    290Leasehold improvements
    
    
    39
    
    
    
    51
    
    
    
    66Amortisation of non-current assetsPlant and equipment under lease
    
    
    330
    
    
    
    414
    
    
    
    447Goodwill
    
    
    
    
    
    
    
    
    
    
    224Total depreciation and amortisation expenses
    
    
    1,626
    
    
    
    1,721
    
    
    
    1,888Bad and doubtful debts  trade
    
    
    (78
    )
    
    
    99
    
    
    
    52Inventory write offs
    
    
    276
    
    
    
    979
    
    
    
    617Provision for employee entitlements
    
    
    98
    
    
    
    154
    
    
    
    44Rental expense relating to operating leases
    
    
    668
    
    
    
    683
    
    
    
    677Borrowing costs expensedInterest expense on finance leases
    
    
    56
    
    
    
    120
    
    
    
    132Total borrowing costs expensed
    
    
    56
    
    
    
    120
    
    
    
    132
 83




---



##### 



PROFIT FROM ORDINARY ACTIVITIES
(Continued)
 Consolidated2005
    
    2004
    
    2003$000
    
    $000
    
    $000(d) Losses/(Gains)Net loss/(gain) on disposal of property, plant and equipment
    
    
    
    
    
    
    467
    
    
    
    (12
    )Net loss/(gain) on foreign currency
    
    
    325
    
    
    
    137
    
    
    
    525
 3. INCOME TAX
 2005
    
    2004
    
    2003$000
    
    $000
    
    $000(a) The prima facie tax, using tax rates applicable in the
country of operation, on profit differs from the income tax
provided in the financial statements as follows:Prima facie tax (credit) on profit/(loss) from ordinary activities
    
    
    (3,683
    )
    
    
    (3,774
    )
    
    
    (3,202
    )Tax effect of permanent differences:Foreign tax rate differentials
    
    
    126
    
    
    
    (111
    )
    
    
    Non deductible depreciation and amortisation
    
    
    
    
    
    
    
    
    
    
    67Non deductible expenses
    
    
    44
    
    
    
    118
    
    
    
    67Research and development allowance
    
    
    (411
    )
    
    
    (271
    )
    
    
    (261
    )Sundry items
    
    
    
    
    
    
    21
    
    
    
    89Income tax adjusted for permanent
differences
    
    
    (3,924
    )
    
    
    (4,017
    )
    
    
    (3,240
    )New Zealand income tax
    
    
    
    
    
    
    
    
    
    
    (7
    )Under provision for income tax in prior years
    
    
    749
    
    
    
    Net current year tax losses and timing differences not brought to
account/(prior year tax losses and timing differences brought to
account)
    
    
    3,177
    
    
    
    4,017
    
    
    
    3,240Income tax expense attributable to operating loss
    
    
    2
    
    
    
    
    
    
    
    (7
    )
 84




---



##### 



Consolidated2005
    
    2004
    
    2003$000
    
    $000
    
    $000(b) Future income tax benefit not brought
to account at balance date as realisation
of the benefit is not regarded as virtually
certain arising from:(i) tax losses carried forward
    
    
    31,462
    
    
    
    27,691
    
    
    
    21,371(ii) timing differences
    
    
    2,119
    
    
    
    2,713
    
    
    
    4,32633,581
    
    
    
    30,404
    
    
    
    25,697
         4. CASH
 Consolidated2005
    
    2004$000
    
    $000Cash at bank and on hand
    
    
    19,421
    
    
    
    39,977Deposits at call
    
    
    24,689
    
    
    
    15,454Cash at Call
    
    
    44,110
    
    
    
    55,431Secured Cash (Refer Note 13)
    
    
    3,150
    
    
    
    3,000Total Cash
    
    
    47,260
    
    
    
    58,431
  85




---



##### 



5. RECEIVABLES
 Consolidated2005
    
    2004
    
    2003$000
    
    $000
    
    $000CurrentTrade debtors
    
    
    3,291
    
    
    
    3,274
    
    
    
    4,517Provision for doubtful debts
    
    
    (305
    )
    
    
    (438
    )
    
    
    (350
    )2,986
    
    
    
    2,836
    
    
    
    4,167Other debtors
    
    
    491
    
    
    
    100
    
    
    
    2713,477
    
    
    
    2,936
    
    
    
    4,438
 Consolidated2005
    
    2004
    
    2003$000
    
    $000
    
    $000Provision for doubtful accounts:Beginning Balance
    
    
    (438
    )
    
    
    (350
    )
    
    
    (783
    )Provisions charged to income
    
    
    
    
    
    
    (88
    )
    
    
    Amounts charged net of recovery
    
    
    133
    
    
    
    
    
    
    
    433Ending Balance
    
    
    (305
    )
    
    
    (438
    )
    
    
    (350
    )
    86




---



##### 



6. INVENTORIES
 Consolidated2005
    
    
    2004$000
    
    
    $000CurrentWork in progress  at cost
    
    
    2,722
    
    
    
    4,223Finished goods  at cost
    
    
    2,766
    
    
    
    1,406Provision for diminution in value
    
    
    
    
    
    
    (40
    )5,488
    
    
    
    5,589Non-currentRaw materials  at cost
    
    
    1,333
    
    
    
    1,020Work in progress  at cost
    
    
    3,943
    
    
    
    2,169Other inventory  at cost
    
    
    259
    
    
    
    294Provision for diminution in value
    
    
    (955
    )
    
    
    (619
    )4,580
    
    
    
    2,864
 2005
    
    2004
    
    2003$000
    
    $000
    
    $000Provision for diminution in valueBeginning balance
    
    
    (658
    )
    
    
    (954
    )
    
    
    (1,680
    )Increase in provision for diminution
    
    
    (516
    )
    
    
    (672
    )
    
    
    (8
    )Utilisation of provision
    
    
    219
    
    
    
    968
    
    
    
    734Ending balance
    
    
    (955
    )
    
    
    (658
    )
    
    
    (954
    )
 7. OTHER CURRENT ASSETS
 Consolidated2005
    
    2004$000
    
    $000Prepayments
    
    
    821
    
    
    
    865
 87




---



##### 



8. PROPERTY, PLANT AND EQUIPMENT
 Consolidated2005
    
    2004$000
    
    $000Land at cost
    
    
    1,572
    
    
    
    1,572Buildings at cost
    
    
    3,459
    
    
    
    3,459Accumulated depreciation
    
    
    (2,296
    )
    
    
    (2,005
    )1,163
    
    
    
    1,454Total land and buildings (property)
    
    
    2,735
    
    
    
    3,026Plant and equipment under lease  at cost
    
    
    2,591
    
    
    
    3,035Accumulated amortisation
    
    
    (1,624
    )
    
    
    (1,738
    )967
    
    
    
    1,297Plant and equipment  at cost
    
    
    8,721
    
    
    
    8,591Accumulated depreciation
    
    
    (6,564
    )
    
    
    (6,225
    )2,157
    
    
    
    2,366Leasehold improvements  at cost
    
    
    
    
    
    
    382Accumulated depreciation
    
    
    
    
    
    
    (343
    )
    
    
    
    39Total property, plant and equipment  at cost
    
    
    16,343
    
    
    
    17,039Accumulated amortisation and depreciation
    
    
    (10,484
    )
    
    
    (10,311
    )Total property, plant and equipment
    
    
    5,859
    
    
    
    6,728
  a) Assets pledged as security
   Consolidated2005
    
    2004$000
    
    $000Plant and equipment under lease
    
    
    967
    
    
    
    1,297
 88




---



##### 



b) Reconciliations
  Consolidated2005
    
    2004$000
    
    $000Freehold landCarrying amount at beginning
    
    
    1,572
    
    
    
    1,545Additions
    
    
    
    
    
    
    271,572
    
    
    
    1,572Buildings on freehold landCarrying amount at beginning
    
    
    1,454
    
    
    
    1,745Additions
    
    
    
    
    
    
    Depreciation expense
    
    
    (291
    )
    
    
    (291
    )1,163
    
    
    
    1,454Plant and equipment under leaseCarrying amount at beginning
    
    
    1,297
    
    
    
    1,746Additions
    
    
    
    
    
    
    Disposals
    
    
    
    
    
    
    (35
    )Amortisation expense
    
    
    (330
    )
    
    
    (414
    )967
    
    
    
    1,297Plant and equipmentCarrying amount at beginning
    
    
    2,366
    
    
    
    3,195Additions
    
    
    757
    
    
    
    649Disposals
    
    
    
    
    
    
    (513
    )Depreciation expense
    
    
    (966
    )
    
    
    (965
    )2,157
    
    
    
    2,366Leasehold improvementsCarrying amount at beginning
    
    
    39
    
    
    
    52Additions
    
    
    
    
    
    
    38Depreciation expense
    
    
    (39
    )
    
    
    (51
    )
    
    
    
    39
 9. INTERESTS IN CONTROLLED ENTITIES
 Equity
    
    Cost ofHolding
    
    NovogenLimitedsInvestmentName of Entity
    
    Country of
    
    Class of
    
    2005
    
    2004
    
    2005
    
    2004Incorporation
    
    Shares
    
    %
    
    %
    
    $000
    
    $000Novogen Laboratories Pty Ltd (i)
    
    Australia
    
    Ordinary
    
    
    100
    
    
    
    100
    
    
    
    400
    
    
    
    400Novogen Research Pty Ltd (i)
    
    Australia
    
    Ordinary
    
    
    100
    
    
    
    100
    
    
    
    7,000
    
    
    
    7,000Phytosearch Pty Ltd
    
    Australia
    
    Ordinary
    
    
    100
    
    
    
    100
    
    
    
    
    
    
    
    Phytogen Pty Ltd
    
    Australia
    
    Ordinary
    
    
    100
    
    
    
    100
    
    
    
    20
    
    
    
    20Glycotex Pty Ltd
    
    Australia
    
    Ordinary
    
    
    100
    
    
    
    100
    
    
    
    
    
    
    
    
 89




---



##### 



Equity
    
    Cost ofHolding
    
    NovogenLimitedsInvestmentName of Entity
    
    Country of
    
    Class of
    
    2005
    
    2004
    
    2005
    
    2004Incorporation
    
    Shares
    
    %
    
    %
    
    $000
    
    $000Norvogen Pty Ltd
    
    Australia
    
    Ordinary
    
    
    100
    
    
    
    100
    
    
    
    
    
    
    
    Central Coast Properties Pty Ltd (i)
    
    Australia
    
    Ordinary
    
    
    100
    
    
    
    100
    
    
    
    
    
    
    
    Novogen Inc.
    
    USA
    
    Ordinary
    
    
    100
    
    
    
    100
    
    
    
    
    
    
    
    Glycotex, Inc.
    
    USA
    
    Ordinary
    
    
    84.3
    
    
    
    97.6
    
    
    
    54
    
    
    
    Novogen Limited (UK)
    
    UK
    
    Ordinary
    
    
    100
    
    
    
    100
    
    
    
    
    
    
    
    Promensil Limited
    
    UK
    
    Ordinary
    
    
    100
    
    
    
    100
    
    
    
    
    
    
    
    Novogen BV
    
    Netherlands
    
    Ordinary
    
    
    100
    
    
    
    100
    
    
    
    
    
    
    
    Novogen New Zealand Limited
    
    NZ
    
    Ordinary
    
    
    100
    
    
    
    100
    
    
    
    
    
    
    
    Novogen Canada Limited
    
    Canada
    
    Ordinary
    
    
    100
    
    
    
    100
    
    
    
    
    
    
    
    Marshall Edwards, Inc.
    
    USA
    
    Ordinary
    
    
    86.9
    
    
    
    86.9
    
    
    
    
    
    
    
    Marshall Edwards Pty Limited
    
    Australia
    
    Ordinary
    
    
    86.9
    
    
    
    86.9
    
    
    
    
    
    
    
    7,474
    
    
    
    7,420
 Entities subject to class order relief
   90




---



##### 



Summarised Statement of Financial Performance
Year ended 30 June, 2005
 2005
    
    
    2004$000
    
    
    $000Operating (loss)/profit before income tax
    
    
    (5,076
    )
    
    
    2,667Income tax attributable to operating (loss)/profit
    
    
    
    
    
    
    Operating (loss)/profit after income tax
    
    
    (5,076
    )
    
    
    2,667Accumulated losses at the beginning of the
financial year
    
    
    (50,448
    )
    
    
    (53,115
    )Accumulated losses at the end of the financial year
    
    
    (55,524
    )
    
    
    (50,448
    )
 Summarised Statement of Financial Position
as at 30 June, 2005
 2005
    
    2004$000
    
    $000CURRENT ASSETSCash
    
    
    15,655
    
    
    
    21,552Receivables
    
    
    5,050
    
    
    
    3,348Inventories
    
    
    3,249
    
    
    
    2,839Total current assets
    
    
    23,954
    
    
    
    27,739NON-CURRENT ASSETSReceivables
    
    
    41,873
    
    
    
    43,750Inventories
    
    
    4,016
    
    
    
    2,313Property, plant and equipment
    
    
    5,767
    
    
    
    6,660Investments
    
    
    54
    
    
    
    Total non-current assets
    
    
    51,710
    
    
    
    52,723TOTAL ASSETS
    
    
    75,664
    
    
    
    80,462CURRENT LIABILITIESPayables
    
    
    3,419
    
    
    
    3,333Interest bearing liabilities
    
    
    750
    
    
    
    843Provisions
    
    
    445
    
    
    
    334Total current liabilities
    
    
    4,614
    
    
    
    4,510NON-CURRENT LIABILITIESInterest bearing liabilities
    
    
    15
    
    
    
    765Provisions
    
    
    253
    
    
    
    270Total non-current liabilities
    
    
    268
    
    
    
    1,035TOTAL LIABILITIES
    
    
    4,882
    
    
    
    5,545NET ASSETS
    
    
    70,782
    
    
    
    74,917EQUITYContributed equity
    
    
    126,306
    
    
    
    125,365Accumulated losses
    
    
    (55,524
    )
    
    
    (50,448
    )TOTAL EQUITY
    
    
    70,782
    
    
    
    74,917
 91




---



##### 



10. PAYABLES
 Consolidated2005
    
    2004$000
    
    $000CurrentTrade creditors
    
    
    3,078
    
    
    
    2,986Accrued trade creditors
    
    
    1,689
    
    
    
    2,213Accrued clinical trial payments
    
    
    734
    
    
    
    7645,501
    
    
    
    5,963
     11. INTEREST BEARING LIABILITIES
 Consolidated2005
    
    2004$000
    
    $000CurrentLease liabilities (secured) (Note 23b)
    
    
    750
    
    
    
    843750
    
    
    
    843Non-currentLease liabilities (secured) (Note 23b)
    
    
    15
    
    
    
    76515
    
    
    
    765Secured lease liability  finance leases
    
    
    765
    
    
    
    1,608
   92




---



##### 



12. PROVISIONS
 Consolidated2005
    
    2004$000
    
    $000CurrentEmployee benefits
    
    
    474
    
    
    
    361Non-currentEmployee benefits
    
    
    253
    
    
    
    270727
    
    
    
    631
 13. FINANCING ARRANGEMENTS
 Consolidated2005
    
    2004$000
    
    $000(a) Financing arrangementsUnrestricted access was available at balance date
to the following lines of creditTotal facilitiesLease facilities
    
    
    4,000
    
    
    
    4,0004,000
    
    
    
    4,000Used at balance dateLease facilities
    
    
    1,454
    
    
    
    2,3531,454
    
    
    
    2,353Unused at balance date
    
    
    2,546
    
    
    
    1,647Lease facilities
    
    
    2,546
    
    
    
    1,647
   93




---



##### 



14. CONTRIBUTED EQUITY
 (a) Issued and paid up capital
 Consolidated2005
    
    2004$000
    
    $000Novogen Limited97,045,662 (2004: 96,723,543) ordinary shares
    
    
    126,306
    
    
    
    125,364Marshall Edwards, Inc.56,938,000 (2004: 56,938,000) ordinary shares
    
    
    44,424
    
    
    
    44,424Glycotex, Inc16,644,446 (2004: 14,350,000) ordinary shares
    
    
    5,505
    
    
    
    488176,235
    
    
    
    170,276
 Terms and conditions of contributed equity:
 Novogen Limited
    Number of
    
    
    Issue
    
    
    $000shares
    
    
    price$On issue 1 July, 2004
    
    
    96,723,543
    
    
    
    
    
    
    
    125,364Options converted to shares
    
    
    153,120
    
    
    
    4.00
    
    
    
    613Options converted to shares
    
    
    104,968
    
    
    
    1.53
    
    
    
    161Options converted to shares
    
    
    54,031
    
    
    
    2.10
    
    
    
    114Total options exercised during the period
    
    
    312,119
    
    
    
    
    
    
    
    888New shares issued  exercise of Glycotex convertible security
    
    
    10,000
    
    
    
    5.40
    
    
    
    54On issue 30 June, 2005
    
    
    97,045,662
    
    
    
    
    
    
    
    126,306
 Marshall Edwards, Inc.
  94




---



##### 




    
    one share of Marshall Edwards, Inc., common stock; and
    
    one warrant to purchase a share of Marshall Edwards, Inc. common stock at an exercise price
equal to US$9.00. These warrants were immediately exercisable from the date of issue and expire 3
years from their date of issue.
    Number of shares
    
    Issue price
    
    $000$On issue 1 July, 2004
    
    
    56,938,000
    
    
    
    
    
    44,424On issue 30 June, 2005
    
    
    56,938,000
    
    
    
    
    
    44,424
 Glycotex, Inc.
    95




---



##### 



Number ofshares
    
    Issue price
    

$000$On issue 1 July, 2004
    
    
    14,350,000
    
    
    
    
    
    
    
    488Options converted to shares
    
    
    630,000
    
    
    
    1.43
    
    
    
    900New shares issued
    
    
    1,664,446
    
    
    
    3.11
    
    
    
    5,183Elimination of share capital owned
by parent company following exercise
of convertible security
    
    
    
    
    
    
    
    
    
    
    (54
    )less Outside Equity Interest
    
    
    
    
    
    
    
    
    
    
    (1,012
    )Total shares issued during the period
    
    
    2,294,446
    
    
    
    
    
    
    
    5,017On issue 30 June, 2005
    
    
    16,644,446
    
    
    
    
    
    
    
    5,505
 96




---



##### 



Converted
    
    OptionsOn issue
    
    Issued
    
    to fully
    
    forfeited
    
    On issue
    
    ExercisableGrant
    
    
    
    Exercise
    
    Expiry
    
    Original
    
    1 July,
    
    during the
    
    paid
    
    during the
    
    30 June,
    
    30 June,Date
    
    
    
    Price
    
    Date
    
    issue
    
    2004
    
    year
    
    shares
    
    year
    
    2005
    
    200513/03/00
    
    (i)
    
    $
    4.00
    
    
    
    13/03/05
    
    
    
    221,028
    
    
    
    99,776
    
    
    
    
    
    
    
    97,096
    
    
    
    2,680
    
    
    
    
    
    
    
    13/03/00
    
    (ii)
    
    $
    4.00
    
    
    
    13/03/05
    
    
    
    27,360
    
    
    
    21,840
    
    
    
    
    
    
    
    21,840
    
    
    
    
    
    
    
    
    
    
    
    20/07/00
    
    (v)
    
    $
    3.5819
    
    
    
    20/07/05
    
    
    
    50,180
    
    
    
    50,180
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    50,180
    
    
    
    50,18030/11/00
    
    (i)
    
    $
    4.00
    
    
    
    30/11/05
    
    
    
    238,220
    
    
    
    134,893
    
    
    
    
    
    
    
    32,372
    
    
    
    5,832
    
    
    
    96,689
    
    
    
    96,68930/11/00
    
    (ii)
    
    $
    4.00
    
    
    
    30/11/05
    
    
    
    7,248
    
    
    
    3,624
    
    
    
    
    
    
    
    1,812
    
    
    
    
    
    
    
    1,812
    
    
    
    1,81227/10/00
    
    (iv)
    
    $
    4.01
    
    
    
    27/10/05
    
    
    
    9,384
    
    
    
    6,256
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,256
    
    
    
    6,25610/08/01
    
    (i)
    
    $
    1.53
    
    
    
    10/08/06
    
    
    
    695,528
    
    
    
    354,197
    
    
    
    
    
    
    
    104,968
    
    
    
    1,888
    
    
    
    247,341
    
    
    
    137,69413/07/01
    
    (v)
    
    $
    2.05
    
    
    
    13/07/06
    
    
    
    101,950
    
    
    
    101,950
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    101,950
    
    
    
    101,95030/11/02
    
    (i)
    
    $
    2.10
    
    
    
    30/11/07
    
    
    
    526,332
    
    
    
    419,981
    
    
    
    
    
    
    
    54,031
    
    
    
    15,472
    
    
    
    350,478
    
    
    
    149,78630/11/02
    
    (ii)
    
    $
    2.10
    
    
    
    30/11/07
    
    
    
    37,200
    
    
    
    37,200
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    37,200
    
    
    
    18,60027/02/04
    
    (i)
    
    $
    6.76
    
    
    
    27/02/09
    
    
    
    189,536
    
    
    
    174,064
    
    
    
    
    
    
    
    
    
    
    
    11,780
    
    
    
    162,284
    
    
    
    40,57127/02/04
    
    (ii)
    
    $
    6.76
    
    
    
    27/02/09
    
    
    
    6,660
    
    
    
    6,660
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,660
    
    
    
    1,66516/03/05
    
    (i)
    
    $
    4.90
    
    
    
    16/03/10
    
    
    
    276,844
    
    
    
    
    
    
    
    276,844
    
    
    
    
    
    
    
    
    
    
    
    276,844
    
    
    
    16/03/05
    
    (ii)
    
    $
    4.90
    
    
    
    16/03/10
    
    
    
    14,244
    
    
    
    
    
    
    
    14,244
    
    
    
    
    
    
    
    
    
    
    
    14,244
    
    
    
    Total
    
    
    
    
    
    
    
    
    
    
    
    
    2,401,714
    
    
    
    1,410,621
    
    
    
    291,088
    
    
    
    312,119
    
    
    
    37,652
    
    
    
    1,351,938
    
    
    
    605,203
 97




---



##### 



Converted
    
    OptionsOn issue
    
    Issued
    
    to fully
    
    forfeited
    
    On issue
    
    ExercisableGrant
    
    
    
    Exercise
    
    Expiry
    
    Original
    
    1 July
    
    during the
    
    paid
    
    during the
    
    30 June
    
    30 June,Date
    
    
    
    Price
    
    Date
    
    issue
    
    2003
    
    year
    
    shares
    
    year
    
    2004
    
    200424/09/98
    
    (iii)
    
    $
    2.91
    
    
    
    24/09/03
    
    
    
    700,000
    
    
    
    700,000
    
    
    
    
    
    
    
    700,000
    
    
    
    
    
    
    
    
    
    
    
    26/03/99
    
    (i)
    
    $
    2.84
    
    
    
    26/03/04
    
    
    
    217,000
    
    
    
    79,436
    
    
    
    
    
    
    
    79,436
    
    
    
    
    
    
    
    
    
    
    
    26/03/99
    
    (ii)
    
    $
    2.84
    
    
    
    26/03/04
    
    
    
    38,572
    
    
    
    38,572
    
    
    
    
    
    
    
    38,572
    
    
    
    
    
    
    
    
    
    
    
    23/06/99
    
    (v)
    
    $
    2.9460
    
    
    
    23/06/04
    
    
    
    20,000
    
    
    
    20,000
    
    
    
    
    
    
    
    20,000
    
    
    
    
    
    
    
    
    
    
    
    23/06/99
    
    (v)
    
    $
    2.7725
    
    
    
    23/06/04
    
    
    
    85,000
    
    
    
    85,000
    
    
    
    
    
    
    
    85,000
    
    
    
    
    
    
    
    
    
    
    
    13/03/00
    
    (i)
    
    $
    4.00
    
    
    
    13/03/05
    
    
    
    221,028
    
    
    
    125,480
    
    
    
    
    
    
    
    23,575
    
    
    
    2,129
    
    
    
    99,776
    
    
    
    99,77613/03/00
    
    (ii)
    
    $
    4.00
    
    
    
    13/03/05
    
    
    
    27,360
    
    
    
    27,360
    
    
    
    
    
    
    
    5,520
    
    
    
    
    
    
    
    21,840
    
    
    
    21,84020/07/00
    
    (v)
    
    $
    3.5819
    
    
    
    20/07/05
    
    
    
    50,180
    
    
    
    50,180
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    50,180
    
    
    
    50,18030/11/00
    
    (i)
    
    $
    4.00
    
    
    
    30/11/05
    
    
    
    238,220
    
    
    
    159,548
    
    
    
    
    
    
    
    19,252
    
    
    
    5,403
    
    
    
    134,893
    
    
    
    101,17030/11/00
    
    (ii)
    
    $
    4.00
    
    
    
    30/11/05
    
    
    
    7,248
    
    
    
    7,248
    
    
    
    
    
    
    
    3,624
    
    
    
    
    
    
    
    3,624
    
    
    
    2,71827/10/00
    
    (iv)
    
    $
    4.01
    
    
    
    27/10/05
    
    
    
    9,384
    
    
    
    6,256
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,256
    
    
    
    4,69210/08/01
    
    (i)
    
    $
    1.53
    
    
    
    10/08/06
    
    
    
    695,528
    
    
    
    499,805
    
    
    
    
    
    
    
    101,080
    
    
    
    44,528
    
    
    
    354,197
    
    
    
    177,09913/07/01
    
    (v)
    
    $
    2.05
    
    
    
    13/07/06
    
    
    
    101,950
    
    
    
    101,950
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    101,950
    
    
    
    101,95030/11/02
    
    (i)
    
    $
    2.10
    
    
    
    30/11/07
    
    
    
    526,332
    
    
    
    503,916
    
    
    
    
    
    
    
    35,699
    
    
    
    48,236
    
    
    
    419,981
    
    
    
    104,99530/11/02
    
    (ii)
    
    $
    2.10
    
    
    
    30/11/07
    
    
    
    37,200
    
    
    
    37,200
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    37,200
    
    
    
    9,30027/02/04
    
    (i)
    
    $
    6.76
    
    
    
    27/02/09
    
    
    
    189,536
    
    
    
    
    
    
    
    189,536
    
    
    
    
    
    
    
    15,472
    
    
    
    174,064
    
    
    
    27/02/04
    
    (ii)
    
    $
    6.76
    
    
    
    27/02/09
    
    
    
    6,660
    
    
    
    
    
    
    
    6,660
    
    
    
    
    
    
    
    
    
    
    
    6,660
    
    
    
    Total
    
    
    
    
    
    
    
    
    
    
    
    
    3,171,198
    
    
    
    2,441,951
    
    
    
    196,196
    
    
    
    1,111,758
    
    
    
    115,768
    
    
    
    1,410,621
    
    
    
    673,720
 
 (i)
    
    Options issued under the Employee Share Option Plan. Options vest in four equal annual
instalments over the vesting period.(ii)
    
    Options issued to consultants. Options vest in four equal annual instalments over the vesting
period.(iii)
    
    Options issued to the Managing Director by resolution of shareholders on 24 September, 1998.(iv)
    
    Option issued to Non-executive Directors by resolution of shareholders on 27 October, 2000.
Options vest in four equal annual instalments over the vesting period.(v)
    
    Options issued to consultants Options vest twelve months after grant date.The last trade of Novogen Limited shares on the Australian Stock Exchange on June 30, 2005 was
$4.65. Share option plans
 Employee share option plan
  98




---



##### 



Consultant options
  15. ACCUMULATED LOSSES AND RESERVES
 (a) Accumulated Losses
 Consolidated2005
    
    2004$000
    
    $000Balance at the beginning of the year
    
    
    (104,972
    )
    
    
    (94,424
    )Adjustment to opening retained earnings
attributed to outside equity interest holders
    
    
    32
    
    
    
    387Current year losses
    
    
    (11,129
    )
    
    
    (10,935
    )Balance at the end of the year
    
    
    (116,069
    )
    
    
    (104,972
    )
 (b) Foreign currency translation reserve
 Consolidated2005
    
    2004$000
    
    $000(i) Nature and purpose of reserveThe foreign currency translation reserve is used to
record exchange differences arising from the translation
of the financial statements of self-sustaining foreign
operations(ii) Movements in reserveBalance at beginning of year
    
    
    (449
    )
    
    
    (1,956
    )(Loss)/gain on translation of overseas controlled entities
    
    
    (2,964
    )
    
    
    1,507Balance at end of year
    
    
    (3,413
    )
    
    
    (449
    )
 99




---



##### 



16. OUTSIDE EQUITY INTEREST
 Consolidated2005
    
    2004$000
    
    $000Reconciliation of outside equity interest in controlled entitiesOpening balance
    
    
    4,356
    
    
    
    571Additions to outside equity interest by way of share issue- Marshall Edwards, Inc.
    
    
    
    
    
    
    5,496- Glycotex, Inc.
    
    
    981
    
    
    
    Add Share of reserves of controlled entities- Marshall Edwards, Inc.
    
    
    (448
    )
    
    
    (67
    )- Glycotex, Inc.
    
    
    2
    
    
    
    Add Share of operating losses of controlled entities- Marshall Edwards, Inc.
    
    
    (1,078
    )
    
    
    (1,639
    )- Glycotex, Inc.
    
    
    (74
    )
    
    
    (5
    )Closing balance
    
    
    3,739
    
    
    
    4,356
 17. SEGMENT INFORMATION
 Segment accounting policies
   100




---



##### 



PRIMARY SEGMENT
 Australia/NZ
    
    
    North America
    
    
    Europe
    
    
    Elimination
    
    
    Consolidated2005
    
    
    2004
    
    
    2003
    
    
    2005
    
    
    2004
    
    
    2003
    
    
    2005
    
    
    2004
    
    
    2003
    
    
    2005
    
    
    2004
    
    
    2003
    
    
    2005
    
    
    2004
    
    
    2003$000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000Geographical segmentsRevenueSales to customers
outside the consolidated
entity
    
    
    4,646
    
    
    
    4,022
    
    
    
    6,228
    
    
    
    6,240
    
    
    
    6,357
    
    
    
    10,658
    
    
    
    2,518
    
    
    
    2,341
    
    
    
    2,744
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,404
    
    
    
    12,720
    
    
    
    19,630Other revenues from
customers outside the
consolidated entity
    
    
    2,879
    
    
    
    2,327
    
    
    
    3,360
    
    
    
    
    
    
    
    166
    
    
    
    
    
    
    
    76
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,955
    
    
    
    2,494
    
    
    
    3,360Intersegment Revenues
    
    
    3,144
    
    
    
    4,043
    
    
    
    6,457
    
    
    
    29
    
    
    
    43
    
    
    
    71
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,173
    )
    
    
    (4,086
    )
    
    
    (6,528
    )
    
    
    
    
    
    
    
    
    
    
    Total segment revenue
    
    
    10,669
    
    
    
    10,392
    
    
    
    16,045
    
    
    
    6,269
    
    
    
    6,566
    
    
    
    10,729
    
    
    
    2,594
    
    
    
    2,342
    
    
    
    2,744
    
    
    
    (3,173
    )
    
    
    (4,086
    )
    
    
    (6,528
    )
    
    
    16,359
    
    
    
    15,214
    
    
    
    22,990Unallocated revenue  interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,319
    
    
    
    1,232
    
    
    
    1,266Total consolidated revenue
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    17,678
    
    
    
    16,446
    
    
    
    24,256ResultsSegment net gain/(loss)
on foreign currency
    
    
    (5,380
    )
    
    
    (405
    )
    
    
    (9,230
    )
    
    
    4,079
    
    
    
    859
    
    
    
    7,990
    
    
    
    975
    
    
    
    (591
    )
    
    
    715
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (326
    )
    
    
    (137
    )
    
    
    (525
    )Segment result (loss)
    
    
    (25,773
    )
    
    
    (6,268
    )
    
    
    (89,654
    )
    
    
    942
    
    
    
    (2,502
    )
    
    
    3,146
    
    
    
    644
    
    
    
    (1,252
    )
    
    
    (376
    )
    
    
    11,964
    
    
    
    (2,437
    )
    
    
    76,343
    
    
    
    (12,223
    )
    
    
    (12,459
    )
    
    
    (10,541
    )Unallocated expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (56
    )
    
    
    (120
    )
    
    
    (132
    )Consolidated entity
profit/(loss) from
ordinary activities
before income tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (12,279
    )
    
    
    (12,579
    )
    
    
    (10,673
    )Income tax credit/(expense)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2
    )
    
    
    
    
    
    
    7Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (12,281
    )
    
    
    (12,579
    )
    
    
    (10,666
    )
 101




---



##### 



SEGMENT INFORMATION  PRIMARY SEGMENT (Contd)
 Australia/NZ
    
    
    North America
    
    
    Europe
    
    
    Elimination
    
    
    Consolidated2005
    
    
    2004
    
    
    2005
    
    
    2004
    
    
    2005
    
    
    2004
    
    
    2005
    
    
    2004
    
    
    2005
    
    
    2004$000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000Geographical segmentsAssetsSegment assets
    
    
    81,249
    
    
    
    89,044
    
    
    
    56,983
    
    
    
    56,178
    
    
    
    1,615
    
    
    
    1,128
    
    
    
    (72,362
    )
    
    
    (68,937
    )
    
    
    67,485
    
    
    
    77,413LiabilitiesSegment liabilities
    
    
    8,484
    
    
    
    8,154
    
    
    
    46,599
    
    
    
    50,179
    
    
    
    10,343
    
    
    
    10,499
    
    
    
    (58,433
    )
    
    
    (60,630
    )
    
    
    6,993
    
    
    
    8,202Other segment informationAcquisition of
property plant and
equipment, intangible
assets and other non
current assets
    
    
    686
    
    
    
    671
    
    
    
    47
    
    
    
    43
    
    
    
    24
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    757
    
    
    
    714Depreciation
    
    
    1,255
    
    
    
    1,249
    
    
    
    34
    
    
    
    49
    
    
    
    7
    
    
    
    9
    
    
    
    
    
    
    
    
    
    
    
    1,296
    
    
    
    1,307Amortisation
    
    
    330
    
    
    
    414
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    330
    
    
    
    414Non cash
expenses other than
depreciation and
amortisation
    
    
    4,317
    
    
    
    (1,194
    )
    
    
    151
    
    
    
    338
    
    
    
    30
    
    
    
    53
    
    
    
    (4,202
    )
    
    
    2,035
    
    
    
    296
    
    
    
    1,232Long Lived Assets
    
    
    5,767
    
    
    
    6,660
    
    
    
    70
    
    
    
    64
    
    
    
    22
    
    
    
    5
    
    
    
    
    
    
    
    
    
    
    
    5,859
    
    
    
    6,728
   102




---



##### 



SEGMENT INFORMATION  SECONDARY SEGMENT
 Pharmaceuticalresearch andDietary supplements
    
    development
    
    Elimination
    
    Consolidated2005
    
    2004
    
    2005
    
    2004
    
    2005
    
    2004
    
    2005
    
    2004$000
    
    $000
    
    $000
    
    $000
    
    $000
    
    $000
    
    $000
    
    $000Segment revenue
    
    
    14,703
    
    
    
    14,189
    
    
    
    2,975
    
    
    
    2,257
    
    
    
    
    
    
    
    
    
    
    
    17,678
    
    
    
    16,446Segment assets
    
    
    35,183
    
    
    
    47,490
    
    
    
    35,117
    
    
    
    38,519
    
    
    
    (2,815
    )
    
    
    (8,596
    )
    
    
    67,485
    
    
    
    77,413Acquisition of
property plant and
equipment,
intangible assets
and other non
current assets
    
    
    272
    
    
    
    401
    
    
    
    485
    
    
    
    313
    
    
    
    
    
    
    
    
    
    
    
    757
    
    
    
    714
 18. DIRECTOR AND EXECUTIVE DISCLOSURES
 a) Details of specified Directors and specified Executives
 (i) Specified DirectorsPA Johnston
    
    Chairman (Non-executive)C Naughton
    
    CEOGE Kelly
    
    Executive DirectorPJ Nestel AO
    
    Director (Non-executive)PB Simpson
    
    Director (Non-executive)LC Read
    
    Director (Non-executive)GM Leppinus
    
    Director (Non-executive) appointed February 24, 2005(ii) Specified ExecutivesAJ Husband
    
    Research DirectorDR Seaton
    
    Chief Financial OfficerWJ Lancaster
    
    VP Commercial and Corporate DevelopmentBM Palmer
    
    General Manager OperationsCD Kearney
    
    General Manager Consumer BusinessRL Erratt
    
    Company Secretary
 b) Remuneration of specified Directors and specified Executives
   103




---



##### 



104




---



##### 



PostPrimary
    
    
    employment
    
    
    Equity
    
    
    Other
    
    
    TotalNon-monetary
    
    
    Superan-Salary & fees
    
    
    benefits
    
    
    nuation
    
    

options
    
    
    BonusesSpecified DirectorsPA Johnston2005
    
    
    
    104,588
    
    
    
    
    
    
    
    9,412
    
    
    
    136
    
    
    
    
    
    
    
    114,1362004
    
    
    
    97,706
    
    
    
    
    
    
    
    8,794
    
    
    
    668
    
    
    
    
    
    
    
    107,168C Naughton2005
    
    
    
    507,724
    
    
    
    53,643
    
    
    
    45,696
    
    
    
    
    
    
    
    
    
    
    
    607,0632004
    
    
    
    419,016
    
    
    
    52,865
    
    
    
    37,711
    
    
    
    
    
    
    
    
    
    
    
    509,592GE Kelly2005
    
    
    
    334,314
    
    
    
    29,981
    
    
    
    30,088
    
    
    
    
    
    
    
    
    
    
    
    394,3832004
    
    
    
    306,234
    
    
    
    34,317
    
    
    
    27,561
    
    
    
    
    
    
    
    
    
    
    
    368,112PJ Nestel AO2005
    
    
    
    82,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    82,0002004
    
    
    
    74,500
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    74,500PB Simpson2005
    
    
    
    51,376
    
    
    
    
    
    
    
    4,624
    
    
    
    136
    
    
    
    
    
    
    
    56,1362004
    
    
    
    44,494
    
    
    
    
    
    
    
    4,006
    
    
    
    668
    
    
    
    
    
    
    
    49,168LC Read2005
    
    
    
    40,368
    
    
    
    
    
    
    
    3,632
    
    
    
    
    
    
    
    
    
    
    
    44,0002004
    
    
    
    25,688
    
    
    
    
    
    
    
    2,312
    
    
    
    
    
    
    
    
    
    
    
    28,000GM Leppinus2005
    
    
    
    16,820
    
    
    
    
    
    
    
    1,513
    
    
    
    
    
    
    
    
    
    
    
    18,3332004
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total Remuneration: Specified Directors2005
    
    
    
    1,137,190
    
    
    
    83,624
    
    
    
    94,965
    
    
    
    272
    
    
    
    
    
    
    
    1,316,0512004
    
    
    
    967,638
    
    
    
    87,182
    
    
    
    80,384
    
    
    
    1,336
    
    
    
    
    
    
    
    1,136,540Specified ExecutivesAJ Husband2005
    
    
    
    286,818
    
    
    
    51,155
    
    
    
    25,814
    
    
    
    40,940
    
    
    
    
    
    
    
    404,7272004
    
    
    
    234,371
    
    
    
    53,076
    
    
    
    20,605
    
    
    
    40,579
    
    
    
    
    
    
    
    348,631DR Seaton2005
    
    
    
    298,526
    
    
    
    20,085
    
    
    
    26,867
    
    
    
    41,031
    
    
    
    
    
    
    
    386,5092004
    
    
    
    257,203
    
    
    
    20,085
    
    
    
    23,148
    
    
    
    37,795
    
    
    
    
    
    
    
    338,231WJ Lancaster (USA)2005
    
    
    
    186,822
    
    
    
    6,197
    
    
    
    19,915
    
    
    
    21,595
    
    
    
    
    
    
    
    234,5292004
    
    
    
    209,225
    
    
    
    6,295
    
    
    
    18,531
    
    
    
    22,851
    
    
    
    
    
    
    
    256,902BM Palmer2005
    
    
    
    142,942
    
    
    
    33,594
    
    
    
    12,865
    
    
    
    23,366
    
    
    
    
    
    
    
    212,7672004
    
    
    
    131,976
    
    
    
    27,196
    
    
    
    11,877
    
    
    
    24,114
    
    
    
    
    
    
    
    195,163CD Kearney2005
    
    
    
    164,376
    
    
    
    22,951
    
    
    
    14,794
    
    
    
    21,417
    
    
    
    
    
    
    
    223,5382004
    
    
    
    152,880
    
    
    
    22,951
    
    
    
    13,759
    
    
    
    17,210
    
    
    
    
    
    
    
    206,800RL Erratt2005
    
    
    
    152,026
    
    
    
    20,157
    
    
    
    13,682
    
    
    
    23,774
    
    
    
    
    
    
    
    209,6392004
    
    
    
    142,664
    
    
    
    21,602
    
    
    
    12,839
    
    
    
    25,165
    
    
    
    
    
    
    
    202,270Total remuneration: specified Executives2005
    
    
    
    1,231,510
    
    
    
    154,139
    
    
    
    113,937
    
    
    
    172,123
    
    
    
    
    
    
    
    1,671,7092004
    
    
    
    1,128,319
    
    
    
    151,205
    
    
    
    100,759
    
    
    
    167,714
    
    
    
    
    
    
    
    1,547,997
 105




---



##### 



c) Remuneration options: Granted and vested during the year
  Terms and conditions for each grantValue per
    
    
    Exercise
    
    
    First
    
    
    LastVested
    
    
    Granted
    
    
    
    
    
    
    option at
    
    
    price per
    
    
    exercise
    
    
    exercisenumber
    
    
    number
    
    
    Grant date
    
    
    grant date
    
    
    share
    
    
    date
    
    
    date($)
    
    
    ($)Specified DirectorsPA Johnston
    
    
    782PB Simpson
    
    
    782Specified ExecutivesAJ Husband
    
    
    27,730
    
    
    
    22,592
    
    
    
    16/03/2005
    
    
    
    2.96
    
    
    
    4.90
    
    
    
    16/03/2006
    
    
    
    16/03/2010DR Seaton
    
    
    27,970
    
    
    
    22,592
    
    
    
    16/03/2005
    
    
    
    2.96
    
    
    
    4.90
    
    
    
    16/03/2006
    
    
    
    16/03/2010WJ Lancaster (USA)
    
    
    17,070
    
    
    
    10,224
    
    
    
    16/03/2005
    
    
    
    2.96
    
    
    
    4.90
    
    
    
    16/03/2006
    
    
    
    16/03/2010BM Palmer
    
    
    16,191
    
    
    
    12,392
    
    
    
    16/03/2005
    
    
    
    2.96
    
    
    
    4.90
    
    
    
    16/03/2006
    
    
    
    16/03/2010CD Kearney
    
    
    8,001
    
    
    
    12,088
    
    
    
    16/03/2005
    
    
    
    2.96
    
    
    
    4.90
    
    
    
    16/03/2006
    
    
    
    16/03/2010RL Erratt
    
    
    18,547
    
    
    
    12,264
    
    
    
    16/03/2005
    
    
    
    2.96
    
    
    
    4.90
    
    
    
    16/03/2006
    
    
    
    16/03/2010Total
    
    
    117,073
    
    
    
    92,152
 106




---



##### 



d) Shares issued on exercise of remuneration options
 Sharesissued
    
    
    Paid
    
    
    Unpaidnumber
    
    
    $ per share
    
    
    $ per shareSpecified ExecutivesAJ Husband
    
    
    26,256
    
    
    
    4.00
    
    
    
    WJ Lancaster (USA)
    
    
    51,891
    
    
    
    2.59
    
    
    
    BM Palmer
    
    
    14,888
    
    
    
    4.00
    
    
    
    RL Erratt
    
    
    10,328
    
    
    
    4.00
    
    
    
    Total
    
    
    103,363
 e) Option holding of specified Directors and specified Executives
 Balance at
    
    
    
    
    
    
    
    
    
    
    Net
    
    
    
    
    
    
    Vested atbeginning of
    
    
    Granted as
    
    
    Options
    
    
    change
    
    
    Balance at
    
    
    30 June,period
    
    
    remuneration
    
    
    exercised
    
    
    other
    
    
    end of period
    
    
    2005
    
    
    Not1 July, 2004
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    30 June, 2005
    
    
    Total
    
    
    exercisable
    
    
    ExercisableSpecified DirectorsPA Johnston
    
    
    3,128
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,128
    
    
    
    3,128
    
    
    
    
    
    
    
    3,128C Naughton
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    PJ Nestel AO
    
    
    20,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20,000
    
    
    
    20,000
    
    
    
    
    
    
    
    20,000PB Simpson
    
    
    3,128
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,128
    
    
    
    3,128
    
    
    
    
    
    
    
    3,128Specified ExecutivesAJ Husband
    
    
    137,176
    
    
    
    22,592
    
    
    
    (26,256
    )
    
    
    
    
    
    
    133,512
    
    
    
    70,180
    
    
    
    
    
    
    
    70,180DR Seaton
    
    
    90,738
    
    
    
    22,592
    
    
    
    
    
    
    
    
    
    
    
    113,330
    
    
    
    49,764
    
    
    
    
    
    
    
    49,764WJ Lancaster (USA)
    
    
    77,624
    
    
    
    10,224
    
    
    
    (51,891
    )
    
    
    
    
    
    
    35,957
    
    
    
    1,962
    
    
    
    
    
    
    
    1,962BM Palmer
    
    
    79,652
    
    
    
    12,392
    
    
    
    (14,888
    )
    
    
    
    
    
    
    77,156
    
    
    
    40,668
    
    
    
    
    
    
    
    40,668CD Kearney
    
    
    32,004
    
    
    
    12,088
    
    
    
    
    
    
    
    
    
    
    
    44,092
    
    
    
    13,954
    
    
    
    
    
    
    
    13,954RL Erratt
    
    
    84,516
    
    
    
    12,264
    
    
    
    (10,328
    )
    
    
    
    
    
    
    86,452
    
    
    
    48,306
    
    
    
    
    
    
    
    48,306Total
    
    
    527,966
    
    
    
    92,152
    
    
    
    (103,363
    )
    
    
    
    
    
    
    516,755
    
    
    
    251,090
    
    
    
    
    
    
    
    251,090
 107




---



##### 



f) Shareholdings of specified Directors and their related parties and specified Executives
and their related parties
 Balance
    
    
    Granted as
    
    
    On exercise
    
    
    Net change
    
    
    Balance1 July, 2004
    
    
    remuneration
    
    
    of options
    
    
    other
    
    
    30 June, 2005Ord
    
    
    Ord
    
    
    Ord
    
    
    Ord
    
    
    OrdSpecified DirectorsPA Johnston
    
    
    43,594
    
    
    
    
    
    
    
    
    
    
    
    5,000
    
    
    
    48,594C Naughton
    
    
    738,511
    
    
    
    
    
    
    
    
    
    
    
    (105,000
    )
    
    
    633,511GE Kelly
    
    
    8,503,552
    
    
    
    
    
    
    
    
    
    
    
    (144,400
    )
    
    
    8,359,152PJ Nestel AO
    
    
    12,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12,000PB Simpson
    
    
    500
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    500LC Read
    
    
    2,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,000Specified ExecutivesAJ Husband
    
    
    58,892
    
    
    
    
    
    
    
    26,256
    
    
    
    (25,000
    )
    
    
    60,148DR Seaton
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    WJ Lancaster (USA)
    
    
    44,420
    
    
    
    
    
    
    
    51,891
    
    
    
    (56,311
    )
    
    
    40,000BM Palmer
    
    
    152,886
    
    
    
    
    
    
    
    14,888
    
    
    
    (13,048
    )
    
    
    154,726CD Kearney
    
    
    7,850
    
    
    
    
    
    
    
    
    
    
    
    1,000
    
    
    
    8,850RL Erratt
    
    
    103,532
    
    
    
    
    
    
    
    10,328
    
    
    
    (10,000
    )
    
    
    103,860Total
    
    
    9,667,737
    
    
    
    
    
    
    
    103,363
    
    
    
    (347,759
    )
    
    
    9,423,341
  108




---



##### 



19. REMUNERATION OF AUDITORS
 Consolidated2005
    
    
    2004$
    
    
    $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;
    
    
    245,067
    
    
    
    (b) other services in relation to the entity
and any other entity in the consolidated
entity.
    
    
    14,500
    
    
    
    259,567
    
    
    
    Amounts received or due and receivable by
Ernst & Young Australia for:(a) an audit or review of the financial report
of the entity and any other entity in the
consolidated entity;
    
    
    34,407
    
    
    
    220,619(b) other services in relation to the entity
and any other entity in the consolidated
entity.
    
    
    8,195
    
    
    
    154,95342,602
    
    
    
    375,572Amounts received or due and receivable by
related practice of Ernst & Young Australia
for other services in relation to any entity
in the economic group.
    
    
    11,616
    
    
    
    195,555Amounts received or due and receivable by
auditors of other subsidiaries in the economic
entity for an audit/review, which are not
already disclosed.
    
    
    30,313
    
    
    
    21,657344,098
    
    
    
    592,784
 109




---



##### 



20. STATEMENT OF CASH FLOWS
 Consolidated2005
    
    
    2004$000
    
    
    $000(a) RECONCILIATION OF OPERATING LOSS AFTER INCOME TAX
TO NET CASHFLOWS FROM OPERATIONSOperating loss after income tax
    
    
    (12,281
    )
    
    
    (12,579
    )Depreciation and amortisation
    
    
    1,626
    
    
    
    1,721Net (gain)/loss on disposal of property,
plant and equipment
    
    
    
    
    
    
    467Changes in assets and liabilities(increase)/decrease in trade debtors
    
    
    (17
    )
    
    
    1,243(increase)/decrease in prepayments
    
    
    44
    
    
    
    (277
    )(increase)/decrease in other debtors
    
    
    (391
    )
    
    
    171(increase)/decrease in inventories
    
    
    (1,615
    )
    
    
    (1,976
    )increase/(decrease) in accounts payable
    
    
    (462
    )
    
    
    307increase/(decrease) in provisions
    
    
    (37
    )
    
    
    247exchange rate change on opening cash
    
    
    325
    
    
    
    137Net cash outflow from operating activities
    
    
    (12,808
    )
    
    
    (10,539
    )
 b) FINANCE LEASES
  110




---



##### 



21. EARNINGS PER SHARE
 Consolidated2005
    
    
    2004$000
    
    
    $000The following reflects the income and share
data used in calculating basic and diluted
earnings per shareNet loss
    
    
    (12,281
    )
    
    
    (12,579
    )Adjustments:Net loss attibutable to outside equity interests
    
    
    1,152
    
    
    
    1,644Earnings used in calculating basic and diluted
earnings per share
    
    
    (11,129
    )
    
    
    (10,935
    )
 Number of
    
    
    Number ofshares
    
    
    sharesWeighted average number of ordinary shares used
in calculating basic and diluted earnings per
share
    
    
    96,839,570
    
    
    
    96,306,286Basic and diluted loss per share  (cents)
    
    
    (11.5
    )
    
    
    (11.4
    )
 Diluted earnings per share:
   Conversions, call subscriptions or issues after June 30, 2005
  111




---



##### 



22. FINANCIAL INSTRUMENTS
 (a)
    
    Interest rate risk exposuresThe economic entitys exposure to interest rate risk and the effective weighted average
interest rate for each class of financial assets and liabilities is set out below.
 WeightedFloating
    
    
    Fixed
    
    
    Fixed
    
    
    Non-interest
    
    
    
    
    
    
    
    
    
    
    Average RateInterest Rate
    
    
    1 year or less
    
    
    Over 1 to 5 years
    
    
    bearing
    
    
    Total
    
    
    of Interest2005
    
    
    2004
    
    
    2005
    
    
    2004
    
    
    2005
    
    
    2004
    
    
    2005
    
    
    2004
    
    
    2005
    
    
    2004
    
    
    2005Note
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    
    
    
    2004Financial assetsCash
    
    
    4
    
    
    
    12,777
    
    
    
    38,777
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,644
    
    
    
    1,200
    
    
    
    19,421
    
    
    
    39,977
    
    
    
    1.34
    %
    
    
    1.07
    %Deposits
    
    
    4
    
    
    
    2,621
    
    
    
    3,011
    
    
    
    25,218
    
    
    
    15,443
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    27,839
    
    
    
    18,454
    
    
    
    4.26
    %
    
    
    5.22
    %Receivables
    
    
    5
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,477
    
    
    
    2,936
    
    
    
    3,477
    
    
    
    2,936
    
    
    
    N/A
    
    
    
    N/A15,398
    
    
    
    41,788
    
    
    
    25,218
    
    
    
    15,443
    
    
    
    
    
    
    
    
    
    
    
    10,121
    
    
    
    4,136
    
    
    
    50,737
    
    
    
    61,367Financial liabilitiesPayables
    
    
    11
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,501
    
    
    
    5,963
    
    
    
    5,501
    
    
    
    5,963
    
    
    
    N/A
    
    
    
    N/AInterest bearing liabilities
    
    
    12
    
    
    
    
    
    
    
    
    
    
    
    750
    
    
    
    843
    
    
    
    15
    
    
    
    765
    
    
    
    
    
    
    
    
    
    
    
    765
    
    
    
    1,608
    
    
    
    8.33
    %
    
    
    8.42
    %
    
    
    
    
    
    
    
    750
    
    
    
    843
    
    
    
    15
    
    
    
    765
    
    
    
    5,501
    
    
    
    5,963
    
    
    
    6,266
    
    
    
    7,571Net financial assets/(liabilities)
    
    
    
    
    
    
    15,398
    
    
    
    41,788
    
    
    
    24,468
    
    
    
    14,600
    
    
    
    (15
    )
    
    
    (765
    )
    
    
    4,620
    
    
    
    (1,827
    )
    
    
    44,471
    
    
    
    53,796
 (b)
    
    Net fair value of financial assets and liabilitiesThe net fair value of financial assets and liabilities approximates their carrying value
in the Statement of Financial Position, because they are short term and at market rates
of interest.
 (c)
    
    Credit risk exposuresThe consolidated entities maximum exposures to credit risk at balance date in relation
to each class of recognised financial assets is the carrying amount of those assets as
indicated in the Statement of Financial Position.
 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.
 112




---



##### 



23. EXPENDITURE COMMITMENTS
 Consolidated2005
    
    
    2004$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
    
    
    199
    
    
    
    375Later than 1 year but not later than 2 years
    
    
    218
    
    
    
    32Later than 2 years but not later than 3 years
    
    
    247
    
    
    
    1Later than 3 years but not later than 4 years
    
    
    248
    
    
    
    Later than 4 years but not later than 5 years
    
    
    192
    
    
    
    1,104
    
    
    
    408(b) Finance leases **Commitments in relation to finance leases
are payable as follows:Not later than 1 year
    
    
    767
    
    
    
    899Later than 1 year but not later than 2 years
    
    
    15
    
    
    
    767Later than 2 years but not later than 3 years
    
    
    
    
    
    
    15Minimum lease payments
    
    
    782
    
    
    
    1,681Less: Future finance charges
    
    
    (17
    )
    
    
    (73
    )765
    
    
    
    1,608Representing lease liabilities:Current  (Note 11)
    
    
    750
    
    
    
    843Non-current  (Note 11)
    
    
    15
    
    
    
    765765
    
    
    
    1,608(c) Other expenditure commitmentsResearch and development contracts for
service to be rendered:Not later than 1 year
    
    
    3,556
    
    
    
    6,200Later than 1 year but not later than 2 years
    
    
    607
    
    
    
    9124,163
    
    
    
    7,112
 
 *
    
    Operating leases represent payments for property and equipment rental. Leases for property
include an annual review for Consumer Price Index (CPI) increases.**
    
    Finance lease commitments have an average term of 4 years with an average interest rate of
8.33%. Assets which are subject to finance leases include building, plant and equipment. 113




---



##### 



24. CONTINGENT LIABILITIES
 Parent entity guarantees
 (a)
    
    The parent company has unconditionally guaranteed financial support for Novogen Limited (UK)
should it be unable to meet its financial obligations.
 (b)
    
    The parent company has guaranteed in a deed dated 16 May, 2002 the performance of the Novogen
subsidiaries arising in connection with the License Agreement and the Manufacturing and Supply
Agreement with Marshall 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 28 May, 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)
    
    Refer to Subsequent Events Note 25.
 25. SUBSEQUENT EVENTS
   26. IMPACT OF ADOPTING AUSTRALIAN EQUIVALENTS TO INTERNATIONAL FINANCIAL REPORTING STANDARDS
    114




---



##### 



PROFORMA STATEMENT OF FINANCIAL PERFORMANCE  for the year ended 30 June, 2005
 ConsolidatedAGAAP
    
    
    A-IFRS
    
    
    A-IFRSactual*
    
    
    impact
    
    
    proformaNotes
    
    
    $000
    
    
    $000
    
    
    $000RevenueSales revenue
    
    
    
    
    
    
    13,404
    
    
    
    
    
    
    
    13,404Other revenue from ordinary activities
    
    
    
    
    
    
    4,274
    
    
    
    
    
    
    
    4,274Total Revenue from ordinary activities
    
    
    
    
    
    
    17,678
    
    
    
    
    
    
    
    17,678Costs and ExpensesCost of goods sold
    
    
    
    
    
    
    (4,666
    )
    
    
    
    
    
    
    (4,666
    )Research & development
    
    
    
    
    
    
    (10,217
    )
    
    
    
    
    
    
    (10,217
    )Selling & promotion
    
    
    
    
    
    
    (8,411
    )
    
    
    
    
    
    
    (8,411
    )Shipping and handling
    
    
    
    
    
    
    (444
    )
    
    
    
    
    
    
    (444
    )General and administrative
    
    
    (i
    )
    
    
    (6,163
    )
    
    
    (389
    )
    
    
    (6,552
    )Total Costs and Expenses before interest and tax
    
    
    
    
    
    
    (29,901
    )
    
    
    (389
    )
    
    
    (30,290
    )Interest expense
    
    
    
    
    
    
    (56
    )
    
    
    
    
    
    
    (56
    )(LOSS) FROM ORDINARY ACTIVITIES BEFORE INCOME
TAX EXPENSE
    
    
    
    
    
    
    (12,279
    )
    
    
    (389
    )
    
    
    (12,668
    )INCOME TAX (EXPENSE) RELATING TO ORDINARY
ACTIVITIES
    
    
    
    
    
    
    (2
    )
    
    
    
    
    
    
    (2
    )(LOSS) FROM ORDINARY ACTIVITIES AFTER INCOME
TAX EXPENSE
    
    
    
    
    
    
    (12,281
    )
    
    
    (389
    )
    
    
    (12,670
    )NET (LOSS)
    
    
    
    
    
    
    (12,281
    )
    
    
    (389
    )
    
    
    (12,670
    )NET (LOSS) ATTRIBUTABLE TO OUTSIDE EQUITY
INTERESTS
    
    
    
    
    
    
    1,152
    
    
    
    
    
    
    
    1,152NET (LOSS) ATTRIBUTABLE TO MEMBERS OF NOVOGEN
LIMITED
    
    
    
    
    
    
    (11,129
    )
    
    
    (389
    )
    
    
    (11,518
    )
 
 *
    
    Reported financial results for the year ended 30 June 2005 115




---



##### 



Share-based Payments
 116




---



##### 



PROFORMA STATEMENT OF FINANCIAL POSITION
As at 30 June, 2005
 ConsolidatedAGAAP
    
    
    A-IFRS
    
    
    A-IFRSactual*
    
    
    impact
    
    
    proformaNotes
    
    
    $000
    
    
    $000
    
    
    $000CURRENT ASSETSCash
    
    
    
    
    
    
    47,260
    
    
    
    
    
    
    
    47,260Receivables
    
    
    
    
    
    
    3,477
    
    
    
    
    
    
    
    3,477Inventories
    
    
    
    
    
    
    5,488
    
    
    
    
    
    
    
    5,488Other
    
    
    
    
    
    
    821
    
    
    
    
    
    
    
    821Total current assets
    
    
    
    
    
    
    57,046
    
    
    
    
    
    
    
    57,046NON-CURRENT ASSETSReceivables
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Inventories
    
    
    
    
    
    
    4,580
    
    
    
    
    
    
    
    4,580Property, plant and equipment
    
    
    
    
    
    
    5,859
    
    
    
    
    
    
    
    5,859Intangibles
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other financial assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total non-current assets
    
    
    
    
    
    
    10,439
    
    
    
    
    
    
    
    10,439TOTAL ASSETS
    
    
    
    
    
    
    67,485
    
    
    
    
    
    
    
    67,485CURRENT LIABILITIESPayables
    
    
    
    
    
    
    5,501
    
    
    
    
    
    
    
    5,501Interest bearing liabilities
    
    
    
    
    
    
    750
    
    
    
    
    
    
    
    750Provisions
    
    
    
    
    
    
    474
    
    
    
    
    
    
    
    474Total current liabilities
    
    
    
    
    
    
    6,725
    
    
    
    
    
    
    
    6,725NON-CURRENT LIABILITIESInterest bearing liabilities
    
    
    
    
    
    
    15
    
    
    
    
    
    
    
    15Provisions
    
    
    
    
    
    
    253
    
    
    
    
    
    
    
    253Total non-current liabilities
    
    
    
    
    
    
    268
    
    
    
    
    
    
    
    268TOTAL LIABILITIES
    
    
    
    
    
    
    6,993
    
    
    
    
    
    
    
    6,993NET ASSETS
    
    
    
    
    
    
    60,492
    
    
    
    
    
    
    
    60,492EQUITYParent equity interestContributed equity
    
    
    
    
    
    
    176,235
    
    
    
    
    
    
    
    176,235Reserves
    
    
    
    
    
    
    (3,413
    )
    
    
    
    
    
    
    (3,413
    )Accumulated losses
    
    
    (i
    )
    
    
    (116,069
    )
    
    
    
    
    
    
    (116,069
    )Total parent equity interest in equity
    
    
    
    
    
    
    56,753
    
    
    
    
    
    
    
    56,753Total outside equity interest
    
    
    
    
    
    
    3,739
    
    
    
    
    
    
    
    3,739TOTAL EQUITY
    
    
    
    
    
    
    60,492
    
    
    
    
    
    
    
    60,492
 
 *
    
    Reported financial results for the year ended 30 June 2005(i)
    
    Under AASB 2 Share-based Payments, the company would
recognise the fair value, 117




---



##### 



Restated AIFRS Statement of Cash Flows for the year ended June 30 2005.
  27. PENSION PLANS
    2003
    
    2004
    
    2005A$000
    

A$000
    

A$000Contribution expense
    
    
    604
    
    
    
    518
    
    
    
    597
 28. DIVIDENDS
  118




---



##### 



29. DIFFERENCES BETWEEN AUSTRALIAN GAAP AND U.S. GAAP
   119




---



##### 



US GAAP2003
    
    2004
    
    2005
    
    2005A$000
    
    A$000
    
    A$000
    
    US$000Operating RevenueSales Revenue
    
    
    18,977
    
    
    
    11,774
    
    
    
    12,928
    
    
    
    9,848Other Operating Revenue
    
    
    3,325
    
    
    
    2,414
    
    
    
    2,955
    
    
    
    2,251Total Operating Revenue
    
    
    22,302
    
    
    
    14,188
    
    
    
    15,883
    
    
    
    12,099Costs and ExpensesCost of Goods Sold
    
    
    (7,191
    )
    
    
    (4,753
    )
    
    
    (4,666
    )
    
    
    (3,555
    )Research & Development
    
    
    (8,274
    )
    
    
    (8,261
    )
    
    
    (10,217
    )
    
    
    (7,783
    )Selling and Promotions
    
    
    (11,585
    )
    
    
    (8,816
    )
    
    
    (7,935
    )
    
    
    (6,044
    )Shipping and Handling
    
    
    (468
    )
    
    
    (382
    )
    
    
    (444
    )
    
    
    (338
    )Bad & Doubtful Debts Expense
    
    
    (52
    )
    
    
    (99
    )
    
    
    78
    
    
    
    59General and Administrative
    
    
    (5,831
    )
    
    
    (4,971
    )
    
    
    (5,958
    )
    
    
    (4,538
    )Total Costs and Expenses
    
    
    (33,401
    )
    
    
    (27,282
    )
    
    
    (29,142
    )
    
    
    (22,199
    )Loss from operations
    
    
    (11,099
    )
    
    
    (13,094
    )
    
    
    (13,259
    )
    
    
    (10,100
    )Other Income (Expense)Interest Expense
    
    
    (132
    )
    
    
    (120
    )
    
    
    (56
    )
    
    
    (43
    )Exchange Gains/(Losses)
    
    
    (525
    )
    
    
    (137
    )
    
    
    (325
    )
    
    
    (248
    )Other
    
    
    1,278
    
    
    
    765
    
    
    
    1,319
    
    
    
    1,005Total Other Income (Expense)
    
    
    621
    
    
    
    508
    
    
    
    938
    
    
    
    714Loss Before Income Tax
    
    
    (10,478
    )
    
    
    (12,586
    )
    
    
    (12,321
    )
    
    
    (9,386
    )Income Tax Expense/(Benefit)
    
    
    7
    
    
    
    
    
    
    
    (2
    )
    
    
    (2
    )Minority Interest
    
    
    212
    
    
    
    1,176
    
    
    
    1,109
    
    
    
    845Net loss
    
    
    (10,259
    )
    
    
    (11,410
    )
    
    
    (11,214
    )
    
    
    (8,543
    )Loss per share  basic and diluted (cents)
    
    
    (10.7
    )
    
    
    (11.8
    )
    
    
    (11.6
    )
    
    
    (8.8
    )
 120




---



##### 



Year ended 30 June2003
    
    2004
    
    2005A$000
    
    A$000
    
    A$000Consolidated Net LossNet loss reported under Australian GAAP
    
    
    
    
    
    
    (10,666
    )
    
    
    (12,579
    )
    
    
    (12,281
    )Adjustments required to accord with U.S. GAAP:Goodwill written off
    
    
    (i)
   
    
    
    224
    
    
    
    
    
    
    
    Stock based compensation cost
    
    
    (ii)
    
    
    
    (504
    )
    
    
    (7
    )
    
    
    (42
    )Minority interest in net losses of subsidiaries
    
    
    (vi)
    
    
    
    212
    
    
    
    1,176
    
    
    
    1,109Adjustment for sales returns
    
    
    (v)
    
    
    
    475
    
    
    
    
    
    
    
    Net loss under U.S. GAAP
    
    
    
    
    
    
    (10,259
    )
    
    
    (11,410
    )
    
    
    (11,214
    )Basic and diluted (loss) per share according to
U.S. GAAP (cents)
    
    
    
    
    
    
    (10.7
    )
    
    
    (11.8
    )
    
    
    (11.6
    )Weighted average number of ordinary shares
outstanding during the year used in calculation
of basic and diluted (loss) per share
    
    
    
    
    
    
    95,472,984
    
    
    
    96,306,286
    
    
    
    96,839,570Comprehensive IncomeNet loss according to U.S. GAAP
    
    
    
    
    
    
    (10,259
    )
    
    
    (11,410
    )
    
    
    (11,214
    )Other comprehensive income
resulting from foreign
currency translation
    
    
    
    
    
    
    (1,956
    )
    
    
    1,400
    
    
    
    (2,964
    )Total comprehensive income
    
    
    
    
    
    
    (12,215
    )
    
    
    (10,010
    )
    
    
    (14,178
    )
 121




---



##### 



Other Comprehensive Income Movement
 2003
    
    2004
    
    2005A$000
    
    A$000
    
    A$000Balance at beginning of year
    
    
    
    
    
    
    (1,956
    )
    
    
    (556
    )Foreign currency translation adjustment
    
    
    (1,956
    )
    
    
    1,400
    
    
    
    (2,964
    )Closing Other Comprehensive Income
    
    
    (1,956
    )
    
    
    (556
    )
    
    
    (3,520
    )
   At 30 June2003
    
    
    2004
    
    
    2005A$000
    
    
    A$000
    
    
    A$000Shareholders EquityShareholders equity reported using
Australian GAAP
    
    
    
    
    
    
    42,397
    
    
    
    69,211
    
    
    
    60,492Cumulative adjustments required to accord
with U.S. GAAP:Stock based compensation cost
    
    (ii)
    
    
    (757
    )
    
    
    
    
    
    
    Minority interest equity
    
    (vi)
    
    
    (571
    )
    
    
    (3,452
    )
    
    
    (2,767
    )Shareholders equity according to U.S. GAAP
    
    
    
    
    
    
    41,069
    
    
    
    65,759
    
    
    
    57,725
 122




---



##### 



2003
    
    2004
    
    2005A$000
    
    A$000
    
    A$000Opening Shareholders equity according to U.S. GAAP
    
    
    51,852
    
    
    
    41,069
    
    
    
    65,759Less: Net loss according to U.S. GAAP
    
    
    (10,259
    )
    
    
    (11,410
    )
    
    
    (11,214
    )Add: New Equity
    
    
    1,449
    
    
    
    38,718
    
    
    
    7,013less: Minority interest in new equity
    
    
    (17
    )
    
    
    (4,018
    )
    
    
    (869
    )Add: movement in other comprehensive income
    
    
    (1,956
    )
    
    
    1,400
    
    
    
    (2,964
    )Closing Shareholders equity according to U.S. GAAP
    
    
    41,069
    
    
    
    65,759
    
    
    
    57,725
  (i) Goodwill, Patents and Trademarks
   123




---



##### 



(ii) Stock Based Compensation
   2003
    
    2004
    
    2005A$000
    
    A$000
    
    A$000Net loss after income tax (US GAAP)- As reported
    
    
    (10,259
    )
    
    
    (11,410
    )
    
    
    (11,214
    )- Stock-based employee compensation
(fair value method)
    
    
    (411
    )
    
    
    (350
    )
    
    
    (445
    )- Pro forma
    
    
    (10,670
    )
    
    
    (11,760
    )
    
    
    (11,659
    )Basic and diluted loss per share (US GAAP)- As reported (cents)
    
    
    (10.7
    )
    
    
    (11.8
    )
    
    
    (11.6
    )- Pro forma (cents)
    
    
    (11.2
    )
    
    
    (12.2
    )
    
    
    (12.0
    )
  124




---



##### 



2003
    
    2004
    
    2005Weighted
    
    
    
    
    
    Weighted
    
    
    
    
    
    Weightedaverage
    
    
    
    
    
    average
    
    
    
    
    
    averageexercise
    
    
    
    
    
    exercise
    
    
    
    
    
    exerciseConsultant Options
    
    Options
    
    price A$
    
    Options
    
    price A$
    
    Options
    
    price A$Outstanding at the
beginning of the
year
    
    
    397,728
    
    
    $
    2.69
    
    
    
    367,510
    
    
    $
    2.75
    
    
    
    221,454
    
    
    $
    2.77Granted
    
    
    37,200
    
    
    $
    2.10
    
    
    
    6,660
    
    
    $
    6.76
    
    
    
    14,244
    
    
    $
    4.90Exercised
    
    
    67,418
    
    
    $
    2.05
    
    
    
    152,716
    
    
    $
    2.88
    
    
    
    23,652
    
    
    $
    4.00Forfeited
    
    
    
    
    
    $
    0.00
    
    
    
    
    
    
    $
    0.00
    
    
    
    
    
    
    $
    0.00Outstanding at the
end of the year
    
    
    367,510
    
    
    $
    2.75
    
    
    
    221,454
    
    
    $
    2.77
    
    
    
    212,046
    
    
    $
    2.78Exercisable at the
end of the year
    
    
    319,846
    
    
    $
    2.78
    
    
    
    185,988
    
    
    $
    2.72
    
    
    
    174,207
    
    
    $
    2.56Weighted average
fair value of
options granted
during the year
    
    
    
    $
    0.78
    
    
    
    
    
    
    $
    2.82
    
    
    
    
    
    
    $
    2.96
 125






---



##### 



2003
    
    2004
    
    2005Weighted average
    
    
    
    
    
    Weighted average
    
    
    
    
    
    Weighted averageEmployee Options
    
    Options
    
    exercise price A$
    
    Options
    
    exercise price A$
    
    Options
    
    exercise price A$Outstanding at the
beginning of the
year
    
    
    1,809,935
    
    
    
    $2.61
    
    
    
    2,074,441
    
    
    
    $2.02
    
    
    
    1,189,167
    
    
    
    $3.00Granted
    
    
    526,332
    
    
    
    $2.10
    
    
    
    189,536
    
    
    
    $6.76
    
    
    
    276,844
    
    
    
    $4.90Exercised
    
    
    131,653
    
    
    
    $2.14
    
    
    
    959,042
    
    
    
    $2.78
    
    
    
    288,467
    
    
    
    $2.75Forfeited
    
    
    130,173
    
    
    
    $2.25
    
    
    
    115,768
    
    
    
    $2.63
    
    
    
    37,652
    
    
    
    $3.96Outstanding at the
end of the year
    
    
    2,074,441
    
    
    
    $2.02
    
    
    
    1,189,167
    
    
    
    $3.00
    
    
    
    1,139,892
    
    
    
    $3.49Exercisable at the
end of the year
    
    
    381,399
    
    
    
    $2.95
    
    
    
    487,732
    
    
    
    $2.69
    
    
    
    430,996
    
    
    
    $2.81Weighted average
fair value of options granted
during the year
    
    $0.78
    
    $2.82
    
    $2.96
     126




---



##### 



(iii) Cash Flow Statement
  2003
    
    
    2004
    
    
    2005A$000
    
    
    A$000
    
    
    A$000Cash and cash equivalents under Australian GAAP
    
    
    31,026
    
    
    
    58,431
    
    
    
    47,260Restricted cash (Note 4)
    
    
    (2,500
    )
    
    
    (3,000
    )
    
    
    (3,150
    )Cash and cash equivalents under U.S. GAAP
    
    
    28,526
    
    
    
    55,431
    
    
    
    44,110
 (iv) Income Tax
    2003
    
    
    2004
    
    
    2005$000
    
    
    $000
    
    
    $000Domestic
    
    
    
    
    
    
    (14,317
    )
    
    
    (9,016
    )
    
    
    (13,865
    )Foreign
    
    
    
    
    
    
    3,644
    
    
    
    (3,563
    )
    
    
    1,586(10,673
    )
    
    
    (12,579
    )
    
    
    (12,279
    )
 127




---



##### 



2004
    
    
    2005$000
    
    
    $000Deferred tax assetsDepreciation
    
    
    816
    
    
    
    975Provisions accruals
    
    
    2,030
    
    
    
    1,323Exchange gains
    
    
    
    
    
    
    Other
    
    
    126
    
    
    
    (60
    )Losses carried forward  Australia
    
    
    11,304
    
    
    
    14,469- USA
    
    
    12,786
    
    
    
    12,894- Other
    
    
    3,601
    
    
    
    4,098Total deferred tax assets
    
    
    30,663
    
    
    
    33,699Deferred tax liabilityExchange losses
    
    
    (44
    )
    
    
    (146
    )Prepayments
    
    
    
    
    
    
    Other
    
    
    (447
    )
    
    
    (100
    )Total deferred tax liability
    
    
    (491
    )
    
    
    (246
    )Net deferred tax asset
    
    
    30,172
    
    
    
    33,453Valuation allowance for deferred tax assets
    
    
    (30,172
    )
    
    
    (33,453
    )Net recorded deferred taxes
    
    
    
    
    
    
    
 2003

    
    
    2004
    
    
    2005$000
    
    
    %
    
    
    $000
    
    
    %
    
    
    $000
    
    
    %Tax at Australian statutory rates
    
    
    (3,078
    )
    
    
    30
    %
    
    
    (3,423
    )
    
    
    30
    %
    
    
    (3,364
    )
    
    
    30
    %Foreign Rate Differentials
    
    
    254
    
    
    
    (2
    %)
    
    
    (111
    )
    
    
    1
    %
    
    
    126
    
    
    
    (1
    %)Non deductible expenses
    
    
    63
    
    
    
    (1
    %)
    
    
    118
    
    
    
    (1
    %)
    
    
    44
    
    
    
    (0
    %)Research and development allowance
    
    
    (79
    )
    
    
    1
    %
    
    
    (271
    )
    
    
    2
    %
    
    
    (411
    )
    
    
    4
    %Other
    
    
    39
    
    
    
    (0
    %)
    
    
    (329
    )
    
    
    3
    %
    
    
    (322
    )
    
    
    3
    %Reversal of intercompany profit in stock elimination
    
    
    (251
    )
    
    
    2
    %
    
    
    (208
    )
    
    
    2
    %
    
    
    (105
    )
    
    
    1
    %Filing Differences
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    748
    
    
    
    (7
    %)Tax expense/(benefit)
    
    
    (3,052
    )
    
    
    30
    %
    
    
    (4,224
    )
    
    
    37
    %
    
    
    (3,284
    )
    
    
    29
    %Change in valuation allowance
    
    
    3,059
    
    
    
    (30
    %)
    
    
    4,224
    
    
    
    (37
    %)
    
    
    3,282
    
    
    
    (29
    %)Income Tax Expense
    
    
    7
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2
    )
 128




---



##### 



Components of Income Tax Expense/(Benefit)
 2003
    
    
    2004
    
    
    2005$000
    
    
    $000
    
    
    $000Current Expense/(Benefit)
    
    
    7
    
    
    
    
    
    
    
    (2
    )Deferred Expense/(Benefit)
    
    
    (3,059
    )
    
    
    (4,224
    )
    
    
    (3,282
    )Movement in Valuation Allowance
    
    
    3,059
    
    
    
    4,224
    
    
    
    3,282Income Tax Expense
    
    
    7
    
    
    
    
    
    
    
    (2
    )
  (v) Revenue
 2003
    
    
    2004
    
    
    2005(A$000)
    
    
    (A$ 000)
    
    
    (A$ 000)Sales Revenue reported using
Australian GAAP
    
    
    19,630
    
    
    
    12,720
    
    
    
    13,404Trade Promotions
    
    
    (1,128
    )
    
    
    (946
    )
    
    
    (476
    )Adjustments for sales returns
    
    
    475
    
    
    
    
    
    
    
    Sales Revenue report using US GAAP
    
    
    18,977
    
    
    
    11,774
    
    
    
    12,928
     129




---



##### 



(vi) Minority interests
   (vii) Other Comprehensive Income
  130




---



##### 



2004
    
    
    2005$000
    
    
    $000Opening balance
    
    
    571
    
    
    
    3,452Additions to outside equity interest by way of share issue:Marshall Edwards, Inc.
    
    
    4,018
    
    
    
    Glycotex, Inc.
    
    
    
    
    
    
    869Add shares of operating losses of controlled entitiesMarshall Edwards, Inc.
    
    
    (1,171
    )
    
    
    (1,078
    )Glycotex, Inc.
    
    
    (5
    )
    
    
    (31
    )Add shares of other comprehensive incomeMarshall Edwards, Inc.
    
    
    39
    
    
    
    (446
    )Glycotex, Inc.
    
    
    
    
    
    
    13,452
    
    
    
    2,767
 (viii) Summary of Significant Accounting Policies
 Use of Estimates
  Financial Instruments
  Advertising Expenses
  131




---



##### 



(iix) Payables
  2004
    
    
    2005$000
    
    
    $000Insurance Premiums
    
    
    433
    
    
    
    405Provision for Sales Returns
    
    
    499
    
    
    
    307Provision for Rebates
    
    
    372
    
    
    
    
 (ix) Recent Accounting Pronouncements
    154),
 132




---



##### 



(x) Segment Information
  30. RESTATEMENTS
  Inventories
   As Reported
    
    
    As Restated$000
    
    
    $000Inventory  Current
    
    
    7,828
    
    
    
    5,589Total current assets
    
    
    70,060
    
    
    
    67,821Inventory  Non-current
    
    
    625
    
    
    
    2,864Total non-current assets
    
    
    7,353
    
    
    
    9,592Total assets
    
    
    77,413
    
    
    
    77,413
  Note 6
 As Reported
    
    
    As Restated$000
    
    
    $000Inventories  CurrentRaw materials
    
    
    649
    
    
    
    Work in progress
    
    
    6,392
    
    
    
    4,223Finished goods
    
    
    1,406
    
    
    
    1,406Provision for diminution in value
    
    
    (659
    )
    
    
    (40
    )Other
    
    
    40
    
    
    
    7,828
    
    
    
    5,589Inventories  Non-currentRaw materials
    
    
    371
    
    
    
    1,020Work in progress
    
    
    
    
    
    
    2,169Finished goods
    
    
    
    
    
    
    294Provision for diminution in value
    
    
    
    
    
    
    (619
    )Other
    
    
    254
    
    
    
    625
    
    
    
    2,864
 133




---



##### 



Interest In Controlled Entities
 
 Closed Group
 As Reported
    
    
    As Restated$000
    
    
    $000Inventories  Current
    
    
    4,527
    
    
    
    2,839Total current assets
    
    
    29,427
    
    
    
    27,739Inventories  Non-Current
    
    
    625
    
    
    
    2,313Total non-current assets
    
    
    51,035
    
    
    
    52,723Total assets
    
    
    80,462
    
    
    
    80,462
  Weighted Average Number of Shares
  As Reported
    
    
    As RestatedWeighted average number of ordinary
shares used in caclulating basic and
diluted earnings per share
    
    
    96,107,215
    
    
    
    96,306,286
  As Reported
    
    
    As Restated$000
    
    
    $000Basic and diluted (loss) per share
according to U.S. GAAP (cents)
    
    
    (11.9
    )
    
    
    (11.8
    )
 134




---



##### 



Income Tax
  As Reported
    
    
    As Restated$000
    
    
    $000(a) The prima facie tax, using tax rates applicable
in the country of operation, on
profit differs from the income tax provided in the
financial statements as follows:Prima facie tax (credit) on profit/(loss) from
ordinary activities
    
    
    (3,774
    )
    
    
    (3,774
    )Tax effect of permanent differences:Foreign tax rate differentials
    
    
    
    
    
    
    (111
    )Non deductible depreciation and amortisation
    
    
    
    
    
    
    Non deductible expenses
    
    
    118
    
    
    
    118Research and development allowance
    
    
    (271
    )
    
    
    (271
    )Sundry items
    
    
    21
    
    
    
    21Income tax adjusted for permanent
differences
    
    
    (3,906
    )
    
    
    (4,017
    )Net current year tax losses and timing
differences not brought to account/(prior year
tax losses and timing differences brought to
account)
    
    
    3,906
    
    
    
    4,017Income tax expense attributable to operating loss
    
    
    
    
    
    
    
  As Reported
    
    
    As Restated$000
    
    
    $000(b) Future income tax benefit not brought
to account at balance date as
realisation of the benefit is not regarded
as virtually certain arising from:(i) tax losses carried forward
    
    
    27,439
    
    
    
    27,691(ii) timing differences
    
    
    2,274
    
    
    
    2,71329,713
    
    
    
    30,404
  135




---



##### 



As Reported
    
    
    As RestatedYear Ended June 30, 2004
    
    $000
    
    
    $000Current Expense/(Benefit)
    
    
    
    
    
    
    Deferred Expense/(Benefit)
    
    
    (4,016
    )
    
    
    (4,224
    )Movement in Valuation Allowance
    
    
    4,016
    
    
    
    4,224Income Tax Expense
    
    
    
    
    
    
    
 As Reported
    
    
    As RestatedYear Ended June 30, 2003
    
    $000
    
    
    $000Current Expense/(Benefit)
    
    
    (7
    )
    
    
    7Deferred Expense/(Benefit)
    
    
    (2,807
    )
    
    
    (3,059
    )Movement in Valuation Allowance
    
    
    2,807
    
    
    
    3,059Income Tax Expense
    
    
    (7
    )
    
    
    7
  Options
  As Reported
 OptionsIssued
    
    
    Converted
    
    
    forfeited
    
    
    
    
    
    
    ExercisableGrant
    
    Exercise
    
    
    Expiry
    
    
    Original
    
    
    On issue 1
    
    
    during the
    
    
    to fully paid
    
    
    during the
    
    
    On issue 30
    
    
    30 June,Date
    
    Price
    
    
    Date
    
    
    issue
    
    
    July 2003
    
    
    year
    
    
    shares
    
    
    year
    
    
    June 2004
    
    
    200430/11/02 (i)
    
    $
    2.10
    
    
    
    30/11/07
    
    
    
    526,332
    
    
    
    503,916
    
    
    
    
    
    
    
    35,699
    
    
    
    64,961
    
    
    
    403,256
    
    
    
    100,814Total
    
    
    
    
    
    
    
    
    
    
    3,171,198
    
    
    
    2,441,951
    
    
    
    196,196
    
    
    
    1,111,758
    
    
    
    132,493
    
    
    
    1,393,896
    
    
    
    669,539
 As Restated
 OptionsIssued
    
    
    Converted
    
    
    forfeited
    
    
    
    
    
    
    ExercisableGrant
    
    Exercise
    
    
    Expiry
    
    
    Original
    
    
    On issue 1
    
    
    during the
    
    
    to fully paid
    
    
    during the
    
    
    On issue 30
    
    
    30 June,Date
    
    Price
    
    
    Date
    
    
    issue
    
    
    July 2003
    
    
    year
    
    
    shares
    
    
    year
    
    
    June 2004
    
    
    200430/11/02 (i)
    
    $
    2.10
    
    
    
    30/11/07
    
    
    
    526,332
    
    
    
    503,916
    
    
    
    
    
    
    
    35,699
    
    
    
    48,236
    
    
    
    419,981
    
    
    
    104,995Total
    
    
    
    
    
    
    
    
    
    
    3,171,198
    
    
    
    2,441,951
    
    
    
    196,196
    
    
    
    1,111,758
    
    
    
    115,768
    
    
    
    1,410,621
    
    
    
    673,720
 136




---



##### 



As Reported
    
    
    As Restated2004
    
    
    2004Weighted
    
    
    
    
    
    
    Weightedaverage
    
    
    
    
    
    
    averageexercise
    
    
    
    
    
    
    exerciseEmployee Options
    
    Options
    
    
    price A$
    
    
    Options
    
    
    price A$Forfeited
    
    
    132,493
    
    
    $
    2.56
    
    
    
    115,768
    
    
    $
    2.63Outstanding at the end of the year
    
    
    1,172,442
    
    
    $
    3.01
    
    
    
    1,189,167
    
    
    $
    3.00Exercisable at the end of the year
    
    
    483,551
    
    
    $
    2.70
    
    
    
    487,732
    
    
    $
    2.69
  137




---



##### 



Segment Information
  SEGMENT INFORMATION  PRIMARY SEGMENT
 Australia/NZ
    
    
    North America
    
    
    Europe
    
    
    Elimination
    
    
    ConsolidatedAs Reported
    
    
    As Restated
    
    
    As Reported
    
    
    As Restated
    
    
    As Reported
    
    
    As Restated
    
    
    As Reported
    
    
    As Restated
    
    
    As Reported
    
    
    As Restated$000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000Geographical segmentsAssetsSegment assets
    
    
    17,552
    
    
    
    89,044
    
    
    
    56,178
    
    
    
    56,178
    
    
    
    1,364
    
    
    
    1,128
    
    
    
    2,319
    
    
    
    (68,937
    )
    
    
    77,413
    
    
    
    77,413LiabilitiesSegment liabilities
    
    
    11,908
    
    
    
    8,154
    
    
    
    50,179
    
    
    
    50,179
    
    
    
    10,735
    
    
    
    10,499
    
    
    
    (64,620
    )
    
    
    (60,630
    )
    
    
    8,202
    
    
    
    8,202Other segment informationNon cash expenses
other than
depreciation and
amortisation
    
    
    (1,448
    )
    
    
    (1,194
    )
    
    
    357
    
    
    
    338
    
    
    
    54
    
    
    
    53
    
    
    
    2,289
    
    
    
    2,035
    
    
    
    1,252
    
    
    
    1,232
 SEGMENT INFORMATION  SECONDARY SEGMENT
 PharmaceuticalDietary supplements
    
    
    research and
    
    
    Elimination
    
    
    ConsolidateddevelopmentAs
    
    
    As
    
    
    As
    
    
    As
    
    
    As
    
    
    As
    
    
    As
    
    
    AsReported
    
    
    Restated
    
    
    Reported
    
    
    Restated
    
    
    Reported
    
    
    Restated
    
    
    Reported
    
    
    Restated$000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000Segment assets
    
    
    20,527
    
    
    
    47,490
    
    
    
    53,619
    
    
    
    38,519
    
    
    
    3,267
    
    
    
    (8,596
    )
    
    
    77,413
    
    
    
    77,413
  138




---



##### 



Director and Executive Disclosures
  PostPrimary
    
    employment
    
    Equity
    
    Other
    
    TotalNon-monetary
    
    Superan-Salary & fees
    
    benefits
    
    nuation
    
    Options
    
    BonusesSpecified DirectorsPA JohnstonAs Reported
    
    
    70,182
    
    
    
    
    
    
    
    6,318
    
    
    
    668
    
    
    
    
    
    
    
    77,168As Restated
    
    
    97,706
    
    
    
    
    
    
    
    8,794
    
    
    
    668
    
    
    
    
    
    
    
    107,168C NaughtonAs Reported
    
    
    419,016
    
    
    
    91,138
    
    
    
    37,711
    
    
    
    
    
    
    
    
    
    
    
    547,865As Restated
    
    
    419,016
    
    
    
    52,865
    
    
    
    37,711
    
    
    
    
    
    
    
    
    
    
    
    509,592GE KellyAs Reported
    
    
    306,234
    
    
    
    45,523
    
    
    
    27,561
    
    
    
    
    
    
    
    
    
    
    
    379,318As Restated
    
    
    306,234
    
    
    
    34,317
    
    
    
    27,561
    
    
    
    
    
    
    
    
    
    
    
    368,112PJ Nestel AOAs Reported
    
    
    44,500
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    44,500As Restated
    
    
    74,500
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    74,500Total Remuneration: Specified DirectorsAs Reported
    
    
    910,114
    
    
    
    136,661
    
    
    
    77,908
    
    
    
    1,336
    
    
    
    
    
    
    
    1,126,019As Restated
    
    
    967,638
    
    
    
    87,182
    
    
    
    80,384
    
    
    
    1,336
    
    
    
    
    
    
    
    1,136,540Specified ExecutivesAJ HusbandAs Reported
    
    
    234,371
    
    
    
    87,644
    
    
    
    20,605
    
    
    
    40,579
    
    
    
    
    
    
    
    383,199As Restated
    
    
    234,371
    
    
    
    53,076
    
    
    
    20,605
    
    
    
    40,579
    
    
    
    
    
    
    
    348,631DR SeatonAs Reported
    
    
    257,203
    
    
    
    28,314
    
    
    
    23,148
    
    
    
    37,795
    
    
    
    
    
    
    
    346,460As Restated
    
    
    257,203
    
    
    
    20,085
    
    
    
    23,148
    
    
    
    37,795
    
    
    
    
    
    
    
    338,231BM PalmerAs Reported
    
    
    131,976
    
    
    
    56,273
    
    
    
    11,877
    
    
    
    24,114
    
    
    
    
    
    
    
    224,240As Restated
    
    
    131,976
    
    
    
    27,196
    
    
    
    11,877
    
    
    
    24,114
    
    
    
    
    
    
    
    195,163CD KearneyAs Reported
    
    
    152,880
    
    
    
    37,576
    
    
    
    13,759
    
    
    
    17,210
    
    
    
    
    
    
    
    221,425As Restated
    
    
    152,880
    
    
    
    22,951
    
    
    
    13,759
    
    
    
    17,210
    
    
    
    
    
    
    
    206,800RL ErrattAs Reported
    
    
    142,664
    
    
    
    38,860
    
    
    
    12,839
    
    
    
    25,165
    
    
    
    
    
    
    
    219,528As Restated
    
    
    142,664
    
    
    
    21,602
    
    
    
    12,839
    
    
    
    25,165
    
    
    
    
    
    
    
    202,270Total remuneration: specified ExecutivesAs Reported
    
    
    1,128,319
    
    
    
    254,962
    
    
    
    100,759
    
    
    
    167,714
    
    
    
    
    
    
    
    1,651,754As Restated
    
    
    1,128,319
    
    
    
    151,205
    
    
    
    100,759
    
    
    
    167,714
    
    
    
    
    
    
    
    1,547,997
  139




---



##### 



Total Comprehensive Income
  As Reported
    
    
    As Restated$000
    
    
    $000Net loss according to U.S. GAAP
    
    
    (11,410
    )
    
    
    (11,410
    )Other comprehensive income resulting
from foreign currency translation
    
    
    (556
    )
    
    
    1,400Total Comprehensive Income
    
    
    (11,966
    )
    
    
    (10,010
    )
  Shareholders equity according to U.S. GAAP
  As Reported
    
    
    As Restated$000
    
    
    $000Opening Shareholders equity according to U.S. GAAP
    
    
    41,069
    
    
    
    41,069Less: Net loss according to U.S. GAAP
    
    
    (11,410
    )
    
    
    (11,410
    )Add: New Equity
    
    
    38,718
    
    
    
    38,718less: Minority interest in new equity
    
    
    (5,884
    )
    
    
    (4,018
    )Add: movement in other comprehensive income
    
    
    1,400
    
    
    
    1,400Closing Shareholders equity according to U.S. GAAP
    
    
    65,759
    
    
    
    65,759
 140




---



##### 



SIGNATURES
  NOVOGEN LIMITEDMr Christopher NaughtonManaging DirectorDate:
December 23, 2005
 141